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Über dieses Buch

This volume focuses on the latest findings concerning financial environment research and the effects on business. Major topics addressed range from finance-driven globalization, contagion risk transmission, financial sustainability, and bank efficiency, to oil price shocks and spot prices research. Further topics include family business, business valuation, public sector development and business organization in the globalized environment.

This book features selected peer-reviewed articles from the 16th EBES conference in Istanbul, where over 270 papers were presented by 478 researchers from 56 countries.



Erratum to: The Impact of Independence and Brand Personality on Brand Evaluations Among Biculturals

Umut Kubat

Banking and Finance


Estimation of Efficiency Change in the Czech Banking Sector Employing the Window Malmquist Approach

The aim of this chapter is to examine efficiency change in the Czech banking sector using the Window Malmquist approach within the period 2004–2013. We use the Window Malmquist model to estimate efficiency change of commercial banks in the Czech Republic. The Window Malmquist index is determined in order to investigate the levels of and the changes in the efficiency of the Czech commercial banks over the analysed period. By this approach, the technical efficiency is examined sequentially with a certain window width (i.e. the number of years in a window) using a panel data of the Czech commercial banks. The Window Malmquist index is based on Data Envelopment Analysis (DEA) models. We found that the average Window Malmquist index reaches the annual average growth of 5 % in CCR and 3 % in BCC models. This positive efficiency change was caused by average annual growth of technological change. In the period 2010–2013, the positive value of Window Malmquist index was as a result of positive value of efficiency change (catch-up effect).

Iveta Palečková

An Assessment of the Paper Industry Firms Listed in Borsa Istanbul Using Entropy-Based MAUT Method

The aim of this study is to measure the market and financial performance of the paper industry firms listed in Borsa Istanbul by adopting multiple attribute utility theory (MAUT) which is one of the most widely used multi-criterion decision-making (MCDM) methods. The performance of the firms is assessed for the period between 2011 and 2013. The weights of evaluation criteria are determined by applying entropy, which is an objective weighting method. In the analysis, the firms are ranked by integrating entropy-based MAUT method. According to the analysis results, Kartonsan has the highest performance rate for all the years, whereas Viking has shown the poorest performance except for the year 2011. During the period, Mondi and Olmuksan, which are acquired by foreign investors, have shown relatively stable performance; however, the performance rate of Kaplamin is unstable. The only firm that has a rising performance trend during the period is Alkim. On the other hand, the sample is also analyzed by using equal weighted MAUT.

Mehmet Apan, Ahmet Oztel, Mehmet Islamoglu

Impact of Integrated Communication on Entrepreneurial Companies’ Financial Performance: A Developing Economy

Entrepreneurial companies as the basis for economic growth should be aware of the factors of influence on their financial success, so they can achieve proper allocation of scarce resources. This chapter presents the state of the art in the communication processes of entrepreneurial companies within an emerging economy and the impact of integrated communications on profitability. The research is a part of a project “Strengthening the business capacity of women entrepreneurs in Republic of Macedonia, as a developing country.” This chapter argues that usage of integrated communication leads to increased profitability. The method of quantitative and qualitative research is used through questionnaires and personal interviews with managers in the food industry. The data are processed with IBM SPSS19. Conclusions are based on descriptive and deductive statistics. The results show that the companies, regardless of the size, give priority to economic propaganda and sales promotion; they mostly use nonpersonal, mass media, mainly television; combination of several elements of the promotional mix, i.e., integrated communications affect profitability; and combination of media for promotion has impact on profitability. The conclusion suggests that implementation of integrated communication results in positive effect on the financial performance and increases the chances of investment in further development.

Tamara Jovanov Marjanova, Elenica Sofijanova, Ljupco Davcev, Riste Temjanovski

Cross-Border Contagion Risk Transmission Through Stock Markets Channel: The Case of the Baltic Countries

International investors have seen emerging stock markets as the most exciting and promising area for investment, especially because they are expected to generate high returns and to offer good portfolio diversification opportunities. However, the recent global shocks in the major financial centers raise the question about portfolio diversification opportunities during financial turmoil. The objective of this study is to identify the episodes of cross-border contagion risk transmission through stock markets channel in the Baltic countries. Dynamic Conditional Correlation Generalized Autoregressive Conditional Heteroskedasticity (DCC-GARCH) model and Favero and Giavazzi outlier test are used. The results of this empirical study allow to identify some episodes of the cross-border contagion risk transmission through stock markets channel in the Baltic countries, for example, the announcement of the Lehman Brothers bank collapse on 15 September, 2008, etc. The empirical results of this study suggest that despite the low degree of the Baltic stock markets global and regional integration, system-wide shocks in the global financial centers affect the Baltic stock markets. The most significant effect of the cross-border contagion risk transmission was identified in Estonian and Lithuanian stock markets, while the reaction of investors in Latvian stock market was more conservative.

Vilma Deltuvaitė

The Issue of Convertible Bonds on the Polish Bond Market Catalyst in the Years 2009–2013

The purpose of this study is to determine the significance of convertible bonds as an instrument of raising capital by companies on the Polish capital market. This study contains an analysis of some examples of convertible bonds issued on the Polish Catalyst market that operates on the transaction platforms of the Warsaw Stock Exchange and of BondSpot. The data come from reports published by companies on the Catalyst. As research method applied is a case study. The analyses performed allow the indication of increasing utilization of convertible bonds by economic operators to raise capital. The applied solutions concern varied situations in which companies found themselves. In extreme cases it concerned companies that were unable to pay off their liabilities generated by issued bonds.Including bonds convertible into shares into financing strategy of a company allows to obtain borrowed capital cheaply in comparison with traditional bonds or a bank loan, in exchange for the possibility of their conversion into shares. The level of the development of Poland’s capital market indicates opportunities for further growth in using convertible bonds by companies as an instrument for collecting funds and in the case of investors for investing capital.

Bożena Kołosowska, Agnieszka Huterska

Government Strategies Based on Sukuk Issues

Sukuk are innovative instruments of Islamic finance. The primary issuers of certificates are governments and public institutions from countries in Southeast Asia and the Persian Gulf region. In recent years, the group of issuers was joined by Turkey, Great Britain, Luxembourg, the Republic of South Africa, and Hong Kong. The paper aims at indicating the motives for carrying out sukuk issues by governments of selected countries. The work presents actions supporting the development of the Islamic finance sector, detailed conditions of government sukuk issues, as well as the significance of these instruments in public debt management strategies and the development of the financial markets of individual countries. Research was conducted by way of applying critical analysis to the literature of the subject and on the basis of government documents. The research resulted in determining the materiality of nonfinancial factors decisive for carrying out sukuk issues. It was stated that sukuk issues are often treated by governments as part of the development strategies of the Islamic financial market.

Piotrowski Dariusz

Business Valuation: Premiums and Discounts in International Professional Practice

The valuation of a (nontotalitarian) shareholding in the capital stock is characterized by some critical conditions, which are mainly related to the fact that the transfer or acquisition of the same may determine the transfer of control from one subject to another. It follows that the value of the shareholding may not simply be equal to the pro rata value of the business capital, but rather its valuation has to take into consideration the features, peculiarities, and effects, which are inherent to the typology of the shareholding to be transferred. Discounts and premiums do not just affect the value of a company; they play a crucial role in influencing a host of other factors and conditions that can make or break a deal. When it comes to business valuations, it is the business appraiser’s responsibility to be intimately knowledgeable with every aspect of discounts and premiums: the different types, the situations when they may or may not apply, and how to quantify them. The paper aims to examine if the Italian professional practice adopts premiums and discounts, when to value the company, and how to quantify them.

Olga Ferraro

The Role and Implications of Internal Audit in Corporate Governance

This article aims to address audit role in corporate governance in the light of scientific literature. The foundation of this study is achieved by synthesizing current state of knowledge through quantitative and qualitative research. So we extracted the main lines of topics: conceptual levels on internal audit, corporate governance developments at national and international levels, internal audit in corporate governance of public and private entities from Romania and other corporate governance issues. As a research method, we used survey and data were processed using a statistical program. The novelty that we caught in the present paper is the analysis of the role of internal audit in the governance in public and private entities through two pillars: promoting ethics and values within the organization and ensuring effective organizational performance management/governance.

Lucan (Cioban) Alexandra Narcisa, Hlaciuc Elena

Financial Liquidity and Profitability Management in Practice of Polish Business

From the point of view of companies’ survival strategies, in the short term, financial liquidity plays a more important role than profitability does. In the case when the company is not profitable in the short term but is characterized by good financial liquidity, it has the potential for further development and for improving its performance. However, in a long-term perspective, profitability is more important because its lack in the long term will result in lacking financial liquidity. Therefore, an important element of company management is making a systematic analysis of financial liquidity and profitability, both on the basis of financial statements and on data derived from its accounts. The objective of the article is to present Polish companies’ approach to managing financial liquidity and profitability. The article presents the results of a survey made on the issue. Based on the survey, the extent of the use in making management decisions of the following was determined: liquidity ratios, working capital and the demand for working capital, analysis of the cash flow statement, and indicators of profitability. The researched entities indicated the extent of usefulness of managing receivables, liabilities, inventory, and cash in financial liquidity and profitability management.

Katarzyna Goldmann

The Business Audit as an Alternative to Discriminant Analysis in Assessing Risks of Going Concern

The ability of a business entity to develop and at least to survive is crucial for all stakeholders. Nowadays, mostly statistical methods are applied in its assessment. Efficiency of these methods is restrained by multiple and changing factors influencing the risk of disruption of continuation as a going concern, which raises the necessity of seeking an alternative solution. A new solution should be aimed at the analysis of the ability and not only the assessment of threats to continuing operation. The objective of the work is to present the research findings which justify the necessity of a multidimensional evaluation of an entity to define its ability to keep operating under the conditions of sustainable development. The article presents the findings of the expert research and surveys conducted in the years 2013–2015. As an alternative to discriminant analysis models, the author presents the concept of a multidimensional assessment of an entity, its scope, and the interpretation of its results. The presented model allows the assessment of the maturity level of an organization in the implementation of a sustainable development strategy, the assessment of an entity’s ability to continue as a going concern, and its potential to create value for stakeholders.

Marlena Ciechan-Kujawa



Finance-Driven Globalization: Empirical Evidence from the Commonwealth of Independent States

Finance-driven globalization has produced winners and losers in the developing world. Over the past 30 years, many developing countries have experienced spurts of economic growth followed by collapses. In the process, some have fallen further behind the advanced economies, while only a few have enjoyed sustained economic growth. The main purpose of this paper is to provide an assessment of the empirical evidence on the effects of financial globalization for developing economies of the Commonwealth of Independent States (former Soviet Republics). This group of countries was chosen for reasons of geographic proximity and similarities in economic structure; we tried to answer the question: Did the drive by the financial sector globalization empower the growth for the sample countries? On the basis of Blundell and Bond (Journal of Econometrics 87:115–143, 1998), a dynamic panel data model is employed. The econometric methodology is the system GMM two-step estimator developed by Arellano and Bover (Journal of Econometrics 68:29–51, 1995), Blundell and Bond (Journal of Econometrics 87:115–143, 1998; Econometric Reviews 19:321–340, 2000), and Roodman (The Stata Journal 9:86–136, 2009). Considering a possible correlation between the lagged dependent variable and the panel fixed effects and the “small T, large N” restriction, Windmeijer’s (Journal of Econometrics 126:25–51, 2005) procedure is implemented so that standard errors become robust after getting small sample size of the dataset under control.Our results show that only trade has a positive effect on growth, while FDI financial openness and financial integration do not have any impact on growth for the counties’ sample.

Argiro Moudatsou, Georgios Xanthos

Export Diversification in Lithuanian Traditional Technology Industry

This research study introduces the analysis of the export diversification in Lithuanian traditional technology industries by commodity groups and the geographical export markets. The actuality of research problem is based on the relation between degree of export diversification and fluctuations in export earnings and economic growth rates. The evaluation of export diversification lays the foundations to reveal the actual performance of low-tech industries and to explore their main export tendencies. The core aim of empirical study is to disclose which low-tech industry is most diversified, e.g., is best protected from possible external upheavals and ensures higher stability to the country’s economy. The methods of the scientific research used in empirical study are analysis of scientific literature and mathematic estimations and comparative analysis of export concentration indexes. The calculations of export concentration indexes (HHI) are performed using Lithuanian export-of-goods data, disaggregated to the Classification of Products by Activity (CPA). The results of empirical study demonstrate a moderate level of export concentration of Lithuanian low-tech sector according to both dimensions of geographical regions and commodity groups. In order to improve Lithuanian export competitiveness and to reduce losses of future demand fluctuations in the main export markets, the recommendations for export diversification enlarging are presented in this chapter.

Daiva Laskiene, Asta Saboniene, Irena Pekarskiene, Rozita Susniene

The Impact of Environmental Taxes on Competitive Performance of Pollution-Intensive Industries Among Transition Economies: Evidence from Panel Analysis

The persistent differences in environment-related taxes across countries may be considered as a source of competitive (dis)advantage depending on countries’ commitments to sustainable development and environmental protection. In this study, an attempt is made to overcome at least two deficiencies associated with previous literature concerning the influence of environmental stringency on trade flows among transition economies, the measurement of environmental stringency that rarely accounts for the direct impact of taxing pollutant emissions, and the common use of cross-section analysis encompassing transition economies. Although, economists and policy makers generally agree that prices should incorporate the full costs of environmental degradation and that market-based instruments present an effective environmental policy measures, the introduction and the use of these measures has remained limited. Previous literature has not studied the impact of environment-related taxes on relative export performance of transition economies’ heavy pollutant industries in a dynamic and an integrated framework that allows for more validated assessment of costs/benefits of environmental regulation. This research attempts to fill-in this gap in the literature. The results of panel analysis in this chapter seem to render support to the hypothesis of the least regulated transition economies, i.e., CEE EU member states tend to specialize in pollution-intensive industries and tend to benefit from differences in compliance with environmental regulation among EU countries.

Sabina Silajdzic, Eldin Mehic

Modeling of the Natural Resources’ Intensive Use Regions’ Innovative Development: Problems of Circumpolar Area Innovative System Formation

The ideas of regional innovative development and the role of innovations in promoting economic growth are discussed. This study examines the differentiation and unevenness of regional development as well as a significant imbalance of regional innovation systems in Russia. The regions have been clustered in two directions “the research potential” and “the innovative performance,” which has allowed not only to estimate the stage of innovative development, but also to qualitatively identify existing imbalances in them. The cluster analysis of the Arctic regions has emphasized strong and weak sides and has carried out the typology of regions into some group for stimulation of innovative development and eliminating the narrow places and ensures continuity of the innovation cycle.

Taisya Pogodaeva, Dmitry Rudenko, Daria Zhaparova

Challenges and Possible Consequences of Transatlantic Trade and Investment Partnership

In recent years, the European Union (EU) and the USA change their trade policy, and also they began negotiations for signing the most comprehensive free trade agreement. Its negotiations began in the second half of 2013 and is called Transatlantic Trade and Investment Partnership (TTIP), whose key points are transparency, coherence, and nondiscriminatory. With these types of qualifications, EU and US administration believes that this partnership will boost economic power, and not only the EU and the USA but also all countries in the world will benefit from the outputs of the agreement. On the other hand, although their intensions are widely on the same direction, sometimes controversial platforms occur, because both parties do not want to change their implementations at some topics such as conformity assessments, genetically modified products, and hormone-treated meat. Accordingly, the objective of this paper is to identify mainly the key challenges of the TTIP with qualitative and quantitative data. Descriptive analysis of the data will be displayed. The agreement has two main bodies as horizontal side which means regulatory cooperation and sectorial side. In this paper, regulatory cooperation and its context are considered as essential subjects. Sectors have more details and it is hard to explain all situations in sectors. After focusing on the reasons of the existence of the TTIP, the need will be explained. Then the main elements, such as market access, regulatory coherence, and improved cooperation, are mentioned. As a conclusion, mostly recommendations and expectations take part because of the fact that negotiations are going on.

Hande Kurtul, Erkut Akkartal

The Impact of Economic Globalization on the Labor Market of an Open Small Economy

The globalization of national economies and markets is a noticeably prominent tendency in recent decades, and the expansion of activities of multinational enterprises (MNEs) is one of the most prominent features of the global economy. The expanding economic globalization process was induced by a complex interaction of growing international trade and foreign direct investment flows, the diffusion of new technologies, evolving corporate strategies toward a more global focus, and labor force movements. The features of the labor market are being modified by the impact of globalization. Economic globalization has both a positive and negative impact on the labor market of a small open economy. The people of small open economies participate in the economic globalization process in two ways: many local employees work for the affiliates of MNEs and acquire new qualifications and experience, while others move to more developed countries looking for a better salary and better conditions of life. The expansion of activities of MNEs not only has a great impact on the qualifications and structure of local human resources but also alters the labor market demand in a small open country, especially in one with a high concentration of activity and low level of competitiveness.

Irena Pekarskiene, Daiva Laskiene, Asta Saboniene, Rozita Susniene

Model of Region’s Food Security in Russia

The food security on national and regional levels has a great significance in the modern world. In Russia unstable geopolitical situation together with the sanctions, imposed by the EU and USA, makes the question of intensive agrarian sector development more important than ever. Therefore the research covers the topical issues. The challenges connected with import substitution as well as new opportunities opening before agro-industrial enterprises make us analyze questions of food security more deeply. The main objective of our research is to estimate the level of regional food security, to identify the factors providing food security, to create the model of food security, and to develop recommendations for agrarian policy improvement. In the article we consider the conditions and state of agro-industrial complex in Chelyabinsk Region. Discovered features and main tendencies in this sector define key problems, including imperfection of the contractual relations, high entrance barriers, and technological lag. The existing agrarian policy in Russia demonstrates low level of effectiveness. It must be directed to improve the contractual relations in the sector as the main condition of regional food security achievement, which demands to reduce a chain of contractors “farmers—manufacturers—merchandisers—consumers” by effective regulation of all agents’ relationship.

Daria Bents, Elena Silova

Human Development and Quality of Institutions in Highly Developed Countries

The article concentrates on the problem of influence of quality of institutional system in the context of utilizing the potential of knowledge-based economy (KBE) on the human development in highly developed countries. In order to measure the quality of institutional system, a synthetic measure based on multivariate analysis techniques was proposed. To obtain the institutional measure, TOPSIS method was applied. To quantify the institutional factors, the data from Fraser Institute was used. As diagnostic variables of quality of institutions, 29 variables qualified to four aspects of national institutional systems were used: (a) formal regulations influencing entrepreneurship, (b) effectiveness of juridical system in keeping low level of transaction costs and supporting effectiveness of market mechanism, (c) competitive pressure and effectiveness of labor markets, and (d) financial market institutions as a stimulator of development of enterprises with high growth potential. The Human Development Index (HDI) proposed within United Nations Development Programme was used for measuring the quality of life. The estimation of relation between institutions and the human development was made with econometric dynamic panel model. The estimation was made for 24 European Union countries for the years 2004–2010. The econometric analysis shows the positive influence of quality of institutions on the human development in the context of knowledge-based economy in developed countries.

Adam P. Balcerzak, Michał Bernard Pietrzak

Financial Sustainability of Funded Pension Systems in OECD Countries at Demographic Risks

The current distribution pension system is on the verge of financial sustainability, which resulted in a budget deficit of the Pension Fund of the Russian Federation and the redirection of pension funds to the distribution system in 2014. One of the main reasons for this is the demographic risks. One of the tools for solving the demographic problem of the distribution pension system is funded systems. However, they are exposed to demographic risks as well. The paper provides an analysis of the impact of demographic risks on funded pension systems. It offers conditions for the financial sustainability of the funded pension system under the influence of demographic and macroeconomic factors. It investigates the compliance with the conditions of the financial sustainability of funded pension systems of Russia and OECD countries in the period from 1958 to 2012, making the forecast for the financial sustainability of funded pension systems until 2050, and the comparative dynamic analysis is held.

Nepp Alexander

Crude Oil Price Shocks and Macroeconomic Performances in the ASEAN Economies

This paper examines the relationship between the crude oil price shocks and the macroeconomic performance in the panel data set of 10 ASEAN economies: Brunei Darussalam, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam, over the period 1970–2013. We implement a second-generation panel unit root test, the panel cointegration analysis, accounting for multiple structural breaks, the panel dynamic ordinary least squares (PDOLS) estimations, and the panel-causality test in sequence. The empirical findings imply that there is only a statistically significant cointegration between the crude oil prices and the real GDP per capita levels. The results of the panel-causality test also indicate that there is a significant pairwise causal relationship between the levels of crude oil price and the real GDP per capita. In addition, the results of the PDOLS estimations indicate that 10 % increase in the crude oil price leads to 1.8 % increase in the real GDP per capita in the ASEAN economies in general. Running the common correlated effects panel estimations, we obtain the coefficients for each country and observe that the significant and positive effects are valid in 7 of 10 countries.

Giray Gozgor, Youngho Chang, Mehmet Huseyin Bilgin

Government Debt and GDP Growth

The question of how the government debt affects state’s economy is still under discussion. The goal of the present research is to explore correlations between government debt and such indicators as GDP, GDP growth rate, debt accumulation rate and budget deficit. Data on 176 world countries were analyzed. Significant negative correlation between debt and budget deficit and poor correlation between debt and GDP growth demonstrate that countries spend borrowed money to satisfy current societal needs, rather than for investments in economy. The only exception is the South and East Asia region, where higher debt is associated with higher GDP growth.

Nadezhda Semjonova

Oil Spot Prices’ Next Day Volatility: Comparison of European and American Short-Run Forecasts

The aim of the current paper is to estimate spot prices’ next-day volatility of the two largest kinds of crude oil, European Brent oil and American WTI oil, and examine differences due to selected global incidents. Daily data for oil spot prices are from May 1987 till January 2015. The contribution of the study is in a comparison of oil spot prices’ development and impacts of the Euro sovereign debt crises, recent global financial crises, and also the historical affairs as the military conflict in the Persian Gulf in 1990, or particular incidents after the start of the new millennium. The estimation method for short-run forecasting is the volatility model GARCH (1,1). While it has been proven that there was higher volatility during the global financial crisis within American WTI oil prices, higher errors were examined within European Brent oil prices. There was no higher volatility due to the euro crisis in the last 4 years. Nonetheless, both investigated oil prices were affected by highest volatility during military conflict in 1990 in our estimated period. It was clearly concluded that military conflicts can affect oil prices in a much higher way than recent financial crises.

Tomáš Heryán



The Effects of Public Key Infrastructure (PKI) Implementation on Process Improvements in Public Authorities: An Empirical Study of the PKI Implementation in Tax Administration of the Federation of Bosnia and Herzegovina

The use of public key infrastructure in administration has great potential, given that a large number of services are performed in a traditional manner, including long waiting lines and the waste of time, human, and financial resources. This paper is aimed at investigating whether the PKI implementation in public institution such as the Federation BiH Tax Administration contributes to improving its process, enhancing performance and quality of public services, including the end-user satisfaction. The research focuses on the two most extensive and basic processes of Tax Administration (TA): the tax form submission and the issuance of tax payment certificates. The methodology includes comparison between the existing “AS IS model,” based on the manual authentication and the new “TO BE model,” which includes the PKI implementation. The research findings indicate that TO BE model has contributed to the process optimization, including a complete automation of the user authentication and authorization processes. Therefore, the filling of tax return process is carried out in 5, instead of previous 14 different processes, resulting in significant costs in savings and time. On the other hand, a successful PKI implementation depends on the understanding and commitment of staff, including their readiness to change. To that end, they were asked to respond to a questionnaire on their experiences with the PKI. The sample included 37 respondents, who work in different tax offices. It is encouraging that 89 % of them are convinced that the PKI implementation in their institution would significantly improve their tasks and processes, enabling them to develop partnerships with taxpayers.

Aida Habul, Amila Pilav-Velić, Mirza Teftedarija

The Features of Family Business in the Country with Transitional Economy: Russian Case

The modern economy has only few decades of history in Russia. The family business being a basic economical foundation in countries with developed economies is a relatively new phenomenon in Russia. The main objective of the research is to describe the specifics of family business in the country with no succession tradition. For the research, questionnaires and in-depth interviews were used. We have collected questionnaires from family business members and from experts, who provide consulting service for them. Results of the research are qualification of family business definition in the present Russian circumstances and discovering uncommon process of simultaneous evolution of family culture together with organizational culture of the firm.

Korchagina Elena, Shilo Pavel

Proximity Offshoring Generating Considerable Savings with No Significant Increase of Risks or Losses in Quality—Nearshoring Playing a Key Role on a Business Transformation Program

Information Technology leaders are demonstrating an increased concern on the distance dimension while considering sourcing initiatives. This suggests that, in Information Technology outsourcing activities, “distance is not dead”—actually, distance is seen as a source of challenges that can hurt the project overall health. In order to reduce these risks keeping an effective cost, proximity offshoring (nearshoring) is getting more used over the past two decades, but the academic literature on the subject is still on its beginnings. Using an Information Technology project, part of a large business transformation program that took place in Geneva (Switzerland), done by a vendor that delivered more than 2500 days in consulting as the main case study, this paper analyzes and discusses the benefits and challenges of incorporating nearshoring practices in these types of initiatives. The analysis starts by suggesting that nearshoring can add value to Information Technology projects if managed the right way—when compared to traditional services delivery (onsite consultants), nearshoring practices can have an outstanding result, with a very positive financial impact, showing considerable savings and avoiding a significant increase of risks or losses in quality, leading to an increased return on investment (ROI). Finally, some recommendations are suggested as the starting point for a framework for nearshore usage, pointing directions for further research. A similar analysis was already published by the same authors for a training project, aiming to understand if the same trends are applicable in several types of services delivered using nearshoring practices.

Jorge F. Guedes, Leandro Pereira

The Identification of Crisis Manager Skills by Using Saaty’s Method

The paper presents the skills and abilities of a crisis manager, which microbusiness owners identified, and evaluation of their significance for the performance of this function. The overview of abilities and skills was generated based on brainwriting. Created mind map depicts the ideas into three levels. Hypothesis determined at the start of the research, that the requirements identified by the owners of microbusinesses will be in accordance with the requirements already formulated in the literature, was not rejected. The respondents used Saaty’s method for pairwise comparisons of identified skills. After the evaluation of Saaty’s matrices modified on the basis of comprehensive results, the identified requirements for becoming a crisis manager of a microbusiness were evaluated. Managerial skills were appreciated in most of the groups. On the second level, they are crucial for the performance of the function resilience, independent problem solving, flexibility, and perfect financial management. Based on empirical findings and in cooperation with experts from crisis management, the model of skills required for the performance of a crisis manager was developed.

Marie Mikušová, Andrea Čopíková

Learning by Negotiation: Stake and Salience in Implementing a Journal Management System

This research investigates how an international academic journal implements a new journal management system to overcome their knowledge management issues. By adopting a case study approach, the stakeholders involved within the project are identified, and their salience for the organization is mapped. By providing an account of how these stakeholders negotiated each other, the case highlights how these negotiations are learning processes, showing that learning process is not a conflict-free process. The case also shows that the stakeholder salience changes throughout the project, thus raising the importance of viewing these negotiations as learning platforms rather than just arenas of power struggles, to use them as opportunities to identify possible future stakeholders.

Özgün Imre

City Logistics: Is Deregulation the Answer?

Distribution of goods affects city congestion and air pollution; it also increases costs and reduces quality of life. City logistics are aimed at reducing the negative effects of distribution while supporting city development. Over the past two decades, many city logistics initiatives have failed in Italy and elsewhere in Europe. As many actors and stakeholders are involved in the complex organizational process of city logistics, it is important to investigate and understand the causes of these failures. This is the purpose of this article, which considers Italian experiences of city logistics. Evaluation of city logistics initiatives is necessary to ensure success in future implementation, to achieve sustainable urban freight transport development. Multi-agent systems (MAS) have been applied to evaluate different fields, such as supply chain, stock market, freight distribution, and traffic management. We conducted a review on city logistics projects in the main Italian cities with experience in these initiatives, in particular, in the case of failure. Our analysis considered the MAS, which utilizes multiple stakeholders’ points of view with different effects to improve city logistics feasibility. The study considers Italian experiences in city logistics, but other countries may have different backgrounds and different situations. Therefore, predictions may be valid only for Italy and not in other contexts. Our perspective is quite original compared with the existing literature as it focuses on the failures of city logistics projects rather than best practices.

Antonio Borghesi

Whether the Employee Commitment to Implementation of the CRM System Contributes to Customer Loyalty? Empirical Analysis of a Successful CRM Implementation in the Auto Industry in Bosnia and Herzegovina

This paper aims at exploring whether employee commitment to CRM implementation and their satisfaction is a prerequisite for customer satisfaction. We made an empirical analysis of successful implementation of the CRM system in one of the largest domestic consortium in BiH which is also one of the domestic pioneers in CRM implementation. In order to explore both sides of the coin, we investigated customer and employee satisfaction. The research was conducted via two online questionnaires designed for both groups of respondents. The final samples included 46 employees and 214 customers. The research findings indicate that the employees did not have any major problems in getting used to the new system (CRM system) or in communicating with customers. It is evident that the employees involved in the CRM implementation understand the process and that they are dedicated to the CRM success, but most of them (96 %) believe that a successful implementation would not be possible without external expert involvement. This indicates that a lack of vision, leadership, and training of employees often results in failed implementation. On the other hand, customers are satisfied with services and communication with employees during the sales and post-sales processes. However, regarding the customer loyalty, as many as 49 % of respondents said that they would not leave the company while 35 % might leave, whereas 17 % of the surveyed customers said that they intend to leave the company. These 35 % of customers should not be lost and it is essential to investigate the causes of customer reluctance. In this regard, we provided concrete recommendations.

Aida Habul, Amila Pilav-Velić, Amina Fejzić

Analysis of the State and Dynamics of Chemical Industry in Russia

The paper considers the factors causing change in the state of chemical production in the Russian Federation over the past 20 years. It analyzes the index of chemical production, import and export of products, state of the fixed assets and investments in the fixed capital, and financial performance of the industry. It also assesses the level of efficiency in the use of the fixed production assets and labor productivity. The state development programs of the chemical industry are considered in the paper. As a result, the main directions and trends in the industry were defined, and there was given a consideration of the measures of the branch industrial policy aimed at investment activity in the industry, import substitution, and implementation of an innovative development strategy of chemical industry.

Tatiana Jurievna Kudryavtseva, Iana Vladimirovna Kovalenko

Tacit vs Explicit Knowledge Dichotomy: State-of-the-Art Review for Technology Transfer Purposes

There is no consensus among scholars using and defining knowledge types and their interaction. Theoretical distinction between tacit and explicit knowledge has emerged. The tacit knowledge is positioned in contrast with the explicit knowledge as a result of this dichotomy. However, there are indications that every knowledge has both tacit and explicit elements that cannot exist one without the other—they are complementary and create synergy for the knowledge management. The aim of this paper is to explore relevance of knowledge distinction between the tacit and explicit knowledge for technology transfer purposes. Brief review of literature, draft discussion, and one-on-one interviews were performed in order to find the answer to the research question: Does distinction between tacit and explicit knowledge have place in the exploring of knowledge for technology transfer purposes? Content analysis was performed to process qualitative data that were collected through interviews. The research results show that the distinction between tacit and explicit knowledge is not suitable for technology transfer purposes. Knowledge consists of both tacit and explicit components. There is also an explanation for many contradictions in knowledge management studies exploring knowledge explicitness in this paper. The paper provides a better understanding of the issues related to tacit versus explicit knowledge dichotomy within technology transfer. There are theoretical implications as well as recommendations for future research in this study.

Mikus Dubickis, Elīna Gaile-Sarkane

The Principles of Establishment of Investment Responsibility Centres

The presented scientific research deals with establishment of investment responsibility centres. The research is aimed at identifying the principles of establishment of investment responsibility centres, development of the model of establishment of these centres and methodology of application of such model by scientific literature analysis. The research follows the method of decomposition, based on the analysis of scientific literature on establishment of responsibility centres and classification of responsibility centres and investments. The results of the analysis have been used for development of the model of establishment of investment responsibility centres and methodology of its practical application. Theoretical significance of the research is evidenced by the analysis and summarisation of attributes characteristic of responsibility centres and investments, as well as of the classification of responsibility centres and investments and their subsequent combination in the model of establishment of investment responsibility centres. In terms of practical applicability, the research and developed model are focused on strengthening of the liability for investments in business companies.

Neringa Stonciuviene, Erika Januskeviciene

New Challenges in External Environment and Business Strategy: The Case of Siberian Companies

The paper deals with new trends in the development of strategic management theory in knowledge economy including transition from sector analysis to the analysis of business ecosystems; building strategic business networks; increasing the role of innovative entrepreneurship, given temporary competitive advantages and dynamic external environment; and a greater focus on a value factor as a key element of corporate strategy. Based on compilation of these trends, we propose an approach to strategy formulation with special emphasis on a balance between creating value for customers and maximizing value for the company. Real cases of the Russian companies were used to show that it is very important for any company to use a balanced approach aimed at creating stakeholder value.

Svetlana Kuznetsova, Vera Markova

Best Practices in the Employment of Knowledge Workers 65 and Over and the Benefits of Employing Them (An Empirical Approach)

This paper addresses the issue of the employment of knowledge workers aged 65 and over. It recognizes the inherent value in business organizations, maximizing the use of human resources, as well as the potential for mutual benefit(s) between this age group and the businesses that employ and seek to employ them. It examines how organizations feel about the ways by which practices which utilize the skills of this age group may coincide with their entrepreneurial strategy. Ultimately, this paper aims to shed light on ways that may facilitate the use of the best practices of these knowledge workers by business organizations. The research seeks to obtain answers to the questions: which practices in the employment of knowledge workers 65 and over can be used (i.e., which are available?); which (according to entrepreneurs and executives) are actually used; and, more explicitly, given the high amounts of social capital existing in the age group studied and the resulting potential for such things as knowledge transfer and enhancement of strategic decisions, which benefits does the company receive as a result of employing knowledge workers aged 65 and over?

Grażyna Bartkowiak

Causes of Inattention on Financial Competency: A Qualitative Study

During the recent years, the world has encountered a huge financial change with personal, organizational, national, and global effect. On the other side, competency modeling teams are concerned on the external changes as one of the sources of information. Thereupon, they are expected to pay more attention on financial competency in competency modeling. Our library research and preliminary field study revealed the least attention on financial competency. The purpose of this paper is to diagnose for inattention on financial competency. We held 2 eight-person focus group discussions and 12 in-depth interviews to learn about “why it has been neglected.” The participants included Iranian large-size business owners, organizational top managers, and HR managers. A grounded theory approach was deployed to analyze the findings of focus groups and interviews. The participants addressed to a combination of potentials that have been categorized in this paper.

Omid Mehrabi, Rozeyta Omar

The Marketing Problems of Turkish Movies in Global Markets

In 2014 the Turkish cinema celebrated its 100th anniversary, but it is faced with marketing problems in global markets, although the Turkish theatrical market registered an impressive growth during the past 11 years. Turkish theatrical market is the second largest European growth market and the seventh largest European theatrical market. There are 63 coproductions between 2004 and 2013, and an increasing number of Turkish films and a lot of Turkish films have been selected for international film festivals and received a large numbers of awards. In spite of that fact, the filmmakers and directors cannot sell their films to international film markets. In this paper, the current marketing problems of Turkish movies and possible solutions will be discussed.

Askim Nurdan Tumbek Tekeoglu

Doubts and Risks in the Buying and Purchasing Processes of Business Buyers

This paper aims to reveal the nature of doubts and risks that may cause business buyers to resist making a purchasing decision or proceeding in the business-to-business (B2B) buying process. Much sales literature has focused on B2B value creation and the sales process, but less studied is the buyers’ buying process and business buyers’ feelings concerning the doubts and risks associated with buying. This paper makes an empirical contribution to this debate using 21 in-depth interviews with business buyers, analysed using qualitative methods. The study reveals that the doubts and risks experienced are essential elements of the business buyers’ buying process, as the buyers appreciate salespeople who clearly recognize, raise and minimize the doubts and risks that buyers encounter during the process.

Pia Hautamäki, Ari Alamäki

Towards a Theoretical Framework for Analysing Blogs as User-Generated Content

The purpose of this study is to create a theoretical framework for analysing blogs as user-generated content. The theoretical framework for this conceptual study is created from the motives of users for engaging in user-generated content and the outcomes of doing so. The motivations for consuming and participating in user-generated content are social aspects, information search, entertainment and inspiration, and economic incentives. The motivations for producing user-generated content are self-expression, social aspects, information dissemination, entertainment, and economic and professional incentives. Discussion practices form the basis for the outcomes of engaging in user-generated content. The discussion practices in the context of user-generated content are social networking, drawing inspiration, sharing knowledge, providing peer support, negotiating norms, and opposing values.

Riikka Makinen, Pekka Tuominen

The Impact of Independence and Brand Personality on Brand Evaluations Among Biculturals

This research examines bicultural (people who identify with two distinct cultures equally) consumers’ reactions to sincere and sophisticated brands and the role of independent self-construal in this relationship. Consumers are known to have a strong relationship with brands congruent with their identities. People with predominantly independent self-construal see themselves as independent, distinct from the group, and tend to place high value on uniqueness, accomplishments, and achievement. Sophisticated brands are considered as upper class and charming which may symbolize high achievement; therefore, one would expect that biculturals with a more accessible independent self-construal are more likely to have a higher brand liking toward sophisticated brands compared to less independent ones. This hypothesis is examined across two studies, one of which is a survey and the other is an experiment where brand personality was manipulated. The results show that biculturals’ brand evaluations vary with the level of independent self-construal. Specifically, more independent biculturals evaluate sophisticated brands more favorably than less independent biculturals. There is no significant effect of independent self-construal on evaluations for a sincere brand.

Umut Kubat

Natural Resources Management in Tourism: Dimensions and Impact of Tourist Offer in the Southeastern Europe National Parks

Sustainable tourism in national parks and other protected areas is among the fastest growing segments of tourism. Two exceptional natural entities in the Southeastern Europe only 40 km away from each other, Una National Park (Bosnia and Herzegovina) and Plitvice Lakes National Park (Croatia), have very similar natural features (almost identical flora and fauna, specific travertine–tufa formations, clean water, and preserved natural environment) that create conditions for the development of tourism in this particular region. The main purpose of this paper is to evaluate tourist offer in these protected areas and determine the causes of differences among tourism development of these national parks. Biodiversity of these two territories was compared, along with calculation of absolute and relative number of species, and comparative analysis was conducted in terms of tourist offers in order to determine if elements of management and offer creation are more important than the natural resources characteristics in achieving high level of tourist satisfaction. Practical implications of the research highlight the importance of developing nature-based tourist offers in the particular region as well as the significance of consistency in terms of tourist services delivery. Advantages of cooperation between parks and creation of mutual tourist services are also considered and discussed.

Nedim Suta, Anes Hrnjic, Amra Banda

Between Teaching, English Language, and Supervisor: Young Business Scholars Under the Pressure of Transforming Academia

Research on factors that have an influence on scholars’ success has a rather long tradition, but only recently has this research field become a hot topic in management research, which means that our knowledge of the determinants of success in business academia is fairly new and fragmented. The study presented in this paper contributes to this knowledge by empirically testing the influence of selected factors on research productivity of young business scholars working in Visegrad countries (the Czech Republic, Hungary, Poland, and Slovakia). The research productivity is defined and measured through scholars’ publication scores, including publications in journals with JCR’s Impact Factor (IF). The study suggests that among key determinants of the success of a business scholar from Visegrad area, there are English language skills and teaching load. Surprisingly, productivity of young business scholars seems not to be leveraged much by the recognizability of their supervisors. Moreover, contrary to some other studies, teaching load correlates positively with research productivity. At the end of the paper, the results of empirical study are discussed in the context of prior studies and specific features of academia in postcommunist countries.

Anna Ligia Wieczorek, Maciej Mitręga

Entrepreneurship and Small and Medium-Sized Enterprises


Specific Features of Family Businesses: A Contribution to Literature

The family business represents a subset of the whole range of enterprises, and, therefore, it has all the essential requisites of them. However, it is characterized by the strong relationship with one or more families which, by providing the risk capital, constitute it. Consequently, its functionality strictly depends on the evolution through which these family units go and on the decisions that they make inside of them. Italian and international scholars had devoted particular attention to small- and medium-sized businesses, often considered as transitional phases for a dimensional development of the enterprise. The empirical evidence has actually disproved these assumptions, leading to the conclusion that even small- and medium-sized businesses can achieve high levels of success without necessarily increasing their dimensions. Starting from the eighties of the last century, business studies have considerably developed in this respect. The family business has now assumed an important role in the national and international scene, thus attracting an increasing interest in the theoretical and empirical research. The wide and rich literature on family businesses has highlighted a variety of topics, such as the understanding of the success and development factors of family businesses, the peculiarities of their management models, their corporate governance, their valuation, and, generally, the specificity of small- and medium-sized businesses. Today, a definition of a family business, which is unanimously accepted by the scholars of the field, is nonexistent. Therefore, this work aims at identifying those aspects, which are typical of a family business. Moreover, the abovesaid paper highlights too some other aspects, useful to identify family businesses from nonfamily ones. Finally, the paper wishes to examine how the identified variables (such as the ownership, dimensions, succession, and involvement of family members) affect the family business performance.

Elena Cristiano

Institutional Approach to Enterprise Production Cost Analysis and Optimization

According to the classical rules of economics, performance measure in physical or value terms is considered to be the main criterion for enterprise size characterization. Accuracy of the enterprise size parameter possesses not only methodological value but is also the key aspect of economic management, because the value of current production costs is directly associated with the enterprise size and defined by the production quantity released in physical or value terms. The article discusses an institutional approach to the enterprise size and production cost analysis and optimization.

Daniel S. Demidenko, Ekaterina D. Malevskaia-malevich

Russian Business Practice: Issues of Corruption and Trust

This study examines the dynamics and the ratio changes of different types of corruption practices in the relations between business and government in Russia. Corruption is regarded as a major barrier for the international business practice in Russia and the confidence of a foreign investment community in the Russian companies. It is especially relevant in terms of sanctioned Russian economy, its low competitiveness and innovativeness, deteriorating investment climate. Characteristic and peculiarities of a corruption process in Russia have been determined: (a) the high level of corruption in Russia in the system of international coordinates; (b) the crisis of confidence and trust between the Russian civil society and the government as an ideological foundation of corruption; (c) raw vs. innovation type of economics in Russia as an economical foundation and a precondition of corruption; (d) existence of a sustained corruptive relationship between government and business in Russia (in contrast to other countries, where it is revealed less obviously or has a random character of manifestation); (e) dominating significance and a latent character of the internal business corruption as opposed of its external manifestation in Russia; (f) formation of a social request for the effective anti-corruption policy.

Liudmila Simonova, Dmitry Rudenko

Partnership Cooperation of Companies: Key Characteristics and Influence to Innovative Activities

Partnership cooperation is an important element of relational resources of any company. The role of such resources is constantly increasing under contemporary economic situation. Effective system of partnership relations gives an opportunity to achieve competitive advantages even for small companies which could use the potential of large firms under cooperation. These relations are especially important for the companies which have high level of innovative activities. The research deals with the relationship between types of partnership cooperation used by innovative company from one side and its innovative activities and models of innovative behavior from the other. Research is focused on the small- and medium-size business, though several large corporations are also taken into account. Empirical part is based on survey data of Siberian innovative companies. It was discovered that in spite of the existence of many indirect confirmations of the importance of partnership relations for innovative companies in general, these relations in most cases are formed spontaneously without deep justification. It turned out that many innovative companies consider large domestic and foreign corporations as reliable main partners. Taking into account that an innovative system is very complex and includes different various elements, it is possible to note that these very actors could play an important role in the development of innovative entrepreneurship.

Almira Yusupova
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