The main objective of this paper was to quantify the long- and short-term impacts of labour market reforms on economic activity in EU countries, including Croatia. Therefore, we derived a model using the pooled mean group estimator (PMG) for the period from 2000 to 2011. Before performing dynamic panel analysis based on the PMG estimator, the unit root and panel cointegration tests were performed. According to the results, labour market reforms have positive and statistically significant long-term impact on GDP per capita. On the other hand, labour market reforms also have a statistically significant and negative effect on GDP per capita in the short-run. Control variables (industrial production and the rate of the active population) also have significant impacts on GDP per capita. In addition to econometric analysis, we also present an overview of empirical and theoretical research on labour market reforms in developed, developing and transition countries.
{"title":"Impact of labour market reforms on economic activity in European Union: short term costs and long term benefits","authors":"M. Sertic, Anita Čeh Časni, V. Vučković","doi":"10.3326/FINTP.39.1.4","DOIUrl":"https://doi.org/10.3326/FINTP.39.1.4","url":null,"abstract":"The main objective of this paper was to quantify the long- and short-term impacts of labour market reforms on economic activity in EU countries, including Croatia. Therefore, we derived a model using the pooled mean group estimator (PMG) for the period from 2000 to 2011. Before performing dynamic panel analysis based on the PMG estimator, the unit root and panel cointegration tests were performed. According to the results, labour market reforms have positive and statistically significant long-term impact on GDP per capita. On the other hand, labour market reforms also have a statistically significant and negative effect on GDP per capita in the short-run. Control variables (industrial production and the rate of the active population) also have significant impacts on GDP per capita. In addition to econometric analysis, we also present an overview of empirical and theoretical research on labour market reforms in developed, developing and transition countries.","PeriodicalId":30016,"journal":{"name":"Financial Theory and Practice","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2015-03-11","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"82357994","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Book review: Harmonizacija proracunskog racunovodstva u Republici Hrvatskoj s Medunarodnim racunovodstvenim standardima za javni sektor / Gorana Roje and Vesna Vasicek, eds.","authors":"Mira Dimitrić","doi":"10.3326/FINTP.39.4.5","DOIUrl":"https://doi.org/10.3326/FINTP.39.4.5","url":null,"abstract":"","PeriodicalId":30016,"journal":{"name":"Financial Theory and Practice","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2015-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"88202314","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This paper analyses bank intermediation in emerging market economies (EMEs) at the height of the 2008-09 global financial crisis. The analysis is based on central bank responses to a BIS questionnaire prepared in July 2009, and thus provides a unique snapshot that can be used for studies of commercial banking activity in EMEs before and after the crisis. EME banks by and large adjusted to the crisis in ways that stabilised their financial positions. On the funding side, they reduced reliance on wholesale markets and sought to attract retail deposits. On the lending side, banks slowed new lending, shifted towards less risky loans and increased their holdings of government bonds. In an effort to boost liquidity, banks shortened the maturity of their assets, relied less on the interbank market and increased the scope of their transactions with central banks. Foreign and domestically-owned banks adjusted to the crisis in similar ways.
{"title":"Domestic bank intermediation in emerging market economies during the 2008-09 crisis","authors":"D. Mihaljek","doi":"10.3326/FINTP.38.4.1","DOIUrl":"https://doi.org/10.3326/FINTP.38.4.1","url":null,"abstract":"This paper analyses bank intermediation in emerging market economies (EMEs) at the height of the 2008-09 global financial crisis. The analysis is based on central bank responses to a BIS questionnaire prepared in July 2009, and thus provides a unique snapshot that can be used for studies of commercial banking activity in EMEs before and after the crisis. EME banks by and large adjusted to the crisis in ways that stabilised their financial positions. On the funding side, they reduced reliance on wholesale markets and sought to attract retail deposits. On the lending side, banks slowed new lending, shifted towards less risky loans and increased their holdings of government bonds. In an effort to boost liquidity, banks shortened the maturity of their assets, relied less on the interbank market and increased the scope of their transactions with central banks. Foreign and domestically-owned banks adjusted to the crisis in similar ways.","PeriodicalId":30016,"journal":{"name":"Financial Theory and Practice","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2014-12-10","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"73535074","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Tackling corporate profit shifting requires appropriate anti-avoidance measures. This article reviews one of these measures, a controlled foreign companies (corporations) regime. It has been implemented in many countries, in some of them as early as the 1960s. The need for its introduction has also been expressed on many occasions by the Polish legislator. The article is composed of three sections. The first considers the reasons for the implementation of the analyzed regime. The second describes the controlled foreign corporation legislation in the USA and selected European Union member states. The last section is devoted to a bill on taxing controlled foreign companies in Poland.
{"title":"Legislative proposal for a controlled foreign companies regime in Poland from an international perspective","authors":"M. Hybka","doi":"10.3326/FINTP.38.4.4","DOIUrl":"https://doi.org/10.3326/FINTP.38.4.4","url":null,"abstract":"Tackling corporate profit shifting requires appropriate anti-avoidance measures. This article reviews one of these measures, a controlled foreign companies (corporations) regime. It has been implemented in many countries, in some of them as early as the 1960s. The need for its introduction has also been expressed on many occasions by the Polish legislator. The article is composed of three sections. The first considers the reasons for the implementation of the analyzed regime. The second describes the controlled foreign corporation legislation in the USA and selected European Union member states. The last section is devoted to a bill on taxing controlled foreign companies in Poland.","PeriodicalId":30016,"journal":{"name":"Financial Theory and Practice","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2014-12-10","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"85733835","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"List of articles published in “Financial Theory and Practice”, vol. 38, 2014","authors":"Martina Fabris","doi":"10.3326/fintp.38.4.7","DOIUrl":"https://doi.org/10.3326/fintp.38.4.7","url":null,"abstract":"","PeriodicalId":30016,"journal":{"name":"Financial Theory and Practice","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2014-12-10","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"77735225","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Using two different data sets, both derived from the personal income tax files, this paper analyses income inequality and the effects of the personal income tax on after-tax income of employees in Slovenia. It has been shown by using the Kakwani index of progressivity that increases in tax progressivity came in leaps and bounds upon the introduction of new PIT legislation. After the early years of transition (1991-1993), characterized by a large increase in income inequality, the distribution of income has experienced rather small changes; this can be attributed to the introduction of the minimum wage and introduction of a tripartite institution (The Economic and Social Council), responsible for wage negotiations. Inequality of employee’s income has even been decreasing since 2005; some of this decrease is due to changes in the tax base, as PIT legislation introduced schedular taxation of capital income in 2005 and differentiated tax allowances in 2008. The share of income accruing to the top 1% of earners has not been increasing, but has been fluctuating, though on a decreasing trend in the last 10 years.
{"title":"Personal income tax reforms and tax progressivity in Slovenia, 1991-2012","authors":"Tine Stanovnik, M. Verbič","doi":"10.3326/FINTP.38.4.3","DOIUrl":"https://doi.org/10.3326/FINTP.38.4.3","url":null,"abstract":"Using two different data sets, both derived from the personal income tax files, this paper analyses income inequality and the effects of the personal income tax on after-tax income of employees in Slovenia. It has been shown by using the Kakwani index of progressivity that increases in tax progressivity came in leaps and bounds upon the introduction of new PIT legislation. After the early years of transition (1991-1993), characterized by a large increase in income inequality, the distribution of income has experienced rather small changes; this can be attributed to the introduction of the minimum wage and introduction of a tripartite institution (The Economic and Social Council), responsible for wage negotiations. Inequality of employee’s income has even been decreasing since 2005; some of this decrease is due to changes in the tax base, as PIT legislation introduced schedular taxation of capital income in 2005 and differentiated tax allowances in 2008. The share of income accruing to the top 1% of earners has not been increasing, but has been fluctuating, though on a decreasing trend in the last 10 years.","PeriodicalId":30016,"journal":{"name":"Financial Theory and Practice","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2014-12-10","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"82636714","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Book review: Emerging from the Shadow: A Comparative Qualitative Exploration of Private Tutoring in Eurasia","authors":"P. Bejaković","doi":"10.3326/fintp.38.4.5","DOIUrl":"https://doi.org/10.3326/fintp.38.4.5","url":null,"abstract":"","PeriodicalId":30016,"journal":{"name":"Financial Theory and Practice","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2014-12-10","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"88927842","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The aim of this paper is to analyze the performance and efficiency of the VAT system in B&H and explore the effects of internal and external factors influencing VAT collection. The VAT system in B&H is a consumption-type, single-rate and broad-based system. Ever since its implementation, VAT collection in B&H has been subject to strong oscillations, from an extremely high performance in the first two years after the introduction, to a sharp drop at the beginning of the crisis. After a temporary recovery, VAT collection declined in the last quarter of 2012 and has been negative ever since, although a weak recovery of the B&H economy was observed in 2013. The key hypothesis is that the high efficiency of the broadbased and single-rate structured VAT system may be neutralized by the country’s specific circumstances and VAT policy design. Applying a set of indicators for VAT efficiency analysis, developed by IMF, OECD and EU, we find a deterioration of the components of the policy gap caused by derogations of the VAT Law, and an increasing compliance gap, due to an increase of the VAT debt and tax evasion, in consequence of poor policy design in the field of excises. As a result of the influence of the country’s specific circumstances and its VAT policy design the identifiable current net losses on VAT in 2013 amount to 4% of net VAT collection or 0.4% of GDP. The analysis presented in the paper proves the main hypothesis that a VAT design, even when it is close to theoretically ideal concept, cannot on its own produce a high level of VAT efficiency and performance.
{"title":"Efficiency of a single-rate and broad-based VAT system: the case of Bosnia and Herzegovina","authors":"Dinka Antić","doi":"10.3326/FINTP.38.3.3","DOIUrl":"https://doi.org/10.3326/FINTP.38.3.3","url":null,"abstract":"The aim of this paper is to analyze the performance and efficiency of the VAT system in B&H and explore the effects of internal and external factors influencing VAT collection. The VAT system in B&H is a consumption-type, single-rate and broad-based system. Ever since its implementation, VAT collection in B&H has been subject to strong oscillations, from an extremely high performance in the first two years after the introduction, to a sharp drop at the beginning of the crisis. After a temporary recovery, VAT collection declined in the last quarter of 2012 and has been negative ever since, although a weak recovery of the B&H economy was observed in 2013. The key hypothesis is that the high efficiency of the broadbased and single-rate structured VAT system may be neutralized by the country’s specific circumstances and VAT policy design. Applying a set of indicators for VAT efficiency analysis, developed by IMF, OECD and EU, we find a deterioration of the components of the policy gap caused by derogations of the VAT Law, and an increasing compliance gap, due to an increase of the VAT debt and tax evasion, in consequence of poor policy design in the field of excises. As a result of the influence of the country’s specific circumstances and its VAT policy design the identifiable current net losses on VAT in 2013 amount to 4% of net VAT collection or 0.4% of GDP. The analysis presented in the paper proves the main hypothesis that a VAT design, even when it is close to theoretically ideal concept, cannot on its own produce a high level of VAT efficiency and performance.","PeriodicalId":30016,"journal":{"name":"Financial Theory and Practice","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2014-09-12","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"77196253","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Book review: Anatomija destrukcije: politicka ekonomija hrvatskog visokog skolstva","authors":"Anto Bako","doi":"10.3326/FINTP.38.3.5","DOIUrl":"https://doi.org/10.3326/FINTP.38.3.5","url":null,"abstract":"","PeriodicalId":30016,"journal":{"name":"Financial Theory and Practice","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2014-09-12","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"89831708","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The goals of this article were to determine whether the efficiency of tax authorities in Croatia improved over the period 1997-2012 and to identify how their efficiency can be improved in the future. According to our research the administrative costs of taxation in Croatia, as a percentage of GDP, decreased slightly over the past fifteen years but still remain above the EU average. Thus, there is a need to reduce the administrative costs of taxation, first by identifying and abolishing nuisance taxes that raise very little revenue and have high administrative costs. Second, special attention should be devoted to analysing and reducing the service expenses of tax authorities (especially IT expenses and expenses for telephone, mail and transportation services). The main problem related to research into administrative costs in Croatia over a longer period is the lack of relevant and reliable data, and hence the Croatian tax authorities should collect more data and release them to the public.
{"title":"Can the efficiency of the Croatian tax authorities be improved","authors":"Mihaela Bronić, Vjekoslav Bratić","doi":"10.3326/FINTP.38.3.1","DOIUrl":"https://doi.org/10.3326/FINTP.38.3.1","url":null,"abstract":"The goals of this article were to determine whether the efficiency of tax authorities in Croatia improved over the period 1997-2012 and to identify how their efficiency can be improved in the future. According to our research the administrative costs of taxation in Croatia, as a percentage of GDP, decreased slightly over the past fifteen years but still remain above the EU average. Thus, there is a need to reduce the administrative costs of taxation, first by identifying and abolishing nuisance taxes that raise very little revenue and have high administrative costs. Second, special attention should be devoted to analysing and reducing the service expenses of tax authorities (especially IT expenses and expenses for telephone, mail and transportation services). The main problem related to research into administrative costs in Croatia over a longer period is the lack of relevant and reliable data, and hence the Croatian tax authorities should collect more data and release them to the public.","PeriodicalId":30016,"journal":{"name":"Financial Theory and Practice","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2014-09-12","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"77501047","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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