The aim of the paper is to reveal how financial statement preparers in the developing and transition country of the Republic of Serbia, behave in situations where they can choose between the valuation model based on historical cost and the valuation model based on fair value. In that regard, we have analysed the subsequent measurement of property and plant and equipment in Serbia. We find that companies are more likely to choose the historical cost model than the revaluation model (the model based on fair value) for owner-occupied properties and plant and equipment, and the fair value model rather than the historical cost model for investment properties. The willingness to use the revaluation model for subsequent measurement of owner-occupied properties and plant and equipment varies across different categories of companies, and we find a statistically significant relationship between that willingness and the legal form of the company. We also find that in the notes to their financial statements, a significant number of companies in Serbia do not disclose adequate information on the model used for subsequent measurement of property and plant and equipment, although such information is required by the applicable financial reporting standards.
{"title":"The use of historical cost and fair value for property and plant and equipment measurement: Evidence from the Republic of Serbia","authors":"Nemanja Karapavlović, V. Obradović, J. Bogićević","doi":"10.2298/eka2027095k","DOIUrl":"https://doi.org/10.2298/eka2027095k","url":null,"abstract":"The aim of the paper is to reveal how financial statement preparers in the developing and transition country of the Republic of Serbia, behave in situations where they can choose between the valuation model based on historical cost and the valuation model based on fair value. In that regard, we have analysed the subsequent measurement of property and plant and equipment in Serbia. We find that companies are more likely to choose the historical cost model than the revaluation model (the model based on fair value) for owner-occupied properties and plant and equipment, and the fair value model rather than the historical cost model for investment properties. The willingness to use the revaluation model for subsequent measurement of owner-occupied properties and plant and equipment varies across different categories of companies, and we find a statistically significant relationship between that willingness and the legal form of the company. We also find that in the notes to their financial statements, a significant number of companies in Serbia do not disclose adequate information on the model used for subsequent measurement of property and plant and equipment, although such information is required by the applicable financial reporting standards.","PeriodicalId":35023,"journal":{"name":"Economic Annals","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2020-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"68476542","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 importance of risk man-agement in agriculture is unquestionable. Farmers in Bosnia and Herzegovina face weather, product, and price and market risk. Index-based insurance products for agriculture present alternatives for man-aging weather risk. They differ from clas-sical insurance products in that they do not remunerate actual loss and to purchase a weather index insurance policy the insured does not actually have to have an insurable interest. In this research, two flood para-metric insurance products are presented, one with fixed compensation and the other with compensation proportional to flood intensity.
{"title":"Parametric crop insurance against floods: The case of Bosnia and Herzegovina","authors":"Bojan Baškot, Stanko Stanić","doi":"10.2298/eka2024083b","DOIUrl":"https://doi.org/10.2298/eka2024083b","url":null,"abstract":"The importance of risk man-agement in agriculture is unquestionable. Farmers in Bosnia and Herzegovina face weather, product, and price and market risk. Index-based insurance products for agriculture present alternatives for man-aging weather risk. They differ from clas-sical insurance products in that they do not remunerate actual loss and to purchase a weather index insurance policy the insured does not actually have to have an insurable interest. In this research, two flood para-metric insurance products are presented, one with fixed compensation and the other with compensation proportional to flood intensity.","PeriodicalId":35023,"journal":{"name":"Economic Annals","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2020-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"68476060","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 considers the factors influencing the comparative performance of state-owned and privately-owned enterprises (SOE/POE). The economics literature has argued that firm performance is influenced by governance arrangements, leading to expectations of inferior performance from SOEs. Meanwhile, a political economy literature classifies countries according to the model of state engagement, which also has implications for SOE performance. We combine these two frameworks to provide a taxonomy. The first framework relating to governance concerns the relationship between owners and managers, the relationship between large and small owners, and the functioning of the managerial labour market. The second framework considers three types of model of state engagement: the Welfare State, the Developmental State, and the Predatory State. Each of the six resulting taxonomies yields distinct outcomes in terms of SOE versus POE performance. In all models, SOEs perform better in a better governance environment than in a worse governance environment, and this ranking is the same in Welfare States and Predatory States. However, in Developmental States with strong governance, SOEs may outperform POEs if they can benefit from superior state resources.
{"title":"Towards a framework to understand the relative performance of state-owned firms","authors":"S. Estrin","doi":"10.2298/eka2025011e","DOIUrl":"https://doi.org/10.2298/eka2025011e","url":null,"abstract":"This paper considers the factors influencing the comparative performance of state-owned and privately-owned enterprises (SOE/POE). The economics literature has argued that firm performance is influenced by governance arrangements, leading to expectations of inferior performance from SOEs. Meanwhile, a political economy literature classifies countries according to the model of state engagement, which also has implications for SOE performance. We combine these two frameworks to provide a taxonomy. The first framework relating to governance concerns the relationship between owners and managers, the relationship between large and small owners, and the functioning of the managerial labour market. The second framework considers three types of model of state engagement: the Welfare State, the Developmental State, and the Predatory State. Each of the six resulting taxonomies yields distinct outcomes in terms of SOE versus POE performance. In all models, SOEs perform better in a better governance environment than in a worse governance environment, and this ranking is the same in Welfare States and Predatory States. However, in Developmental States with strong governance, SOEs may outperform POEs if they can benefit from superior state resources.","PeriodicalId":35023,"journal":{"name":"Economic Annals","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2020-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"68476252","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 employs a quantile regression approach to explore the determinants and properties of international foreign exchange reserves in Serbia and North Macedonia, at various foreign exchange levels. The observed period covers quarterly data for 2005q1-2019q1. The results reveal quantile-dependent determinants of foreign exchange reserves and enable comparison between the two countries, showing co-movements between monetary policy and economic fluctuations. Following the estimates obtained in this research, the paper compares the role of foreign exchange reserves in Serbia and North Macedonia.
{"title":"Determinants of foreign exchange reserves in Serbia and North Macedonia","authors":"Mile Bošnjak, Vlatka Bilas, Gordana Kordić","doi":"10.2298/eka2026103b","DOIUrl":"https://doi.org/10.2298/eka2026103b","url":null,"abstract":"This paper employs a quantile regression approach to explore the determinants and properties of international foreign exchange reserves in Serbia and North Macedonia, at various foreign exchange levels. The observed period covers quarterly data for 2005q1-2019q1. The results reveal quantile-dependent determinants of foreign exchange reserves and enable comparison between the two countries, showing co-movements between monetary policy and economic fluctuations. Following the estimates obtained in this research, the paper compares the role of foreign exchange reserves in Serbia and North Macedonia.","PeriodicalId":35023,"journal":{"name":"Economic Annals","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2020-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"68476097","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}
Marija Džunić, Natasa Golubovic, Srdjan Marinkoviċ
This study aims to provide evidence on the drivers of institutional trust in transition economies. Trust in institutions is of critical importance for the consolidation of democracy, as well as for political and social stability. Bearing in mind the political developments during the transition, the fragile democracies of post-socialist countries have faced significant challenges in terms of declining institutional trust, leading to problems of legitimacy and government ineffectiveness. Therefore, the transition countries represent a fertile ground for testing the theories that explain the origins and dynamics of institutional trust. In this paper we explore the level of institutional trust in Serbia and test the alternative views on the determinants of trust in key institutions of cultural and institutional theories. The cultural perspective implies that the level of trust in institutions is dependent on citizens? long-standing and deep-seated cultural norms, while the institutional approach explains trust as the outcome of individual perceptions of institutional performance. In order to examine the cultural and institutional variables that explain trust in a set of public institutions in Serbia, we employ individual-level data from the Life in Transition Survey. The analysis is aimed at generating policy suggestions and measures that can raise institutional credibility.
{"title":"Determinants of institutional trust in transition economies: Lessons from Serbia","authors":"Marija Džunić, Natasa Golubovic, Srdjan Marinkoviċ","doi":"10.2298/eka2025135d","DOIUrl":"https://doi.org/10.2298/eka2025135d","url":null,"abstract":"This study aims to provide evidence on the drivers of institutional trust in transition economies. Trust in institutions is of critical importance for the consolidation of democracy, as well as for political and social stability. Bearing in mind the political developments during the transition, the fragile democracies of post-socialist countries have faced significant challenges in terms of declining institutional trust, leading to problems of legitimacy and government ineffectiveness. Therefore, the transition countries represent a fertile ground for testing the theories that explain the origins and dynamics of institutional trust. In this paper we explore the level of institutional trust in Serbia and test the alternative views on the determinants of trust in key institutions of cultural and institutional theories. The cultural perspective implies that the level of trust in institutions is dependent on citizens? long-standing and deep-seated cultural norms, while the institutional approach explains trust as the outcome of individual perceptions of institutional performance. In order to examine the cultural and institutional variables that explain trust in a set of public institutions in Serbia, we employ individual-level data from the Life in Transition Survey. The analysis is aimed at generating policy suggestions and measures that can raise institutional credibility.","PeriodicalId":35023,"journal":{"name":"Economic Annals","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2020-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"68476402","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 research explores the effectiveness of the Washington Consensus (WC) programme as a mechanism for improving national welfare in transition and emerging economies, using its internalisation by the European Union (EU) as a proxy. The results indicate that there is a positive benefit to firms with accession to the EU, leading to greater productivity improvement and performance advantages than in non-member states. Foreign direct investment directly benefitted those firms that became investees, with little evidence of spillovers to domestic companies. The vertical nature of the investment, with an emphasis on international production networks that utilise significant levels of foreign inputs, infers protection of intellectual property and a reduction in value added, with results indicating a failure to achieve an export multiplier. There is evidence of substantial benefits accruing to firms in receipt of loans, but the apparent paucity of their availability may imply market failure. The gains made by innovative firms do not appear to do justice to the initiatives undertaken and may indicate a dilution of national innovative capacity.
{"title":"The influence of the Washington Consensus programme on the transitional economies of Eastern Europe - a firm-level analysis","authors":"Peter Howard-Jones, J. Hölscher","doi":"10.2298/eka2026009h","DOIUrl":"https://doi.org/10.2298/eka2026009h","url":null,"abstract":"This research explores the effectiveness of the Washington Consensus (WC) programme as a mechanism for improving national welfare in transition and emerging economies, using its internalisation by the European Union (EU) as a proxy. The results indicate that there is a positive benefit to firms with accession to the EU, leading to greater productivity improvement and performance advantages than in non-member states. Foreign direct investment directly benefitted those firms that became investees, with little evidence of spillovers to domestic companies. The vertical nature of the investment, with an emphasis on international production networks that utilise significant levels of foreign inputs, infers protection of intellectual property and a reduction in value added, with results indicating a failure to achieve an export multiplier. There is evidence of substantial benefits accruing to firms in receipt of loans, but the apparent paucity of their availability may imply market failure. The gains made by innovative firms do not appear to do justice to the initiatives undertaken and may indicate a dilution of national innovative capacity.","PeriodicalId":35023,"journal":{"name":"Economic Annals","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2020-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"68476457","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}
N. O. Salmanov, V. N. Babina, V. M. Samoshkina, P. I. Drachena, P. I. Salmanova
The aim of this article is to identify patterns of profitability volatility and to establish the degree of dynamic conditional correlation between the stock markets of developed countries and those of Russia. This issue is important for investment strategies and the international diversification of investments. We use the BEKK-GARCH, CCC-GARCH, and DCCGARCH models and show that the correlation between the Russian stock market and the markets of the USA, UK, Germany, and France has decreased significantly in recent years. We find that while the correlation between the Russian market and the mature European markets is bidirectional, the relationship between the US market and the Russian market is unidirectional. An assessment of the transfer of volatility from all of the mature markets to the Russian market establishes its statistical significance and shows that feedback from the Russian market to the UK and German markets is insignificant. Diversification of international portfolios in the Russian market is recommended.
{"title":"The effects of volatility and changes in conditional correlations in the stock markets of Russia and developed countries","authors":"N. O. Salmanov, V. N. Babina, V. M. Samoshkina, P. I. Drachena, P. I. Salmanova","doi":"10.2298/eka2027067s","DOIUrl":"https://doi.org/10.2298/eka2027067s","url":null,"abstract":"The aim of this article is to identify patterns of profitability volatility and to establish the degree of dynamic conditional correlation between the stock markets of developed countries and those of Russia. This issue is important for investment strategies and the international diversification of investments. We use the BEKK-GARCH, CCC-GARCH, and DCCGARCH models and show that the correlation between the Russian stock market and the markets of the USA, UK, Germany, and France has decreased significantly in recent years. We find that while the correlation between the Russian market and the mature European markets is bidirectional, the relationship between the US market and the Russian market is unidirectional. An assessment of the transfer of volatility from all of the mature markets to the Russian market establishes its statistical significance and shows that feedback from the Russian market to the UK and German markets is insignificant. Diversification of international portfolios in the Russian market is recommended.","PeriodicalId":35023,"journal":{"name":"Economic Annals","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2020-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"68476526","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}
I. Adekunle, T. Williams, O. J. Omokanmi, S. O. Onayemi
This study examines the mediating role of institutions in the remittance- growth relationship in Nigeria. We use autoregressive distributed lag (ARDL) estimation to establish the interaction of the variables of interest. The short-run results reveal that remittance inflows positively influence growth, probably due to the immediate injection of financial resources that an increase in remittances brings about. This effect is reinforced by improvements in regulatory quality. In contrast the long-run results reveal that, over time, remittance inflows are negatively related to growth probably due to adverse macroeconomic consequences, to a decrease in work incentives, and a decline in the motivation for technological innovation. However, the adoption of improved institutional environment is found to offset the negative long-run effect of remittances on growth, at least to some extent. Therefore, remittance receiving countries should improve the design and enforcement of laws, regulatory quality, and control over corruption, so that they can make best use of remittance inflows and other sources of external financing needed to augment domestic productivity and growth.
{"title":"The mediating role of institutions in the remittance-growth relationship: Evidence from Nigeria","authors":"I. Adekunle, T. Williams, O. J. Omokanmi, S. O. Onayemi","doi":"10.2298/eka2027007a","DOIUrl":"https://doi.org/10.2298/eka2027007a","url":null,"abstract":"This study examines the mediating role of institutions in the remittance- growth relationship in Nigeria. We use autoregressive distributed lag (ARDL) estimation to establish the interaction of the variables of interest. The short-run results reveal that remittance inflows positively influence growth, probably due to the immediate injection of financial resources that an increase in remittances brings about. This effect is reinforced by improvements in regulatory quality. In contrast the long-run results reveal that, over time, remittance inflows are negatively related to growth probably due to adverse macroeconomic consequences, to a decrease in work incentives, and a decline in the motivation for technological innovation. However, the adoption of improved institutional environment is found to offset the negative long-run effect of remittances on growth, at least to some extent. Therefore, remittance receiving countries should improve the design and enforcement of laws, regulatory quality, and control over corruption, so that they can make best use of remittance inflows and other sources of external financing needed to augment domestic productivity and growth.","PeriodicalId":35023,"journal":{"name":"Economic Annals","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2020-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"68476143","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}
Anh To Tho, Quoc Tran Tuan, Thi Tran Siem, Kim Thai Phong, Thi Ho Thu
This study examines the relevance of board independence to stock return volatility for a sample of 160 companies listed on the Vietnamese stock market over ten years (2008-2017). After controlling for potential endogeneity, we find that the presence of non-executive directors on the board tends to increase firm risk. The results indicate that non-executive directors do not play a supervisory role under the agency theory. Our findings remain robust when we apply alternative measures of the dependent variable.
{"title":"The monitoring role of nonexecutive directors in Vietnam from a return-volatility perspective","authors":"Anh To Tho, Quoc Tran Tuan, Thi Tran Siem, Kim Thai Phong, Thi Ho Thu","doi":"10.2298/eka2024029t","DOIUrl":"https://doi.org/10.2298/eka2024029t","url":null,"abstract":"This study examines the relevance of board independence to stock return volatility for a sample of 160 companies listed on the Vietnamese stock market over ten years (2008-2017). After controlling for potential endogeneity, we find that the presence of non-executive directors on the board tends to increase firm risk. The results indicate that non-executive directors do not play a supervisory role under the agency theory. Our findings remain robust when we apply alternative measures of the dependent variable.","PeriodicalId":35023,"journal":{"name":"Economic Annals","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2020-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"68476350","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 study aims to examine the causality between industrial production index and crude oil price for Russia, Kazakhstan and Azerbaijan by using Frequency Domain Causality Analysis. For this purpose, the monthly data of the industrial production index and Brent oil price data over the period 1993-2019 are used. The Frequency Domain Causality Analysis suggests that the uni-directional causality relationship runs from oil prices to industrial production index is valid in the medium run for Russia and Azerbaijan and in the short run for Kazakhstan. However, there is no uni-directional causality linkage between oil prices and industrial production index in the long run for any of the countries. We hope to contribute to the literature by using frequency-domain causality test which examines the interrelation of crude oil prices on industrial production with the periodicity in these countries. The finding of this study is expected to serve as a tool for industrial production policy.
{"title":"Industrial production index - crude oil price nexus: Russia, Kazakhstan and Azerbaijan","authors":"Fatih Kaplan, Ayşe Ünal","doi":"10.2298/eka2027119k","DOIUrl":"https://doi.org/10.2298/eka2027119k","url":null,"abstract":"The study aims to examine the causality between industrial production index and crude oil price for Russia, Kazakhstan and Azerbaijan by using Frequency Domain Causality Analysis. For this purpose, the monthly data of the industrial production index and Brent oil price data over the period 1993-2019 are used. The Frequency Domain Causality Analysis suggests that the uni-directional causality relationship runs from oil prices to industrial production index is valid in the medium run for Russia and Azerbaijan and in the short run for Kazakhstan. However, there is no uni-directional causality linkage between oil prices and industrial production index in the long run for any of the countries. We hope to contribute to the literature by using frequency-domain causality test which examines the interrelation of crude oil prices on industrial production with the periodicity in these countries. The finding of this study is expected to serve as a tool for industrial production policy.","PeriodicalId":35023,"journal":{"name":"Economic Annals","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2020-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"68476591","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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