International Journal of Economic Sciences and Applied Research

ISSN: 1791-5120   E-ISSN: 1791-3373

 

Publisher: Kavala Institute of Technology

Host/Platform: Kavala Institute of Technology

Country: Greece

Language(s): English

Journal Homepage: http://www.ijesar.org
Year Open Access Began: 2008
Article Processing Charges (APCs): No.
Submission Charges: No.
Keywords: economics, business informatics, accounting
Subjects: Economic theory. Demography , Social Sciences

Volumes

Volume 7

Issue 3 (Dec 2014)

A Quantitative Approach to Measure Tax Competitiveness Between EU Countries
Konstantinos J. Liapis (Panteion University of Political and Social Sciences, Faculty of Economic Sciences and Public Administration, Department of Economic and Regional Development, 136, Syngrou Ave., 17671, Athens, Greece), Christos L. Galanos (Panteion University of Political and Social Sciences, Faculty of Economic Sciences and Public Administration, Department of Economic and Regional Development, 136, Syngrou Ave., 17671, Athens, Greece), Evangelos D. Politis (Piraeus University, Department of Maritime Studies, 21, Gr. Lambraki Ave. & Distomou Str., 18532, Piraeus, Greece), Dimitrios D. Kantianis (Panteion University of Political and Social Sciences, Faculty of Economic Sciences and Public Administration, Department of Economic and Regional Development, 136, Syngrou Ave., 17671, Athens, Greece)
fulltext: http://ijbesar.teiemt.gr/docs/volume7_issue3/tax_competitiveness_eu_countries.pdf
pages: 7 - 23
(abstract)

The basic purpose of the study is to find a metric-variable of competitiveness for each country's tax regime and to assess the impact of tax regime differentiation across the common market. A country adopting competitive taxation policies manages to attract productive factors, funds and investments from other intra- and inter-countries. The value added tax (VAT), property tax as well as corporate and personal taxes are examined for the twenty seven (27) European Union (EU) countries. The methods applied consist of Least Square Dummy variable models and the results from the estimations for each one of the aforementioned taxes are integrated into a new total competitiveness taxation index (TCTI), following weighted hierarchical quantitative approaches. Our findings suggest that significant differences still exist between the countries examined and the application of diverse tax regime systems results in various tax performances. Using the above procedure, we also find that subgroups exist within the (27) EU countries and that EU lacks taxation policies with common rules or restrictions. Following the TCTI methodology proposed by this research, a tool for monitoring EU tax regimes is introduced in order to assist in the EU integration to a common tax regime.

Fear of Floating and Inflation Targeting in Turkey
Vasif Abiyev (Aksaray University, Department of Economics, Adana Yolu, E-90 Karayolu, Aksaray, 68000, Turkey), Munise Ilıkkan Özgür (Aksaray University, Department of Economics, Adana Yolu, E-90 Karayolu, Aksaray, 68000, Turkey)
fulltext: http://ijbesar.teiemt.gr/docs/volume7_issue3/floating_inflation_targeting_turkey.pdf
pages: 25 - 42
(abstract)

The objective of this paper is to test empirical validity of Fear of Floating hypothesis for Turkey after the adoption of Inflation Targeting. We start applying methodologies developed by Calvo and Reinhart (2002) and Ball and Reyes (2004, 2008) to check the probabilities of changes in exchange rate and monetary policy instruments before and after inflation targeting regime. We then use a VAR model to estimate exchange rate pass-through and response of monetary policy instruments to exchange rate shocks before and after inflation targeting regime. VAR model helps to understand the impacts of switch in monetary policy regime on exchange rate pass-through and foreign exchange market interventions. The paper concludes that after the adoption of inflation targeting regime, the exchange rate pass-through still matters for the attainment of inflation targets and the monetary policy do not exhibit a fear of floating practices.

The Turn-of-the-Month-Effect: Evidence from Periodic Generalized Autoregressive Conditional Heteroskedasticity (PGARCH) Model
Eleftherios Giovanis (University of Bologna, Department of Economics, Via Tanari Vecchia 9-2, 40121, Bologna, Italy)
fulltext: http://ijbesar.teiemt.gr/docs/volume7_issue3/heteroskedasticity_pgarch.pdf
pages: 43 - 61
(abstract)

The current study examines the turn of the month effect on stock returns in 20 countries. This will allow us to explore whether the seasonal patterns usually found in global data; America, Australia, Europe and Asia. Ordinary Least Squares (OLS) is problematic as it leads to unreliable estimations; because of the autocorrelation and Autoregressive Conditional Heteroskedasticity (ARCH) effects existence. For this reason Generalized GARCH models are estimated. Two approaches are followed. The first is the symmetric Generalized ARCH (1,1) model. However, previous studies found that volatility tends to increase more when the stock market index decreases than when the stock market index increases by the same amount. In addition there is higher seasonality in volatility rather on average returns. For this reason the Periodic-GARCH (1,1) is estimated. The findings support the persistence of the specific calendar effect in 19 out of 20 countries examined.

Structural Breaks and Finance-Driven Growth Hypothesis in ECOWAS: Further Empirical Evidence
Olusegun A. Omisakin (Department of Economics & Business Studies, Redeemer's University, Nigeria; and Centre for Econometrics and Allied Research (CEAR), University of Ibadan, Ibadan, Nigeria), Oluwatosin A. Adeniyi (Department of Economics, University of Ibadan, Ibadan, Nigeria)
fulltext: http://ijbesar.teiemt.gr/docs/volume7_issue3/hypothesis_ecowas.pdf
pages: 63 - 80
(abstract)

This study makes a cross sectional case in investigating the validity, or otherwise, of the finance-driven growth hypothesis in the ECOWAS countries using annual data from 1970 to 2008 for seven countries namely: Burkina Faso, Cote d’Ivoire, The Gambia, Ghana, Nigeria, Senegal and Togo. In contrast to earlier studies on developing countries, this study specifically tests for the possibility of structural breaks/regime shifts in the finance-growth long run relationship by employing the Gregory and Hansen (1996) residual based test which accounts for endogenous structural break. While the Gregory-Hansen structural break cointegration result confirms the existence of cointegration relationships among the selected countries despite the breakpoints, the Granger-causality test result indicates a general pattern of causality running from financial development to economic growth in most of the countries. Also, the striking feature of the result of our estimated growth model generally lends credent to the importance of financial development in explaining growth dynamics among the selected countries, thus reinforcing the finance-driven growth hypothesis.

The Role of Agriculture in Economic Growth: A Comparison of Mediterranean and Northern Views in Europe
Ioanna Apostolidou (Aristotle University of Thessaloniki, School of Agriculture, Dept. of Agricultural Economics, 54124, Thessaloniki, Greece), Achilleas Kontogeorgos (University of Patras, Department of Business Administration of Food and Agricultural Enterprises, 30100, Agrinio, Greece), Anastasios Michailidis (Aristotle University of Thessaloniki, School of Agriculture, Dept. of Agricultural Economics, 54124, Thessaloniki, Greece), Efstratios Loizou (Technological Educational Institution of Western Macedonia, Dept. of Agricultural Products Marketing and Quality Control, Terma Kontopoulou, 53100, Florina, Greece)
fulltext: http://ijbesar.teiemt.gr/docs/volume7_issue3/agriculture_economic_growth.pdf
pages: 81 - 102
(abstract)

The main objective of this paper is to identify the causal relationship that exists between agricultural value added per worker and Gross Domestic Product per capita in Europe. More specifically, the role of agriculture in economic growth is examined with special emphasis to the differences and similarities among Mediterranean and Northern countries. In order to examine short-run and long-run relationships, recent methods of linear co-integration are employed while the role of agricultural value added in economic growth is also examined by Granger causality tests. Results show a bi-directional relationship between agricultural value added and economic growth in the northern EU countries and only in one Mediterranean country. From a policy point of view, this relationship is of crucial importance since it can facilitate successful economic decisions. Taking into consideration that the role of agriculture in economic growth is an issue that always attracts the interest of scholars, this research could be prove extremely interesting and useful. Especially for this period of economic crisis, when the whole growth approach is reexamined and reevaluated, the research findings provide evidence that agriculture can lead as an engine of growth in several EU countries and can play stabilizer's role in the whole EU economy.

Innovation, R&D and Productivity: Evidence from Thai Manufacturing
Thanapol Srithanpong (Graduate School of Business and Commerce, Keio University, 2-15-45, Mita, Minato-ku, Tokyo, 108-8345, Japan)
fulltext: http://ijbesar.teiemt.gr/docs/volume7_issue3/thai_manufacturing.pdf
pages: 103 - 132
(abstract)

This paper empirically examines the relationship between innovation, R&D (Research and Development), and productivity in Thai manufacturing using cross-sectional data from the 2007 Industrial Census of Thailand. We utilize a simplified structural model (CDM model) that describes the link between innovation output, R&D and productivity for the Thai case. Various estimation techniques are used to compare and provide evidence for empirical results. Our findings generally suggest that government aid and plant characteristics play an important role for a plant to engage in R&D and to be innovative, both in terms of process innovation and product innovation. Exporting plants, plants in the central region, and plants that are categorized as Head Branch type are more likely to engage in R&D and be innovative. The type of industry and specific technological characteristics of plants are shown to influence innovation effort and decisions to undertake R&D. On average, plant size, foreign ownership, exporting and product innovation are important drivers of productivity enhancement in Thai manufacturing.

The Evaluation of Company's Intangible Assets' influence for Business Value
Živilė Savickaitė (Mykolas Romeris University, Faculty of Economics and Finance Management, Ateities st. 20, LT-08303 Vilnius)
fulltext: http://ijbesar.teiemt.gr/docs/volume7_issue3/intangible_assets.pdf
pages: 133 - 155
(abstract)

Mismeasurement of intangible assets in a company may result in high costs and loss of its competitiveness and position in the market. Conventional evaluation methods are not able to identify reliably intangible intensive business value because of such assets specificity. Therefore, the business assessment process adjustment, making it comprehensive and including the intangible asset valuation methods is a critical process that allows to evaluate companies better and increases business management efficiency and quality. The article states the importance of further scientific research in the areas of the intangible value resources, creation of business valuation, intangible assets valuation methods and models - the creation of intangible assets on the firm level and how they meet changing needs of the company's owners, capital markets investors, politicians and other interest-groups needs in the intangible intensive economy should be analysed as well as how economic systems based on intangible assets operates. Also special attention is be given to the strenghtening of the cooperation of scientific research and business. It's important to avoid a repeat of guidelines, methods, models and systems of intangible assets' measurement and business valuation methods and to eliminate its disadvantages in order to create and establish universal system for effective intangible intensive business valuation.

Issue 2 (Sept 2014)

International financial transmission of the Fed's monetary policy
Nikola Mirkov (Swiss National Bank, Borsenstrasse 15, 8022 Zurich, Switzerland)
fulltext: http://www.ijesar.org/docs/volume7_issue2/international_financial_transmission.pdf
pages: 7 - 49
(abstract)

This paper proposes a way to study the transmission mechanism of the US monetary policy to foreign yield curves. It elaborates the high-frequency identification of monetary policy shocks from (Piazzesi, 2005) in an international setting. The shocks are extracted from a two-country term structure model and the procedure is illustrated on the US-UK daily data.

The impact of the recent global crisis on the prioritization of central banks final objectives. A structural approach in the context of Central and Eastern European states
Iulian Vasile Popescu ("Al. I. Cuza" University of Iasi, Bd. Carol I no. 22, 700505, Iasi, Romania)
fulltext: http://www.ijesar.org/docs/volume7_issue2/banks_final_objectives.pdf
pages: 51 - 76
(abstract)

This paper aims to identify the actual objectives of monetary authorities in Central and Eastern Europe (CEE) that promote an independent monetary policy. In this sense we consider the study of central banks (CBs) behavior in the Czech Republic, Poland, Romania and Hungary in establishing short-term nominal interest rate by estimating a Taylor-type monetary policy rule, with new features in terms of elements aimed at exploring the interactions between the monetary policy and financial stability. We estimate the monetary policy rule based on a dynamic stochastic general equilibrium model (DSGE). The main results revealed the strong stance of the selected monetary authorities towards their fundamental objective of price stability, but in parallel, towards stabilizing the exchange rate and real economic activity and the existence of specific elements indicating a leaning against the wind orientation of the monetary policy in countries under analysis. Following the emergence of international turmoil our analysis has identified the maintaining of a strong orientation towards the primary objective of monetary policy, a similar relative stance of monetary policy relative to the stabilization of the real activity alongside a decrease in the focus of stabilizing the exchange rate, while the accentuated focus on financial stability does not appear to be achieved through monetary policy.

Growth and project finance in the least developed countries
Lisbeth F. la Cour (Department of Economics, Copenhagen Business School, Porcelaenshaven 16A, 2000 Frederiksberg, Denmark), Jennifer Müller (Houverather Heide 3, 41812 Erkelenz, Germany)
fulltext: http://www.ijesar.org/docs/volume7_issue2/growth_project_finance.pdf
pages: 77 - 103
(abstract)

This article examines the effects of project finance on economic growth in the least developed countries (LDC). Inspired by the neoclassical growth model we set up an econometric model to estimate the effects of project finance for a sample consisting of 38 of the least developed countries using data from the period 1994-2007. The results of our study suggest, that project finance has a significant positive effect on economic growth and therefore constitute an important source of financing in the selected set of countries. Additionally, the project sheds light on other factors of importance for economic growth in LDCs. We find that a higher regulatory quality, lower government consumption and a higher level of education helps increase growth. The significance of these variables are, however, not as consistently robust as the results for project finance.

Business concentration through the eyes of the HHI
George Djolov (University of Stellenbosch, and Socio-Economic Integration Unit, Statistics South Africa, Pretoria, South Africa)
fulltext: http://www.ijesar.org/docs/volume7_issue2/business_concentration_hhi.pdf
pages: 105 - 127
(abstract)

This paper examines the understanding of business concentration through the Her findahl-Hirschman Index (HHI), by showing that this index is conceptually a model according to which this concentration is the consequence of a renewal process. This process is prompted by firms engaging in different types of economic activity as the means by which to vie for market share. The resultant rivalry produces departures between the market shares of firms. These departures ultimately transmit into differing concentration levels attributable only to the economic activity with which firms vie. As a consequence, while the HHI is commonly interpreted to be a screening indicator of market structure, it is in fact first and foremost a screening indicator of market conduct, which incidentally doubles-up as an indicator of market structure. As part of this, the paper shows that while the HHI cannot identify the exact economic conduct that produces the corresponding business concentration of the observed market structure, it does reveal that whatever this conduct is, it is always subordinated to some type of regenerative or revitalising process.

Directional accuracy for inflation and unemployment rate predictions in Romania
Mihaela Simionescu (Institute for Economic Forecasting of the Romanian Academy, 050711, Bucharest - Romania, Casa Academiei, Calea 13 Septembrie no.13, District 5)
fulltext: http://www.ijesar.org/docs/volume7_issue2/directional_accuracy_romania.pdf
pages: 129 - 138
(abstract)

The main objective of this study is to assess the usefulness and rationality of the inflation and unemployment rate forecasts made for Romanian by three experts in forecasting: F1, F2 and F3. All the unemployment rate forecasts over the horizon 2001-2013 provided by all experts do not provide valuable information for future decisional process. According to Pesaran-Timmermann test, the directional forecasts of F3 and the autumn expectations of F2 are useful and rational.

Role of fiscal policy for private investment in Pakistan
Ghulam Rasool Madni (Department of Economics at "The University of Lahore" Lahore, Pakistan)
fulltext: http://www.ijesar.org/docs/volume7_issue2/fiscal_policy_pakistan.pdf
pages: 139 - 152
(abstract)

Fiscal policy has much controversial debate regarding its effectiveness on private investment. Taxation and government expenditure are two main instruments of fiscal policy. This paper is aimed to analyze the effect of fiscal deficit and other variables on private investment of Pakistan. The data time span for this study is 1979-2012. After finding the integration order of all variables by Augmented Dicky Fuller Test, the impact of variables is analyzed by utilizing the Auto Regressive Distributed Lag approach of Cointegration which is a better estimation technique for small sample size. Error Correction Model is applied for short run dynamics. The results reveal that fiscal deficit, rate of interest, inflation and external debt are affecting negatively the private investment in Pakistan while exchange rate and exports have a positive impact on private investment.

The effects of the implementation of value-based management
Valentin Beck (Leeds Metropolitan University, UK)
fulltext: http://www.ijesar.org/docs/volume7_issue2/value_based_management.pdf
pages: 153 - 165
(abstract)

Many managers are caught in a dilemma: between a desire to maximize the value of their companies and the demands of "stakeholder theory" to take into account the interests of all the stakeholders in a firm. The way out of the conflict lies in a new way of measuring value. The purpose of this paper is to explore how value-based management is perceived, implemented, and utilized in leading automotive corporations in Germany, and to examine factors that influence the decision to utilize it. The data was gained by using in-depth interviews with financial managers of German automotive corporation to study their opinions of and experiences with value-based management systems and metrics. The findings of the empirical study and primary research shows the problems of value-based management implementation in failing to achieve the right balance between all actors of agency conflict.

Issue 1 (Apr 2014)

Growth and inequality examined by integrating the Walrasian general equilibrium and neoclassical growth theories
Wei-Bin Zhang (Ritsumeikan Asia Paci fi c University, Jumonjibaru, Beppu-Shi, Oita-ken, 874-8577 Japan)
fulltext: http://www.ijesar.org/docs/volume7_issue1/walrasian_general_equilibrium.pdf
pages: 7 - 32
(abstract)

This paper builds a heterogeneous-households growth model of a small open economy with fixed resource (land) by integrating the Walrasian general equilibrium and neoclassical growth theories. The production side consists of two sectors. We use an alternative utility function proposed by Zhang, which enable us to develop a dynamic growth model with genuine heterogeneity. The wealth and income inequality is due to household heterogeneity in preferences and human capital as well as the households’ initial wealth. This is different from the standard Ramsey-type heterogeneous-households growth models, for instance, by Turnovsky and Garcia-Penalosa (2008), where agents are heterogeneous only in their initial capital endowment, not in preference or/and human capital. We simulate the model for an economy with three types of households. The system has a unique stable equilibrium point. We also simulate the motion of the national economy and carry out comparative dynamic analysis with regard to changes in the rate of interest, the population, the propensity to stay at home, and the propensity to save. The comparative dynamic analysis provides some important insights.

Business cycle correlation between the Euro area and the Balkan countries
Sofia Gouveia (Centre for Transdisciplinary Development Studies, Department of Economics, Sociology and Management, University of Trás-os-Montes and Alto Douro, Complexo Pedagógico, Quinta de Prados, 5001-801 Vila Real, Portugal)
fulltext: http://www.ijesar.org/docs/volume7_issue1/business_cycle_correlation.pdf
pages: 33 - 49
(abstract)

This paper examines the degree of trade integration and business cycle synchronisation between eight Balkan countries and the Euro area over the period 2000:1-2011:4. The main findings are that Slovenia and the Former Yugoslav Republic of Macedonia exhibit a high level of openness relative to Euro area and seem to have achieved a large degree of business cycle synchronisation with the aggregate Euro area cycle. The other Balkan countries are characterized by high trade integration with the EMU (except Greece and Turkey) and a rather modest degree of association with the Euro area cycle, although Turkey is nearest the average of the EMU countries. We further document that there is a tendency for an increase in the degree of synchronisation with EMU for all Balkan countries. We also note, however, that at the end of the period, the degree of synchronisation has become less pronounced.

BRICs in the global economy under the prism of economic nationalism of IPE
Spyros A. Roukanas (Lecturer, Dept. of International and European Studies, University of Piraeus, Piraeus, Greece), Gabriel V. Diamantis (Associate professor, Dept. of International and European Studies, University of Piraeus, Piraeus, Greece)
fulltext: http://www.ijesar.org/docs/volume7_issue1/brics_ipe.pdf
pages: 51 - 67
(abstract)

The international economic crisis which began in 2007 has limited developed countries’ growth rates and manifested debt crises in certain economies in the Eurozone. It is the aim of this article to analyze the role that the BRIC group of nations has played in international financial institutions under the prism of economic nationalism of International Political Economy. Firstly, it aims to deepen our understanding of the emergence of the BRICs in the world economy. To this end, a macroeconomic analysis is carried out with the aim of making clear the changes the BRICs have brought to the world economy. Secondly, an analysis is made of the extent to which the global economic crisis has enhanced the role of the BRICs in the world economy, for instance in the decisions taken by powerful institutions such as World Trade Organization, the International Monetary Fund and its sister organization the World Bank. An analysis of the findings of the study is also provided.

Is there a relationship between fiscal sustainability and currency crises? International evidence based on causality tests
Alexis Cruz-Rodriguez (Pontificia Universidad Católica Madre y Maestra, Av. Abraham Lincoln Esq. Rómulo Betancourt, Ensanche La Julia, Santo Domingo, Dominican Republic)
fulltext: http://www.ijesar.org/docs/volume7_issue1/fiscal_sustainability_currency_crises.pdf
pages: 69 - 87
(abstract)

This paper uses Granger causality tests on a fiscal sustainability indicator (FSI) and currency crises for 17 countries to evaluate the direction of causality between the FSI and currency crises. The FSI developed by Croce and Juan-Ramón (2003) is used. Also, different definitions for currency crises are used to evaluate whether they induce different results in the analysis. In general, the results suggest evidence of causality between the lagged FSI and currency crises.

A partial equilibrium analysis of NAFTA's impact on U.S. bilateral trade
Cephas Naanwaab (Assistant Professor of Economics, School of Business and Economics, North Carolina A&T State University, 1601 East Market Street, Greensboro, NC 27411, USA), Osei-Agyeman Yeboah (Associate Professor and Interim Director, L.C. Cooper Jr. International Trade Center, North Carolina A&T State University, 1601 East Market Street, Greensboro, NC 27411, USA)
fulltext: http://www.ijesar.org/docs/volume7_issue1/nafta.pdf
pages: 89 - 112
(abstract)

This paper examines the effects of the North American Free Trade Agreement on agricultural commodity trade using extensive data. The data cover agricultural exports and imports between the U.S. and NAFTA partners over the extended period of 1989-2010. The commodities covered in the analyses include; corn, soy bean, cotton, wheat, fresh vegetables, poultry, dairy products, and red meats. A partial equilibrium model, in which we derive each trading partner’s excess demand and excess supply, is used to study the impact of NAFTA on trade, controlling for other trade-inducing variables such as exchange rates, tariffs, per capita incomes, and relative prices. Regression results show mixed effects of NAFTA on different commodities while graphical and counterfactual analyses indicate strictly positive effects.

Modelling nonlinear behavior of labor force participation rate by STAR: An application for Turkey
Sibel Cengiz (Associate Professor of Economics, Department of Economics, Mugla Sitki Kocman University, Mugla, Turkey), Afsin Sahin (Associate Professor of Economics, Department of Banking, Gazi University, Ankara, Turkey)
fulltext: http://www.ijesar.org/docs/volume7_issue1/labor_force_participation_rate.pdf
pages: 113 - 127
(abstract)

The aim of this paper is to contribute to the understanding of the behavior of participation rates in terms of gender differences. We employed smooth autoregressive transition models for the quarterly Turkish labor force participation rates (LFPR) data between 2000: Q1 - 2011: Q4 to present an asymmetric participation behavior. The smoothness parameter indicates a gradual transition from low to high regimes. It is higher for female workers compared to the male workers. Participation rates diminish during a recession but they increase smoothly during the periods of expansion. The estimation results of Enders et al. (1998) also verified the asymmetry and nonlinearity in participation rates. During periods of economic expansion, they are higher than the threshold but the low regime indicator function takes the value zero. The results of the paper have economic implications for policy makers. Due to the discouraged worker and added worker effects, LFPR should be observed with the unemployment rates while evaluating the tightness of the labor market.

How accounting information and macroeconomic environment determine credit risk? Evidence from Greece
Vasiliki Makri (PhD Candidate, Department of Business Administration, University of Patras, Greece), Konstantinos Papadatos (Research Associate, Department of Business Administration, University of Patras, Greece)
fulltext: http://www.ijesar.org/docs/volume7_issue1/credit_risk.pdf
pages: 129 - 143
(abstract)

In this paper, we study the determinants of credit risk in the Greek banking sector. Credit risk is related to bank asset quality and considered responsible for bank failures. In this context, we investigate how loan quality can be explained by accounting and macroeconomic factors. Aggregate loans loss provisions (LLP) are used as a proxy for measuring credit risk. Using quarterly aggregate data that span from 2001Q1 to 2012Q4, we examine a period that covers the recent financial crisis in Greece. The results of Generalized Method of Moments (GMM) estimations indicate that LLP is positively affected by unemployment, public debt, loans loss provisions of previous quarter and negatively by capital adequacy ratio. Therefore, our findings support the hypotheses that both macroeconomic environment and accounting information exert significant influence on the credit risk of Greek banking system.