Estimation of the world economic system stability from 1963 to 2013 by using a discrete dynamic model

This article [written by Anatoly Kilyachkov, Larisa Chaldaeva, Nikolay Kilyachkov ] – published in Business and Economic Horizons, Volume 15(1), 2019.

TitleEstimation of the world economic system stability from 1963 to 2013 by using a discrete dynamic model


Abstract: Authors estimated the world economic system stability, using a discrete dynamic model (DDM). DDM allows to describe the state of the world economy (whether it is stable, potentially stable or unstable) at different time intervals by means of a generalized image, a “pictogram”. These pictograms are radii of convergence (Julia sets) of DDM approximating polynomials. We used this methodology to analyze the state of the world economic system in the interval from 1963 to 2013. In order to determine the type of stability of the world economy in each year during this period, we solved the following interrelated tasks: determined the coefficients of the approximating polynomials, corresponding to different years; found basins of attraction of these polynomials for different values of the coefficients; determined the patterns of convergence of the basins of attraction thus found; built the Julia sets (the radii of convergence) corresponding to them. The obtained results confirm the conclusion that the development of the world economy is largely unstable. But the stability of the world economic system has increased over the period under review (1963-2013). Moreover, the last world economic crisis was not accompanied by a loss of stability. Based on the obtained results, we conclude that the potential stability of the development of the world economic system and economic crises are not unambiguously related concepts. It is necessary to distinguish between the situations of stable development of the economy and the crisis in the economy.

 

Keywords: Discrete dynamic model, annual rate of world GDP change, attractors, Julia set, basin of attraction

Citation: Kilyachkov, Anatoly; Chaldaeva, Larisa; Kilyachkov, Nikolay, 2019.
“Estimation of the world economic system stability from 1963 to 2013 by using a discrete dynamic model”,
Business and Economic Horizons, Vol.15, Issue1, pp.137-157. DOI: http://dx.doi.org/10.15208/beh.2019.9  

The new Keynesian trade-off between output and inflation: Time series based evidence from Russia

This article [written by Chin-Hong Puah, Chong Yang Sim, Mui Yin Chin, M. Affendy Arip ] – published in Business and Economic Horizons, Volume 15(1), 2019.

TitleThe new Keynesian trade-off between output and inflation: Time series based evidence from Russia

Abstract: As oil exports remain the main source of income for the Russian economy, the ongoing plunging of global oil prices is causing severe adverse supply shock and cost-push inflation in the country. The recent attempts at stabilisation policies by the policymakers have not been very successful in stabilising both national output and inflation. This has brought about concern over the relevance of policymaker interventions in the Russian economy. We investigate this matter by applying Asai’s (1999) model. Our empirical results indicated that the trade-off between output and inflation in the short run in Russia is inversely associated with the mean rate of inflation, which supports the new Keynesian view. As such, stabilisation policies, particularly monetary policies adopted by policymakers, are extremely crucial in moderating the short-run trade-off between output and inflation with respect to the recent financial crisis.

 

Keywords: Output-inflation trade-off, new Keynesian, new classical, nominal rigidity

 

Citation: Puah, Chin-Hong; Sim, Chong Yang; Chin, Mui Yin; Arip, M. Affendy, 2019.
“The new Keynesian trade-off between output and inflation: Time series based evidence from Russia”,
Business and Economic Horizons, Vol.15, Issue1, pp.126-136. DOI: http://dx.doi.org/10.15208/beh.2019.8  

Efficiency analysis by combination of frontier methods: Evidence from unreplicated linear functional relationship model

This article [written by Omar Sharif, Md Zobaer Hasan, Yun Fah Chang, Mahboobeh Zangeneh Sirdari ] – published in Business and Economic Horizons, Volume 15(1), 2019.

Title: Efficiency analysis by combination of frontier methods: Evidence from unreplicated linear functional relationship model

Abstract: This study proposes a new efficiency measurement technique CDS as combination of data envelopment analysis (DEA) and stochastic frontier analysis (SFA) and compares the CDS efficiency score with the DEA and SFA efficiency scores. The financial companies listed in Malaysian Stock Exchange for the period 2007-2016 are used to estimate the different types of efficiency score. Besides, linear regression analysis and ULFR (unreplicated linear functional relationship) analysis are used to analyze the performance of this CDS technique with the DEA and SFA techniques. The result suggests that the most efficient model is CDS which has a significant positive correlation with profit risk. Among the CDS, DEA and SFA techniques, the recommended technique (CDS) shows higher coefficient of determination values for both ULFR (0.9994) and linear regression (0.292) analysis. Also, based on the results of CDS, this study postulates that the most efficient firm is ACSM (Aeon Credit Service (M) Bhd) and the least efficient firm is MAY (Malayan Banking Bhd).

Keywords: Malaysian Stock Exchange, data envelopment analysis, stochastic frontier analysis, unreplicated linear functional relationship model

 

Citation: Sharif, Omar; Hasan, Md Zobaer; Chang, Yun Fah; Sirdari, Mahboobeh Zangeneh, 2019.
“Efficiency analysis by combination of frontier methods: Evidence from unreplicated linear functional relationship model”,
Business and Economic Horizons, Vol.15, Issue1, pp.107-125. DOI: http://dx.doi.org/10.15208/beh.2019.7

Cluster analysis of development of alternative finance models depending on the regional affiliation of countries

This article [written by Pavlo Rubanov, Tetiana Vasylieva, Serhiy Lyeonov, Svitlana Pokhylko ] – published in Business and Economic Horizons, Volume 15(1), 2019.

Title: Influence of regulatory capital requirements on the self-financing capacity of a banking company

Abstract: The article examines the hypothesis about the existence of regional peculiarities in the development of alternative financing models (such as p2p consumer lending, p2p business lending, p2p real estate lending, balance sheet business lending, balance sheet consumer lending, equity-based crowdfunding, reward-based crowdfunding, real estate crowdfunding, profit sharing crowdfunding, donation-based crowdfunding, invoice trading, debt-based securities). According to an alternative hypothesis, due to the high integration of international financial markets, there are no regional peculiarities of the development of alternative financing models. The cluster analysis tools allow verifying these hypotheses. The cluster analysis methods used, such as tree clustering, k-means clustering, and two-way joining, demonstrate the lack of links between the country’s regional affiliation and the degree of development of certain types of alternative financing in it. The key factors affecting the formation of clusters are volumes of peer-to-peer consumer lending and business lending, as well as the volume of invoice trading. According to the results of the research, the authors conclude that it is necessary to find other factors, apart from the regional features, which influence the ratio in the development of certain types of alternative financing in different countries.

Keywords: Alternative finance, peer-to-peer lending, crowdfunding, cluster analysis, regional analysis

 

Citation: Rubanov, Pavlo; Vasylieva, Tetiana; Lyeonov, Serhiy; Pokhylko, Svitlana, 2019.
“Cluster analysis of development of alternative finance models depending on the regional affiliation of countries”,
Business and Economic Horizons, Vol.15, Issue1, pp.90-106. DOI: http://dx.doi.org/10.15208/beh.2019.6

 

Influence of regulatory capital requirements on the self-financing capacity of a banking company

This article [written by Ivica Klinac, Anita Pesa, Berislav Bolfek ] – published in Business and Economic Horizons, Volume 15(1), 2019.

Title: Influence of regulatory capital requirements on the self-financing capacity of a banking company

Abstract: This paper explores activities of the banking companies in the new regulatory environment of the European banking system. For this purpose, the dynamic panel data models are estimated by utilizing the system GMM estimator. The research sample consists of 35 publicly listed groups of banks operating in the period from 2000 to 2016, selected by size of assets. The chosen banking companies are unquestionably market makers on the bank-centric economy of the EU. Hence, the research is in line with other current empirical works regarding the post-Basel III Standard adjustment of the banking industry as a whole. The model results show that the required increase in capital position affects the lack of bank credit activity towards the non-financial sector. The banks can maintain the higher regulatory capital ratio and self-finance the required growth by increasing the volume of share capital. Asymmetric information about the bank’s net worth discourage public investors to get into the shareholders position, which results in further bank lending constraints and reduced profitability. Potential growth of the revenue from non-credit risk operations cannot compensate for the negative pressure on the real value of the banking firm. From the policy-making perspective, the paper concludes that the resolution of structural problems of non-performing credit assets under new regulatory conditions should contribute to restoring the confidence of the investment public towards the self-financing capacity of the banking industry as well as bring the banking system back to the traditional client-oriented business model.

 

Keywords: Return on equity, capital requirements, credit assets, dynamic panel models

 

Citation: Klinac, Ivica., Pesa, Anita., Bolfek, Berislav. Influence of regulatory capital requirements on the self-financing capacity of a banking company. Business and Economic Horizons, Vol.15, Issue1, pp.70-89. DOI: http://dx.doi.org/10.15208/beh.2019.5  

 

Dividend policy as a multi-purpose mechanism; the case of conventional and Islamic banks before and after the 2008 crisis

This article [written by Talla Aldeehani] – published in Business and Economic Horizons, Volume 15(1), 2019.

Title: Dividend policy as a multi-purpose mechanism; the case of conventional and Islamic banks before and after the 2008 crisis

Abstract: Dividend policy and its association to firm value is still a concern for researchers. Empirical research provided evidence that it is relevant in various forms including signaling, pecking order, and agency. The aim of this study is to investigate the dividend policy of Islamic banks versus conventional banks in response to a major financial crisis. By studying the mixed banking industry of the Gulf Cooperation Council countries, known for negligible taxation systems, we provide evidence that conventional and Islamic banks use dividend payouts as a multi-purpose mechanism. At times of economic prosperity, conventional banks use them as signaling and pecking-order instruments, while it is used as an agency problem protection instrument during downturns. For Islamic banks, however, dividend policy is a pecking order mechanism before and after the crisis. Discussions on theoretical and empirical implications are provided.

 

Keywords: Dividend policy, Islamic banks, financial crisis

 

Citation: Aldeehani, T. M. (2019). Dividend policy as a multi-purpose mechanism; the case of conventional and Islamic banks before and after the 2008 crisis. Business and Economic Horizons, 15(1), 37-59. http://dx.doi.org/10.15208/beh.2019.3

 

The value of education in the labour market. How realistic are student expectations?

This article [written by Alice Reissova, Jana Simsova] – published in Business and Economic Horizons, Volume 15(1), 2019.

Title: The value of education in the labour market. How realistic are student expectations?

Abstract: The study deals with student expectations associated with their placement in the labour market. In total, 437 students of the third and fourth grades of grammar schools and secondary schools teaching business and technical fields of study were interviewed as well as 257 potential employers of these students. The objective was to identify whether students appreciate the link between education and salary, whether salary expectations of students are realistic, and last but not least, whether such expectations differ in terms of gender. It was established that students appreciate the link between the level of education and the amount of gross salary, but only if they were employed. If they started their own business, they expect their income to be higher than if they were employed, regardless of their highest completed education. It was interesting to find out that students cannot see any links between future salary and what type of secondary school they study (technical schools, business schools or grammar schools). The key finding of the essay is the fact established using Friedman´s ANOVA and Kendall´s coefficient of concordance, i.e., that the salary expectations of students are higher than the realistic offer of employers, both in terms of salary after secondary school and that after university. There are statistically significant differences between boys and girls – boys expect a higher initial gross salary, both after secondary school and university. Salary expectations are the same concerning gender only in the event they would choose to start their own business.

Keywords: Expected salary, offered salary, educational level, gender differences

Citation:Reissová, A., Šimsová, J. (2019). The value of education in the labour market. How realistic are student expectations? Business and Economic Horizons, 15(1), 20-36.
http://dx.doi.org/10.15208/beh.2019.2

 

The nexus prevalent in nonlinear finance and growth in the presence of macroeconomic instability in Turkey: Does the stock market really matter?

This article [written by Emrah Gulay] – published in Business and Economic Horizons, Volume 15(1), 2019.

Title: The nexus prevalent in nonlinear finance and growth in the presence of macroeconomic instability in Turkey: Does the stock market really matter?

Abstract: The link between stock market and economic development has become a significant volatile issue over the past few years. Our major contribution in the debate concerning the nexus between finance and growth is to bring to the fore the asymmetric effects of stock market development on economic growth under macroeconomic instability. Hence, towards this purpose, the stock market development index and the macroeconomic instability index, which are both constructed by incorporating the exchange rate and unemployment rate, are built based on principal component analysis. Utilizing the nonlinear autoregressive distributed lag model (NARDL) within the framework of a time series approach, we provide evidence that there is an asymmetric relationship between economic growth and the development of the stock market in Turkey.

Keywords: Financial development, stock market, economic growth, macroeconomic instability, nonlinear ARDL model

Citation: Gulay, E. (2019). The nexus prevalent in nonlinear finance and growth in the presence of macroeconomic instability in Turkey: Does the stock market really matter? Business and Economic Horizons, 15(1), 1-19. http://dx.doi.org/10.15208/beh.2019.1