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

 

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The Perspectives of Innovations, Economics and Business (PIEB) is established by Prague Development Center (publisher) as academic communication platform founded on important ethical standards in science publishing. Publisher and editorial board follow principles to avoid bad practices related to ghostwriting, plagiarism, and predatory publishing practices. The publisher and editors commit to practices which create and support the trust on every  phase of editorial and communication process embracing authors, editors and peer-reviewers.
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The effect of internal control on asset misappropriation: The case of Vietnam

This article [written by Manh Dung Tran, Thi Thu Ha Le] – published in Business and Economic Horizons, Volume 14(4), 2018.

Title: The effect of internal control on asset misappropriation: The case of Vietnam

Abstract: Asset misappropriation is a kind of fraud that may cause severe damages to the businesses. The internal control system is expected to provide a reasonable assurance for the management of the businesses in preventing and detecting frauds, including asset misappropriation. The study is conducted to examine the effect of internal control system on asset misappropriation in Vietnamese firms. Based on questionnaires collected from internal auditors, accountants and department managers in Vietnamese firms, the study assess the impact of COSO five internal control components on the popularity of asset misappropriation in the firms. The results show that of the five components, control environment presents the strongest impact, followed by control activities, information and communication in respective order. Determinants with the mildest impact are risk assessment and monitoring of control. Based on the findings, it is important that the management of the firms improve the internal controls to effectively reduce the chance of fraud in their firms.

Keywords: Asset misappropriation, fraud control, internal control, Vietnam

Citation: Tran, Manh Dung; Le, Thi Thu Ha (2018). “The effect of internal control on asset misappropriation: The case of Vietnam”, Business and Economic Horizons, Vol.14, Issue4, pp.941-953. DOI: http://dx.doi.org/10.15208/beh.2018.64

 

Assessing the financial security of the engineering enterprises as preconditions of application of anti-crisis management: practical aspect

This article [written by Oleksandr Sylkin, Andriy Shtangret, Olha Ogirko, Alexander Melnikov] – published in Business and Economic Horizons, Volume 14(4), 2018.

Title: Assessing the financial security of the engineering enterprises as preconditions of application of anti-crisis management: practical aspect

Abstract: Today, engineering enterprises in Ukraine are experiencing poor development. The crisis development of many domestic engineering enterprises is reinforced by both internal and external factors, so it is critical to develop new methodologies to comprehensively estimate their level of financial security, thus serving as the information basis for the application of anti-crisis management. The objective of the study is to develop a model to assess the financial security of engineering enterprises. The subjects of the study are the activities of the top ten engineering enterprises in Ukraine for the period 2013-2017. The purpose of our research is to form a methodical approach to assess the financial security of engineering enterprises, which would become the basis for applying a certain type of anti-crisis management and encouragement in domestic engineering enterprises. The results of the study made it possible to form and implement a model to assess financial security, which will help to establish the need to apply anti-crisis management in an enterprise.

Keywords: Financial security; engineering enterprises; anti-crisis management; assessing the financial security of the enterprise

Citation: Sylkin, Oleksandr; Shtangret, Andriy; Ogirko, Olha; Melnikov, Alexander (2018). “Assessing the financial security of the engineering enterprises as preconditions of application of anti-crisis management: practical aspect”, Business and Economic Horizons, Vol.14, Issue4, pp.926-940. DOI: http://dx.doi.org/10.15208/beh.2018.63

 

Efficiency as a new ideology of trust-building corporate governance

This article [written by Maryna Brychko, Andrii Semenog] – published in Business and Economic Horizons, Volume 14(4), 2018.

Title: Efficiency as a new ideology of trust-building corporate governance

Abstract: This paper seeks to examine the mainstream theories of corporate governance in an attempt to suggest that efficient corporate governance has no logical claim to “objectivity” and not always contribute to trust-building. Therefore, efficiency as the corporate governance goal is political and ideological plan of actions based on a set of controversial conceptual and empirical assumptions, which constitute norms and prescriptions. In addition, mechanisms of how these ideologies are supported and reproduced are shown. The paper provides the basis and seeks to persuade policymakers and commentators for new interdisciplinary research into the behavioral and political economy of corporate governance.

Keywords: Corporate governance, good corporate governance, trust-building strategy, efficiency, shareholder value, ideology, objective truth rule

Citation: Brychko, Maryna; Semenog, Andrii (2018).”Efficiency as a new ideology of trust-building corporate governance”, Business and Economic Horizons, Vol.14, Issue4, pp.913-925.
DOI: http://dx.doi.org/10.15208/beh.2018.62

 

Is there any causality between Islamic banks’ return on depositors and conventional banks’ deposit interest: Evidence of causality from Bahrain’s financial market

This article [written by Abdus Samad] – published in Business and Economic Horizons, Volume 14(4), 2018.

Title: Is there any causality between Islamic banks’ return on depositors and conventional banks’ deposit interest: Evidence of causality from Bahrain’s financial market

Abstract: Unlike conventional banks’ interest payment on deposits, Islamic banks do not pay interest to depositors. What they pay to depositors is called the rate of return to depositors. Does the rate of return of Islamic banks on deposits follow conventional banks’ interest rates? This paper empirically investigates the relationship of causality and the causal direction between conventional banks’ interest rate and Islamic banks’ return applying VEC model. The results of the VAR Granger Causality/Block Exogeneity Wald Tests fail to reject the null hypothesis of bidirectional causality between Islamic banks’ rate of return and conventional banks’ interest. The pairwise Granger causality also confirms the same results. This suggests that Islamic banks’ rate of return and the conventional banks’ interest rate are not independent of each other rather they follow each other in the Bahrain financial market.

Keywords: Bahrain, conventional bank, interest rate, Islamic bank, rate of return, Granger causality

Citation: Samad, Abdus (2018). “Is there any causality between Islamic banks’ return on depositors and conventional banks’ deposit interest: Evidence of causality from Bahrain’s financial market”, Business and Economic Horizons, Vol.14, Issue4, pp.894-912. DOI: http://dx.doi.org/10.15208/beh.2018.61

 

Can disclosure practices and stakeholder management influence zakat payers’ trust? A Malaysian evidence

This article [written by Nahla Samargandi, Sakinah Mohamed Tajularifin, Erlane K. Ghani, Asmah Abdul Aziz, Ardi Gunardi] – published in Business and Economic Horizons, Volume 14(4), 2018.

Title: Can disclosure practices and stakeholder management influence zakat payers’ trust? A Malaysian evidence

Abstract: This study examines whether disclosure practices and stakeholder management play an important role in influencing the zakat payers’ trust in the zakat institutions in Malaysia. A regression analysis was performed to examine the relationship between disclosure practices and stakeholder management of the zakat institutions on zakat payers’ trust. Using questionnaire survey on 184 zakat payers, this study shows that the disclosure practices do influence the zakat payers’ trust in the zakat institutions. However, it is revealed that stakeholder management does not influence the zakat payers’ trust in zakat institutions. The findings in this study imply that the zakat institutions should focus on the transparency of disclosure practices. The findings in this research could assist the zakat institutions to increase the trust level of the zakat taxpayers towards them and assist the policy makers in establishing zakat institutions which would be perceived by the public as legitimate.

Keywords: Zakat payers’ trust level, disclosure practices, stakeholder management, zakat institutions

Citation: Samargandi, Nahla; Tajularifin, Sakinah Mohamed; Ghani, Erlane K; Aziz, Asmah Abdul; Gunardi, Ardi, 2018. “Can disclosure practices and stakeholder management influence zakat payers’ trust? A Malaysian evidence”, Business and Economic Horizons, Vol.14, Issue4, pp.882-893. DOI: http://dx.doi.org/10.15208/beh.2018.60