This article analyses the approximation of Bosnia-Herzegovina to the European Union (EU) from a Central European perspective, with a focus on the role of the Visegrad Four (V4) states in this process. The article sets out with two strategies of state-building exercised by the West in the aftermath of the Dayton Peace Treaty – a ‘hands-on’ and ‘hands-off’ (or ownership) strategy. It analyses the position of the Visegrad states towards these strategies. The text mainly explains the overall engagement of V4 in the context of EU enlargement policies. The article asks to what extent the four partners cooperate with each other and with likely regional partners Croatia, Slovenia, and Austria. The positions of the Central European states are informed by qualitative interviews with stakeholders and research literature on external governance in Bosnia-Herzegovina. It is concluded that the V4’s engagement is limited due to small budget commitments and to a significant overlap of V4 positions with the positions of more active European partners.
Competitive pressures of the world economy are continuously reshaping the global supply chains of manufacturing firms. At the same time, global competition is altering the nature of output offered by manufacturers, shifting it towards a higher share of service elements. The goal of this paper is to investigate how these two factors are combined, using a sample of manufacturing companies from 13 European countries belonging to the assembly industries of fabricated metal products, machinery and equipment. The results indicate that different business models became dominant in the less developed Eastern European and the developed Western European region. Involving measures of business performance and reasons for plant location, this study also argues that in terms of service offerings and supply chain position, other types of business models can coexist and successfully prevail in the two regions.
Spatial autocorrelation analysis is an important method that can reveal the structure and patterns of economic spatial variables. It can be used to identify not only global spatial patterns in the country, but also characteristic locations at micro levels. In this research, we used spatial autocorrelation methodologies, including Global Moran’s I and Local Getis—Ord Gi statistics to identify the intensity of the spatial clustering of municipalities in Serbia by the level of average monthly net earnings from 2001 to 2010. We identified and mapped local clusters (hot and cold spots) by the level of average monthly net earnings for the same period. The results show that overall spatial segregation between municipalities with high and low average monthly net earnings was predominantly increasing during the investigated period. Local statistics illustrated that overall spatial segregation followed a broad north—south divide, with a concentration of municipalities with high net earnings in the north of Serbia, and low net earnings in the south. Closer inspection showed that at the beginning of the study period, there were three statistically significant hot spots in the north. As time passed, only one highly clustered hot spot remained — the Belgrade region. One cold spot retained a relatively stable position in the country’s southeast. This research shows that spatial changes of net earnings can be successfully studied with respect to statistically significant global and local spatial associations in the variables using spatial autocorrelation analysis.
For two decades Hungary, like the other Eastern European countries, followed a general policy of establishing and strengthening the institutions of democracy, rule of law, and a market economy based on private property. However, since the elections of 2010, when Viktor Orbán’s Fidesz party came to power, Hungary has made a dramatic U-turn. This article investigates the different spheres of society: political institutions, the rule of law, and the influence of state and market on one another, as well as the world of ideology (education, science and art), and describes the U-turn’s implications for these fields and the effect it has on the life of people. It argues against the frequent misunderstandings in the interpretation and evaluation of the Hungarian situation, pointing out some typical intellectual fallacies. It draws attention to the dangers of strengthening nationalism, and to the ambivalence evident in Hungarian foreign policy, and looks into the relationship between Hungary and the Western world, particularly the European Union. Finally, it outlines the possible scenarios resulting from future developments in the Hungarian situation.
The notion of over-education has drawn considerable research attention since the work of Freeman (1976). This study provides evidence that education match matters for labor market outcomes. Using data from the REFLEX survey, we find that over-education and over-skilling has a significant negative impact on wages and job satisfaction in the Czech labor market. Secondly, we find that the wage penalty is stronger for female respondents. In contrast, overskilled and overeducated men are more dissatisfied than women.
Authors:Pieter Bleyen, Stijn Lombaert and Geert Bouckaert
In search for efficiency, effectiveness and fiscal sustainability, governments gather more performance information than ever before. As many of them have sought to incorporate and use this kind of information in budgeting and planning documents, the main goal of this article is to discover how local government performance budgeting practices can be mapped by a survey in a way that enables international comparison. Three previous mapping endeavors served as preliminary guidelines to develop a refined index based on the dimensions measurement, incorporation and use of performance information which form a generally accepted logical sequence in the public management literature. Results for the case of 304 Flemish local governments show a huge variation in the way performance budgeting is practiced, as index scores vary from nearly zero to more than 76 percent. Although it seems that available performance information is incorporated fairly well, measurement and use are lacking. It can be concluded that measuring performance budgeting offers interesting insights in the way this kind of budgeting is practiced in local governments. Although, from an analytical point of view, it is not sufficient to fully grasp performance budgeting and this for several reasons discussed in the article.
The objective of the paper is to create a composite leading indicator (CLI) for monitoring and predicting Hungarian business cycles. We compare the existing CLI applied by the OECD and Eurostat with our own CLI. According to our findings, our CLI forecasts the evolution of a referential series more precisely than the CLIs developed by the OECD and Eurostat. Nevertheless, from our point of view, the application of all existing CLIs at the same time can be appropriate. Consequently, the number of false signals should be reduced. The CLIs allow us to receive the first rough preliminary estimations of an economic cycle, in our case, the Hungarian one.
The paper seeks to explore the pricing strategies used by Hungarian food retail chains and how these strategies are related to the market and financial performance of the chains. A two-phase empirical research was carried out in 2011/2012. The research is based on 44 in-store observations, the analysis of price promotion leaflets and interviews with retail professionals. In-store observations focused on collecting data on baseline prices. The price promotion leaflets enabled the assessment of the promotional activity of the observed retailers. The interviews were used to check the validity of the research results. By grouping the analysed 11 retail chains along baseline price levels and price promotion activities, three different types of pricing strategies were identified. A relationship was found between the three pricing strategies and the performance indicators of the included chains. An important finding is that retail chains with a medium price level and low promotional activity were the least successful, while retailers with a low price level and high promotional activity achieved the best performance.
Authors:Éva Komlósi, László Szerb, Zoltán J. Ács and Raquel Ortega-Argilés
This paper presents a regional application of the Global Entrepreneurship and Development Index (GEDI) methodology of Acs et al. (2013) to examine the level of entrepreneurship across Hungary’s seven NUTS-2 level regions between 2006 and 2012. The Regional Entrepreneurship and Development Index (REDI) has been constructed for capturing the individual efforts, and their contextual features, of entrepreneurship across regions. The REDI method builds on a Systems of Entrepreneurship Theory and provides a way to profile Regional Systems of Entrepreneurship. Important aspects of the REDI method include the Penalty for Bottleneck analysis, which helps in identifying constraining factors in Regional Systems of Entrepreneurship, and Policy Portfolio Optimisation analysis, which helps policymakers consider trade-offs between alternative policy scenarios and associated allocations of policy resources. The paper describes the entrepreneurial disparities amongst Hungarian regions and provides public policy suggestions to improve the level of entrepreneurship and to optimise resource allocation over the 14 pillars of entrepreneurship in the seven Hungarian regions.
Inter-regionalism refers to regular forms of cooperation between regions or actors from different regions and is a result of the parallel phenomena of globalization and regionalism. Inter-regional links are rapidly developing all around the world and form a new level of global governance. Though originally inter-regionalism typically connected the actors of the so-called Triad, today emerging economies and developing regions are more active and visible participants of inter-regional cooperation. The article examines the perspectives and limitations of inter-regional relations between China and Latin America as a new dimension of deepening Sino—Latin American relations.
In the wake of the economic crisis, a question arises increasingly often: what is the role of economic culture in overcoming the crisis? Since the mid-2000s, leaders of developed countries have kept pointing out that fostering political and economic education is a driver of growth and development. Curricula are being overhauled; new modules are appearing in the study programmes of secondary schools, colleges, and university-level undergraduate courses; significant curriculum developments have been launched at the world’s leading universities in the last few years. Hungarian higher education cannot exclude itself from this process.
Authors:Chih-Hai Yang, Mei-Chun Cheng and Chun-Hung Lin
This study examines the determinants of China’s outward direct investment (ODI) between 2003 and 2009. We first analyse the structure and dynamics of ODI. We propose three testable hypotheses including technology sourcing, resource seeking, and political linkage. Various estimates show that technology sourcing is supported moderately, whereas resource seeking serves one of primary driving forces. Crucially, the motive of political linkage is significantly related to ODI and it is particularly relevant to developing destinations. This finding indicates that China tends to invest in developing countries with high political risk, which is in contrast with the prediction of the FDI theory. Furthermore, a developing country with high political risk seems to be the favoured destination for China’s ODI to acquire technologies and resources.
This paper offers a few remarks on the so-called heterodoxy commentaries of recent times (e.g. Bod 2013, Csaba 2011). In accordance with the growing popularity of unusual economic policy actions, a set of “tools” is emerging that aims to exert its effects breaking with instrumental actions. Outlining a special framework of the history of mainstream economics, it will be argued that economic policy only gradually has become capable of applying this system. In our view, both the emergence of symbolic economic policies mentioned above and the rise of heterodoxy are on the same level, since certain governments can only operate through giving signals. Although it is not the time to formulate ultimate and eternal generalised statements, it may perhaps be stated that symbolic economic policies can make some room for manoeuvring available as a last resort. In other words, the possibility of a certain kind of economic policy “tools” can be derived from theoretical considerations, and this set has become highlighted recently by some constraining changes in the macroeconomic environment. Our theoretical framework will be filled sporadically with some episodes from the last few years of the economic policy of Hungary.
Assuming an alternative corporate governance paradigm that puts employees in the firm’s governance structures, as well as understanding their objective functions, we investigate capital structure decisions in employee-governed firms. Examining corporate capital structure decisions in 12 European countries, we provide strong empirical evidence of employees’ conservatism in capital structure choice. We find that employee-governed firms operate with significantly lower leverage and that employee-governed firms are significantly less levered at the same amount of earnings volatility than firms governed by other stakeholders. We also find evidence that employee-governed firms, at least in some countries, rely on internal resources to a larger extent. However, we did not find evidence that employee-governed firms have to pledge more collateral to obtain debt financing. In addition to this, we find evidence that employee-governed firms choose debt of shorter maturity and, somewhat surprisingly, that employee-governed firms in some countries are faced with lower cost of debt compared to firms governed by other stakeholders and not higher cost of debt as expected because of credit rationing and limited borrowing capacity.
Authors:Szabolcs Szilárd Sebrek and Betsabé Pérez Garrido
This paper seeks to illuminate empirically a class of drivers of firm performance hitherto neglected in the economic literature. To accomplish this objective, we distinguished three elements: sales volume, participation in technology alliancing, and successful patent issuing. Our findings suggest that competitive pressure posed by larger rivals in an industry affects sales performance negatively, but the possession of absorptive capacity can counter this deleterious effect. Findings regarding the effects caused by a product portfolio with high technological content are mixed. Depending on the performance measure applied, the results show evidence of adverse outcomes for sales, U-shaped effects for participation in technology alliancing and inverted U-shaped results for patenting. We obtained our raw data from the 2006 and 2008 PITEC database, which is the Spanish equivalent of the EU Community Innovation Survey. Our sample embraces more than 3000 firms.
Authors:Stephen P. Osborne and Sarah-Sophie Flemig
Public policy seeks innovation as a solution to society’s big problems, yet it almost always fails to address one key component of innovation: risk. Furthermore, risk management in public policy predominately focuses on the minimization or even avoidance of risk, no matter its nature. This article focuses on the nexus between risk and social innovation specifically in public policy. It acknowledges the special context of decision-making in public policy and proposes two differentiations that are necessary for a holistic model of risk management in public policy innovation: Firstly, the differentiation between cases of risk and uncertainty; and, secondly, between hard and soft risk management approaches. Concluding, the paper presents a framework that can inform public policy makers and practitioners alike regarding risk management and its effect on social innovation.
Authors:Nádia Simões, Nuno Crespo and José Castro Pinto
Based on a micro-level approach and using data from the European Working Conditions Survey, covering 27 countries, we analyse the determinants of job quality. With cluster analysis applied to 11 dimensional indices, we form three homogeneous country groups and identify, by estimating twice-censored Tobit models, the main determinant factors affecting the individual level of job quality in each group. We verify the relevance of variables related to worker characteristics, firm characteristics, and the country in which the individual works. Among worker characteristics, education and employment status are the factors with the highest impact on job quality, while the economic sector is the most important firm characteristic. The results suggest the existence of important differences among groups regarding the magnitude of the impact of some factors. The highest dissimilarities are found between the group with better jobs (Nordic countries plus Belgium) and the group with lower quality jobs (Central and Eastern European countries plus Portugal and Greece). Variables related to age, education, dimension of the firm, and economic sector are those in which more heterogeneity is found among the groups.
Authors:Nikica Mojsoska-Blazevski, Marjan Petreski and Venera Krliu-Handjiski
The objective of this paper is to examine the factors influencing workers’ job satisfaction aside from the conventional factors, in the light of basic cultural values and beliefs, and then to set this into a comparative perspective for three groups of countries: South-East European (SEE) countries, Central and Eastern European countries (CEE) and Western Europe. Cultural values are grouped into traditional vs. secular-rational values and survival vs. self-expression values. The main result of the study is that culture has a considerable effect on job satisfaction across all groups of countries under investigation. However, there are between-group differences in terms of the relative importance of specific cultural values for job satisfaction. We also find some evidence suggesting the persistency of cultures and slow-moving institutions.
Freedom and life satisfaction are desirable conditions and they both have a special meaning in Eastern Europe — transition was largely about gaining freedom and ultimately overall wellbeing. There are several studies about the effect of freedom on life satisfaction, but none of them focuses on Eastern Europe. I investigate the effect of self-reported freedom on life satisfaction in post-transition Eastern Europe using the World Values Survey. Surprisingly, East Europeans feel less free and less satisfied with their lives than other nationals. But a personal feeling of freedom increases their life satisfaction at a higher rate than in other countries. Freedom is a strong predictor of life satisfaction as compared to national income.
The latest reform of the Common Agricultural Policy (CAP) has recently been accepted, identifying important challenges for EU agriculture, but proposing only limited changes to the previous CAP. Now it is time for the implementation of the new measures. However, from a theoretical point of view, it seems that the CAP can hardly meet the challenges it faces due to the inconsistencies between the predefined challenges and the measures proposed to meet them. The aim of the paper is to systematically analyse the consistency between the challenges of European agriculture and the policy measures aimed at meeting them. It seems that not all measures are consistent with the challenges.
The paper investigates the role of regionalization and regional identity in the endeavours of emerging economies to connect successfully to the global world economy. It addresses the question of whether the Association of Southeast Asian Nations (ASEAN), with its loose institutional integration framework, has contributed to the global integration of its very heterogenous members in the first decade of the 21st century — and, if so, what are the drivers behind this. The paper summarizes connecting theories, using a multidisciplinary approach, and uses descriptive statistical analysis to identify the achievements of the ASEAN-6 countries within global trade and foreign direct invesment (FDI) flows in the given time period. We suggest that ASEAN countries, with their efforts to initiate interconnecting regional organizations in Asia, most specifically the ASEAN+3 (APT) construction, did contribute to greater integratedness of member countries; and they have created a regional image with a common market and production base. Such achievements, however, can be in great part attributed to the micro-level activities of international and regional firms wishing to establish cross-border production networks in these countries.
Authors:Tamás Balás, Ádám Banai and Zsuzsanna Hosszú
The risks of household lending are still a major issue in Hungarian banking. The proportion of non-performing loans is rising continuously. We constructed a model to find those factors which have significant effect on the probability of default of households’ mortgages. We also used this model to calibrate the optimal level of household mortgages’ payment-to-income ratios, which is important from a regulatory point of view. Our results show that the denomination of the loan and the indebtedness of the household are crucial factors in the performance of the loan. We also show that loans contracted via agents are riskier than others. The results carry two important messages from a regulatory perspective. Prescribing the same payment-to-income (PTI) ratios for HUF and FX loans may be unnecessarily restrictive for the former and excessively permissive for the latter. The uniform regulation of households with different income levels may also lead to undesired anomalies.
The aim of the paper is to highlight the main characteristics of the recent Hungarian public administration reform, as well as to reveal the inconsistent nature of some of its elements and to describe the connected risks. The starting point of the article is the Magyary Zoltán public administration development programme. The reform steps are compared to the ideal type NPM approach. The Hungarian public administration reform can be characterized by strong centralization and the revitalization of Hungarian anti-liberal traditions at macro level, and by the support of the enhancement of market rules and management at micro level.
Authors:Radmila Dragutinović-Mitrović and Predrag Bjelić
This paper aims at investigating the role of different trade regimes in determining the bilateral trade of Western Balkan countries and the enlarged European Union between 2001—2010. Special focus is laid on the intra-regional trade of Western Balkan countries and complementarities of this sub-regional trade integration and the EU accession process. Using panel data, we estimated the gravity model of bilateral exports from Western Balkan and Central Eastern European countries to the core EU members in the 2001–2010 period. The results confirm the importance of EU membership for the development of acceding countries’ trade and shed light on asymmetrical trade regimes as important factors of boosting the bilateral trade flows. Additionally, CEFTA 2006 has a significant contribution to intra-regional Western Balkans trade.
This paper revisits the empirical trade literature on East-West trade in the early 1990s and provides a replication of the traditional gravity findings of that period with the Baier-Bergstrand version of the model, providing thereby better estimates of the trade hindering impact of the Cold War by including multilateral and world resistance factors and simultaneously considering country fixed effects. Breaking down the Cold War Walls increased world trade by 2.7% of world GDP. The replication with the Baier-Bergstrand model also reveals that Cold War trade distortions also significantly impacted China’s trade with the West.
Authors:Péter Földvári, Bas van Leeuwen and Dmitry Didenko
According to the consensus view, it was primarily physical capital accumulation that drove economic growth during the early years of state socialism. Growth models incorporating both human and physical capital accumulation led to the conclusion that a high physical/human capital ratio can cause a lower economic growth in the long run, hence offering an explanation for the failure of socialist economies. In this paper, we show theoretically and empirically that according to the logic of the socialist planner, it was optimal to achieve a higher physical to human capital ratio in socialist countries than in the West. Using a VAR analysis, we find empirical confirmation that within the Material Product System of national accounting, the relative dominance of investment in physical capital accumulation relative to human capital was indeed more efficient than under the system of national accounts.
This study examines the determinant of non-life insurance consumption in 14 countries of Central and South-Eastern Europe between 1995 and 2010 within a vector error correction model (VECM). We use non-life insurance penetration as a measure for non-life insurance consumption. Empirical results provide evidence that the number of dwellings and number of passenger cars positively and significantly influence non-life insurance consumption in the long run, while the existence of the rule of law and EU membership are significant in the short run.
One factor that contributes in the size of the shadow economy is the regulation of business activities. This paper provides empirical analysis of the effects of regulatory discretion on the unofficial economy. It adds to the previous findings by gathering evidence from a large data set of 162 countries for the 1999 to 2007 period. Going beyond simple correlation, it uses the Arellano-Bond estimator to investigate the dynamics and causal effects of regulation on the shadow economy. We find that increase in regulation increases the size of the shadow economy.
The primary objective of this study is to analyse the impact of human capital accumulation on productivity growth in a sectoral approach. In our estimations, we followed a specific taxonomy to identify the features of output and employment growth tendencies in four different labour-skilled branches in OECD countries. Besides determining the differences of output and labour structure by standard descriptive statistics, we used a dynamic panel regression method to investigate the connection between physical and human capital, employment, and productivity growth in each sector. All in all, we found an increasing role of human capital (HC) from the period between 1985 and 2007. Analysing the time series panel data of these countries, our results also yield valid relationships between the level of education and productivity growth.
Authors:Snežana Knežević, Milanka Marković and Andrijana Brown
The transition period, and the still ongoing economic crisis, amplify the volatility in the domestic insurance market and forces the management of insurance companies to continuously monitor changes in the market, i.e. to identify risks and opportunities, and therefore to undertake certain activities. The focus of the business of insurance companies is based on satisfying the needs of existing and potential clients. Respecting the current situation in the insurance market in anticipation of future events, the management of insurance companies must create and implement the optimal strategy in line with the company’s capabilities. For this purpose it is necessary to measure the efficiency of the business, which is the subject of this paper where the Data Envelopment Analysis (DEA) method is applied to the case of insurance companies operating in Serbia.
Authors:Paulo Mota, Abel Costa Fernandes and Ana-Cristina Nicolescu
The idea that the Euro zone sovereign debt crisis was caused by structural weaknesses degenerating into fundamental macroeconomic imbalances in the peripheral countries prevails among international institutions such as the IMF, the ECB, and the European Commission. On the contrary, some economists believe that this crisis is the consequence of major deficiencies in the architecture of economic policy making in the Euro zone that did not allow a proper response to a global systemic crisis of the financial markets that started in the United States. The objective of this paper is to provide a better understanding of the public debt dynamics in the EU, differentiating the case of Euro zone peripheral countries. We used quarterly data from 2000 to 2011 to estimate a small-scale model that takes into account the interactions between key variables. Our results do not support entirely the official view. We conclude that the cause of the adverse debt dynamics unravelling after 2007 was a sharp GDP contraction, coupled with a substantial increase in the interest cost of debt finance due to higher self-fulfilling solvency risks perceived by creditors, interacting with a higher sensitiveness of Euro zone peripheral countries to fundamentals.
Authors:Patricio Pérez, Marta Bengoa and Adolfo Fernández
This paper uses the Jones (1995) framework to examine the contribution of imitation activities and innovative research effort on productivity growth for the US and some European leading economies. We carry out a comparative analysis for the last 50 years, with two model specifications, assuming country differences in the parameters associated with R&D effort. In the first one, the technological frontier position is determined by the country with the highest productivity, the United States. Alternatively, in the second specification, we alter the definition of the technological frontier, allowing it to transcend the leader. The empirical analysis leads to very different outcomes. The first specification estimation, using GMM techniques, indicates that American researchers are more technology growth enhancing than their European counterparts. In contrast, the results obtained for the second, using Kalman’s filter, show that when using an alternative definition of technological frontier, it is possible to observe a boost in innovation that reduces the dispersion among countries. Then, the leading European countries can take advantage; in this case, Germany exhibits the best performance, followed by the US.
The global crisis of 2008 caused both liquidity shortage and increasing insolvency in the banking system. The study focuses on credit default contagion in the Central and Eastern European (CEE) region, which originated in bank runs generated by non-performing loans granted to non-financial clients. In terms of methodology, the paper relies on the one hand on review of the literature, and on the other hand on a data survey with comparative and regression analysis. To uncover credit default contagion, the research focuses on the combined impact of foreign exchange rates and foreign private indebtedness.
The paper focuses on important topics of the new banking regulation Basel III: leverage and liquidity. Using linear regression, I analysed the long term liquidity, leverage ratios and profitability of banks in the 12 emerging market new EU members and developed, old member countries between 2008 and 2010. I point out that in the EU12 there was a negative relationship between profits and interbank market dependence in 2010, while positive correlation existed between profits and funding base stability ratio. In the case of EU15 there was a negative correlation between solvency and profitability in 2008, while the relationship is positive between capital quality (more tier 1 capital) and profitability. Furthermore, I have tested the Myers-Majluf theory with monthly aggregated equity issue and the Dow Jones financial institutions index changes relating to the eurozone between 1990 and 2011. According to this theory, equity issue leads to lower equity prices. I point out that on an aggregated level (the eurozone) the theory cannot be proved. The Myers-Majluf theory is particularly important in the process of banking recapitalisation, since it dictates slower banking capitalisation. From the perspective of a macroprudential policy, capital increase would be more beneficial than asset decrease.
The development of futures studies and the future-oriented attitude of Finnish institutions and the government can serve as great example for other countries. This attitude appears in education and economy, issues in which Finland is highly competitive in Europe. We introduce the futures studies-related organizations and the foresight system of Finland. An overview of the development of futures studies and the activities, purposes of foresight institutions, with a major emphasis on the Finland Futures Research Centre will be presented. The main question is how could other countries utilize the Finnish example? Societal changes depend on the environment and its historical background, making it quite a challenge to come up with an all-adaptable answer for this question. Thus we will only present guidelines and proposals regarding the development of strategy at the end of this paper.
Authors:Petra Baji, Márta Péntek, Imre Boncz, Valentin Brodszky, Olga Loblova, Nóra Brodszky and László Gulácsi
In the past few years, several papers have been published in the international literature on the impact of the economic crisis on health and health care. However, there is limited knowledge on this topic regarding the Central and Eastern European (CEE) countries. The main aims of this study are to examine the effect of the financial crisis on health care spending in four CEE countries (the Czech Republic, Hungary, Poland and Slovakia) in comparison with the OECD countries. In this paper we also revised the literature for economic crisis related impact on health and health care system in these countries. OECD data released in 2012 were used to examine the differences in growth rates before and after the financial crisis. We examined the ratio of the average yearly growth rates of health expenditure expressed in USD (PPP) between 2008–2010 and 2000–2008. The classification of the OECD countries regarding “development” and “relative growth” resulted in four clusters. A large diversity of “relative growth” was observed across the countries in austerity conditions, however the changes significantly correlate with the average drop of GDP from 2008 to 2010. To conclude, it is difficult to capture visible evidence regarding the impact of the recession on the health and health care systems in the CEE countries due to the absence of the necessary data. For the same reason, governments in this region might have a limited capability to minimize the possible negative effects of the recession on health and health care systems.
Hayek’s theory of socio-cultural evolution is a generalization of his theory on spontaneous market order. Hayek explains both the emergence of market and social institutions serving as a social basis for that order within the framework of a unified evolutionary logic. This logic interprets the emergence and survival of spontaneous order and group-level rules of conduct as an unintended consequence of human action. In order to explain the emergence of social norms exclusively on the basis of methodological individualism, one would have to give up an exclusively evolutionary explanation of these norms. Since Hayek applies the invisible-hand explanation to the investigation of social norms, he combines the position of methodological individualism with functionalist-evolutionary arguments in his analysis. Hayek’s theory of socio-cultural evolution represents a theory in the framework of which methodological individualism and functionalism do not crowd out but complement each other.
In the past decade, talent management (TM) research has mainly focused on (large) organizations in a for-profit context. From this, it has been established that it is important to apply a contingency perspective since ‘organizations develop talent systems which reflect particular organizational objectives in the context of the strategic constraints which they face’ (Vaiman & Collings 2013). Furthermore, Vaiman & Collings (2013) state that future research thus should aim to connect the talent management policy of an organization to the corporate culture and business strategy. In addition, Thunissen et al. (2013a) acknowledge that the approach to talent is not only determined by the management of an organization but also by other stakeholders (e.g. employees and society). This article aims to contribute to these concerns in the literature by using the contextually based human resource theory (CBHRT) of Paauwe (2004) in a public sector context. The CBHRT tries to explain the choice for an HR policy by looking at several dimensions in the (institutional) environment of an organization and by taking into account the influence of stakeholders. Furthermore, by focusing on the Flemish government, this article meets the call to further research on TM in underexplored research areas.
This paper investigates the evolution of sub-central government borrowing in Spain over the period 1996–2011. The arguments and figures provided show that the intense process of political and fiscal decentralisation that took place over the 1990s and 2000s did not lead to higher debt ratios in terms of GDP at these tiers of government until 2007. Although a kind of overspending bias was in effect until the late 2000s, the paper shows that the evolution of GDP and tax revenues provided regional and local governments with enough resources to vigorously pursue their devolved public policy responsibilities and still keep their debt ratios under control. However, since 2008, when the world financial crisis broke out, the situation has changed dramatically. Even though the crisis originated in the financial sector, the paper concludes by stressing the importance of creating incentives and setting controls through institutional arrangements characterising multilevel government for all tiers of government to save in periods of economic growth in order to confront the impact of recession once it comes.
We analyse the impact of FDI on market concentration for the Portuguese manufacturing industries in the 2006–2009 period. Using panel data estimation, and after controlling for other determinants of industry concentration (entry barriers, market size, and growth), we found a significant negative impact of FDI on industry concentration. This finding is in line with the results of the empirical literature on other developed countries. Moreover, it supports the argument that FDI has positive effects on domestic firms, eventually through positive externalities, and contradicts the widespread view that in small economies FDI increases concentration. Overall, this study adds to the controversial literature on FDI and concentration, and it is the first study on this topic applied to Portugal.
Recent studies indicate a paradox: rising income has not led to increases in long-term levels of life satisfaction. Therefore, the hypothesis that citizens adapt to the growth of GDP is tested. This paper analyses empirically the relationship between a deviation in the trend of seasonally adjusted GDP growth and life satisfaction in Euro zone member countries based on data from the European Commission’s Eurobarometer report. This approach is new to the literature and it enables us to detect medium-term adaptation effects on growth rates. This adds a new way of tackling the question of why economic prosperity has had little or no influence on life satisfaction levels.We found that country-wide differences in the relationship of trend GDP growth and life satisfaction exist. Portugal, Italy, Greece, and Spain showed a significantly positive relationship. For other euro member countries, the hypothesis does not hold. This suggests that two different groups exist and if everything else is held constant, economic growth strategies should vary.
In our work, we compare the predictive power of different bankruptcy prediction models built on financial indicators calculable from businesses’ accounting data on the database of the first Hungarian bankruptcy model. For modelling, we use data-mining methods often applied in bankruptcy prediction: neural networks (NN), support vector machines (SVM) and the rough set theory (RST) capable of rule-based classification. The point of departure for our comparative analysis is the practical finding that black-box-type data-mining methods typically show better classification performance than models whose results are easy to interpret, i.e. there seems to be a kind of trade-off between the interpretability and predictive power of bankruptcy models. Empirical results lead us to conclude that the RST approach can be a competitive alternative to black-box-type SVM and NN models. In our research, we did not find any major trade-off between the interpretability and predictive performance of bankruptcy models on the database of the first Hungarian bankruptcy model.
During the present financial crisis, the focus of the regulation and supervision of financial institutions has shifted from being institution-based (microprudential) towards the systemic level (macroprudential). A special element of the macroprudential regulatory and supervisory toolkit is the issue of macroprudential warnings. Prior to the crisis, both the international and the domestic authorities issued warnings concerning the emergence of system-wide risks in the financial sector. However, these warnings did not result in significant changes in the behaviour of the banks, which were the main addressees of the warnings. The article analyses the practice and effectiveness of macroprudential warnings in relation to the European Central Bank and the competent Hungarian authorities. The subject matter is particularly topical, taking into account that one of the very first steps in changing the institutional framework of financial supervision, as a response to the financial crisis, has been the establishment of an institutional framework for issuing macroprudential warnings.
The main goal of the paper is to explain the role of expectations in austerity cycles during financial bailouts. The paper presents a political economy model of bailouts, where the conditions, their implementation, and market reception are considered as forms of a social dilemma. In such situations, expectations about the actions of other actors approximated by the concepts of trust or distrust play a critical role. An environment of trust is conducive to mitigating the size and effects of fiscal contraction, while an environment of distrust is likely to magnify both. It is also argued that the credibility of government is the key driving force in these self-reinforcing cycles. The crisis management experiences of Greece and Ireland serve to illustrate the theoretical model.
In the otherwise rich debate on the eastward expansion of the Eurozone, fragmented approaches prevail, leaving several conceptual avenues of this process underexplored. The case of Poland — initially a fervent enthusiast of the euro adoption and a somewhat assertive endorser today — offers in this context an opportunity to add to the debate and deepen our understanding of the logic behind eastward expansion of the Eurozone. In what follows, Poland's prospective Eurozone entry is examined from the broader angle of the historically determined conceptual and policy-making context of systemic transition. To this end, a conceptual nexus between Eurozone expansion and transition is established and examined through the historical institutionalist perspective. It is argued that rather than being solely a function of Poland's EU membership, both the decision to adopt the euro and the attainment of real and nominal convergence are predominantly a function of the, as yet unfinished, transition process. Interestingly, as this paper suggests, the inconsistency inherent in the execution of the Maastricht convergence criteria not only creates disincentives that effectively delay Poland's Eurozone entry but also triggers reform-drift and backsliding, thus casting a shadow on the prospect of the completion of the Polish transition and its sustainability.
Authors:Sandra Sánchez-Cañizares, Fernando Fuentes-García and Ana Castillo-Canalejo
There is some degree of consensus regarding the view that universities should become more involved in the economic and social development of their community to ensure that the knowledge they generate is useful to society. Given that one of the most pressing needs in the current economic environment is the creation of new businesses, this paper aims to study the entrepreneurial attitudes of students in two schools located in Cordoba (Spain) and Oxford (UK) devoted to the training of entrepreneurs. The results show that although there are very few differences in terms of the reasons students at both universities set up a business and the obstacles they encounter in doing so, intention to start up is much higher in the British case. The paper also examines students’ views on the feasibility of embarking on a venture of this type and the perception they have of themselves. We conclude that universities must work to counteract the adverse effects of the environment and collaborate with students to create an atmosphere conducive to social development based on the pillars of entrepreneurship and innovation.
This paper tries to reframe the man-machine problem, which has frequently changed throughout history. Originally, a machine was a helper of man, but later became its competitor and substitute. As a consequence of this, man has been pushed out of production and possibly, out of life itself. For today, nearly all man’s functions — except for consumption and creativity — can be furnished by machines. Creativity should have a special place because it is the last “shelter” of man in the conflict with machine. Almost every other faculty of man has more or less been simulated by technology. There are some key questions to be answered: Whom do the creative techniques serve? Is the target group men or machines?
The study of happiness and economics indicates a paradox: rising income has not led to increases in long term levels of life satisfaction. Evidence shows that citizens adapt to the growth of GDP, but an important difference among certain countries in connection with life satisfaction and the deviation from trend growth has been found: Spain, Italy, Portugal and Greece adapt to the trend growth of their economies; other European countries, however, do not. This suggests that some characteristics of their welfare state, such as the inability to create sufficient equity might leave their citizens more dependent on economic variables such as rising income. Only in boom times can the young, uneducated or the elderly find access to the otherwise restricted labor market and have a chance to escape the poverty trap. In this regard the paper places special emphasis on the issue of global competition by linking the subject with the current state of the European Union.
The turbulence in global financial markets presents a serious challenge to the stability of the monetary policy trilemma configuration. The trilemma states that a country may simultaneously choose only two of the following three policy goals: monetary policy independence, exchange rate stability, and financial integration. In order to analyse if the financial crisis brought changes in Romania’s monetary policy preference, we have constructed indexes that measure the trilemma policy goals individually in the period between 2005 and 2012. Using these indices, we have shown that there are significant differences between the means of monetary independence and exchange rate stability indices in the pre- and post-crisis periods.
Authors:Milan Deskar-Škrbić, Hrvoje Šimović and Tomislav Ćorić
In this paper, we use the structural VAR model to analyse the dynamic effects of (discretionary) fiscal shocks on the economic activity of the private sector in Croatia between 2000 and 2012. Due to the fact that Croatia is a small open transition economy, we assume that shocks of foreign origin can have notable effects on its performance. Therefore, the original Blanchard-Perotti identification method is extended by introducing variables that represent external (foreign) demand shocks. The results show that government spending has a positive and statistically significant effect on private aggregate demand and private consumption, and that net indirect taxes have a negative and statistically significant effect on private consumption and private investment.
The fundamental problem in developing a theory of international business ethics, without imposing ethnocentric assumptions, lies in the inherent conflict between the need for universal ethics and the reality of diverse national cultures. Integrative social contracts theory holds an intermediate position between ethical universalist and relativist positions — recognizing universal hypernorms on the one hand and moral free space on the other. We argue that all businesses share a common objective of sustaining long-run economic value for their stakeholders. We develop this argument using an evolutionary logic into a hypernorm along three propositions: First, the firm influences, and is influenced by, members of the society (social context proposition). Second, managers maximize profit subject to joint constraints of technical feasibility and ethical norms (managerial decision proposition). Third, ethical norms evolve from interactions among the stakeholders without a central authority. Natural selection favors norms that maximize long run economic value for the society (natural selection proposition). We show that the hypernorm can spawn widely agreed authentic ethical norms. However, moral bounded rationality when interpreting the hypernorm generates different authentic norms in the moral free space. The evolutionary logic is testable along the dimensions of variation, inheritance and selection of ethical norms.
This paper studies the global, regional, and country-specific components of four key financial market indicators: sovereign CDS spreads, equity indices, exchange rates, and EMBI Global bond spreads. In all four markets, the results support the findings of the literature of a significant global com