Global Economy and Governance

Issues

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Volume 11 (2017) Volume 10 (2016) Volume 9 (2015) Volume 8 (2014) Volume 7 (2013) Volume 6 (2012) Volume 5 (2011) Volume 4 (2010) Volume 3 (2009) Volume 2 (2008) Volume 1 (2007)

Volume 11 Issue 3 (2017)

Measuring economic spatial evolutional trend of Central and Eastern Europe by SDE method original article

pp. 253-266 | First published in 30 September 2017 | DOI:10.5709/ce.1897-9254.241

Xiaoxin Yang, Adriana Grigorescu

Abstract

The economic crisis affected the Central and Eastern European economic spatial structure and reshaped perspectives at the European Union and international levels. Whereas Western Europe’s stable economic system has entered maturity, Eastern Europe’s economic landscape is still constantly evolving and improving. From a geographical perspective, based on standard distance and the standard deviational ellipse method, we examine the space-time evolution of the Central and Eastern European economy from 1995-2015. During this period, the Central and Eastern European economic spatial barycenter moves northeastward, and the economic distribution scale extends north-south in space. At the same time, the demographic barycenter moves northwestward, with an intense contraction in space. By comparing the economic and demographic standard deviation ellipses, we found a large degree of spatial differentiation, which gradually decreases. This trend shows that in Central and Eastern Europe, the economic development and demographic distribution is not symmetrical, and there still is large potential for the internal market. We propose that Eastern European countries such as Romania and Bulgaria, which have an abundant population, can increase investment in their home market by linking up with Asian countries. This connection can enable them to make full use of external capital, mine demographic advantages and exploit the benefits of being the hub of both Europe and Asia.

Keywords: economic landscape; evolution of space time, spatial difference; the standard deviation ellipse; economic development

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Quantitative and Qualitative Analysis of X-efficiency in the Croatian Market original article

pp. 267-286 | First published in 30 September 2017 | DOI:10.5709/ce.1897-9254.242

Ozren Rafajac, Marinko Skare

Abstract

This article aims to explain the idea of X-efficiency, which indicates the difference between potential and actual output. If any business subject produces below its own potentials, it can be considered X-inefficient. To determine whether X-inefficiency in Croatian companies exists, how large it is in its volume and why it appears, in 2014, empirical research was conducted. Since only 22% of interviewed companies use all their available resources and given that the mean capacity utilization rate is only 70% and the mean resource utilization rate is 68%, our study results suggest that among business subjects in the Republic of Croatia, X-inefficiency exists to a large extent. Qualitative analysis shows that X-inefficiency appears mostly because of the competitive pressure. Other reasons include legal and administrative problems, the existence of inertness and a lack of motivation, the decision to work “less for more”, inadequate demand, economic crisis, the decision to save resources for future use, seasonal demand, incompetence of the government, corruption, and the risk of debt collection as well as local organizational problems.

Keywords: X-efficiency, social efficiency, market failures, transitional economies

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The impact of a trend pattern for sustainable marketing budgets on turnover dynamics (a case study) original article

pp. 287-302 | First published in 30 September 2017 | DOI:10.5709/ce.1897-9254.243

Alexandru Capatina, Adrian Micu, Nicoleta Cristache, Angela Eliza Micu

Abstract

In business practice, sustainable marketing seeks to meet environmental and social sustainability needs. Sustainable marketing budgets should create a balance between market needs and the need to use existing resources as rationally as possible. By recognizing that certain internal and external factors may cause fluctuations in sustainable marketing budgets and have a direct impact on the expected turnover, managers could capture opportunities to channel these budgets into business areas with higher return on investment (ROI). This study highlights the trends of sustainable marketing budgets in the case of one company and assesses their impact on its business turnover. Based on the assumed objective, this study provides explanations regarding the efficiency of sustainable marketing budgets in terms of benefits and, more precisely, on turnover dynamics. From the methodological perspective, the use of the coefficient of variation method allows the assessment of the longitudinal data homogeneity, reflecting the dynamics of the indicators, sustainable marketing budgets and turnovers. The results reveal that monthly sustainable marketing budgets have a significant impact on monthly turnover dynamics, considering the quadratic trend in the case of monthly sustainable marketing budgets and the exponential trend of monthly turnovers. From a managerial perspective, the implications of this study reveal that the more you invest in sustainable marketing, the more revenue your company could earn.

Keywords: sustainable marketing, sustainable development, trend pattern, coefficient of variation

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Pension Systems Similarity Assessment: An Application of Kendall’s W to statistical multivariate analysis original article

pp. 303-314 | First published in 30 September 2017 | DOI:10.5709/ce.1897-9254.244

Edyta Marcinkiewicz

Abstract

The study aims at empirical verification of the quality of pension system clustering based on two dimensions: the extent of involvement of the state in the pension system and the level of voluntariness. To answer the question of whether these two dimensions actually determine the division into homogeneous groups that constitute pension regimes, Kendall’s W concordance coefficient is employed. It is typically used in Delphi studies as an indicator of expert consensus, but it has been shown that the concept of concordance can also be applied to statistical multivariate analysis to measure intra-group similarity. This empirical research comprises 30 OECD countries grouped into three pension regimes. It employs the classical chi-square test as well as the permutation test of the coefficient of concordance previously applied to empirical problems in biology. Additionally, this study proposes a new permutation procedure that allows for verifying the quality of clustering from a different perspective.

Keywords: Kendall’s W, concordance, cluster analysis, pension regimes, pension systems

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Commodity Price Fluctuations and Unemployment in a Dependent Economy original article

pp. 315-326 | First published in 30 September 2017 | DOI:10.5709/ce.1897-9254.245

Jonaki Sengupta, Ranjanendra Narayan Nag, Bhaskar Goswami

Abstract

The interconnected issues of commodity price fluctuation, unemployment and balance of trade developments are of critical importance in times of globalization. The present paper addresses these issues in terms of a monetary dependent economy macro model that applies to a large class of emerging market economies that export their primary products. However, there exists a manufacturing sector that produces non-traded goods using imported capital goods as an input. Moreover, in such an emerging economy, the stocks of primary commodities constitute a widely used financial asset, among other assets. Thus, the price of these primary commodities behaves as an asset price, which has significant implications for the nature of the interlinkage between the real sector and the financial sector of the economy. In an absence of any capital account transactions, and under a fixed exchange rate regime, the paper examines the effects of supply shock, devaluation, capital flow and fiscal policy on major macro variables, including terms of trade, the stock of primary commodities and real money balances. The result points to the contractionary implications of devaluation, while an exogenous increase in food production produces favorable macroeconomic outcomes.

Keywords: Commodity price fluctuation; unemployment; emerging market Economies; globalization; dependent economy

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Evaluating the efficiency of state socio-economic policy of Latvia original article

pp. 327-342 | First published in 30 September 2017 | DOI:10.5709/ce.1897-9254.246

Zhanna Tsaurkubule

Abstract

This article presents an analytical overview and defines the essence of the concept “social policy” in the context of its relation to the economy. The author of the article has developed a system of indicators to measure the impact of social policy and proposed a technique for assessing its efficiency on the basis of a comparative analysis of the dynamics of changes in key indicators of socio-economic development of Latvia in the context of its integration into the EU. The efficiency of social policy is determined using a system of indicators combined into eight areas of economic and social policy: social protection, employment, income, poverty, healthcare, education, demography, and economic policy. Furthermore, the authors also conducted a quantitative assessment of statistical data describing the impact of social policies, and conclusions and recommendations are drawn to improve this technique further. The research on Latvia’s efficiency of social policy demonstrate that it is relatively low compared to other EU countries. In the future, it is recommended to improve the presentation of statistical data, to expand the list of indicators, and to assess the efficiency of social policy in a complex way, rather than in accordance with individual disparate indicators.

Keywords: social policy, essence of social policy, social and economic development of state, indicators of social policy, efficiency of social policy, efficiency evaluation

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On the causal links between the stock market and the economy of Hong Kong original article

pp. 343-362 | First published in 30 September 2017 | DOI:10.5709/ce.1897-9254.247

Sin-Yu Ho, Bernard Njindan Iyke

Abstract

A bulk of literature has identified the major economic drivers of Hong Kong’s rapid and steady economic performance over the last three decades. Of the major economic drivers identified, the performance of the stock market has received less attention. This paper examines the causal links between the stock market performance and economic performance of Hong Kong in an augmented VAR setting. Using an extended quarterly dataset that covers the period of 1986Q2–2014Q4 and the Toda-Yamamoto causality test, we find that stock market performance as proxied by the market capitalization ratio and economic performance stimulate each other. In addition, stock market performance as proxied by the total value traded ratio and economic performance influence each other. However, the causal links between stock market performance and economic performance dissipate if stock market performance is proxied by the turnover ratio. This finding suggests that the causal links between stock market performance and economic performance are highly dependent on the proxy used for stock market performance in the case of Hong Kong.

Keywords: Causality, Economic Performance, Stock Market Performance, Toda-Yamamoto

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