CE Special Issue - COVID-19
Challenges of Contemporary Economics


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Volume 14 (2020) Volume 13 (2019) Volume 12 (2018) 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 7 Issue 1 (2013)

Announcements Effect of Corporate Bond Issuance and Its Determinants original article

pp. 5-18 | First published in 15 March 2013 | DOI:10.5709/ce.1897-9254.70

Sze Kim Chin, Nur Adiana Hiau Abdullah


This study aims to investigate the effect of bond issuance announcements and to determine the company characteristics that could influence this effect. The findings reveal positive cumulative average abnormal returns following bond issuances, indicating that the market considers bond offers to be favorable news. Nevertheless, cross-sectional regression analysis shows an insignificant relation of company profitability, growth opportunities, asset tangibility, size, and managerial ownership with cumulative abnormal returns. The results confirm that there is a signaling effect of bond issuance announcements and that this effect is not affected by company characteristics.

Keywords: bond, equity market behavior, event study

Testing the Monetary Model for Exchange Rate Determination in South Africa: Evidence from 101 Years of Data original article

pp. 19-32 | First published in 15 March 2013 | DOI:10.5709/ce.1897-9254.71

Riané de Bruyn, Rangan Gupta, Lardo Stander


Evidence in favor of the monetary model of exchange rate determination for the South African Rand is, at best, mixed. A co-integrating relationship between the nominal exchange rate and monetary fundamentals forms the basis of the monetary model. With the econometric literature suggesting that the span of the data, not the frequency, determines the power of the co-integration tests and the studies on South Africa primarily using short-span data from the post-Bretton Woods era, we decided to test the long-run monetary model of exchange rate determination for the South African Rand relative to the US Dollar using annual data from 1910 – 2010. The results provide some support for the monetary model in that long-run co-integration is found between the nominal exchange rate and the output and money supply deviations. However, the theoretical restrictions required by the monetary model are rejected. A vector error-correction model identifies both the nominal exchange rate and the monetary fundamentals as the channel for the adjustment process of deviations from the long-run equilibrium exchange rate. A subsequent comparison of nominal exchange rate forecasts based on the monetary model with those of the random walk model suggests that the forecasting performance of the monetary model is superior.

Keywords: nominal exchange rate, monetary model, long-span data, forecasting

Local Government Systems and Decentralization: Evidence from Pakistan’s Devolution Plan original article

pp. 33-44 | First published in 15 March 2013 | DOI:10.5709/ce.1897-9254.72

Muhammad Shakil Ahmad, Noraini Bt. Abu Talib


The discourse of governance and development practitioners continues to embrace community participation and community empowerment as an elementary means of building local capacity for poverty reduction, development and change at the local level. This article is a review of the decentralization initiatives of local government systems after the announcement of the devolution plan in Pakistan. It evaluates the initiatives’ participatory methods to ascertain the extent to which they have improved the process of community development at the local level. This article also measures the impact of community empowerment on the sustainability of community-driven projects implemented under the decentralization initiative through community-based organizations known as Citizen Community Boards (CCBs). Document analysis and literature review methodologies were employed to gain further insight into the decentralization phenomenon in Pakistan. The results describe human development, improvements in community empowerment and the sustainability of local projects; however, the sense of community has yet to be translated into shared benefits for rural communities. The fundamental goal of decentralization seems to be elusive because only power was transferred to the local level, whereas there is little support for community capacity building and community access to resources and the elites still control the electoral process. It is argued that community development initiatives in Pakistan require continuous support from local governments to boost local rural economies. Likewise, community-local government participatory development strategies can lead to strong local ownership and empowerment in rural communities.

Keywords: decentralization, community empowerment, citizen community boards, sustainability, community driven development

Risk Management in the Agri-food Sector original article

pp. 45-62 | First published in 15 March 2013 | DOI:10.5709/ce.1897-9254.73

Hrabrin Bachev


This paper incorporates the interdisciplinary New Institutional Economics in a comprehensive framework for analyzing risk management in the agri-food sector. First, it specifies the diverse types of agri-food risks (natural, technical, behavioral, economic, policy, etc.) and the modes of their management (market, private, public, and hybrid). Second, it defines the efficiency of risk management and identifies the factors (personal, institutional, dimensional, technological, and natural) of governance choice. Next, it presents stages in the analysis of risk management and the improvement of public intervention in the governance of risk. Finally, it identifies the contemporary opportunities and challenges for risk governance in the agri-food chain.

Keywords: risk management; market, private, and public governance; agri-food chain

Potential For Agricultural Biomass Production for Energy Purposes in Poland: a Review original article

pp. 63-74 | First published in 15 March 2013 | DOI:10.5709/ce.1897-9254.74

Rafał Baum, Karol Wajszczuk, Benedykt Pepliński, Jacek Wawrzynowicz


This article reviews the production capacity of Polish agriculture with respect to biomass used for energy production. The forecast production potential of agricultural biomass in Poland in 2020 includes three key areas: the expected consumption of renewable energy according to energy type, the energy potential of agriculture and barriers to the use of biomass. Studies have shown that in Poland, total energy consumption will significantly increase (over 10% by 2020). Growth of demand for renewable energy will primarily result from strong growth of demand for transport biofuels and electricity. In 2020, approximately 80% of final energy from renewable sources will come from biomass. More than three-quarters of the biomass will be generated from agriculture. In Poland, crops from 1.0 to 4.3 million ha can be used for energy production. The study shows changes in the structure of biomass use, and the analysis confirms the declining share of biomass for heat production and the increasing share of biomass for electricity and biofuels. The main obstacles to the continued use of agricultural biomass are a lack of local markets for biomass energy and poor financial support for energy crop production.

Keywords: biomass, biomass production, agricultural biomass, energy crops, biofuels

The Holding Company as an Instrument of Companies’ Tax-Financial Policy Formation original article

pp. 75-82 | First published in 15 March 2013 | DOI:10.5709/ce.1897-9254.75

Dominik Gajewski


The aim of this article is to present the holding institution as an economic and taxation solution. This article describes the holding company, indicates its advantages and disadvantages, and compares it to similar solutions. The main goal of holding companies is to change tax policies. As a result of these institutions, companies can change their tax status and economic situation. The holding institution influences the economic development of its constituent companies. The functioning of a holding company also has great importance for economic development. Establishing holdings is a worldwide trend that may be realised through various models.

Keywords: holding company, income tax from legal persons, capital company

Examination of the Individual Competencies that Differentiate Results in Direct Sales original article

pp. 83-100 | First published in 15 March 2013 | DOI:10.5709/ce.1897-9254.76

Barbara A. Sypniewska


The importance of knowledge and skills in meeting new challenges in production and distribution is particularly evident in today’s market, which is characterized by a saturation of products and strong competition. To be successful in the market, companies must stand out and be creative and communicative. The leading factor in providing these features is the human potential, which represents both opportunities and threats to the operation and development of the companies. For companies involved in sales, especially direct sales, this factor is expressed in the specific competencies of individual employees. The importance of individual competence in direct sales is reflected in the demand for research in this field. This article presents the results of research the author conducted on a group of 455 direct sales vendors that operate in the form of direct sales known as multilevel marketing (MLM). The respondents represented three groups: group I - inexperienced sellers that are starting work; group II - sellers who reach significant sales results; and group III - the leaders that achieve the highest sales results. The article presents the results of two analyses, namely discriminant and correlation analysis. The purpose of the discriminant analysis was to identify the set of competencies that particularly distinguish each group. The analysis was performed to indicate the factors that differentiate the surveyed groups. The purpose of the correlation analysis was to identify the correlation between particular competencies in the surveyed groups. Intercorrelations between the individual competencies were analyzed. The results identified the competences that best differentiate the surveyed sellers groups and also showed that most competencies strongly correlate with one another. The results indicate that by influencing the development of one competency, another set of competencies can be developed. This is an important aspect of the development of training programs for sellers.

Keywords: individual competencies, direct sales, multilevel marketing, discriminant analysis, correlation analysis

Willingness to Share Knowledge Compared with Selected Social Psychology Theories original article

pp. 101-109 | First published in 15 March 2013 | DOI:10.5709/ce.1897-9254.77

Ewa Krok


Knowledge is one of the key determinants in the growth and competitiveness of modern enterprises. Hence, it is essential to analyse the factors that induce employees to exchange knowledge. The problem of sharing an intangible asset — in this case, the knowledge of individuals — can be viewed from many perspectives: psychological, economic, organisational, sociological and technological. The aim of this article is to explore selected social psychology theories and to analyse the incentives for people to share knowledge. The article attempts to interpret the willingness to share knowledge through the Social Exchange Theory, the Social Impact Theory, the Theory of Reasoned Action and the Theory of Planned Behaviour. This analysis leads to the following conclusions: • we share our knowledge and expect a return; • we share our knowledge when we believe that the benefits of this action outweigh the costs; • we are pushed to share knowledge by the power of empathy; • workers’ willingness to share knowledge is influenced by three social processes: subordination, identification and internalisation; • the decision to share knowledge is preceded by an intention formed under the influence of an individual attitude towards that behaviour, subjective norms and perceived behavioural control; and • the decision to share knowledge is also influenced by additional components, including the knowledge and skills to implement this behaviour, environmental limitations, behavioural emphasis and habits.

Keywords: knowledge sharing, willingness to share knowledge, social psychology theories