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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 10 Issue 1 (2016)

Aggregate matching in Spain. Time series analysis using cointegration techniques original article

pp. 5-12 | First published in 31 March 2016 | DOI:10.5709/ce.1897-9254.194

Ewa Gałecka-Burdziak

Abstract

I analyze the matching process in the Spanish labor market from 1994-2005. I use monthly registered unemployment data and refer solely to public employment intermediation. This period reflects an upward movement along a downward sloping Beveridge curve; therefore, major changes in the process efficiency should not be observed. I narrow the considerations to a job queuing model, which is the most relevant description of the labor market matching process in Spain, according to the literature. I apply various quantitative methods to address the problem of non-stationary data. The Engle-Granger estimates emphasize the crucial role of the demand in generating the outflows from unemployment to employment. The ECT coefficient confirms that the model efficiently approaches the new equilibrium. These findings confirm that job seekers find themselves on the disadvantaged side of the market and compete for scarce job offers, which, in turn, are ascribed randomly to the workers. The diagnostic tests of the VAR models question the relevance of a multivariate space analysis because the outflow from unemployment to employment appears to be the sole endogenous variable.

Keywords: labor market matching, job queuing model, time series analysis, Spanish labor market

Implications of Unprofitable Horizontal Mergers: A Positive External Effect Does Not Suffice To Clear A Merger! original article

pp. 13-26 | First published in 31 March 2016 | DOI:10.5709/ce.1897-9254.195

Oliver Budzinski, Jürgen-Peter Kretschmer

Abstract

Standard analysis of mergers in oligopolies along the lines of the popular Farrell-Shapiro Framework (FSF) relies, regarding its policy conclusions, on the assumption that rational agents will only propose privately profitable mergers. If this assumption were held, a positive external effect of a proposed merger would represent a sufficient condition to allow the merger. However, the empirical picture on mergers and acquisitions reveals a significant share of unprofitable mergers, and economic theory, moreover, demonstrates that privately unprofitable mergers can be the result of rational action. Therefore, we drop this restrictive assumption and allow for unprofitable mergers to occur. This exerts a considerable impact on merger policy conclusions: while several insights of the original analysis are corroborated (e.g., efficiency defense), a positive external effect does not represent a sufficient condition for the allowance of a merger any longer. Applying such a rule would cause a considerable amount of false decisions.

Keywords: mergers & acquisitions, oligopoly theory, horizontal merger policy, profitability of mergers, antitrust

Complementary Person-Environment Fit as a Predictor of Job Pursuit Intentions in the Service Industry original article

pp. 27-38 | First published in 31 March 2016 | DOI:10.5709/ce.1897-9254.196

Marlena A. Bednarska

Abstract

There is an intrinsic link between the success of service firms and the availability of appropriate labor resources, making employee attraction and retention a critical concern for service organizations. Effects of recruitment efforts are influenced by applicants’ subjective person-environment (P-E) fit, referring to the compatibility between an individual and a work environment. The purpose of this paper is to examine the role of employer attractiveness in the relationship between potential employees’ perceptions of P-E fit and job pursuit intentions in the service industry. This study was conducted with a group of 335 undergraduates and graduates enrolled in tourism and hospitality studies in Poznan. Data were collected through group-administered questionnaires. Research revealed that students generally did not believe that a career in the hospitality sector would fulfill their needs, rating job attributes slightly higher than organization attributes. Regression analyses showed that both person-job (P-J) fit and person-organization (P-O) fit were positively related to intentions to apply for a job, with the former being a stronger predictor. The relationship under study was fully mediated by the perceived attractiveness of hospitality employers. The findings contribute to an improved understanding of the influence of P-J and P-O fit on work-related attitudes and intentions of Generation Y prospective employees in the hospitality industry.

Keywords: person-environment fit, employer attractiveness, job pursuit intentions, service industry, potential employees

Financial market regulation, country governance, and bank efficiency: Evidence from East Asian countries original article

pp. 39-54 | First published in 31 March 2016 | DOI:10.5709/ce.1897-9254.197

Sok-Gee Chan, Mohd Zaini Abd Karim

Abstract

This paper examines the relationship between financial market regulation, country governance and efficiency of commercial banks in East Asian economies during the period 2001-2008 using a two-stage estimation technique. In the first stage, we employ a non-parametric approach—Data Envelopment Analysis (DEA)—to estimate the banks’ cost and profit efficiency scores and then Tobit estimation to analyze the impact of financial market regulations and country governance on bank efficiency. The results suggest that commercial banks in East Asia are relatively profit efficient rather than cost efficient. The findings show that countries with more financial freedom and independence are more cost efficient. Moreover, government effectiveness is found to be positively related to bank efficiency. Consistent with economic theory, corruption is negatively related to bank efficiency. Therefore, this study reveals the importance of financial market regulations and country governance as catalysts for efficient banking operations in East Asian economies.

Keywords: bank efficiency; institutional environment; data envelopment analysis; tobit regression; East Asia

An Introduction to the Multidimensional Real-Time Economic Modeling original article

pp. 55-70 | First published in 31 March 2016 | DOI:10.5709/ce.1897-9254.198

Mario Arturo Ruiz Estrada, Vgr Chandran, Muhammad Tahir

Abstract

This article proposes a new economic modeling theoretical framework known as multidimensional real-time economic modeling (MRTE-Modeling). The model is an important tool that economists and educators can use to demonstrate the multidimensional aspects of economic behavior. MRTE-Modeling facilitates the analysis of a series of complex and dynamic economic problems that can affect market behavior from a multidimensional perspective. The proposed MRTE-Modeling framework is based on the uses of an alternative mathematical modeling framework, multidimensional graphical modeling approach, and computer algorithm and, thus, allows the possibility to transition from 2-dimensional economic dynamic modeling to multidimensional real-time economic modeling. Therefore, the main objective of using the proposed experimental model in the field of economics is to analyze different macroeconomic scenarios to monitor and provide a warning of possible unexpected economic failure(s). The proposed alternative experimental model is based on the application of Econographicology. Hence, our model is expected to offer policy makers and researchers new analytical tools to study the impact and trend of economic failures in the economy of any country from a new perspective.

Keywords: economic modeling, real-time analysis, multidimensional coordinate spaces, econographicology

A review of individual and systemic risk measures in terms of applicability for banking regulations original article

pp. 71-82 | First published in 31 March 2016 | DOI:10.5709/ce.1897-9254.199

Katarzyna Sum

Abstract

The latest financial crisis has exposed substantial weaknesses in the bank risk models used by national regulators as well as the Basel Accords. The study is aimed at presenting the evolution and critique of risk measures and risk models in banking, with a special focus on the dynamically developing area of systemic risk measures. A discussion of the features of the respective measures allows us to draw conclusions for banking regulations based on the analyzed models and to present the main challenges for regulators in terms of bank risk measurement. The study shows that substantial challenges for regulators include compensating for the drawbacks of the Value at Risk (VaR) and expected shortfall risk models, resolving the pro-cyclicality in risk modeling, improving the techniques of stress testing, and addressing the fallacy of composition in banking (i.e., to model risk from a systemic point of view and not only from the perspective of an individual bank). As the discussion concerning proper risk measurement in regulatory frameworks, such as the Basel Accord or the European Banking Authority’s (EBA) rules is in progress, the topic seems to be of particular importance; moreover, measures of systemic risk are not yet a subject of regulation.

Keywords: bank risk, risk measures, risk models, systemic risk

Measuring Business Cycles: A Review original article

pp. 83-94 | First published in 31 March 2016 | DOI:10.5709/ce.1897-9254.200

Marinko Škare, Saša Stjepanović

Abstract

This article summarizes the main findings on problems related to the measurement and identification of business cycles. The aim of this study is to define and identify the determinants of business cycles. This paper provides an overview of the methodology and its future course. Our investigation suggests that some methodological frameworks are available in the literature, but none is perfect. A new development in the field lies in spectral analysis methods for measuring business cycles, which may have advantages over existing methodologies (nonlinearity, stationarity issues). We feel that fractional integration is important in the proper monitoring and explanation of business cycles. Spectral analysis techniques have also proved to be useful for addressing the problems of stationarity and structural breaks in time series when analyzing business cycles. Another important issue that is excluded when studying business cycles is that the link between cycles and economic growth is presumed to be non-existent, implying money neutrality.

Keywords: economic growth, cycles, contraction, recession, total factor productivity