Challenges of Contemporary Economics

Issues

full text available abstract only
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 13 Issue 1 (2019)

Attribution Asymmetry in Perception of Companies’ Successes and Failures original article

pp. 5-20 | First published in 31 March 2019 | DOI:10.5709/ce.1897-9254.295

Oleg Gorbaniuk, Adam Żaliński

Abstract

This study assessed the asymmetry in the causal and dispositional attributions for a company’s failures and successes from the perspective of an external observer in the context of morality- vs. competence-related events. Eight hundred respondents participated in a five-factor experiment within a covariation model. We found asymmetry in the attributions of successes and failures in that company factors were found to have contributed more to successes than failures. Successful companies were perceived as open, innovative and stable, whereas unsuccessful companies were viewed as less innovative and unstable. This study contributes to the knowledge of how observers react to the successes and failures of companies with respect to two broad categories of attribution targets.

Keywords: causal attribution, dispositional attribution, company’s image, success vs. failure, competence- vs. morality-related events

Creative Commons License
This work is licensed under a Creative Commons Attribution 4.0 International License .

Inflation and Unemployment Trade-off: A Re-examination of the Phillips Curve and its Stability in Nigeria original article

pp. 21-34 | First published in 31 March 2019 | DOI:10.5709/ce.1897-9254.296

Nurudeen Abu

Abstract

Although the maintenance of price stability and the attainment of full employment are important macroeconomics goals in any economy, Nigeria still contends with problems of high inflation and unemployment. This study examines the Phillips curve hypothesis (inflation and unemployment trade-off) and its stability in Nigeria from 1980 to 2016 using the Autoregressive Distributed Lag (ARDL) bounds testing approach. Other estimation techniques including the Fully Modified Ordinary Least Squares (FMOLS), Dynamic Ordinary Least Squares (DOLS), Static Ordinary Least Squares (OLS), and Canonical Cointegrating Regression (CCR) were employed to ascertain the consistency and robustness of the results that were generated using the ARDL bounds testing method. The results of the cointegration test reveal the existence of a long-run relationship between inflation and unemployment. The results of the ARDL bounds testing, FMOLS, DOLS, static OLS and CCR estimations indicate that there is a trade-off relationship between the variables, and higher unemployment leads to lower inflation in the long-run. The plots of the cumulative sum of squares of recursive residuals (CUSUMQ) confirm the stability of the long-run parameters. The results of the causality test using the standard Granger causality test and the Toda and Yamamoto approach demonstrate that there is unidirectional causality from inflation to unemployment. Based on these findings, this study recommends policies to reduce both inflation and unemployment.

Keywords: Inflation, Unemployment, Phillips Curve, Nigeria

Creative Commons License
This work is licensed under a Creative Commons Attribution 4.0 International License .

Modeling Dynamic Causalities between the Indonesian Rupiah and Forex Markets of ASEAN, Japan and Europe original article

pp. 35-48 | First published in 31 March 2019 | DOI:10.5709/ce.1897-9254.297

Hizir Sofyan, M. Shabri Abd. Majid, Moh. Rizky Rahmanda

Abstract

Historically, the Indonesian Rupiah (IDR) has fluctuated throughout the years, and its fluctuations have been very much interrelated with other forex markets. Since the IDR fluctuations impact national economic growth, investigating the movements of forex markets with respect to the IDR provides important policy implications. Due to limited previous studies investigating the interactions between the IDR and forex markets, this study explores the dynamic causality over both the short and long run between the IDR and the forex markets of ASEAN (Association of South East Asian Nations), Japan and Europe. The study utilizes the daily nominal exchange rates of Indonesia, Thailand, Malaysia, Singapore, the Philippines, Japan, the U.S., and Europe spanning from January 1, 2008, to December 31, 2015. These data were then analyzed using the cointegration and vector error correction (VECM) techniques. The study found that the IDR was cointegrated with the forex markets of ASEAN, Japan, and Europe. The IDR was found to be the most dependent market compared to the other ASEAN forex markets since those forex markets appeared to have close causal linkages between them. For multivariate causalities, the Philippine Peso was found to be the only forex market that was independent of both the Japanese and European forex markets. Additionally, the ASEAN forex markets were more influenced by the forex markets of Japan rather than those of Europe. Since the forex markets become more integrated regionally, there is a need for policy synchronization among those countries in order to manage the impacts of forex fluctuations.

Keywords: Integration; Granger causality; Forex trading benefits; Forex markets; ASEAN

Creative Commons License
This work is licensed under a Creative Commons Attribution 4.0 International License .

Local Authority Tax Policy in Poland. Evidence from the Union of Polish Metropolises original article

pp. 49-62 | First published in 31 March 2019 | DOI:10.5709/ce.1897-9254.298

Paweł Felis, Henryk Rosłaniec

Abstract

Local taxes and the related taxing power are significant determinants of public authority decentralization. Local taxes should primarily serve as an effective source of self-government revenues. Therefore, it is extremely important to identify and comprehend the motives and behaviors of self-government authorities with regard to local taxes. This work focuses on real property tax, the most efficient of all local taxes. Importantly, in Poland, the system of real property taxation is based on the area of the given property and not on its value. The present work is based on two sources: official data derived from budget reports and reports from town council meetings during which tax resolutions were made. The spatial scope of the analysis covers 12 largest Polish cities – members of the Union of Polish Metropolises (UMP). The article is aimed at the comprehension of ways in which town self-governments make use of opportunities created by the current legal framework in Poland. Therefore, through the use of the correlation testing methods (Pearson’s correlation (r) and Spearman’s correlation) the article attempts to determine the impact of a reduction in rates on the volume of budget revenues and to explain the statistical diversification of real property tax rates. It presents econometric models illustrating the financial effects of town tax authority on real property taxes. The results of the empirical study reveal diversity in the tax policies of large cities. The observed differences can to some extent be explained by the size and wealth of a city. Furthermore, the results confirm that tax policy influences city income but that consequences of the policies change significantly over time.

Keywords: local authority tax policy, taxing power decentralization, self-government own revenues, local taxes, real property tax

Creative Commons License
This work is licensed under a Creative Commons Attribution 4.0 International License .

The moderating effect of audit quality on the relation between shareholder activism and earnings management: Evidence from France original article

pp. 63-78 | First published in 31 March 2019 | DOI:10.5709/ce.1897-9254.299

Souha Bouaziz Siala, Anis Jarboui

Abstract

The present paper aims to provide empirical evidence regarding the impact of shareholder activism on earnings management. Specifically, it is focused on investigating the moderating role of an external governance mechanism such as external audit quality. Based on a sample of French companies listed on the French stock market index (SBF 120 index) from 2008 to 2012, we apply several multiple regressions using a standard methodology devised by Aiken and West (1991). We find that external audit quality plays a moderating role between shareholder activism and earnings management in such a way that it greatly helps to attenuate the relationship in the presence of high-quality external audits.

Keywords: shareholder activism, discretionary accruals, earnings management, audit quality index

Creative Commons License
This work is licensed under a Creative Commons Attribution 4.0 International License .

The role of social and physical infrastructure spending in tradable and non-tradable growth original article

pp. 79-98 | First published in 31 March 2019 | DOI:10.5709/ce.1897-9254.300

Fakhri J. Hasanov, Jeyhun I. Mikayilov, Sabuhi Yusifov, Khatai Aliyev, Samra Talishinskaya

Abstract

This study investigates the impact of social and physical infrastructure spending on the non-oil tradable and non-tradable sectors while controlling for non-oil capital stock and employment in the Azerbaijani economy for the period 1995-2014. The analysis employs the Engle-Granger and Phillips-Ouliaris cointegration tests using FMOLS estimation results to test for the existence of long-run relationships. The tests results indicate the existence of long-run relationships among the variables. The estimation results reveal positive impacts of both social and physical infrastructure spending on non-oil tradable and non-tradable outputs. However, the impacts on the non-tradable sector are considerably larger than those on the non-oil tradable sector. Developing the non-resource tradable sector, and thereby reducing possibility of the “Resource Curse” and especially the Dutch Disease, is one of the strategic aims of natural resource-rich countries. In this regard, the findings of this research may be useful for Azerbaijani policymakers in taking measures that aim at fostering the development of the non-oil tradable sector, thereby avoiding possible negative outcomes of resource dependency such as the Dutch Disease.

Keywords: Social expenditures; infrastructure expenditures; non-oil tradable sector; non-tradable sector; Dutch Disease, Azerbaijan

Creative Commons License
This work is licensed under a Creative Commons Attribution 4.0 International License .

The strange fate of Brexit and Grexit and the Eurozone: Integration and disintegration original article

pp. 99-106 | First published in 31 March 2019 | DOI:10.5709/ce.1897-9254.301

Bruno Dallago, Stephen Rosefielde

Abstract

This article addresses an anomaly in the European Union (EU)’s recent evolution. Two years ago, Great Britain’s exit from the EU seemed improbable, while Greece’s departure appeared to be imminent. The outcome was precisely the reverse. We explain the paradox and examine its ramifications. The principal finding is that Brexit should be less disruptive than initially supposed if the EU responds constructively by filling the gaps in its institutional setup that reduce the system’s vulnerability to asymmetric shocks. Greece’s decision to remain enhances the prospects for Eurozone reform.

Keywords: Brexit, Grexit, Eurozone

Creative Commons License
This work is licensed under a Creative Commons Attribution 4.0 International License .