Contemporary Economics supports GIKA


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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 5 Issue 4 (2011)

Financialization of commodities original article

pp. 4-17 | First published in 27 December 2011 | DOI:10.5709/ce.1897-9254.24

Michał Falkowski


The basic theory of price formation tells us how the price of a particular asset will change based on the adjustment to its supply and demand. However, values of assets are also determined by other business fundamentals, company’s and world events, human psychology, and investors’ belief about the possible future profit. In recent history that lead to an increase of individual and institutional investors’ interest in allocating their resources in commodity markets. With a large inflow of capital commodities’ prices started to rise making them attractive components to effective investment portfolios. The presented paper addresses the issue of so called commodities ‘financialization’ process. It looks at the main factors standing behind commodities’ price movements and to what extent financial market participants contributed to commodities price volatility in recent years. Based on the data examined it distinguishes the involvement of both commercial and non-commercial traders in short and long term periods of time. As well as explaining the impact of growing investors’ interest in commodity markets it defines other market forces - like currency appreciations and emerging markets - as being part of increased volatility in raw and soft commodity markets. Along with market examination the paper focuses on possible future outcomes in attempts to regulate commodities derivatives markets and potential effects of those efforts.

Keywords: commodities, financial markets, futures, index funds, market speculation,

The Short and Long Term Performance Persistence in the Central European Banking Industry original article

pp. 18-31 | First published in 27 December 2011 | DOI:10.5709/ce.1897-9254.25

Krzysztof Jackowicz, Oskar Kowalewski, Łukasz Kozłowski


This article investigates the scale of performance persistence in the Central European banking industry. Contrary to the existing literature, we test not only for the short-term performance persistence but we propose also a novel method of analyzing the long-term persistence. Using an extensive dataset, covering the 1992-2009 period, we establish that banks’ results are strongly persistent in two-years sub-periods as well as in the long-run. Moreover, we find that the strength of studied phenomenon is not significantly influenced by the macroeconomic environment, banks size and capital base and country-specific factors.

Keywords: performance persistence, banks profitability, emerging economies

Job Satisfaction, Effort, and Performance: A Reasoned Action Perspective original article

pp. 32-43 | First published in 27 December 2011 | DOI:10.5709/ce.1897-9254.26

Icek Ajzen


In this article the author takes issue with the recurrent reliance on job satisfaction to explain job-related effort and performance.  The disappointing findings in this tradition are explained by lack of compatibility between job satisfaction–-a very broad attitude–-and the more specific effort and performance criteria.  Moreover, attempts to apply the expectancy-value model of attitude to explore the determinants of effort and performance suffer from reliance on unrepresentative sets of beliefs about the likely consequences of these behaviors.  The theory of planned behavior (Ajzen, 1991, 2012), with its emphasis on the proximal antecedents of job effort and performance, is offered as an alternative.  According to the theory, intentions to exert effort and to attain a certain performance level are determined by attitudes, subjective norms, and perceptions of control in relation to these behaviors; and these variables, in turn, are a function of readily accessible beliefs about the likely outcomes of effort and performance, about the normative expectations of important others, and about factors that facilitate or hinder effective performance.

Keywords: job satisfaction, job performance, expectancy-value model, theory of planned behavior

DCF Fair Value Valuation, Excessive Assetes and Hidden Inefficiencies original article

pp. 44-57 | First published in 27 December 2011 | DOI:10.5709/ce.1897-9254.27

Paweł Mielcarz, Paweł Wnuczak


Fair value concept is widely used in DCF (Discounted Cash Flow)  business valuation. One of the main principle of fair value concept is full information symmetry between contracting parties. The assumption enforces specific way of FCF (Free Cash Flow) estimation: all areas of inefficiency of valuated companies should be identified and their effect on free cash flow should be eliminated. The projection of free cash flow thus prepared should reflect the optimum operations of the business. The methodological issues of fair value valuation of inefficient companies are not comprehensibly addressed in the financial and accounting literature. There is easily observable gap between fair value theory and valuation practices. Thus this article is an attempt to answer the question about practical issues in fair value valuation of companies which do not apply value based management rules. It is based on literature review, theory examination and short case studies which present proposed solution for practical problems. Methods of identification and assessment of impact of inefficiencies on the fair value of a business are hereinafter presented and supported with arguments.

Keywords: fair value, non-operating assets, valuation of a business

Decentralization and Participatory Rural Development: A Literature Review original article

pp. 58-67 | First published in 27 December 2011 | DOI:10.5709/ce.1897-9254.28

Muhammad Shakil Ahmad, Noraini Bt. Abu Talib


Most of the developing nations are still struggling for efficient use of their resources. In order to overcome physical and administrative constraints of the development, it is necessary to transfer the power from the central government to local authorities. Distribution of power from improves the management of resources and community participation which is considered key to sustainable development. Advocates of decentralization argue that decentralized government is source to improve community participation in rural development. Decentralized government is considered more responsive towards local needs and development of poor peoples. There are many obstacles to expand the citizen participation in rural areas. There are many approaches for participatory development but all have to face the same challenges. Current paper highlights the literature about Decentralization and participatory rural development. Concept and modalities of Decentralization, dimensions of participation, types of rural participation and obstacles to participation are also the part of this paper.

Keywords: decentralization, participatory rural development, sustainable development, literature review, rural development policy

The Influence of Working Capital Management on the Food Industry Enterprises Profitability original article

pp. 68-81 | First published in 27 December 2011 | DOI:10.5709/ce.1897-9254.29

Anna Bieniasz, Zbigniew Gołaś


The article presents the results of working capital management efficiency in the food industry in Poland and selected countries of the Eurozone. The research was conducted on the basis of the unpublished data by the Polish Central Statistical Office in the trade structure and dimension of food industry enterprises in Poland in the period of 2005-2009, and comparatively, in respect of the food sector in selected Eurozone countries. The working capital management efficiency was assessed by means of the inventory, accounts receivables, current liabilities turnover cycles, cash conversion cycle, and in respect of the obtained rates of return from non-financial assets. The research proved that in the food industry sectors with the shortest working capital cycles, relatively higher rates of profitability were obtained. A favorable influence of working capital cycles reduction of the profitability was also verified by means of a multiple regression analysis.

Keywords: working capital, rate of return, food industry

Economic Efficiency in Indian Rubber Industry original article

pp. 82-91 | First published in 27 December 2011 | DOI:10.5709/ce.1897-9254.30

Sarba Priya Ray


The article tries to assess the utilization efficiency of capacity of Indian rubber industry in terms of econometric framework for the period,1979-80 to 2008-09.Capacity output has been  obtained at the minimum point of short run average cost curve. The result suggests that there has been declining growth rate of capacity utilization in rubber industry of India during the post reforms period accompanied by declining output growth as well as capacity growth. There exists some excess capacity in the rubber industry which remains unutilized during our study period. The result exhibits that  high correlation coefficient between actual output and capacity output for Indian rubber sector implies that  major part of under utilization of capacity is intended and low correlation  between capacity expansion (CE) and past utilization(CUL) seems to suggest that under utilization, if any, is mainly of the unintended nature, capacity expansions do not  move in line with past utilization rates and it also indicates that abolition of restrictions on licensing due to trade liberalization do not  help industry to expand capacity. On the other hand, low correlation between capacity expansion (CE) and lagged output (QL ) indicates that unintended excess capacity is varying from year to year in an unsystematic matter.

Keywords: capacity, utilization, growth, rubber, industry, India