EFSA

Volume 14, No. 2Vol 14 No 2 (2019): South East European Journal of Economics and Business

Published September 24, 2019

  1. Tomislava Pavić Kramarić, Marko Miletić

    THE BOONE INDICATOR AS DETERMINANT OF CROATIAN INSURANCE MARKET SOUNDNESS

    This paper deals with the influence of competition on soundness of Croatian insurers using the Boone indicator when measuring competition. The authors analyse Croatian insurers that operated over the pre-EU accession period 2008 – 2012 as well as in the period 2013 – 2017, i.e. after the accession to the EU. Several firm-level, industry-level and macroeconomic variables are used in the research. The findings of the analysis are twofold. Specifically, the Boone indicator reveals the impact of competition on the performance of efficient insurers in post-EU accession period only accounting for the reallocation effects proving that efficient insurers make higher profits. Regarding the determinants of the insurers’ soundness, premium to surplus ratio and inflation rate play significant role in pre - EU accession period whereas reinsurance and GDP growth rate are statistically significant after EU accession. Moreover, the competition increased in the years after the EU accession. Robustness check provides similar results.

  2. Sanja Franc, Anita Čeh Časni, Antea Barišić

    DETERMINANTS OF MIGRATION FOLLOWING THE EU ENLARGEMENT: A PANEL DATA ANALYSIS

    The Eastern enlargements of the European Union (EU) since the early 2000s have included post-transitional economies at a lower level of development than the existing member states and thus have significantly affected the East-West migration flows and labour markets on both sides. This has provided a distinctive opportunity to study the effects of the liberalization and to identify economic factors leading to migration flows with the purpose of enabling better estimations of future migration trends. In this research, a panel data analysis with pair of country fixed effects and time fixed effects is used to explore several pull and push factors of the East-West EU migration flows in the period from 2000 to 2017. Results indicate that emigration rate responds rather quickly to changes in GDP per capita and unemployment rate of the youth population in immigration country, with statistically significant elasticity coefficients, suggesting that international migration contributes significantly to adjusting the labour supply to fluctuations in economic activity.

  3. Velid Efendić, Nejra Hadžiahmetović

    PRODUCTIVITY CHANGE OF MICROFINANCE INSTITUTIONS IN BOSNIA AND HERZEGOVINA

    The main aim of this paper is to investigate the productivity changes of microfinance institutions (MFIs) in Bosnia and Herzegovina (BiH) during and after the recent financial crisis. The study covers the period starting from 2008 until 2015. Using the Malmquist Productivity Index (MPI) over the sample of 10 MFIs and a balanced panel dataset of 80 observations, this study explores technical and technological change as well as total factor productivity (TFP) change. The empirical findings indicate a decline in TFP in most of the analyzed periods with an average decrease of 2.5%. The study reveals an average technological decline in the industry of 1.7%, while technical efficiency change is recorded at the level of -0.8%. Overall, crisis efficiency recovery occurred during the period between 2009 and 2013. However, due to technological inefficiencies, average total factor productivity change remains negative. Hence, policy makers need to enhance the technological progress in order to meet their strategic objectives in BiH MFIs.

  4. Josip Tica, Luka Šikić

    ENDOGENOUS CONVERGENCE AND INTERNATIONAL TECHNOLOGICAL DIFFUSION CHANNELS

     The goal of the paper is to estimate relative importance of channels of technological diffusion between new member states and core EU countries. Based on neoclassical growth theory and extensive literature survey on technological diffusion we explore movements in the relative TFP in EU member states and try to identify relative importance of channels of technological diffusion as suggested by theory: imports, exports, FDI, R&D, human capital and fixed capital formation, etc. In the first step we employ Phillips and Sul (2007) log t test which has power to detect convergence even in the absence of cointegration between time series. In the second part we employ Abrigo and Love (2016) PVAR model in order to detect channels of diffusion of technology. The data is sampled from Eurostat and PWT repository and covers the period from 1995-2016 panel analysis and 1950-2014 for TFP convergence analysis. Our results indicate that in the overall sample FDI and R&D are major drivers of technological change, while, contrary to conventional wisdom, trade openness and human capital are dominant channels for TFP diffusion in periphery countries. The overall results point that productivity gap reduction is a heterogeneous process, country specific problem, but on average in the periphery it can be supported through various economic policies focused on openness and human capital

  5. Tomasz Tadeusz Skica, Małgorzata Leśniowska-Gontarz, Katarzyna Miszczyńska (Authors)

    MEASURING THE EFFICIENCY OF POLISH MUNICIPALITIES IN TERMS OF SUSTAINABLE DEVELOPMENT – DATA ENVELOPMENT ANALYSIS APPROACH

    The aim of the paper is to evaluate the efficiency of Polish municipalities.The research study involved a DEA (Data Envelopment Analysis) approach – in order to achieve the goal of sustainable development and to improve the quality of life of society. Conducted research study covered 2044 Polish municipalities for the year 2016. Using DEA model the ranking of Polish municipalities was prepared and a model Decision Making Unit (DMU) has been selected. It is possible to set goals for inefficient DMUs which should follow and regularly evaluate the progress in aims implementation. Inefficient municipalities can improve their efficiency following the technological example of chosen benchmarks.

  6. Marko Kukanja, Tanja Planinc

    COST-EFFECTIVE SERVICE EXCELLENCE: EXPLORING THE RELATIONSHIPS AMONG RESTAURANTS' OPERATIONAL EFFICIENCY, SIZE AND SERVICE QUALITY

    The main goal of this study is to investigate whether higher (cost-effective) operational efficiency in restaurants can be achieved without lowering the perceived level of service quality. This study also investigates the importance of restaurants' size on operational efficiency and on the perceived level of service quality level. We present the methodological procedures used to investigate the relationships among restaurants' operational efficiency, size, and service quality after presenting the conceptualization of the cost-effective service excellence (CESE) research construct. The restaurants' efficiency was assessed using Data Envelopment Analyses and the DINESERV tool was implemented to analyse guests' perceptions of service quality. Guests of low- and high- efficient restaurants perceive service quality based on the same quality dimensions. Based on the structural equation modelling, it is clearly evident that CESE can be achieved in the restaurant industry. The restaurant size has proven to influence restaurants' operational efficiency and guests’ quality perceptions.

  7. Bojana Olgić Draženović, Sabina Hodžić, Dario Maradin

    THE EFFICIENCY OF MANDATORY PENSION FUNDS: CASE OF CROATIA

    The phenomenon of pension funds industry growth in the last decades is inevitable in Central and Eastern European countries including Croatia that was enacted by the systemic pension reforms and introduction of mandatory private individual schemes. One of the main roles of the pension funds is to collect and invest the money contributed by the employer or the employee during working years until retirement. Therefore, development of pension funds as institutional investors is especially important for capital markets as well as for the whole economy.

     The aim of this paper is to examine performance of pension funds in Croatia, or more precisely, to measure the mandatory pension funds technical efficiency. By applying the methodology of data envelopment analysis on a sample of 12 mandatory pension funds for 2015-2018 period, we provide further evidence on their efficiency level. The results have shown very small differences among relative inefficient pension funds.

  8. Teresa Mroczek, Tomasz Tadeusz Skica, Jacek Rodzinka

    OPTIMAL SIZE OF THE GENERAL GOVERNMENT SECTOR FROM THE POINT OF VIEW OF ITS IMPACT ON THE EU ECONOMIES

    This article is an attempt to determine the optimal size of the general government sector (GGS) from the point of view of the economies of EU countries. Achievement of this research objective implied a few intermediate objectives. Firstly, measures enabling the description of the size of the general government sector were identified. In order to do that, measures present in the literature, classical measures of size of the GGS, as well as the public sector were extended to include additional measures proposed by the authors. Selected variables enabled us to measure the size of the GGS, choosing sector variables which positively influenced the economies of EU countries. Based on that, researches on optimization of the size of the general government sector from a perspective of the economies of EU countries were made, using for that purpose an approach based on diagnostic inference. A combination of research methodology innovative for such elaborations on the topic adopted by the authors resulted in the paper, presenting in a complex manner the issues of combining measures and impact of the general government sector on the economies of the researched countries.

  9. Andrii Galkin, Yuliia Popova, Oksana Bodnaruk, Yuliia Zaika, Elena Chuprina, Denys Shapovalenko, Oleg Kolonataievskyi

    ATTRACTIVENESS MODELING OF RETAIL ON EMOTIONAL FATIGUE OF CONSUMERS

    Demand for high-quality shopping service has seen continuous growth in the recent years, allowing retail chains to achieve sustainable competitive advantage, increase number of loyal customers. This in-turn results in demand boosting and image of the firm. To analyze and achieve this emotional reactions of customers while shopping becomes important. The paper attempts to evaluate the effect of emotional fatigue on purchase process and uses neuromarketing tool – Galvanic skin reaction analysis to do so. Changes in the buyer emotional reaction of consumers was observed through more than 150 experiments at 15 different retailers.  The results showed that retailer selection depended on emotional fatigue of the customer. Different types of retailers create different emotional fatigue which affects the footfall.

  10. Arberesha Loxha

    DO REMITTANCES REDUCE POVERTY IN KOSOVO? - A COUNTERFACTUAL ANALYSIS

    Kosovo is of the poorest countries in Europe, with 17.6 percent of the Kosovar population living below the national poverty line, and an estimated 5.2 percent reported as extremely poor. Migration and remittances have been an effective mechanism for mitigating poverty, as well as a coping mechanism for disadvantaged households with no or little employment and earning opportunities. The high dependence of households on remittances suggests that poverty rates would be much higher without the safety net provided through migration and remittances. This paper analyzes the impact that remittances and migration have on the poverty in Kosovo, in a hypothetical case, without remittances and migration using data from the Household Budget Survey 2011. The study developed counterfactual consumption estimates for remittance recipient households through the use of econometric estimations to predict the consumption of households in the case of no remittances. Due to the potential presence of selection bias, the paper uses a two-stage Heckman-type selection procedure which suggests that there is no selection bias. The results support the hypothesis that remittances increase the consumption of recipient households. The poverty rate would be higher for a considerable proportion of households in the case of no remittances. The poverty rates would increase particularly in rural areas.