Şakir Sakarya1, Feyyaz Zeren2 and Hilmi Tunahan Akkuş1
Affecting a significant portion of the world economy, the commodity market is the world’s largest “nonfinancial” market. In addition to the other macroeconomic variables, commodity prices have a special importance for Islamic stock indices, which have improved in recent years because Islamic finance is a financial system based on the profit/loss sharing principle and supports the real sector’s activities. In this study, cointegration and the causality relationship between commodity markets (the Gold ounce and Brent oil) and the Participation-30 Index established by taking Islamic criteria into account were investigated in Turkey. As a result of the analysis, no cointegration relation was found between the Participation-30 Index and the commodity markets. According to these results, an investor investing in gold or oil will, in addition to the Participation-30 Index, diversify its portfolio with this commodity investment and minimize its risk. The fact that there is no relation between the variables according to the causality results indicates that the Participation-30 Islamic Indices’ structure is independent of commodity markets and conventional stock markets.
Vladimir Obradović
The paper is devoted to the review of the position of the International Financial Reporting Standard (IFRS) for Small and Medium-sized Entities (SMEs) in the financial reporting regulation and practice in the Republic of Serbia. After considering the global importance of this standard, its position in the regulatory framework for financial reporting in the Republic of Serbia, in which it was included in 2013, is analyzed, while a deeper insight into the position of the standard in practice is achieved by the empirical research on a sample of 175 enterprises. Since it has the potential to facilitate financial reporting to many companies that had previously had to apply the full IFRSs, its adoption in the Republic of Serbia is useful, but the potential problem arises from the fact that it is not adopted at the European Union (EU) level. The research in the paper reveals that the enterprises in the Republic of Serbia that can choose between the IFRS for SMEs and the full IFRSs, however, are more likely to choose the full IFRSs. This finding should be considered in the context of the long-term application of the full IFRS before the implementation of the IFRS for SMEs. Subsidiary enterprises less often choose the IFRS for SMEs than the enterprises that do not have this characteristic.
Olubunmi Florence Osemene1, Joshua Solomon Adeyele2 and Pauline Adinnu3
In many countries, there are a certain number of organizations going through severe crises due to a failure in corporate governance. In this study, the main aim is to determine how the ownership structure and the characteristics of the boards of Nigeria’s listed deposit money banks (DMBs) affect aggressive earnings management for a period of 5 years (2011-2016). The panel least-square method was used to analyze the data collected. The findings revealed that private, foreign and government shareholdings have a negative and significant impact on aggressive earnings management. Also, directors’ tenures status has a significant effect on aggressive earning management, while the board size, the gender and the size of the firm have no such significant effect in the period observed. Based on these findings, the study concludes that the ownership structure has a significant impact on aggressive earnings management, whereas the characteristics of the board, excluding directors’ tenures status, do not have any significant effect. Hence, the study recommends that the 10% threshold imposed by the CBN on the government shareholding should be maintained, while regulatory and supervisory agencies are advised to pay adequate attention and conduct the monitoring of the activities performed by the CEOs of the banks, especially upon expiry of the directors’ tenure, so as to protect shareholders.
Alphonse Kumaza
Corporate innovation and technology application for the purpose of improving business profits are a permanent fixation in management. The study explores corporate innovation and its capability to ensure social accountability and environmental responsibility. Innovation is necessary for growth, the maintenance of the market share and for the continual expansion and exploration of business opportunities, yet difficult to secure sustainable communities. The results of an SPSS statistical analysis show that business innovative technology and new thinking capabilities are not so designed to promote environmental accountability and social welfare, but rather to enhance corporations’ growth. The insufficient poor understanding of business management of the enterprise’s externality contributes to corporations’ poor environmental performance. This contribution, which might be the subject matter of possible future research, exposes corporations’ inability to promote sustainable stakeholder communities and environmental responsibility, contrary to the perceptions that business innovation works for environmental sustainability.
Vlastimir Leković
Issue 3 Volume 20 Year 2018 contains four original scientific papers, one review paper, a review of the international scientific conference, the Subject-matter Index of the papers and the List of the Authors and Titles of all of the contributions published in the Economic Horizons in 2018. Simultaneously, we are indicating the fact that six scientific papers by the authors from abroad (Nigeria, China, Turkey, and Croatia) have been published in Volume 20 Year 20018, which accounts for 35.3% of the total number of the scientific papers published in the Journal in 2018.
Ana Krstić
Milјan Leković
Investment diversification is a widely accepted investment strategy, aimed at reducing investment uncertainty, while simultaneously keeping the expected return on investment unaltered. The development of investment diversification coincided with the development of portfolio theory. At the time when traditional portfolio theory was recognized as the leading portfolio management practice, the simple diversification of investments was the most commonly used strategy; however, due to its inability to recognize the importance of the correlation between returns on different investments, simple diversification was later rejected in modern portfolio theory and replaced with efficient diversification. The research study is aimed at conducting a comparative analysis between the simple and efficient diversifications of investments, together with the inevitable analysis of the optimal number of securities in a portfolio and the testing of the validity of the international diversification of investments. By applying a qualitative research methodology, it is concluded that the benefits of the international diversification of investments are still substantial, and as such outweigh specific limitations, and that the number of securities in a portfolio should be increased as long as its marginal benefits, in the form of reduced investment risk, exceed its marginal costs – in terms of increased portfolio management costs, which also represents the main result of the research.
Siniša Milošević1, Dejan Trifunović2 and Jelena Popović Markopoulos1
In this paper, we will analyse the impact of the effective application of the competition policy to the economic development of developing countries. Many empirical papers suggest that the existence of the competition policy does not significantly affect the level of the GDP per capita, and that only its effective application is important. We will take the same approach and use the World Economic Forum index as a proxy for the effective application of the competition policy. We will demonstrate that a part of the variations in the GDP per capita between developing countries could be explained by an effective application of the competition policy.