Emilija Beker Pucar and Olgica Glavaški
The paper reviews the monetary stages and frameworks towards the eurozone (EZ) for emerging EU members. At the first pre-EU stage, three monetary frameworks were identified, whereas at the second pre-EZ stage, the emerging EU members combined ER targeting with the rigid/fixed exchange rate regimes (ERRs), on the one hand, and inflation targeting (IT) with the Exchange Rate Mechanism (ERM II), on the other. The last stage of monetary convergence assumes monetary nonautonomy within the monetary union as a rigid ERR, where the ER and monetary policies are sacrificed as countercyclical instruments. Countries with rigid ERRs are more prone to macroeconomic overheating, performing worse under a crisis impact compared to the floaters. The difficulties to maintain stability under a rigid ER environment, such as the monetary union, as well as the inherent vulnerabilities of the EZ, are crucial for the delayed entry of some EU members into the ERM II.
Temitope Olamide Fagbemi1, Taiwo Azeez Olaniyi1 and Ayobolawole Adewale Ogundipe2
Due to the multiplicity and overburdening of Nigeria’s tax system, the economic units in which systemically important banks (SIBs) are included implement the corporate strategies that identify the loophole which minimizes, postpones, or entirely avoids tax payments so as to reduce its negative effect on financial performance. Therefore, this study examined the corporate tax planning and financial performance of systemically important banks in Nigeria. Ex-post facto was adopted as the research design in this study, while Pooled OLS was used to analyze the data. This study has shown that the effective tax rate has a negative and significant impact on financial performance. Thin capitalization has a positive significant impact on the financial performance of SIBs in Nigeria, whereas capital intensity and the lease option have demonstrated an insignificant impact on the financial performance of SIBs in the country. The study concluded that corporate tax planning affects financial performance depending on the adopted tax planning strategies. Likewise, the study recommended, among other things, that the tax authorities should engage in the tax reforms whereby the corporate tax rate is to be adjusted, and that banks should engage in the activities that can reduce the effective tax rate.
Mathew Olasehinde Fashagba1 and Emmanuel Olaniyi Dunmade2
This study is aimed at examining the difference between the retirement benefit of the old, pay-as-you-go pension scheme, and the new, contributory pension scheme (CPS). The data used in the study were obtained indirectly from secondary sources. In the study, the Analysis of Variance (ANOVA) and the Pearson Correlation methods are employed, aided by the SPSS for the purpose of data analysis. The study finds that the financial value of the retirement benefit of the old pension scheme is significantly higher than that of the new pension scheme. The study also finds that the benefits of the two pension schemes significantly follow the same trend. The study concludes that the new pension scheme pays out a lesser amount of the retirement benefit than the old. The study provides the recommendations for the efficient management of the investments in the pension fund so as to achieve a sufficient return in order to bridge the gap with respect to the retirement benefit between the two pension plans.
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.
Marko Slavković, Goran Pavlović and Marijana Simić
The transformation of a capital-intensive to knowledge-driven economy has marked the beginning of a new epoch in business doing. Carrying out business activities in an extremely dynamic environment has greatly reduced the importance of traditional concepts and techniques, which is the reason why the focus has shifted to human resources and their management. Accordingly, a company should attract, retain and motivate its employees in order to ensure a high level of their satisfaction by ensuring the achievement of strategic goals. A possible direction of achieving the desired position is based on the development of the employer brand. Therefore, the aim of this paper is to determine the impact of practice in conducting employee recruitment activities on their satisfaction, as well as the influence of the employer brand as a mediator on the identified relationship between the recruitment and satisfaction of employees in Serbia. The results of the conducted empirical research study have proven the existence of a statistically significant positive influence of employee recruitment on satisfaction, while the mediating influence of the employer brand has also been fully confirmed.
Joshua Solomon Adeyele
The inability of small and medium enterprises (SMEs) to access funds from financial institutions has been identified as one of the major problems limiting their expansion horizons. This study assesses the criteria and mechanisms used by financial institutions when granting loans to SMEs. The data were sourced from the relevant financial institutions and analyzed by using different statistical tools. One of the findings revealed that the financial ratio and the internal control system accounted for 28.7% of the part of the conditions for granting loans to SMEs. Similarly, good working capital and the ease of asset conversion accounted for 94.5% of the criteria used by financial institutions to extend credits/loans to SMEs. Also, the educational background of SMEs’ operators significantly influenced the financial institutions’ choice of SMEs to finance. Based on these findings, the study recommends that there is a need for SMEs’ operators to align their business activities with financial institutions’ lending criteria.
Edvard Jakopin
Are the transitional countries of SEE trapped in institutional transition or not? The institutional transition that has been lasting for almost three decades, and almost two decades in the Republic of Serbia, initiated the rapid destruction of the institutions of the previous political and economic system, but the construction of new market institutions has been slow, inefficient and partial. The Republic of Serbia lost the three decades of economic growth and development, which, as evidenced by economic law, takes twice as much time to restore the system to the previous equilibrium of the length of the time which the system is located in off-balance. The average 3% growth in the seventeen transition years is insufficient to compensate for the enormous backlog of the 1990s. The contribution of the research study to the work focuses on the analysis of the interdependence of economic growth and institution building. A special viewpoint is aimed at the corruption factor destroying institutions in all transition countries, reducing their economic growth and productivity, and negatively affecting the attractiveness of FDIs.