Vladislav Radak1, Aleksandar Damjanović1, Vladimir Ranković2 and Mikica Drenovak2
Capital requirements for the market risk exposure of banks is a nonlinear function of the expected shortfall (ES), which is calculated based on a bank’s actual portfolio, i.e. the portfolio represented by the bank’s current holdings. To tackle portfolio optimization with respect to the ES, a genetic algorithm (GA) is used in this paper. The paper examines the effectiveness of a specific GA technique, namely the Strength Pareto Evolutionary Algorithm 2 (SPEA2) for portfolio optimization when the expected return (the mean) and percentage ES are set as the optimization goals. In addition, the differences between the mean-ES optimal portfolios and the mean-VaR optimal portfolios obtained by using the same optimization algorithm is analyzed in the study. The results document that the SPEA2 method provides well-distributed portfolios along the efficient frontier covering different risk levels. Compared to the mean-VaR optimal portfolios, the mean-ES optimal portfolios document superiority over the entire efficient frontier in the mean-ES plane. Concurrently, the converted mean-ES portfolios seem to converge towards the mean-VaR portfolios in the mean-VaR plane and nearly coincide for the high levels of the expected return.
Milan Čupić and Stefan Vržina
Despite exports having been the subject of academic attention for decades, associating exports with firm performance is unclear. Previous studies have produced two opposite theories. The learning-by-exporting hypothesis states that exports improve firm performance due to knowledge transfers from foreign markets to exporters, on the one hand, whereas on the other, those advocating the self-selection hypothesis argue that firms with better financial performance are more likely to export. This paper aims to examine the relationship between exports and the performance of firms in Serbia. The results of this research study show that exports are statistically significantly associated with productivity, this finding being robust to changes in the productivity measure and the sample size. Associating exports with firm profitability, however, is sensitive to changes in profitability measures. In addition, the research results are more typical of the manufacturing sector. Several reasons for the poor performance of Serbian exports and several recommendations with respect to that are offered in this paper.
Marsellisa Nindito1, Ilya Afianti2, Poppy Sofia Koeswayo2 and Nanny Dewi Tanzil2
This study investigates the impact of related-party transactions on financial statement fraud in the Indonesian publicly listed firms grounded in agency theory. The research study is aimed at examining the need for good corporate governance in order to uphold reporting integrity. This research applies a quantitative approach and a sample of 500-unit data from the companies listed on the Indonesian Stock Exchange in the period from 2017 to 2019 is analyzed using logistic regression models. This study also utilizes moderating regression analysis so as to investigate the moderating roles of institutional ownership and independent commissioners in the research model. The study results have revealed that related-party transactions and institutional ownership significantly affect the likelihood of the financial statement fraud occurrence in Indonesia and that institutional ownership can moderate the impact of related-party transactions on the likelihood of the financial statement fraud occurrence. This study provides the empirical evidence on the role of related-party transactions and corporate governance in shaping the quality of financial statements in emerging economies.
Nenad Tomić and Marija Mirić
Business models in the video game industry have shifted from physical to digital. With microtransactions, game producers have been provided with the ability to charge for extra in-game content. Loot boxes are one of the most controversial forms of microtransactions in video games. These are the prize packages that consist of one or multiple virtual items, whose specific content remains unknown to the player prior to opening. This study is aimed at identifying the combination of the factors that act as motivators for players in Serbia to engage themselves in monetary transactions for the purchase of loot boxes. To address the requirements of the study, modifications were made to the fundamental Technology Acceptance Model (TAM) so as to encompass the additional variables that had been perceived as significant for players’ decision-making processes. The findings of the study indicate the fact that the “perceived enjoyment, customization”, and “perceived ease of use” variables are the important factors that can predict the “perceived usefulness of loot boxes” variable. Additionally, the “perceived usefulness of loot boxes” and “propensity for gambling” variables are significant predictors of players’ intention to purchase. Furthermore, the “intention to purchase loot boxes” variable has a statistically significant impact on the “actual use of loot boxes” variable.
Jelena Erić Nielsen1, Ana Todorović Spasenić2 and Aleksandra Stevanović1
In the contemporary business environment characterized by risk and uncertainty, manufacturing companies need to focus on improving quality in every single aspect of their business model, with a focus on reaching the level of business excellence. As the central dimension of organizational design, organizational structure has the status of important support for achieving business excellence in the following areas: the success of the quality management system, process management, orientation towards employees (their satisfaction and motivation), the development of partnership relations with suppliers and customers, supply chain management, innovation, and social responsibility. The goal of the research is to identify the parameters of the organizational structure which have the highest influence on the success of manufacturing companies in terms of achieving business excellence. The results of the research conducted on a sample of 94 manufacturing companies in the territory of the Republic of Serbia showed the statistically significant influence of the organizational structure on each of the business excellence determinants, whereby the following parameters have the most important role: specialization, coordination (based on a combination of mechanisms) and formalization (based on compliance with QMS requirements – Quality Management System and the ISO 9001 standards).
Dejan Molnar1, Sonja Josipović2 and Bojan Baškot3
The paper presents different concepts of regional economic growth, according to which the educational structure of the working age population and entrepreneurial activity significantly contribute to the improvement of economic performance. It also analyzes the role of the entrepreneurial activity and the quality of human capital in regional economic growth in Serbia in the period from 2011 to 2020 using a sample of 25 NUTS 3 level sub-regions. The results of the evaluation of the three selected panel models indicate that entrepreneurial activities play a vital role in the growth of gross added value at the level of the sub-region. Given the fact that the main theoretical and numerous empirical findings suggest that bearers of regional development should be entrepreneurs who possess the appropriate knowledge, abilities, creativity and skills, the recommendation for the creators of public policies is to continuously work on improving the business climate and building a stimulating entrepreneurial environment. Such an environment can encourage highly educated individuals to become the key bearers of entrepreneurial activities.
Ivan D. Trofimov
This paper examines profitability disparities across the European economies using the aggregate and sectoral data for the period from 1995 to 2019 and applying a combination of panel unit root tests and the club convergence procedure. For most of the sectors, no convergence was identified at the aggregate level. Convergence within the clubs to multiple equilibrium levels, however, was identified. This convergence pattern was the most typical in the knowledge-intensive service sectors. The exogenous shocks had temporary effects on the economies’ profit rates (thus contributing to convergence), whereas the country- and sector-specific profitability components were characterized by stochastic behavior (attesting to nonconvergence). Overall, the persistence of profitability disparities was demonstrated. The findings suggest the importance of the firm-specific and local profitability drivers and the limited effects of the macroeconomic and competition policies on profit rates.
Darko Lazarov and Emilija Miteva Kacarski
The main goal of the paper is to investigate the intraregional trade performance of the Western Balkan region in the last five years and identify future intraregional trade opportunities and potentials for the period from 2023 to 2027. The methodology applied in order to explore intraregional trade is based on an analysis of the growth sources of trade at the country and product levels, while the identification of untapped regional trade potentials is based on the methodology developed by the International Trade Center (ITC), which applies the Export Potential Indicator (EPI) at the product level. The results estimated in the paper found that intraregional trade inside the Western Balkan region had had positive trends in the last five years. However, regional trade is still highly concentrated and based on a small number of traded products. The paper, however, found significant untapped regional trade potentials in the future which should be a huge motivation for each country and policymakers to work on further improvements of trade and economic conditions and circumstances for the purpose of intensifying regional trade and accelerating economic growth in these countries through it.
Teodora Tica, Bojana Vuković, Kristina Peštović and Ivana Medved
The paper aims to analyze the influence of the selected financial determinants on profitability as a key determinant of corporate performance success. The sample includes 473 joint-stock companies in the Republic of Serbia that were actively operating in period 2017-2021. Panel data evaluation revealed the presence of a significant positive influence of the company size, growth, and cash flow on profitability, as well as a significant negative influence of the capital and asset structures. In contrast, the influence of liquidity and a tax shield on profitability is statistically insignificant. The obtained results primarily serve the management who can consider the indicators of the business done by joint-stock companies in order to improve profitability and ensure proper resource allocation. They are also useful for investors in planning investment and operational activities with the aim of a more effective and more efficient achievement of profitability goals. The results are also aimed at other stakeholders who want to create a profitability growth and corporate performance strategy directed towards ensuring long-term growth.
Zoran Borović, Dalibor Tomaš and Jelena Trivić
The paper is mainly aimed at identifying the sources of total factor productivity (TFP) growth within the framework of convergence for the Republic of Srpska (RSRP). The main research question is what it is that drives technological progress for a small transition country. The current study focuses on the RSRP, as the follower, and the Republic of Serbia (RSRB), as the technological leader. The analysis carried out in this research study confirms the presence of convergence at the industry level, which means that the farther away from the technological frontier a country is, the higher the TFP growth rate. The research results enable policymakers to design and implement policies capable of enhancing domestic development and increase productivity growth.