Vladimir Obradović1, Marko Milašinović2 and Jasmina Bogićević1
Information about the segments of a company is an important basis for making business decisions. In order for decisions based on segment information to be adequate, that information should be communicated in accordance with regulations. This paper is aimed at examining the adequacy of the segment information of listed companies in the Republic of Serbia and the Republic of Croatia and determining whether the volume of disclosed financial segment information is related to the company size and character of the audit firm. The research reveals that, in general, the disclosure of segment information is not fully in line with the International Financial Reporting Standard 8 – Operating Segments and that the joint-stock companies with a higher value of their total assets disclose financial segment information in more detail. However, there is no statistically significant difference in the amount of the segment information disclosed between the companies whose financial statements are audited by large audit firms and those that are the clients of other audit firms.
Radovan Kovačević
In this paper, the adequacy of foreign exchange reserves in the Republic of Serbia (RS) and the factors that influence their accumulation is analyzed by means of an econometric model. The relevant variables, such as the Gross Domestic Product (GDP), the Real Effective Exchange Rate (REER) and monetary aggregate M2/GDP are included in the analysis. The unit root tests applied in the research led to the conclusion that the timeseries were integrated of the order I(1). The cointegration test revealed that there was one cointegration equation. The regression model was estimated using the quarterly data for the period from 2002q1 to 2020q3. The estimated cointegration coefficients showed that the economic activity approximated in terms of the GDP had a significant influence on foreign exchange reserves accumulation, which is only followed by appreciation pressure on the dinar (approximated by the REER index) and money supply growth (estimated through the monetary aggregate M2/GDP). In addition to conventional factors, the analysis also points out specific factors and their impact on foreign exchange reserve accumulation in RS. The results of the research study show that foreign exchange reserves in RS are greater than the levels suggested by standard optimality criteria. The findings also suggest that it is necessary to take into account the dividends realized by foreign investors, as well as some segments of portfolio investment in assessing the specific indicator of the adequate level of foreign exchange reserves.
Henry Osahon Osazevbaru
This paper investigates the joint impact of interest rate and exchange rate volatility on the performance of the informal sector in Nigeria, focusing on Small and Medium-sized Enterprises (SMEs). The annual time-series data on the exchange and interest rates for the period 1981-2018 were obtained from where exchange and interest rates volatility data were computed. The data analysis was carried out using descriptive statistics, correlation, a unit root test, an Autoregressive Distributed Lag (ARDL) bound test for cointegration and the ARCH regression model. The results obtained by the ARDL bound test confirmed the presence of the long-term relationship between interest and exchange rates volatility and SMEs’ performance, which suggests that all the variables of interest move together in the long run. Moreover, the ARCH regression model showed a positive impact of exchange and interest rates volatility on SMEs’ performance. However, only exchange rate volatility was significant. Thus, policy makers should pursue the interest rate and exchange rate regimes that will encourage massive investments in SMEs. This, in turn, would increase the performance of SMEs. Also, the monetary authorities should implement the policies aimed at curtailing incessant volatility in the exchange rate and the interest rate so as to protect SMEs from the external perturbations of the movements of the exchange rate and the interest rate.
Slađana Savović, Dejana Zlatanović and Jelena Nikolić
In line with the open innovation paradigm, technology acquisitions which seek to gain access to new technologies and knowledge are becoming an important strategic tool for enhancing the innovative potential of companies. This research study is aimed at showing how technology acquisitions can help companies be more successful in making an innovation a reality. In that sense, various possibilities of improving companies’ innovative potential after the implementation of technology acquisitions are analyzed in the paper. The challenges that companies are faced with in a period after technology acquisitions are explained and possible ways to overcome those challenges are indicated as well. The results of the conducted empirical research in the impact of technology acquisitions on a company’s innovation are presented. The paper confirms the fact that the process of acquiring technology and knowledge from external sources and the harmonization of external knowledge with the internally developed knowledge base improve a company’s innovative potential. Additionally, the research results show that acquisitions increase the likelihood of innovation in integration companies. Innovations are also made a reality much faster than they would be without the cooperation of companies.
Mirela Mitrasevic1 and Snezana Bardarova2
The subject matter of this paper is measuring the risk of lending to Small and Medium-sized Enterprises (SMEs) from the point of view of the existing banking regulations. The paper starts from the hypothesis that an increase in the transparency of the credit risk measurement process would enable the timely detection of problems and leave room for the actions necessary for the management of small and medium-sized enterprises, as well as all creditors, and generate an opportunity for SMEs to provide more favorable sources of financing. In the research study, the well-known Altman Z-Score model was used to assess the probability of default and rank a company. The results of the application of the Z-Score model indicate that, to a certain extent, they can detect the companies in which bankruptcy may occur in the two years following the assessment, on the one hand, but they cannot be considered as reliable for the assessment of the probability of the bankruptcy of SMEs in the Republic of Serbia, on the other.
Stevan Luković
The retirement savings process for the members of a pension fund involves regular contribution payments made by a member and/or his employer, and the investment earnings generated by following an investment strategy. After the Global Financial Crisis, the aspect of value preservation has become particularly important to members of a pension fund, thus affecting the selection of an investment strategy. In face of increasing fluctuations on the financial market, static lifecycle strategies have become an unsatisfactory solution for members of a pension fund given the absence of a response to shocks on the financial market. In the paper, a comparative analysis of the performance of dynamic and static lifecycle strategies is carried out using bootstrap resampling in order to simulate investment returns and VaR indicators so as to assess the risk of an adverse financial outcome at retirement. The results of the analysis indicate the fact that dynamic lifecycle strategies generate more favorable financial results than static lifecycle strategies do, with a slightly increased likelihood of generating extremely unfavorable outcomes.
Edesiri Godsday Okoro1 and Confidence Joel Ihenyen2
Regardless of the viewpoints of prior studies on earnings management, no study has been carried out on whether earnings management exerts pressure on firms’ return on assets and equity, particularly in Sub-Saharan Africa in a single study. Drawing inferences from the existing earnings management models, a dissimilar model of earnings management, unlike those used in prior studies, which may match the peculiarity of Sub-Saharan Africa is developed in this paper. The data used were obtained from the Stock Exchange database of Sub-Saharan African countries by employing the fixed and random effects statistical technique. Using the proposed earnings management model, the study finds the intriguing results that may contribute to knowledge and magnify the literature that, notwithstanding the fact that earnings management exerts significant pressure on firms’ performances, it is even more so deemed as high in South Africa, only to be followed by West Africa, and low in East Africa. Interestingly, the study finds that the size of a firm plays a vital role in moderating the nexus between the earnings management and performances of Sub-Saharan African firms.
Cheng-Wen Lee1 and Andrian Dolfriandra Huruta2,3
In this paper, the effects of Foreign Direct Investments (FDIs) and exports on economic growth in the Association of Southeast Asian Nations Plus Three countries are explored. The panel data of a total of 13 countries pertaining to the period from 2008 to 2018 were analyzed. Based on the result of the Lagrange Multiplier (LM) test, the data fit to the random effect model. In a similar fashion, the Wald test suggests that there is no endogeneity problem in the given model. Furthermore, the results of the Hausman and Chow test also indicate that the random effect model is the most effective model to describe the effects of FDIs and exports on economic growth. The results prove that FDIs positively impact economic growth. In addition, exports also have a positive and meaningful effect on economic growth. Overall, the paper empirically confirms FDI-led growth and export-led growth. To conclude, the findings indicate the fact that FDIs and exports are crucial for boosting the economic growth of the ASEAN+3 countries. The ASEAN+3 region remains quite an attractive destination for international companies around the world when FDIs and trade are concerned.
Edvard Jakopin
Structural changes in the economy directly affect macroeconomic and financial stability, income growth, productivity and economic efficiency, social inclusion, and the improved quality of life. The global contraction in 2020, caused by COVID-19, the deepest since the Second World War, will cause a great global economic reset, extreme poverty will increase, and the biggest permanent loss will be in human capital. The biggest consequences for the Serbian economy will be a slowdown in structural reforms. The key performance of the economy in the conjunctural period was positive and affected the growth of the resilience of the economic system, but the research showed that the implemented structural reforms were insufficient and slow, that the old problems are still the causes of low competitiveness. In the context of new reform challenges, the focus of activities needs to be shifted towards creating a stimulating environment for the development of domestic entrepreneurship and the growth of private investment in order to increase trust in the entrepreneurship-institution relationship.
Biljana Bogićević Milikić
Intensive changes in the business environment with significant implications for organizations reflected in increasing their size, thinning structures, the application of new models in the intra- and inter-organizational designs, the growing importance of knowledge management and the application of multi-strategies have produced significant effects on the human resource management (HRM) architecture. As there are a number of different approaches to the HRM architecture in the relevant literature, this paper is aimed at creating an integral conceptual framework for designing this function. For this purpose, the paper analyzes different approaches to HRM design from the standpoint of the main theoretical models of organizational design in order to identify both similarities and distinctions between them, and build up an integral conceptual framework for designing the HRM architecture. These will form the ground for the application of a comprehensive approach in creating, analyzing and understanding the HRM architecture. The research findings suggest that the HRM modern architecture includes six design elements, namely: HRM contingent factors, key stakeholders’ interests, the HRM hard components, the HRM soft components, organizational results, and feedback.