Fatai Abiodun Atanda1 and Florence Olubunmi Osemene2
This study examines the key determinants of the competitiveness of firms in Nigeria. It draws the firm-level (i.e. firm-specific characteristics) data and macro-data (environmental factors) from the annual reports and accounts of non-financial listed firms and the Statistical Bulletin of the Central Bank of Nigeria, respectively. In addition, it employs descriptive, inferential and econometric tools to analyze the data. The results reveal that the age of a firm, its productive assets, profitability and the capital expenditure ratio of the government enhanced the competitiveness of high-competition firms, on the one hand, while the high cost of finance hindered it, on the other. However, profitability, business risk, the size of a firm and inflation contributed to the competitiveness of low-competition firms, on the one hand, while sales growth and employees’ capacity reduced it, on the other. It was concluded that both firm-specific and environmental factors played the beneficial and detrimental roles when the level of the competitiveness achieved by the Nigerian non-financial listed firms is concerned. Thus, the policy implications of these results were discussed.
Vladimir Mihajlović
This study investigates the validity of the New Keynesian Phillips curve in the Republic of Serbia. By means of empirical analysis, the impact of domestic inflation drivers, i.e. inflation expectations, real marginal costs and the output gap, is quantified. The results reveal that inflation in Serbia responds more intensively to negative rather than positive supply and demand shocks as it decreases more significantly in economic contraction than in expansion. The estimated model of the New Keynesian Phillips curve with marginal costs gives the unambiguous evidence that the growth of cost-push inflation could be reduced by a productivity-enhancing policy. Expected inflation significantly impacts the actual inflation rate, albeit inflation dynamics are dominated by inertia, i.e. past rates affect the current. The empirical estimate of the New Keynesian Phillips curve model with the output gap that indicates monetary expansion in the Republic of Serbia might, inter alia, stimulate the economic activity without causing significant inflationary pressures to occur.
Edirin Jeroh
This paper comparatively analyzes the internal determinants of environmental disclosure practices among firms in Sub-Saharan Africa (SSA). To achieve this, secondary data on the characteristics of the measures of the board and the characteristics of the audit committee were obtained from a sample of 60 companies from across the region (20 each from Kenya, Nigeria and South Africa). The regression technique was used to analyze the data and the results revealed the fact that, while the characteristics of the measures of the board and the audit committee were found to be the significant determinants of the environmental disclosure of firms in Kenya and Nigeria, the same cannot be said of firms in South Africa. The study, therefore, recommends that borrowing from South Africa, environmental management practices should be institutionalized in the entire region. Additionally, standard-setters should make practical efforts by developing new reporting standards which will guide and encourage a full disclosure of environmental concerns by firms.
Wasiu Abiodun Sanyaolu1, Trimisiu Tunji Siyanbola2 and Hafeez Babatunde Makinde3
Credit risk is one of the biggest challenges banks in Nigeria are faced with. By implication, it is also the one with dire consequences for their operation and survival, given the fact that a series of banks’ failures have significantly been brought into connection with nonperforming loans. Thus, this study examined the bank-specific and macroeconomic determinants of the nonperforming loans of the listed Deposit Money Banks (DMBs). Regression analysis involving fixed effect was adopted in order to analyze the panel data of the 10 selected deposit money banks in the period from 2008 to 2017. The findings show that the capital adequacy ratio, the size and the loans-to-total-assets ratio negatively and significantly affect nonperforming loans, whereas profitability and age were found to significantly but positively influence nonperforming loans of the Nigerian deposit money banks. More so, the liquidity ratio negatively, but insignificantly, affects nonperforming loans. However, not a single macroeconomic variable exerts a significant effect on nonperforming loans. The study recommends that banks should always deploy strategies for credit risk management by taking cognizance of the bank-specific and economic determinants of the nonperforming loans.
Olgica Glavaški and Emilija Beker Pucar
In the aftermath of the global recession, the need for fiscal consolidation in order to reduce budget deficits and the public debt has intensified, but with the aim to make the measures applied not affect the further slowdown of the economic activity in the European Union (EU) economies. In this paper, the episodes of the fiscal consolidation in the period from 1990 to 2015 in the 28 EU economies are analyzed, differentiating the multiyear episodes against the one-year (i.e. cold shower) episodes and their effects before and after the global recession. The episodes of the fiscal consolidation that result in successful (a reduction in the cyclically-adjusted primary budget deficit) and expansionary effects (the GDP growth) are identified, thus empirically confirming the existence of non-Keynesian effects. The stated affirms the idea that the achievement of fiscal sustainability by using austerity measures does not necessarily imply contractions in economies and that the development of a fiscal architecture in the EU by establishing complementarity between the national and supranational fiscal rules is of extraordinary importance in the post-crisis period.
Taiwo Azeez Olaniyi and Babatunde Akinola
Traditional theories ignored the power of culture with respect to tax performance, even though culture does have an impact on everything that people do or decide not to do. This study examines the impact of the national culture dimensions: the power distance, individualism, masculinity, uncertainty avoidance, long-term orientation and indulgence on tax performance in ten African countries. A quantitative research design was adopted and a panel dataset from 2010 to 2016 was analyzed using the Panel-Corrected Standard Error estimator. The results show that indulgence indicates a significant positive impact on tax performance, the power distance, individualism and long-term orientation have a significant negative impact on tax performance, whereas masculinity and uncertainty avoidance have an insignificant impact. Thus, high tax performance is associated with a low power distance, low individualism, low short-term orientation, moderate uncertainty avoidance, masculinity and high indulgence. This study recommends that tax policymakers should consider cultural values when designing tax compliance legislation or when investigating possible behavioral irregularities.
Milena Nedeljković Knežević1, Maja Mijatov1 and Slađana Nedeljković2
The subject matter of this research study is the importance of the sociodemographic characteristics and the personality dimensions of employees for communication satisfaction. This study is aimed at determining the significant influences and correlations between the main constructs within the research study conducted on a sample of 119 employees. The obtained results have shown that, except for the gender structure of the respondents, the other examined sociodemographic characteristics have an influence on certain dimensions of communication satisfaction. Correlations were also identified between certain personality dimensions and the dimensions of communication satisfaction. The research results have numerous practical implications. The quality of the interpersonal relationships between highly-educated employees and their supervisors needs to be improved by providing a greater autonomy and complex working tasks. It is also necessary to improve the bottom-up communication process for the purpose of enabling subordinates to express their ideas without barriers. Finally, it is recommended that employees with a high level of the personality dimensions ‘Openness to new experiences’ and ‘Extraversion’ should be in the positions in which they could achieve the best results.
Danijela Martinovic
The break-even point model is a well-known instrument for determining target production, income and costs for the purpose of gaining a zero profit. Although it is a concept that was present in the literature as early as in the late XIX century, the break-even point is applied in the contemporary business practice even today. This paper aims to demonstrate the advantages and limitations of the traditional (linear) and contemporary (nonlinear) break-even models. Particular attention is paid to the assumptions needed for a successful application of both models. The frequency of the use of the break-even point, limitations and assumptions were studied on a sample of 100 manufacturing enterprises in Bosnia and Herzegovina. The research study has revealed management’s awareness of the potentials for applying the break-even point concept and the need to use the modern models that include assumptions pertaining to change in the key variables in the model. This results in the need to design such nonlinear, dynamic and stochastic models that best represent the dynamic conditions of contemporary business.
Ebiaghan Orits Frank
This study empirically investigates the nexus between the moral hazard hypothesis and the adoption of the Deposit Insurance Scheme (DIS) in Nigeria. Using the secondary data sourced from the Nigerian Deposit Insurance Corporation’s (NDIC) annual reports and accounts, a multiple regression model was formulated, comprising a deposit insurance fund as a proxy for moral hazard (the dependent variable), whereas the asset quality indicators of Nigerian banks were the independent variables. The estimation technique according to the Generalized Method of Moments (GMM) was used to test the relationships between the variables. The study revealed a significant positive relationship between the asset quality indicators of Nigerian banks and the deposit insurance fund, which supports the moral hazard hypothesis. It is recommended that governments should strengthen their banking regulatory systems in order to mitigate the unintended risks which the adoption of the DIS portends.
Violeta Todorović, Jasmina Bogićević and Stefan Vržina
Income tax management includes a set of activities aimed at the legal minimization of income tax liabilities. Due to the tax law flexibility and cross-country differences in income taxation, banks may be in a position to significantly reduce their tax burden. An objective of the paper is to calculate the effective income tax burden of banks in the Republic of Serbia and examine the impact of income tax on banks’ operations. A research study conducted on a sample of banks between 2010 and 2016 shows that the effective income tax rate in banks is well below the statutory rate, mostly due to the use of government tax incentives. Furthermore, 25% of the observations have an effective tax rate of 0% despite the reported pre-tax income. The latest increase in the statutory tax rate in the Republic of Serbia has not had an impact on bank leverage, either in the short or long term. This may be an indicator that tax shield effects are not considered when the statutory tax rate is relatively low. The paper also finds that the effective tax rate is not correlated with bank profitability.