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.
Vladan Ivanović
Searching for an institutional structure which enables economic success is in the midst of the practical efforts of governments all around the world, as well as the academic studies endeavoring to understand the sources of success in the most prosperous national economies. The supremacy of the German economy in the European Union, as well as worldwide – from the level of the GDP per capita to high productivity, innovativeness and export performances – is the basic motivation this study rests on. Due to the fact that, unlike a failure, an economic success is always achieved in the long run, this study is aimed at revealing the (historical) institutional roots that have paved the way for the economic success of contemporary Germany. In that context, the model of the Social market economy, i.e. the competitive order (Wettbewerbsordnung), its meaning and importance in solving the allocative equation and reaching the high levels of economic efficiency are the subject matter of analysis in this paper. The key results refer to the identification of the diverse economic and social benefits that a competitive order brings into being, as well as the determination of and pointing to the essential institutional preconditions which such an order is feasible in.
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.