WSEAS Transactions on
Business and Economics

2016 | 2015 | 2014 | 2013 | 2012 | 2011 | 2010 | 2009 | 2008 | Pre-2008

Print ISSN: 1109-9526
E-ISSN: 2224-2899

Volume 13, 2016

Notice: As of 2014 and for the forthcoming years, the publication frequency/periodicity of WSEAS Journals is adapted to the 'continuously updated' model. What this means is that instead of being separated into issues, new papers will be added on a continuous basis, allowing a more regular flow and shorter publication times. The papers will appear in reverse order, therefore the most recent one will be on top.

Volume 13, 2016

Title of the Paper: Usage of Business Intelligence Technology in Croatia: Preliminary Research

Authors: Katarina Ćurko, Vesna Bosilj Vukšić, Zvonko Merkaš

Abstract: Each company aims to improve its business performance. Business Intelligence (BI) helps firms to optimize their management capabilities. Usage of Bi system leads to conditions, procedures and mechanisms for creating quality data, information and business knowledge. By these the companies can efficiently respond to numerous pressures in complex environment. The main objective of the paper is to present the short overview of business intelligence technologies, and show the results of the research about the use of business intelligence technologies as management support system in Croatian companies.

Keywords: Business Intelligence, Data Warehouse, OLAP, Data Mining, research in Croatia

WSEAS Transactions on Business and Economics, ISSN / E-ISSN: 1109-9526 / E-ISSN: 2224-2899, Volume 13, 2016, Art. #54, pp. 591-596

Title of the Paper: Multilateral Bargaining in the Vertically Differentiated Market

Authors: Hyung Rae Cho

Abstract: In this paper, we examine the bargaining strategy of a distributor who sells vertically differentiated, i.e. high and low brand products. In this multilateral bargaining the negotiations are interdependent due to bargaining externality. We derive and analyze the equilibrium solutions for both simultaneous and sequential bargaining games between the distributor and the manufacturers of the high and low brand products. The results shows that the optimal bargaining strategy for the distributor heavily depends on the relative quality and price level of the low brand product comparing to those of the high brand product. It is also shown that, for more bargaining profit, the distributor has strong incentive to prefer a low brand product which has lower quality level per unit price.

Keywords: Multilateral bargaining, Vertically differentiated Market, Simultaneous bargaining, Sequential bargaining, Nash equilibrium solution

WSEAS Transactions on Business and Economics, ISSN / E-ISSN: 1109-9526 / E-ISSN: 2224-2899, Volume 13, 2016, Art. #53, pp. 584-590

Title of the Paper: Owner-Manager Experience and Loan Default Propensity of SMMEs

Authors: Chukuakadibia Eresia-Eke

Abstract: The paper investigates the option of determining the loan default propensity of an SMME by relying on non-financial indicators associated with owner-manager experience. This is essentially because the potential of SMMEs to contribute to economic development has been reduced by a cocktail of problems of which inaccessibility to finance in the form of institutional loans is protuberant. This problem is linked to the lenders’ loan default propensity estimation, often based on financial indicators which small businesses are not quite adept at using to signal their performance ability. The study, an applied research effort, is executed from a positivist standpoint. Using a deductive reasoning approach, hypotheses were formulated from a review of extant literature. A survey research strategy was then adopted and data was collected in a cross-sectional manner from a randomly selected sample of owner-managers, so as to empirically ascertain the (non)existence of a relationship between each of three dimensions of owner-manager experience and business loan default propensity. Results revealed that for all categories of small businesses, regardless of size, industry experience rather than managerial experience of the owner-manager had a significant association with business loan default propensity. On the other hand, interestingly, the association of loan experience of the owner-manager and business loan default propensity was business size-dependent. This, points to size-dependent idiosyncrasies, a reality often overlooked when the small business population is treated as a homogenous set in the loan default estimation process and this should prove invaluable for institutional lenders and SMMEs, alike.

Keywords: Small business, Experience, Owner-Manager, Loan Default Propensity, SMME

WSEAS Transactions on Business and Economics, ISSN / E-ISSN: 1109-9526 / E-ISSN: 2224-2899, Volume 13, 2016, Art. #52, pp. 573-583

Title of the Paper: The Relationship Between Inventory-Management Policies and Customer Service in Manufacturing Industries Logistics in Gauteng Province, South Africa

Authors: Musenga Francis Mpwanya

Abstract: Inventory management is one of key logistical activities that help companies generate revenue, keep customers, and grow. Despite many published papers dealing with inventory management in the business literature, a limited number of studies have been dedicated to the relationship between inventory-management policies and customer service, particularly in the South African context. The study seeks to determine the relationship between inventory-management policies and customer service in the manufacturing industries logistics located in Gauteng Province, South Africa. To achieve the objective, the empirical data were collected through a survey questionnaire from manufacturing industries logistics in Gauteng Province. Fisher’s exact test for a (2x2) contingency table was used to analyse the primary data. The results show that inventory-management policies positively influence customer service in manufacturing-industries logistics in Gauteng Province, indicating that the use of inventory-management policies increases customer satisfaction, and extends the market share in manufacturing industries logistics. It is recommended that a periodic customer survey should be put in place to identify customers’ needs and meet them effectively, and the use of technologically enabled business tools should be intensified, in order to ensure closeness with the customers.

Keywords: inventory, inventory management, inventory-management policies, customers’ needs, customer service

WSEAS Transactions on Business and Economics, ISSN / E-ISSN: 1109-9526 / E-ISSN: 2224-2899, Volume 13, 2016, Art. #51, pp. 556-572

Title of the Paper: Business Environment and HEIs: Grasping the Factors of Innovations as an Interplay Between Developmental Performances and Human Semantic Meanings

Authors: Tea Golob, Jana Suklan

Abstract: Throughout the history, innovations have been addressed from different perspectives contributing to the extensive knowledgebase. But what are the crucial constituent of the harmonized external and internal factors, which have a direct impact on the business, known as value orientations? Our study aims to reveal an underlying dynamics framing the possibilities of knowledge creation and fostering innovation since postmodern orientations and values have an impact on the innovative, creative and reflexive capacities. We took into account the individual characteristics, both sociographic and demographic, as well as postmodern orientations and values, indicators measuring changed cognitive frames, values and orientations we choose perceptions of being autonomous individuals, having an active imagination, supporting technological development and also what are the important child qualities. The results showed that being prone to innovations is influenced by specific social embeddedness of personalities at the individual level and also at the national level as well as that tertiary education does not encourage individuals thinking with their own head, neither being creative or innovative, which at first glance may see counterintuitive.

Keywords: Innovation factors, Developmental performance, Semantic meaning, Hierarchical regression analysis, Global innovation index, Human Development Index

WSEAS Transactions on Business and Economics, ISSN / E-ISSN: 1109-9526 / E-ISSN: 2224-2899, Volume 13, 2016, Art. #50, pp. 548-555

Title of the Paper: Biases in Market-Based Measure of the Conditional Conservatism

Authors: Olga Fullana, Mariano González, Juan M. Nave, David Toscano

Abstract: In this paper we analyse the effects of outlier observations and endogeneity on the market-based measurement of conditional accounting conservatism. To address it, we apply a reverse engineering approach by using two alternative samples to estimate a measure of country-specific conditional conservatism – one including outliers and another without the multivariate influential observations identified. In the same way, on the sample without outliers we use two alternative estimation techniques – one affected by endogeneity and another specially designed to deal with the endogeneity problem. We apply this reverse engineering approach to the estimation of a comparative model of the conditional conservatism in order to analyse the effect of the International Financial Reporting Standards first adoption on the country-specific conditional conservatism. We report for both cases the two alternative results whose differences are only due to the outlier bias and the endogeneity bias, respectively. Our results prove the presence of these biases when outliers are not correctly identified and when the Ordinary Least Squares estimation technique is conducted. Moreover, these biases are large enough to result in misleading conclusions.

Keywords: Earnings conservatism, endogeneity, GMM-SYS, IFRS first adoption, market-based accounting research, multivariate outlier detection, OLS, panel data

WSEAS Transactions on Business and Economics, ISSN / E-ISSN: 1109-9526 / E-ISSN: 2224-2899, Volume 13, 2016, Art. #49, pp. 529-547

Title of the Paper: A Proposed Urban Environmental Sustainability Indicators Framework: The Case of Malaysia

Authors: Choon Shay-Wei, Goh Han-Hwa

Abstract: The process of urbanisation and industrialisation has triggered off the emergence of big cities in Malaysia. The number of big cities exploding in recent years creates not only a huge demand for resources but also a desperate environmental situation. This paper seeks to propose a framework for indicators of urban environmental sustainability in Malaysia from twofold aspects. Firstly, we construct a set of sustainability criteria and indicators for urban environment. Secondly, we devise an integrated index to monitor urban environmental performance as well as to serve as a tool to raise awareness among the local urban authorities in Malaysia. This paper focuses on the four major cities in Malaysia, namely Penang(PG), Malacca (MC), Kuching (KU) and Kota Kinabalu (KK), which are steadily gaining in popularity as a tourist attraction and worldwide recognitions of World Heritage Site in the recent decades. Environmental health and services are the two main criteria proposed in the paper. There are sixteen indicators reflecting these criteria identified in this study. The results show that Penang and Kota Kinabalu have poorer performance than Malacca and Kuching in terms of environmental sustainability, be it environmental health or environmental services. Last but not least, it is interesting to generalise from the results of this study and conclude that various relevant strategies are needed to develop environmental sustainable cities in Malaysia due to the different nature of cities in terms of the level of urbanisation, stages of development, geographical location and historical background.

Keywords: Urbanisation, industrialisation, urban environmental sustainability, sustainability criteria, sustainability indicators framework, environmental health, environmental services

WSEAS Transactions on Business and Economics, ISSN / E-ISSN: 1109-9526 / E-ISSN: 2224-2899, Volume 13, 2016, Art. #48, pp. 522-528

Title of the Paper: Sustainable Study of Primary Comodity Management in South Konawe Indonesia

Authors: Rostin, Ernawati, Ambowonua Nusantara

Abstract: The aim of the study was to investigate the sustainability of primary commodity management in South Konawe Regency, Indonesia. The unit of analysis were primary commodity of South Konawe, comprised of: cacao, rice, cow, and chicken. The dimension assessed was: (1) income, 92) transfer benefit, (3) the availability of fertilizer, food, pestisde, and medicines; (4) the independency of subside of the government; (5) market; (6) price; (7) the availability of the labours. The instruments of the study involved descriptive qualitative by including index and contribution. Results of the study show that cow and cacao commodity is sustained, while the product of chicken and rice are less sustained. The rare of food, medicines and feritilizers are minimum problem which sustain to the aspect of economy from the entire commodity. Another problem of the study was the low income and unstable price (the price of rice), the dependentto government subside (cacao farm); market (cows and chickens) and the transfer for benefit (chickens).

Keywords: sustainable, cacao, rice, cow, chicken

WSEAS Transactions on Business and Economics, ISSN / E-ISSN: 1109-9526 / E-ISSN: 2224-2899, Volume 13, 2016, Art. #47, pp. 514-521

Title of the Paper: Aggregate Market-Based Measurement of Country-Specific Balance-Sheet Conservatism

Authors: Olga Fullana, David Toscano

Abstract: In this paper we review recent literature that following Givoly and Hayn (2000) methodology uses aggregate market-based measures to analyse time evolution of unconditional conservatism. We find that alternative specifications of Givoly and Hayn aggregate market-based measure are used as equivalent measures in the literature. At the same time, we find no analysis proving the goodness of this alternative measures. To highlight the consequences of use the alternative measures, we conduct an analysis of the evolution of unconditional conservatism using them. Concretely, we analyse the effect of International Financial Reporting Standards on the country-specific unconditional conservatism. Our results show that the use of specifications alternative to Givoly and Hayn aggregate market-based measure can result in misleading conclusions.

Keywords: Aggregate book-to-market ratio, arithmetic mean of the ratios, IFRS adoption, market-based accounting research, ratio of the arithmetic means, unconditional conservatism

WSEAS Transactions on Business and Economics, ISSN / E-ISSN: 1109-9526 / E-ISSN: 2224-2899, Volume 13, 2016, Art. #46, pp. 498-513

Title of the Paper: Brazilian Economy Dependence on China

Authors: Renata Klafke, Luiz A. Pilatti, Alexandre Roberto Lages

Abstract: This paper analyzes the influence of the Brazilian exports on China as a variable key for its economic growth during the period between 2000 and 2013. The data were obtained from secondary sources and treated with the use of statistical software. The results show a high correlation between income distributions and the dependence on exports to China. So, based on this circumstance, the reduction of Brazilian poverty depends on China’s demand. This work also shows the relationship between employment and income distribution and the gap of these correlations, which is not the immediate effect of exports in this distribution.

Keywords: Brazilian Commodities, Export, Economic Growth

WSEAS Transactions on Business and Economics, ISSN / E-ISSN: 1109-9526 / E-ISSN: 2224-2899, Volume 13, 2016, Art. #45, pp. 490-497

Title of the Paper: The Effect of Entrepreneurial Orientation and External Environment on Business Strategy and Firm Performance

Authors: Ansir Sri Wiyati Mahrani, Edi Cahyono

Abstract: The purpose of this study was to test and analyze the effect of entrepreneurial orientation and external environment on business strategy and firm performance on small and medium enterprises in West Java. The study was done using the survey method. There are 163 Small and Medium Enterprises (SME’s) participated in this research from 10 regencies in West Java. The method that used in this study is explanatory research method, using a questionnaire as a data collection tool that is distributed to 163 SME in West Java. Analysis of data in this study used descriptive analysis and Structural Equation Modeling (SEM) analysis. The result showed that entrepreneurial orientation and external environment has significant effect on business strategy. Entrepreneurial orientation, external environment and business strategy has significant effect on firm performance. These results generalized the previous researches.

Keywords: entrepreneurial orientation, external environment, business strategy firm performance, Structural Equation Modeling

WSEAS Transactions on Business and Economics, ISSN / E-ISSN: 1109-9526 / E-ISSN: 2224-2899, Volume 13, 2016, Art. #44, pp. 483-489

Title of the Paper: The Influence of Quality Management on the Excellence of Slovenian Physicians' Practice in Public Healthcare

Authors: Dean Rumpf, Jana Suklan, Gorazd Voga, Zlatka Meško Štok

Abstract: The purpose of the article is to define the influence of quality management on Slovenian physicians’ practice excellence in public healthcare, and to provide research-based conclusions and recommendations to improve quality management and excellence in healthcare. When it comes to designing a new quality management paradigm in public healthcare and public healthcare management, we found that it makes sense to search for new approaches that proved to be effective and innovative in the last decade, and which therefore can be considered a part of postmodern period of development. Successful management depends on a good organisation and well-designed policy and strategy in public healthcare, needed knowledge, skills, values, ethics and morals of physicians, on organisation’s knowledge-oriented culture, reasonable economy and interpersonal relations among employees in the internal environment, and with partners in the external environment. Quality is the basis for excellence, and excellence leads to the effectiveness of an individual or public institute. At this point, there is also a scientific challenge to gain new knowledge, information and data about healthcare institutes already awarded with a quality certificate or an acknowledgement of business excellence (EFQM and CAF), and to link such information with the effectiveness of public healthcare operation and practice of physicians employed in these public institutes.

Keywords: quality management, excellence, Slovenian physicians, public healthcare, research

WSEAS Transactions on Business and Economics, ISSN / E-ISSN: 1109-9526 / E-ISSN: 2224-2899, Volume 13, 2016, Art. #43, pp. 474-482

Title of the Paper: A Panel Study of the Environmental Kuznets Curve for Carbon Emissions in ASEAN-5 Countries

Authors: Goh Han Hwa, You Hui Li, Nur Syairah Khan Binti Beram Khan, Tan Su Hong

Abstract: Environmental degradation has now been one of top concerns for scientists, environmentalists, policymakers and people all around the world alike. Carbon dioxide (CO2) is believed to be one of the major components of greenhouse gases that contribute to air pollution and thus global warming and climate change. This research is conducted to investigate the relationship between economic growth and CO2 emissions in ASEAN-5 countries in the presence of foreign direct investment inflow (FDI) and trade openness for the period between 1981 and 2010. In order to carry out the study, various tests are applied such as panel unit root tests, Pedroni panel cointegration test, the Dynamic Ordinary Least Squares (DOLS) and Fully Modified Ordinary Least Squares (FMOLS) regressions, as well as panel vector error correction model (PVECM). The results of the study indicate that the relationship between economic growth and CO2 emissions exists in inverted-S shape in both short- and long-run for ASEAN-5 countries after controlling two additional explanatory variables, i.e. FDI inflow and trade openness. In addition, the outcome of this study also offers some fundamental policy recommendations to policymakers.

Keywords: Carbon dioxide emissions, economic growth, Environmental Kuznets curve, ASEAN-5 countries

WSEAS Transactions on Business and Economics, ISSN / E-ISSN: 1109-9526 / E-ISSN: 2224-2899, Volume 13, 2016, Art. #42, pp. 467-473

Title of the Paper: PLS Modelling on Determinants of Low Pay in Taiwan?

Authors: Yi-Hui Chiang, Hsien-Li Lee

Abstract: As an export-oriented economy, the fruits of Taiwan’s economical growth do not seem to reflect higher wage levels. What determinants account for low pay (wage levels) in Taiwan? This study proposed a partial least squares (PLS) model on wage determinants, testing ten hypotheses derived from with macro-level monthly data during the period of 2000/01-2014/06. The results found that there are seven paths regarding Taiwan’s wage levels. Exports and trade is the key and direct determinant of average regular wage levels and average working hours; the number of college or university graduates is an important one regarding average first regular wage levels in Taiwan. The results provide insight for schools, enterprises and government authorities.

Keywords: wage levels, determinants, partial least square (PLS), Taiwan, low pay

WSEAS Transactions on Business and Economics, ISSN / E-ISSN: 1109-9526 / E-ISSN: 2224-2899, Volume 13, 2016, Art. #41, pp. 457-466

Title of the Paper: Efficiency and Predictability on International Soybean Oil Prices

Authors: Everton Anger Cavalheiro, Kelmara Mendes Vieira, Ariane Ferreira Porto Rosa, Leonardo Rosa Rohde, Carlos Costa

Abstract: In analysing the efficiency, non-linearity and predictability of soybean [Glycine max (L.) Merr.] oil price series structural breaks were identified. The efficiency of the market in its weak form was then analysed using automatic variance ratio for small samples. Group Method of Data Handling (GMDH) polynomial neural networks, the Box Jenkins Method and Genetic Algorithms were tested for their ability to predict return on a monthly basis. The analysis suggested an inefficiency in weak form and some predictability of the market. The Diebold-Mariano, used to discriminate amongst models according to their accuracy, indicated that the combined use of linear (ARIMA) and non-linear (e.g., multilayered and self-organizing artificial neural networks of the GMDH and Genetic Algorithm type) techniques significantly improved the market prediction.

Keywords: market efficiency, soybean oil, predictability

WSEAS Transactions on Business and Economics, ISSN / E-ISSN: 1109-9526 / E-ISSN: 2224-2899, Volume 13, 2016, Art. #40, pp. 444-456

Title of the Paper: The Links Among the Cost Drivers of the South African Mobile Phone Industry and Supply Chain Cost-Reduction Approaches: a Network Diagram Perspective

Authors: Musenga Francis Mpwanya, Cornelius Hendrik Van Heerden

Abstract: The purpose of this paper is to understand the perceptions of mobile-phone players regarding the cost drivers and supply chain cost reduction in the South African mobile phone industry, and to report the links among the cost drivers of the South African mobile-phone industry and supply chain cost-reduction approaches from a network-diagram perspective. Semi-structured interviews were held with eight willing managers of the mobile phone companies in a qualitative case study. Observation and documents were also used for triangulation purposes. The study found network building and network maintenance, handsets, logistics, technology, marketing and sales, as well as training and consulting, to be the cost drivers of the South African mobile-phone industry. The findings of this study suggest that mobile-phone companies should consolidate their strategic relationships and outsource their non-core businesses to specialised service providers. The network diagram designed in the light of the findings showed a set of relationships among the cost drivers of the South African mobile-phone industry and the various supply chain cost-reduction approaches.

Keywords: supply chain, cost drivers, cost reduction, supply chain cost-reduction approaches, mobile phone industry, qualitative case study, network diagram

WSEAS Transactions on Business and Economics, ISSN / E-ISSN: 1109-9526 / E-ISSN: 2224-2899, Volume 13, 2016, Art. #39, pp. 427-443

Title of the Paper: A Study of Intention to Use Tablet PC E-books from a Perspective Combining TAM and IDT

Authors: Mei-Ying Wu, Hung-Chi Pan

Abstract: The emergence of Tablet PCs in recent years has further triggered an evolution of e-books. Tablet PCs are very likely to become a dominant e-book reading device in the future. This paper probed into attitude toward using and intention to read e-books for Tablet PCs among e-book users in Taiwan based on a model combining Technology Acceptance Model and Innovation Diffusion Theory. The proposed model was tested using confirmatory factor analysis. Results indicated that attitude toward using was significantly related to perceived usefulness, compatibility, and observability. In other words, people tend to have a positive attitude toward e-books for Tablet PCs when they perceive reading e-books on Tablet PCs as easy, compatible with traditional printed books, and helpful for their communication with others. Besides, most respondents held a positive view of e-books, and their intention to use e-books was positively affected by perceived usefulness and attitude toward using.

Keywords: e-book, Tablet PC, technology acceptance model, innovation diffusion theory

WSEAS Transactions on Business and Economics, ISSN / E-ISSN: 1109-9526 / E-ISSN: 2224-2899, Volume 13, 2016, Art. #38, pp. 414-426

Title of the Paper: Factors Affecting the Preferences of Agribusiness Actors of Aren Sugar toward Marketing Risk

Authors: Weka Gusmiarty Abdullah, Usman Rianse, Raden Marsuki Iswandi, Sitti Aida Adha Taridala, Lukman Yunus, Ine Fausayana, M. Arief Dirgantoro, Ilma Sarimustaqiyma Rianse, Hartina Batoa, Weka Widayati

Abstract: Everyone has different preferences in addressing risk. Different types of risk preferences can lead to different treatment given to a person who would be facilitated optimizing its ability to manage risk. The purpose of this study was to determine the factors affecting the preferences of agribusiness actors of aren sugar in particular brokers and retailers toward marketing risk. Multiple linear regression was used in this study. The result of this study showed that risk preferences of aren sugar brokers was affected by the variation of length of business and revenue, negatively where the revenue as the dominant factor, while the risk lover preferences of aren sugar retailers was affected by the revenue only, negatively. The implication of this study is the importance of risk preferences serve as the basis for consideration of policy making about the empowerment of aren sugar agribusiness actors.

Keywords: preference, risk lover, risk neutral, marketing risk, broker, retailer, aren sugar

WSEAS Transactions on Business and Economics, ISSN / E-ISSN: 1109-9526 / E-ISSN: 2224-2899, Volume 13, 2016, Art. #37, pp. 408-413

Title of the Paper: Today’s and Tomorrow’s Mobile Technologies in Supply Chains

Authors: Gökhan Kalem, Onur Kurt, Özalp Vayvay, Zeynep Tuğçe Kalender

Abstract: The advance of mobile technologies has attracted much attention in recent years. The competitive environment forces many companies to involve the latest mobile technologies and systems in their supply chains especially where customer focus is the main issue. Here the main motivation is that the industry players need a systematic approach to be able to maintain their position and grow in the market by responding to customer demands more quickly with lower costs in total. Therefore, significance of a well-managed supply chain has been growing day by day and mobile technologies including smartphones, tablets, mobile applications and lastly Internet of Things (IoT) have already become one of the most important parts of supply chain management. This results in a new definiton as “mobile supply chain management”. To understand its benefits, the drivers of mobile supply chain management are explained in detail by giving their use areas in the industry reviewing literature remarkably. At the final stage, new trends and proposals are stated by considering mobile technologies taking new grounds in supply chain management and future topics such as robotics and autonomous vehicles are mentioned as well. In this paper, it is aimed to explain the role of mobile devices, applications and IoT well in terms of characteristics of mobile supply chain management.

Keywords: Mobile supply chain management, smartphone, tablet, mobile application, Internet of Things

WSEAS Transactions on Business and Economics, ISSN / E-ISSN: 1109-9526 / E-ISSN: 2224-2899, Volume 13, 2016, Art. #36, pp. 393-407

Title of the Paper: Assets Value Change in the Accounting Equation

Authors: Fernando Juárez

Abstract: The purpose of the study is to analyze the accounting equation and the relationship between assets and claims on assets (liabilities plus stockholders’ equity), based on the dual concept of monetary units. The method is rationalistic, analytical and deductive, focusing on the implications that the dual concept has for the accounting equation. The analysis consists of the application of the identity and characteristic functions along with a coordinate transformation, to show that the assets-claims on assets relationship involves a change in assets value. The identity function represents the dual concept of monetary unit and the characteristic function relates both sides of the equation linking accounts whose units are partially identical. A reformulation of the accounting equation is made; the new equation has different number of terms on each side. Finally, a coordinate transformation for the assets side terms is done. Results show that the accounting equation consists of a series of addition functions, which take into account the dual concept of monetary units. A different number of coordinate dimensions arises on each side of the final equation, and a coordinate transformation is applied to have both sides of the equation with two dimensions. This transformation results in a change in the value of assets.

Keywords: Dual aspects, accounting transactions, accounting equation, balance sheet

WSEAS Transactions on Business and Economics, ISSN / E-ISSN: 1109-9526 / E-ISSN: 2224-2899, Volume 13, 2016, Art. #35, pp. 384-392

Title of the Paper: Destination Personality Analysis on Brand Attractiveness, Brand Awareness, and its Impact on Brand Loyalty: A Survey Research in Indonesia

Authors: Ratih Hurriyati, Rahyuniati Setiawan

Abstract: This study examines factors leading to reduced visits at the Water Park of Sabda Alam - Garut in Indonesia. The variables studied are personality destination, brand attractiveness, and brand awareness which are believed to play an important role in influencing consumer decisions regarding their visitations of Sabda Alam tourist site. The research aims to determine the effect of destination personality toward brand attractiveness and brand awareness and its impact on brand loyalty. The subjects studied are consumers (or visitors) at the Water Park, involving 222 people and an explanatory survey method has been used to examine the condition. A questionnaire has been used as a data collection technique with the help of SEM (Structural Equation Modeling) for data analysis, using AMOS software version 20. The results show that destination personality is of positive influence on brand attractiveness and brand awareness, while, brand attractiveness, brand awareness and destination personality have positive influence on brand loyalty.

Keywords: brand attractiveness, brand awareness, brand loyalty, destination personality

WSEAS Transactions on Business and Economics, ISSN / E-ISSN: 1109-9526 / E-ISSN: 2224-2899, Volume 13, 2016, Art. #34, pp. 372-383

Title of the Paper: Macroeconomic Indicators within Economic Transition in ECC Countries

Authors: Lea Prijon

Abstract: The present article discusses some of crucial macroeconomic indicators within economic transition in Central and Eastern European countries (CEE), which started the process of transition in 1989, with the fall of the Berlin Wall. We compare five CEE countries (Slovenia, Slovakia, Czech Republic, Hungary and Poland), in order to analyse their economic transition’s outcomes regarding seven crucial macroeconomic indicators: real gross domestic product (GDP), gross domestic product growth, gross domestic product per capita (GDP p.c.), foreign direct investments (FDI), unemployment rate, inflation rate and global competitiveness index (GCI). The aim of the article is to analyse (un)successfulness of economic transition, based on two contradictory approaches these countries have chosen to undergone, i.e. shock therapy and gradualism, while also its possible causal link with transition approach and transition outcomes.

Keywords: Transition, Slovenia, Slovakia, Poland, Czech Republic, Hungary, Gradualism, Shock Therapy

WSEAS Transactions on Business and Economics, ISSN / E-ISSN: 1109-9526 / E-ISSN: 2224-2899, Volume 13, 2016, Art. #33, pp. 355-371

Title of the Paper: Culture Dimensions and Application of IFRSs in the Banking Industry

Authors: Ana Isabel Lopes

Abstract: Using European and Asian banks, this paper investigates how differences in culture in different countries can be related with Loan loss provisions (LLP) based on the Hofstede’s theory. The effect of the application of International Financial Reporting Standards (IFRSs) on the amount of LLP recognized in financial statements published by Banks is also under analysis. Findings suggest that some culture dimensions play a role when analyzing risk factors, but not in all situations. When scores based on characteristics and behavior attributable to national culture are conflicting, the influence of culture on loan loss provisions is rejected. However, the application of IFRSs (vs local GAAP) has an important role, changing the power of national culture to influence the levels of LLP in countries where the scores of culture dimensions are according to the theory, and mitigating that influence when the scores are conflicting, moderating the amount of LLP that Banks should report regardless of culture behavior.

Keywords: Loan loss provisions, Banking industry, Hofstede’ culture dimensions, IFRS

WSEAS Transactions on Business and Economics, ISSN / E-ISSN: 1109-9526 / E-ISSN: 2224-2899, Volume 13, 2016, Art. #32, pp. 341-354

Title of the Paper: Audit Quality and Financial Distress: Evidence from China

Authors: Yu Lu, Diandian Ma

Abstract: This study empirically examines the relationship between audit quality and financial distress based on Chinese listed firms. This paper examines whether high audit quality can reduce the likelihood of financial distress, especially in high growth firms and government owned firms. Results indicate that the quality of the external audit has a negative relationship with financial distress. In addition, for high growth firms, results show that the relationship between audit quality and financial distress is more significant. Finally, the association between audit quality and financial problems is moderated by ownership. The overall results demonstrate that audit quality is negatively associated with financial distress and their relationship is enhanced in growth firms and state-owned firms. The findings suggest that in China, external auditing is an effective governance mechanism to face a financial crisis.

Keywords: Audit quality, Financial distress, Growth, Ownership

WSEAS Transactions on Business and Economics, ISSN / E-ISSN: 1109-9526 / E-ISSN: 2224-2899, Volume 13, 2016, Art. #31, pp. 330-340

Title of the Paper: A Test of the Efficient Market Hypothesis with Regard to the Exchange Rates and the Yield to Maturity in Colombia

Authors: Julio Sarmiento Sabogal, Abdulnasser Hatemi J., Edgardo Cayón Fallon

Abstract: This article investigates the informational efficiency of the Colombian stock market with regard to the information contained in the exchange rates as well as the yield to maturity. Since the underlying data is non-normal with time-varying volatility we make use of tests that are based on bootstrap simulations with leverage adjustments in order to create reliable critical values. The results show that neither the exchange rates nor the yield to maturity is causing the stock price index. This is interpreted as empirical support for the efficient market hypothesis in that the Colombian stock market is with regard to these two main variables.

Keywords: EMH, Colombia Stock Market, Granger Causality

WSEAS Transactions on Business and Economics, ISSN / E-ISSN: 1109-9526 / E-ISSN: 2224-2899, Volume 13, 2016, Art. #30, pp. 321-329

Title of the Paper: Enroll an EMI Course Offered by NSTs or not? Perspective of Undergraduates in Taiwan

Authors: Yi-Hui Chiang

Abstract: English has become one of the most vital skills that non-Westerners university students need to acquire. Most universities in Taiwan have either expanded the percentage of English medium instruction (EMI) lectures offered by native-speaking teachers (NST). Why, or why not, do students endroll an EMI course offered by a NST? The purpose of this paper is to propose a partial least squares (PLS) model on the relationship between EMI determinants and the enrollment from the perspective of students in Taiwan. The result shows that student determinants comprise the key factor affecting the EMI enrollment; teacher determinants, course determinants and keyman determinants all play stimulator and bridging roles regarding the students’ EMI evaluation. It provides insights for the related entities regarding enhancement of higher education in an EMI context.

Keywords: English medium instruction (EMI), native speaking teachers (NST), partial least squares (PLS), undergrates, Taiwan

WSEAS Transactions on Business and Economics, ISSN / E-ISSN: 1109-9526 / E-ISSN: 2224-2899, Volume 13, 2016, Art. #29, pp. 311-320

Title of the Paper: The Influence of Brazilian Crisis on Inefficiency and Nonlinearity on Soybean Prices

Authors: Everton Anger Cavalheiro, Kelmara Mendes Vieira, Alisson Eduardo Maehler, Carlos Costa

Abstract: We investigated the effect of the 2007-2008 Brazilian financial crisis on nonlinearity and the prediction accuracy of artificial neural networks on monthly soybean prices in Brazil. To determine the exogenous variable, the commodity’s logarithm return was calculated. The best period for the series simulation was then identified, simulations carried out and the model validated. Model forecasting results were satisfactory for all samples. A Group Method of Data Handling (GMDH) methodology was capable of demonstrating the returns’ non-randomness, denoting marketing inefficiency, arbitrage opportunities and abnormal return to investors, especially after the financial crisis of 2007-2008.

Keywords: Financial Crisis, Predictability, Nonlinearity, Soybean

WSEAS Transactions on Business and Economics, ISSN / E-ISSN: 1109-9526 / E-ISSN: 2224-2899, Volume 13, 2016, Art. #28, pp. 301-310

Title of the Paper: Determining Production Capacity Under the Consideration of a Multi-Stage BOM

Authors: Traian Alexandru Buda, Emilia Calefariu, Flavius Sarbu, Garila Calefariu

Abstract: This paper introduces a new approach for determining the production capacity in manufacturing systems or supply chains. The production capacity problem is solved when the following information is determined: how many parts can be produced at each resource and from each material, considering the given time span, the multi-stage bill of materials, the routing file and the demand mix based on the customer orders. The current model proposes a new approach in manipulating the already stated inputs by adopting the matrix calculus and data representation in order to obtain the desired outputs: the production capacity at material level and the loading level for each resource. By approaching the matrix calculus with the combination between the bill of materials and the routing file, the model reduces the calculus complexity. The opportunity of such a model is that the classic MRP data structure is directly manipulated with the purpose of obtaining the production capacity. The results are used in the rough-cut capacity planning, budgeting process and customer order confirmation. Also the facile integration in MRP systems is a vital point. The model was created also to serve any variety of manufacturing systems.

Keywords: Capacity planning, Supply Chain, MRP systems, multi-stage BOM, Routing file, Matrix calculus

WSEAS Transactions on Business and Economics, ISSN / E-ISSN: 1109-9526 / E-ISSN: 2224-2899, Volume 13, 2016, Art. #27, pp. 292-300

Title of the Paper: Taking the Financing Decision Considering Various Funding Possibilities for Entrepreneurs

Authors: Calefariu Emilia, Buda Traian Alexandru

Abstract: Entrepreneurs in emerging countries have various and numerous innovative ideas that imply solutions for developing new or existing companies. Technological enterprises have the most to benefit from these ideas, but unfortunately they have few possibilities for implementing them. In the current paper we propose a method that can be a highly objective and helpful tool in determining the best financing solution for an enterprise with no or insufficient funds. The proposed model and analysis determines the total profit obtained from developing a project, by taking into consideration two possible cases. The first case determines the profit obtained after financing the project with borrowed capital from a bank, a private person or company which demands an interest. The second case that the model takes into consideration is obtaining a public fund, governmental, European or other public funds. Also taken into consideration is equity financing, a particular case of loan-based financing. The model proposed in this paper is a fast decision instrument for entrepreneurs, for identifying the most profitable solution for financing their innovative ideas, applicable both for a large enterprise but also for a start-up.

Keywords: Virtual Enterprise, Funding sources, Borrowed capital, Regional Development, Business Models, Profitability, Comparison, Forecast

WSEAS Transactions on Business and Economics, ISSN / E-ISSN: 1109-9526 / E-ISSN: 2224-2899, Volume 13, 2016, Art. #26, pp. 283-291

Title of the Paper: An Innovative Approach to Strategic Risk Management in Banking: Russian Banks Case Study

Authors: Olga Korableva, Olga Kalimullina

Abstract: The paper presents new approaches to risk management in banking on the example of Russia. The relevance of the topic is related to the necessity of forming a unified risk based approach to the activities of all companies, including the financial sector. At the present stage of development, Russian banking system has faced a wider range of risks, which includes increased risk of systemic banking crisis, lack of financing, the volatility of the external environment, fierce competition in the market of banking services and many others. The situation forces lenders to rethink principles of risk oriented management and the implementation of innovative risk management tools. Despite the fact that wide range of tools of analysis and management of risk is used in banking, modern business environment requires changes in risk management methodology as well as a review of the principles of risk management. First of all, in the current situation the integrated approach to risk management is becoming increasingly important. On the one hand, such approach implies the assessment of risk on an integrated basis taking into account all types of risks, which affect the activities of a credit organization. On the other hand, in the present situation there is upgrading in the level of risk management. Along with operational level, issues of risk management are starting to be considered at the strategic level. These issues become the basis for strategic decision-making and business development. The situation is largely related to corporate governance, as well as the awareness of the risks not only as threats, but as also opportunities for business. In addition, when identifying and analyzing risks, it is important to take into account together both quantitative and qualitative indicators, allowing to assess the risk more accurately. The paper proposes an advanced methodology of risk management based on a hybrid SWOT and BSC-analysis, which allows to consider all the above mentioned approaches. The application of the tool is illustrated using the example of three groups of commercial banks in Russia.

Keywords: analytic network process, Balanced Scorecard, SWOT-analysis, strategy, risk-management

WSEAS Transactions on Business and Economics, ISSN / E-ISSN: 1109-9526 / E-ISSN: 2224-2899, Volume 13, 2016, Art. #25, pp. 269-282

Title of the Paper: The Reporting of Goodwill in National and International Context: Evidence from the Czech Republic

Authors: Jaroslav Sedláček, Oleksandra Lemeshko

Abstract: Goodwill as an important part of intangible assets has been more and more interesting not only for researchers but mainly for managers of corporation and its owners. This article deals with differences in accounting treatment and reporting in financial statement pursuant for the International Financial Reporting Standards in comparison to the United States Generally Accepted Accounting Principles and Czech accounting legislation. Our research had shown that there are intangible assets which do not meet the recognition criteria stipulated in Financial Accounting Standard 142 and International Financial Reporting Standard 3(R). However, if there are such assets in the corporation, then should be allocated into goodwill. The greatest differences were identified in comparison supranational legislation reporting of goodwill with the Czech accounting standards. This leads to a different presentation of the financial position and performance of the corporation that affect management decisions and investors.

Keywords: IFRS, US GAAP, goodwill accounting, recognition and measurement, goodwill impairment

WSEAS Transactions on Business and Economics, ISSN / E-ISSN: 1109-9526 / E-ISSN: 2224-2899, Volume 13, 2016, Art. #24, pp. 260-268

Title of the Paper: Evidence of Increasing Integration Between International Markets

Authors: Alexandre Costa, Paulo Sérgio Ceretta, Alexander Souza Block

Abstract: Since the origins of modern finance theory, interdependence between assets is an issue as the search for diversification ends with a better portfolio. Many studies and many approaches have been given to answer to the questions of correlation, covariance and interdependence but the subprime crises and the almost meltdown of financial markets throughout the globe, proved that portfolios were not efficiently diversified. The concept of diversification and the risk measures did not prevent from hundreds of companies worldwide to go belly up. This paper focuses its attention to a bewildering fact: interdependence is increasing along the years and the task of diversification is becoming tougher. Utilizing the Quantile Regression and including a volatility measure of the American market regressed with other international major players grouped by their geographic region it brings up strong evidence of increasing integration. It comprises stock market data from the year 2000 to 2012, going through four major events: the Nasdaq burst, the 9/11, the Subprime and the European crises.

Keywords: Quantile Regression, GARCH, interdependence, volatility, diversification

WSEAS Transactions on Business and Economics, ISSN / E-ISSN: 1109-9526 / E-ISSN: 2224-2899, Volume 13, 2016, Art. #23, pp. 238-259

Title of the Paper: Use of Timebanking as a Non-Monetary Component in Agent-Based Computational Economics Models

Authors: Petr Tučník, Lukáš Válek, Petr Blecha, Vladimír Bureš

Abstract: The current mainstream in economic research is intensively supplemented by new modelling paradigms that have been established only recently. Application of agent-based modelling in the realm of economic systems labelled as Agent-based Computational Economics (ACE) represents one rapidly evolving approaches. On the other hand, there is a lack of research focused on timebanks (TBs) as an economic concept. TBs are grounded in collaborative creation of value through (typically voluntary) exchange of timebanking credits, which represent worked hours for the benefit of TB community members. As a non-monetary concept of economic exchange of value, TB represent interesting complement to standard monetary systems. Effective utilization of TB concepts have potential to improve both social and economic standing of its community members, since TB membership allows access to services that would not be otherwise available. The idea of expanding agent-based economic models with timebanking component allows research and study of economic principles from the less traditional, and more novel perspective. Thus, timebanks represent the main research construct of this paper. This manuscript focuses on TBs definition and categorization and it develops TB in a form of general architecture utilizable in agent-based economic computational models.

Keywords: Timebanking, agent-based computational economics, economic models, complementary currency

WSEAS Transactions on Business and Economics, ISSN / E-ISSN: 1109-9526 / E-ISSN: 2224-2899, Volume 13, 2016, Art. #22, pp. 229-237

Title of the Paper: Influence of World Governance Indicators on the Determination of Sovereign Ratings in Latin American Countries

Authors: Luis Fernando Enciso, Wesley Vieira Da Silva, June Alison Westarb Cruz, Pedro Guilherme Ribeiro Piccoli, Claudimar Pereira Da Veiga

Abstract: The credit risk of governments worldwide has been evaluated by expert international agencies that disclose their ratings. However, the weightings of the variables that determine these ratings are still not as transparent as they should be. This study has the purpose of assessing the influence of worldwide governance indicator measures on the determination of long-term sovereign credit ratings in Latin American countries, using ordinal regression as the analytical tool. The results of this study show that the government effectiveness and regulation quality are two of the factors that can influence the perception of sovereign risk. The contributions of this study include the expansion of knowledge on this subject and the search for empirical evidence regarding the determination of ratings. Information regarding the effects of governance indicators on the determination of sovereign risk can be useful for researchers, governments, and agents of the financial market, aiding them in decision making and risk management.

Keywords: Economy, Finance, Sovereign risk, Ratings, Indicators

WSEAS Transactions on Business and Economics, ISSN / E-ISSN: 1109-9526 / E-ISSN: 2224-2899, Volume 13, 2016, Art. #21, pp. 216-228

Title of the Paper: The Novice Versus the Experienced Investors: Insights into the Work of the Investment Behavior

Authors: Lai Ming-Ming, Tan Siow-Hooi, Chong Lee-Lee

Abstract: This paper compared investing behaviors of experienced and novice share investors in theMalaysian equity market. The comparison is made betweenboth experienced institutional and retail investors with novice share investors. Despite some obvious differences in their behaviors, all three types of investors did behave the same in using main information to make financial decision. Investors’ behavior is related to their investment preferences and risk tolerance. Novice share investors are risk averse and financially less knowledgeable. They have great dissatisfactions with their current savings in their bank accounts and property investment despite possessing excess cash on-hand. The dissatisfaction of novice share investors on investment and their average investment skills suggest the need of financial literacy to reduce the performance gap they face. Financial education at a young age and innovation in simplifying financial products and their processes cast important consumer and policy implications.

Keywords: Behavioral finance, novice investors, experienced investors

WSEAS Transactions on Business and Economics, ISSN / E-ISSN: 1109-9526 / E-ISSN: 2224-2899, Volume 13, 2016, Art. #20, pp. 207-215

Title of the Paper: Brazilian REITs Performance: an Analysis of Higher Moments and Time Scales Influence

Authors: Bruno Milani, Paulo Sergio Ceretta, Mari Eldionara Rosa Machado

Abstract: Real Estate investments have been used to provide diversification without increasing portfolio risk, although direct real estate investment has several disadvantages, such as low liquidity and high transaction costs, and Real Estate Investment Trusts (REITs) are an alternative investment aim to overcome these difficulties. This paper analyzes the REITs performance, comparing it to Ibovespa (proxy of market) and Ifix (Brazilian REITs proxy). For a better analysis we used the wavelet method, that allows to compare the results of different scales of time. Analyzing the wavelet transform, the REITs have significant coefficients when compared to the market, index Ibovespa, but considering the relationship between the REITs and the real estate funds, Ifix, influence happens in the long run. Market volatility has a negative effect in REITs returns in the long run, probably because a REITs investor tries to avoid risk. That’s because maybe in the long run, REITs investors can change their investments to direct Real Estate if those are presenting better returns, what would reduce REITs demand and consequently, their price. It was noted that REITs returns are influenced by Real Estate companies returns in different scales, indicating that Brazilian REITs returns depend on market volatility. In a general way, this study showed that the relationships between REITs returns, Real Estate Companies returns and Market returns depend on the time scale analyzed, but they tend to be stronger at large scales. Differently of what was found by Milani and Ceretta (2014), Brazilian REITs returns can be better explained by Real Estate Sector Companies returns than by market returns, in the long run. Also, higher moments influence their returns and should be part of a model that tries to explain REITs returns.

Keywords: Real Estate, REITs, wavelets, multiscale analysis, higher moments, Brazilian market

WSEAS Transactions on Business and Economics, ISSN / E-ISSN: 1109-9526 / E-ISSN: 2224-2899, Volume 13, 2016, Art. #19, pp. 193-206

Title of the Paper: Comparison Between Brazilian Exchange-Traded Funds and Mutual Funds Performance: A Multiscale Approach

Authors: Bruno Milani, Paulo Sergio Ceretta

Abstract: The relationship between returns and risk factors are likely to vary depending on the investor’s time horizon, but CAPM supposes homogenous expectations. A relatively new approach known as wavelet analysis takes may help to reduce that problem, incorporating different time scales. Taking advantage of that, this paper aims to verify the differences in performance of Brazilian ETFs and mutual funds, according to benchmark, management style and time scale. We have wavelet decomposed share returns of Brazilian ETFs, returns of the five main Brazilian mutual funds categories and the returns of the Brazilian Market proxy into 7 time scales. Then, we estimate an extended-CAPM in each time scale. We found that there are considerable performance/pricing differences between fund/ETFs categories, which are linked to the time horizon assumed.

Keywords: Mutual Funds, ETFs, Multiscale analysis, Brazilian Market

WSEAS Transactions on Business and Economics, ISSN / E-ISSN: 1109-9526 / E-ISSN: 2224-2899, Volume 13, 2016, Art. #18, pp. 175-192

Title of the Paper: Cointegration’s Relationship and Causality between Exportations and Economic Growth from Southern America’s Countries and the United States

Authors: Claudineia Kudlawicz, Tatiana Marceda Bach, Claudimar Pereira Da Veiga, Carlos Otávio Senff, Wesley Veira Da Silva

Abstract: The objective of this study is to comprehend the dynamic of the relationships in the long term between the economic growth, represented by Gross Domestic Product (GDP) and the exportations from the Southern America’s countries and the United States. Therefore, note that both move together in a period of 51 years, just as well the existence of the causality relationship between them. For this examination, it was used Amplified Dickey Fuller’s methodology and the cointegration test of Johansen (1991) to compare the relationship between the exportations and economic growth and, the causality model proposed by Granger (1969). The results allow inferring, through Johansen’s test, eigenvalue’s statistic and the trace of vector’s existence of cointegration in the United States, Brazil, Colombia, Ecuador and Uruguay. The causality unidirectional was confirmed in Bolivia, Brazil, Chile, Ecuador and Uruguay, confirming the hypotheses GLE (export-led-growth). The main study’s contribution allows inferring that the maintenance of causality relationship, contribute to an economic development, thereby, politics incentive domestic production can be progressives, because the exportations showed up the causer of economic growth. In this respect, the political conduct could highlight the importance of competitiveness from countries in the support to domestic to productivity, fiscal incentives and infrastructure, the realization of commercial deals, aiming the exporter growth. For countries which the causality wasn’t identified, contributes for the clarification for other peculiarities, inherent to the individuals contexts that might contribute to economic growth.

Keywords: Word keys: Gross Domestic Product, Export-led-growth, Development countries, Long-term relationship, Johansen’s cointegration, Granger’s causality

WSEAS Transactions on Business and Economics, ISSN / E-ISSN: 1109-9526 / E-ISSN: 2224-2899, Volume 13, 2016, Art. #17, pp. 162-174

Title of the Paper: Entrepreneurs Skills for Creating and Managing IT Projects

Authors: Maria José Sousa, Maria do Rosário Almeida

Abstract: This article we will analyze the concept of entrepreneurship and the importance of skills development for entrepreneurs to create and manage IT projects. The problem studied in this research was to identify skills for developing an IT culture of entrepreneurship and the main objective was to build a model of skills development for IT entrepreneurs. To accomplish this research it was developed a search of articles based on the keywords "entrepreneurship" and "skills of IT entrepreneurs”, the period being considered between 2010 and 2014. The goal was to identify personal skills (cognitive, social and relational skills, technical skills and management skills) and business skills (strategies adopted by the company, products and/or services, corporate image, and management systems: human resource management, financial management, marketing, among others, and the formal and informal structure of the company). The literature review was based on entrepreneurship studies with the goal to identify soft skills that entrepreneurs need to develop to create and manage IT projects and to identify emergent technologies given the current economic challenges in order to create awareness of the possibilities for promoting the entrepreneurial activity.

Keywords: Entrepreneurs, Skills, Project Management, IT

WSEAS Transactions on Business and Economics, ISSN / E-ISSN: 1109-9526 / E-ISSN: 2224-2899, Volume 13, 2016, Art. #16, pp. 154-161

Title of the Paper: Evaluation of the Impact of the Risk Management of the Company on the Investment Attractiveness of Business

Authors: Vasilisa Makarova

Abstract: The risk management methods of a company are not obvious, thus, the role of the risk management system in the business might be underestimated, which means that the investment attractiveness of the business does not increase. The main goal of this study is to identify key factors of risk management efficiency of the company, the management of which, according to the stakeholders, can improve the investment attractiveness of the business as a whole. In some research papers on risk management, the following key performance indicators are deemed important: the behavior of stock prices at the time of a market collapse and the reduced WACC, yet due to the low information transparency of the domestic financial market, these indicators are not always useful as a method of assessing the efficiency of the business. This article presents those indicators that stakeholders analyze risk management efficiency in the preliminary assessment of the future partner.

Keywords: risk management efficiency, performance evaluation, efficiency indicators, stakeholders, investment attraction

WSEAS Transactions on Business and Economics, ISSN / E-ISSN: 1109-9526 / E-ISSN: 2224-2899, Volume 13, 2016, Art. #15, pp. 144-153

Title of the Paper: Financial Literacy of Students in the Czech Republic in Context with Student Accounts

Authors: Zdenek Hruska, Lilia Dvorakova, Pavla Rihova

Abstract: The paper deals with the current topic of financial literacy of secondary and tertiary level students and it is focused on student accounts. The results of the research performed in 2014 and 2015 are presented in the paper. The main target of the paper is to identify the dependence of the level of education and the financial literacy by the research sample of students. A partial target is to characterize a student account and its advantages over current accounts. Furthermore analysis of student accounts which are offered on the Czech banking market is made and the key criteria of this product are compared. The empiric part of the research includes the survey results analysis and testing of the established hypothesis focused on the relation between the respondents‘ education and their awareness about student accounts, for which statistic methods were used.

Keywords: bank, bank products, current account, education, financial literacy, student account

WSEAS Transactions on Business and Economics, ISSN / E-ISSN: 1109-9526 / E-ISSN: 2224-2899, Volume 13, 2016, Art. #14, pp. 138-143

Title of the Paper: An Empirical Analysis of Winning Bids in Public Procurement in the Italian Construction Sector

Authors: Benedetto Manganelli, Pierluigi Morano, Francesco Tajani

Abstract: The survival of a construction company depends on its ability to minimize the total cost of production in the long run. The long run cost curves reflect the production technology and the organizational structure of a company. These elements are the result of choices made by the entrepreneur and they are certainly influenced by the economic environment where the company is working. This study analyses the discount of the winning bids in the contracts for public works in the construction industry recorded over a sufficiently large and homogeneous period with respect to general external conditions. Based on known microeconomic models and on some specific assumptions, the winning discounts have been used to draw the long run cost curves. In turn, these cost curves have allowed to detect and classify different business strategies in the organization of companies operating in different Italian regions. The work must be attributed equally to the three authors.

Keywords: public sector procurement, winning bids, microeconomic models, business strategy, regression quadratic

WSEAS Transactions on Business and Economics, ISSN / E-ISSN: 1109-9526 / E-ISSN: 2224-2899, Volume 13, 2016, Art. #13, pp. 129-137

Title of the Paper: European Accounting Review: The Profile of Accounting Research in Europe

Authors: Maria João Cardoso Vieira Machado, Juliana De Lima Chalegre Ribeiro

Abstract: Universities and scholars from all over the world are currently under pressure to publish in scientific journals, because that brings great notoriety both for the scholar and the educational institution they are linked to. This paper aims to contribute to systematize the knowledge about the accounting research profile in Europe, by developing an empirical study of all articles published over five years in a European scientific journal of reference. As specific objectives, we aim to contribute to the knowledge about the articles’ main features, particularly: to determine the authorship characteristics, analyse which topics are more researched, and describe the main methods used. The results show that accounting research in Europe consists mainly of articles whose main theme is financial accounting, written mostly by male authors who develop their research collectively. Europe had the highest percentage of participation, especially the UK, which was the country that contributed the most. With regard to methodology, the empirical studies use mainly already existing databases.

Keywords: accounting, journals, research, author affiliation

WSEAS Transactions on Business and Economics, ISSN / E-ISSN: 1109-9526 / E-ISSN: 2224-2899, Volume 13, 2016, Art. #12, pp. 119-128

Title of the Paper: Possibilities of Clusters and Cluster Initiative Creation in Selected Sectors within Slovak and Czech Regions

Authors: Denisa Gajdová, Michaela Krechovská

Abstract: The theory of clusters often develops as a symbiotic relationship between innovation and geographic concentration of companies working within similar areas of industry. Clusters are an important part of regions and during the past years their concept became very popular which is reflected by a growing number of policies and initiatives in the EU countries. The synergies created inside a cluster enhance productivity of companies and their economic performance. An appropriate method of cluster identification is a key element for smart specialization and development of regions. The literature provides several methods for cluster identification. The aim of this paper it is to determine possibilities of cluster creation, mainly to detect the agglomerated sectors, respectively geographic concentration which can be used for the industrial clustering process. This observation offers a new perspective of cluster identification in two neighbouring countries of the Slovakia and Czech Republic and their regions. Five selected areas of economic activities were examined in twenty-two regions of both countries by means of the Location Quotient. Statistical data was provided from official statistic database. Preconditions for the cluster existence were compared to the real clusters operating in those regions. It was shown that the existence of a cluster is not always a condition for employment in the area of its activity and regional disposition. The other outcome includes the fact that quantitative method such as the Location Quotient can vary during the time and that is why calculations in longer periods of time are necessary. The originality of this paper consists of the identification of strong economic perspectives of industrial clusters in regions as the essential base for formation of clusters and their subsequent development.

Keywords: Cluster, cluster creation, cluster identification methods, location quotient, Slovakia and Czech Republic regions

WSEAS Transactions on Business and Economics, ISSN / E-ISSN: 1109-9526 / E-ISSN: 2224-2899, Volume 13, 2016, Art. #11, pp. 104-118

Title of the Paper: Management Accounting Software and Accounting Practices: Empirical Study on SME Enterprises

Authors: Maria João Cardoso Vieira Machado

Abstract: There appears to be a paradox between the methods of product valuation considered theoretically most suitable and those effectively used by enterprises according to empirical studies already made. This research strives to clarify which factors explain enterprises continued use of theoretically inadequate methods. The study aims to identify the methods used by Portuguese small and medium size enterprises to value products and to analyze if the management accounting software influences the methods used. Accounting managers from 58 enterprises in 11 Portuguese districts were interviewed. The interviewees stated that the management accounting software influences the method of indirect cost distribution, and the association of these two variables is statistically significant. However, the individual analysis of the interviews led to the detection of a third variable, namely the way in which the product valuation was conceived, and this influences the previous two variables simultaneously. This evidence suggests that the conditioning that accounting managers believed was exerted by the management accounting software on indirect cost distribution was in fact the result of the direct influence of a third variable on the first two, namely the way in which the method was conceived.

Keywords: management, accounting, software, SME, Portugal

WSEAS Transactions on Business and Economics, ISSN / E-ISSN: 1109-9526 / E-ISSN: 2224-2899, Volume 13, 2016, Art. #10, pp. 94-103

Title of the Paper: Out-of-Pocket Payments (OOP) of Poor Households in Health Care Finance

Authors: Cheng-Kun Wang

Abstract: Every governments are trying to solve the health financial problems of the poor people. Out-of-pocket payments (OOP) and catastrophic payments may cause households to incur catastrophic health expenditures especially in poor households. By analyzing 72,516 citations of 2000 articles published in SSCI and SCI journals on the health care finance from 2004 to 2013. We plotted the virtual social network to describe the relationship between scholars of health care finance and found out the hot topics in this field. Our interpretation of the analysis is that health care finance research between year 2009 and 2013 was composed of at least five subfields: equity and catastrophic payment, health expenditure, cost of health, health system performance and fee exemption policy. We combine quantitative bibliometrics and qualitative literature reviews to find out the important topics in this field. The solution of protecting the poor people's healthcare finance was that government may take strategy to reduce catastrophic payments and provide fee exemption policy for the poor. This study applies bibliometrics to find out hot topics for health care finance, and provides solutions for catastrophic payment.

Keywords: catastrophic payment, health care, finance, co-citation, social network

WSEAS Transactions on Business and Economics, ISSN / E-ISSN: 1109-9526 / E-ISSN: 2224-2899, Volume 13, 2016, Art. #9, pp. 86-93

Title of the Paper: Brazilian Residential Real Estate Bubble

Authors: Leandro Iantas Moralejo, Pablo Rogers Silva, Claudimar Pereira Da Veiga, Luiz Carlos Duclós

Abstract: The rapid pace of credit expansion in Brazil, combined with the strong growth in real estate sales prices, has prompted considerable speculation on the presence of an asset bubble in the residential real estate market. There are signs that the residential real estate is overheated in Brazil and this can be observed by the number of new launches and the increase of residential real estate sales prices on recent years. Due to the growing importance of the real estate market in Brazil and the virtual nonexistence of research related to the empirical identification of bubbles in the Brazilian residential real estate market this research assessed whether the upward movement is justified by fundamental factors in order to assess the existence of a housing bubble in the period of 2001-2013. Augmented Dickey-Fuller (ADF) and Phillips-Perron (PP) unit-root tests, as well as Johansen cointegration and Granger causality tests were conducted to detect changes in time series behavioral patterns. The housing price index was based on monthly Residential Real Estate Collateral Value Index (IVGR). Six variables were used as proxies for residential property fundamental value based on residential property rent-price and cost-price indexes. The results showed that the development of residential real estate prices can be well explained by fundamental variables. Furthermore, cointegration and causality tests reveal the existence of a long relationship between real estate prices and fundamental variables, suggesting the absence of a bubble. These results, however, do not indicate that prices of residential real estate cannot fall. Instead, it is likely that changes in the macroeconomic scenario could put downward pressure on house prices.

Keywords: Brazilian, bubble, Speculation, Dickey-Fuller, Phillips-Perron, Johansen cointegration

WSEAS Transactions on Business and Economics, ISSN / E-ISSN: 1109-9526 / E-ISSN: 2224-2899, Volume 13, 2016, Art. #8, pp. 74-85

Title of the Paper: Sub-National Evaluation of the Corruption Variability

Authors: Veronika Linhartova

Abstract: Quantification of the corruption rate in smaller regional areas is still a considerably unexplored territory worldwide. Also the definition of the potential impacts of corruption or their precise quantification is an area that was investigated only in general level of state. Detailed analysis of corruption still lacks regional dimension. Subnational distinction of a territory in terms of the corruption rate could provide a completely new extension of theories of reasons and consequences of regional disparities. There are several reasons why to focus on this issue. Perhaps the strongest reason is that if corruption is one of the variables that have an effect of reducing economic performance, the elimination of corruption in certain regions may be the key to the elimination of regional economic disparities and thus increase the economic performance of the state. The main goal of the paper is formulated in this connection. A newly proposed Regional corruption index was used to verify corruption variability within the NUTS II regions in European countries. The high level of variability in corruption was confirmed for NUTS II regions, particularly in Italy, but also in other countries. Because of this variability, it could be in many cases very misleading to evaluate the country as a whole from the viewpoint of the level of corruption.

Keywords: corruption, regions, regional disparities, European Commission, regional policy, economic performance

WSEAS Transactions on Business and Economics, ISSN / E-ISSN: 1109-9526 / E-ISSN: 2224-2899, Volume 13, 2016, Art. #7, pp. 64-73

Title of the Paper: Price of Public Contract and Dependence on Estimated Value of Public Contract

Authors: Radek Jurčík

Abstract: This paper is dealing with the one problem of public procurement (determination of final price). The paper contains the analyses of differences between the estimated value of public contract and its tendered (or final) price. This fact surfaces that in some cases due to an inaccurately estimated price of the public contract were such public contracts awarded within a different type of an award procedure than was needed due to the public contract Law in European countries or due to the European Directives. The Subject of analysis in relation to different type of contract: supply, services and works contracts and type of supplier (its business policy and its size - bigger and smaller suppliers). There were evaluated these described relations: estimated value of contract, price and factor for critical assessment. In this study the authors defined regression model of variables mentioned. This relation is important for indication if economic competition is effective and transparent.

Keywords: final price of public contracts, public contracts, estimated value of public contracts, suppliers, small and medium size enterprises

WSEAS Transactions on Business and Economics, ISSN / E-ISSN: 1109-9526 / E-ISSN: 2224-2899, Volume 13, 2016, Art. #6, pp. 54-63

Title of the Paper: Strategic Orientations and their Effects on Sustainable Service Offerings

Authors: Siti Fatin ‘Ainaa Shaikh Mahdzar, Mahazir Ismail, Zaini Abdullah, Mohd Rizaimy Shaharudin, Suhaiza Zailani

Abstract: The aim of this paper is to examine the relationships between strategic orientations (reputation-based strategy, efficiency-based strategy and innovation-based strategy) and the sustainable service offerings in closed-loop supply chains (CLSCs) by third party logistics provider (3PLs). The central importance of the practical implication is to offer solutions to facilitate third party logistics (3PLs) in offering sustainable services, as an addition to the existing services in conventional forward logistics services. In theoretical implications, the institutional theory (INT) has provided fundamental explanation of the 3PLs strategic orientations that influence the effective sustainable service offerings in CLSCs. The analysis results indicated that two types of strategic orientations that impacted sustainable services in CLSCs are efficiency-based strategy and innovation-based strategy. However, reputation-based strategy is less important to 3PLs, signifies the lack of environmental image strategy in offering the sustainable services to their customers. Further research should focus on the impacts of green initiatives by 3PLs into economy, social and environmental aspects, as well as the effect of other green offering by 3PLs to their customers.

Keywords: strategic orientations, reputation-based strategy, efficiency-based strategy, innovation-based strategy, sustainable services, closed-loop supply chains, third-party logistics

WSEAS Transactions on Business and Economics, ISSN / E-ISSN: 1109-9526 / E-ISSN: 2224-2899, Volume 13, 2016, Art. #5, pp. 44-53

Title of the Paper: Business Cycles in the Brazilian Economy in the Post-Real Period: an Analysis from Technological and Monetary Shocks

Authors: Reisoli Bender Filho

Abstract: This study is an examination of the dynamic properties of the Brazilian economy in the period following the implementation of the Real plan in the presence of technological and monetary shocks. The money-in-the-utility function model (MIU) has been used, which assumes that utility generates money by incorporating real money balances in the utility function of economic agents. To identify how business cycles respond to shocks, simulations that consider a benchmark economy and a monetary economy were conducted. The results show that in the benchmark economy the adherence was found only for real variables, while the volatility of nominal variables’ was estimated in comparison to the stylized facts of the real economy; the simulation of monetary economy produced a better adjustment of monetary variables and the movements over the cycle, indicating the non-rejection of real effects in the long-term dynamics in the economy from monetary shocks.

Keywords: business cycles, monetary and technological shocks, Brazilian economy in the post-Real period

WSEAS Transactions on Business and Economics, ISSN / E-ISSN: 1109-9526 / E-ISSN: 2224-2899, Volume 13, 2016, Art. #4, pp. 30-43

Title of the Paper: Modelling Unemployment Rate in the Czech Republic

Authors: Ondřej Čížek

Abstract: Weak aggregate output demand and high unemployment are both basic features of the economy in the Czech Republic these days. For this reason, the model formulated in this paper is based on the following transition mechanism: “High unemployment leads to low consumption demand. Production is also low as no one can afford to buy the goods, which sustains high unemployment.” The paper contributes to the existing literature by incorporating this Keynesian principle of weak aggregate demand into the basic Diamond-Mortensen-Pissarides (DMP) model in a simple and novel way. Despite its simplicity, the proposed model captures the essence of the current economic crisis. The parameters of the model are econometrically estimated. The estimated model turns out to have multiple equilibria, which is interpreted from an economic point of view.

Keywords: nonlinear modelling, unemployment, vacancies, multiple equilibria

WSEAS Transactions on Business and Economics, ISSN / E-ISSN: 1109-9526 / E-ISSN: 2224-2899, Volume 13, 2016, Art. #3, pp. 21-29

Title of the Paper: Credit Cycles under Conventional, Free and Islamic Banking: An Empirical Study of Risk-Taking Behavior

Authors: Dmitry Burakov

Abstract: In this article, we conduct a comparative analysis of credit cycles in various modes of banking. Defining a credit cycle as movement of credit risk, we set ourselves a task to analyse the peculiarities of attitude towards credit risk in modes of traditional, free and Islamic banking. Using correlation analysis in more than 15 countries for the years from 1769 to 1850 and from 1985 to 2014, we come to the following conclusions. The willingness to take risk by lenders depends essentially on the degree of responsibility of creditors to depositors and investors. Thus, the regime of free banking and Islamic model demonstrate sustainable stability in credit cycles and risk aversion, greater duration of credit cycles. Credit market concentration has no significant effect on the amplitude and quality of credit cycles in any mode. Effect of high requirements for capital adequacy on attitude towards credit risk is ambiguous: in case of limited liability of creditors, a positive effect is neutralized. Economic growth and an accompanying rise in prices (expectations of income growth) increase willingness to take risk only in case of limited liability of creditors. In case of full liability (free banking mode) or in terms of profit-loss sharing (Islamic model) the effect of rising yields is also neutralized.

Keywords: bank, credit cycle, credit risk, limited liability, free banking, Islamic banking

WSEAS Transactions on Business and Economics, ISSN / E-ISSN: 1109-9526 / E-ISSN: 2224-2899, Volume 13, 2016, Art. #2, pp. 11-20

Title of the Paper: Innovation Capacity and Service Differentiation: The Study of Methodologies for Competitive Advantage

Authors: Deosir Flávio Lobo De Castro Junior, Marcelo Augusto Menezes Deluca, Elvis Silveira-Martins, Marcio Nakayama Miura, Anderson Antonio Mattos Martins

Abstract: Innovation Capability and Service Differentiation are internationally relevant subjects discussed in academic and empirical research focused on organizational strategies. The present study analyzes the bibliometric methodologies used in international literature on these subjects. The analyses comprised 1078 articles from the EBSCO database, published between the years 1951-2014. The results showed a global perspective on the subject, identifying the works and presenting the methodological procedures and intellectual interconnections between authors and their educational institutions and / or research. The lack of research on the topic and a still modest network of researchers and research institutions were the most significant findings. As for the methodology, a clear orientation towards a quantitative approach for the construct Innovation Capability, and a qualitative one for the construct Service Differentiation was found.

Keywords: Innovation Capability, Service Differentiation; Strategy, Bibliometric Study

WSEAS Transactions on Business and Economics, ISSN / E-ISSN: 1109-9526 / E-ISSN: 2224-2899, Volume 13, 2016, Art. #1, pp. 1-10