Volumen 5 (2019): Heft 2 (December 2019)

This paper examines the characteristics of dividend paying firms in Bosnia and Herzegovina. The research is conducted on a sample of 35 largest public firms during the period of five years, from 2013 to 2017, using multiple linear regression and logistic regression. The aim of the research is to explore the internal determinants of dividend payouts and to find whether there are any deviations from empirical experiences in the world. The research results show that larger and more profitable firms are more likely to pay dividends, while more indebted and closely held firms are less likely to pay dividends. The negative relation found between the dividend decision and investment opportunities is not statistically significant. The research results also show that the size is positively associated with higher payout ratios, while the payout ratios decrease with greater use of financial leverage. Profitability, investment opportunities and ownership concentration do not affect the level of dividend distribution.

Croatian Industrial Confidence Indicator (ICI) is one of the measures of mangers’ sentiment about the economic situation in the Croatian manufacturing industry. Since 2005, the ICI has been calculated in accordance with the harmonised European Commission methodology as a simple average of three variables: order books, stocks of finished products and production expectation. It was empirically confirmed that the ICI could predict the direction of change in industrial production more than one month ahead. With the aim of raising the ICI forecasting power, this paper proposes a novel ICI with a different weighting scheme. The empirical analysis is based on monthly data for three standard ICI subcomponents and industrial production expressed as year-on-year growth rates. The data set covers the period from May 2008 to February 2019. Data sources were the European Commission and Eurostat. The newly defined ICI was constructed by using the nonlinear optimisation approach. The weights were determined by minimizing the root mean square error (RMSE) in a simple regression model and by maximizing the correlation coefficient between the ICI and industrial production for various time lags. The results reveal that the newly defined ICI performs better in adapting and following the industrial production growth rate as well as that the dominant component in the ICI is the production expectation.

The purpose of the article is to present agricultural land tenure in Slovenia and its impact on the division of the factor income into the part intended for the production factor of land and the improvement by the introduction of the rent statistics. The land, together with the labour force and capital, contributes to the income generation and it is one of the production factors that participate in the income division. The analyses so far have been based on the FADN data but the Slovenian analysis is based on data from the Economic Accounts for Agriculture (EAA), it uses different sources, and a different calculation approach. The calculation is based on the share of rented utilised agricultural area which amounts to about 30% of the total utilised area. Due to the availability of the data the rent value is calculated depending on the institutional sectors – for agricultural enterprises (the non-financial enterprise sector) and family farms (the household sector). In 2016 the average rent per ha of utilised agricultural area amounted to almost EUR 150 and the nominal value of rents paid in Slovenian agriculture to EUR 21 million. Slovenian share of rent in factor income for the period 2000–2016 is 3%, which is substantially lower than the European Union (EU-28) average of 8%. In 2016, the factor income per employee was around EUR 6,000; about 4% of this amount was contributed to the land in the form of rent value. The rest was contributed to the workforce and capital. The paper presents the results that could be helpful for the agricultural and land policy makers.

The quadratic trend is a statistical model described by the quadratic function. Finding its extremum (also called the vertex or the turning point) using differential calculus or completing the square method is very well known in the literature. In this paper, a new method for finding the extremum of the quadratic function, based on a simple mathematical inequality is proposed. In comparison with the other two known methods, our method does not require the differentiability assumption and it takes fewer steps than completing the square method. Also, it is shown how the turning point for the quadratic trend can be applied in forecasting the unemployment rate in Croatia in the first quarter of 2019. The obtained conclusions are equal to the conclusions obtained in the usual way by using forecasting software.

Almost three decades after the collapse of the socialist system, numerous informal practices inherited from that period have remained deeply entrenched in the Croatian economy and society. Faced with burdensome regulations and complicated procedures, many citizens and companies opt to resolve their problems using string-pulling, bribery and undeclared work. However, there are many other informal means of conduct, which have not been given adequate attention so far. One of them is the practice of giving gratuity and gifts to medical practitioners for services that are already covered by health insurance, whose roots and the exact function are still not sufficiently understood. To start filling the gap, this paper explores which groups of citizens give out-of-pocket payments to doctors and nurses, as well as what motivates them to do so. The logistic regression analysis applied on data from the Special Eurobarometer Survey No 470, which was conducted in October 2017 on a stratified sample of 1,038 Croatians, reveals that these payments by no means represent a benevolent custom of expressing gratitude for healing. Even though a certain portion of citizens exercises this practice out of choice, informal payments more commonly occur following a direct request by medical staff or simply because the patient feels a pressure to do so. As revealed by the analysis, the majority of such transactions in Croatia highly resemble standard forms of bribery. In line with this, it is recipients rather than donors of gifts and cash supplements who should be targeted in endeavours to eradicate the phenomenon.

Cryptocurrencies are a sweltering topic in modern times of investment strategies. Since the cryptocurrency market is classified as an emerging market, in this paper a portfolio of emerging markets is compiled from the indices of four European Union (EU) countries and one cryptocurrency. The aim of this paper is to investigate how the incorporation of the Bitcoin cryptocurrency into the portfolio affects the performance of the portfolios of these countries. Moreover, by drawing an efficient frontier, the paper identifies where Bitcoin stands relative to other indices in the portfolio. The countries whose indices were used in the analysis are: Croatia, Hungary, Romania and Poland during the period from July 13, 2018 to June 07, 2019. The method used for an efficient frontier formation is Markowitz’s Modern Portfolio Theory (MPT). By applying this theory, the minimum variance portfolio at the efficient frontier was created for the portfolio with and without the cryptocurrency. The empirical analysis indicates that Bitcoin improves the effectiveness of the portfolio in emerging markets of the selected EU countries, where the expected risks of a portfolio that includes the cryptocurrency are smaller and with higher returns than those of portfolios without Bitcoin. From the Markowitz’s theory point of view, the results of the empirical analysis also indicate that Bitcoin is on the efficient frontier. Since all instruments on the efficient frontier according to the modern portfolio theory are efficient, it can be concluded that investments in such instruments depend on investor’s risk aversion.

Future economic growth and competitiveness will increasingly depend on how effectively employers can utilise their ageing workforces. To manage the inevitable changes in demographics, employers need to start preparing for an ageing workforce and developing strategies to manage and retain older employees. The main objective of this paper is to determine the impact of leadership and employee relations on work satisfaction of older employees, as well as to determine the impact of work satisfaction on the work engagement of older employees in financial service companies in Slovenia. To test the hypotheses, the authors used structural equation modelling. The results show that the effects of leadership and employee relations on work satisfaction in the case of older employees in financial service companies in Slovenia are positive, and the effect of work satisfaction on the work engagement of older employees is positive, too.

The financial numbers game is unfortunately alive and doing well. One of the forensic accounting techniques is based on Benford’s Law and is used for the detection of unusual transactions, anomalies or trends. The aim of this paper is to test whether the financial statements of Croatian companies deviate from Benford’s Law distribution. The financial statements of 24 companies that are in the pre-bankruptcy settlement process and 24 companies that are not in the pre-bankruptcy settlement process were analysed using the Benford’s Law test of the first digit distribution for the period from 2015 to 2018. The data used to calculate the first digits of distribution were taken from the Zagreb Stock Exchange. The chi-square test has shown that the observed companies that are not in the process of pre-bankruptcy settlement do not have the first digit distribution which follows the Benford’s Law distribution. The Kolmogorov-Smirnov Z test has shown that the distribution of the first digits from the financial statements of companies listed on the Zagreb Stock Exchange fits to Benford’s Law distribution.

This paper investigates the long-term cointegration between tourism prices and domestic inflation in Croatia and Slovenia. Those two countries share a common economic history and statistical crispness in the 20th century, the time when Econometrics was not a blossoming topic. The two countries split the common economic path in the 1990s and since then, econometricians have been tackling different development issues and researches. The purpose of the paper is to stress the importance of using a well-designed time-series methodology when dealing with multiple variables estimation and evaluation as well in designing adequate and efficient quantitative models, capable to provide valuable forecasts and predict external shocks. It is assumed that, at the basis of an efficient quantitative model, there is a need of unit root and errors normal distribution testing. To test the covariance of cointegration between tourism prices and domestic inflation, the vector autoregressive model (VAR) model is used on 260 valid monthly time-series observations (~ 22 years). The results have shown that prices of short-stay accommodation in Slovenia are cointegrated with domestic inflation, whereas in Croatia there is no stable cointegration vector on prices of accommodation services if / when analysed using the intervention dummy variables and a constant. Although the results indicate that the research hypothesis is generally confirmed, better and more robust results could be obtained including mean-shift dummy variables in a VAR model.