Volume 67 (2021): Edition 4 (December 2021)

In this paper, based on a quarterly dataset of G7 countries with the application of a nonlinear ARDL model we test for the presence of a short-run and long-term asymmetry in the relationship between government spending and economic activity. The main aim of this study is to analyze the relationship between government spending and economic activity in two separate scenarios, first, in periods when government spending increases and, second, in periods when government spending decreases. Our key findings are, first, the linear model that produces a positive relationship between government consumption and economic activity. Second, in the nonlinear model, more than half of the short-run and long-run coefficients are statistically significant. Third, short-run and long-run asymmetry are detected in four out of seven cases with recognized short-run asymmetry also in the remaining three cases based on graphical analysis. Finally, a negatively inclined short-run asymmetry is detected. The results thus imply a stronger output effect in periods of declining dynamics in government consumption. Future research should be focused on broadening the sample countries and model by adding additional variables.

In this article, the authors carried out an empirical analysis of the validity of purchasing power parity (PPP) in Slovenia, Croatia, the Czech Republic, Slovakia and Austria. The results provide mixed support for PPP, which is typical for extransition economies. In the first phase of the empirical part of the research, the authors tested the stationarity of the real exchange rate in a logarithm, while in the second phase, the cointegration of nominal exchange rate, domestic and foreign price levels was tested.The Vector Error Correction Model (VECM) was used in the third phase to test if the signs of variables are in accordance with economics and econometrics theories, while in the final phase, restrictions were imposed for the symmetry and proportionality of coefficients. Slovenia is subject to limitations on the symmetry and proportionality of coefficients, which means the validity of both the absolute and relative versions of the PPP theory. Croatia is subject to a limitation on symmetry, but not to a limit on the proportionality of coefficients, which means the validity of the relative version of the PPP theory. In the case of the Czech Republic, Slovakia and Austria, restrictions on the symmetry and proportionality of the coefficients do not apply, which consequently constitutes an invalidity of both versions. However, to the authors’ knowledge, and taking into account Liu (1992), who states that it is more important to check the presence of co-integration than to check the symmetry and proportionality of the coefficients, since there is a cointegratation between the nominal exchange rate, foreign prices and domestic prices, the theory of PPP is valid for all the selected countries. The empirical results suggest that all the real exchange rate time series are stationary, additionally, cointegration exists among all the variables for all countries, and the signs of coefficients are statistically significant for all variables in all countries, however, the coefficient restrictions are only statistically significant in Slovenia and Croatia.

Emerging markets’ political, economic, and social transition processes led to altered demographic trends and new macroeconomic dynamics in these economies. These changes triggered the growth of the middle class that became an essential factor of emerging markets’ attractiveness for sales and production activities of foreign firms. The purpose of this article is to analyze the demographic and macroeconomic trends of China and India in the decades before the COVID-19 crisis, aimed at estimating their role in the growth of the middle class and the consequent attractiveness of these two important emerging markets for foreign firms. We formulate our research findings on the extensive theoretical foundations and empirical analysis of selected demographic and macroeconomic indicators related to the growth of the middle class. We established that India fell behind China considerably concerning demographic transition and macroeconomic dynamics in the observed periods. China enforced a radical demographic transition. The comparative analysis of macroeconomic dynamics showed a solid leadership of China in economic growth, international trade and investment openness, technological advancement, employment, the structure of the output, domestic investment, urbanization, and salaried workers. Consequently, we estimated the lower growth of the Indian middle class and its lower importance in foreign firms’ decisions to enter the Indian market. The findings brought some implications for international managers at segmenting and selecting target foreign markets.

The e-commerce is becoming increasingly essential and principally relevant in the modern world, especially in the current pandemic. Due to the increased use of the Internet, the growth of e-commerce has escalated. This research focuses on the e-commerce environments of Singaporean and Austrian markets. It contains an outline touching on the theoretical parts and the conduct of an empirical study where the survey results from 206 participants were studied, analysed, and compared. The statistical methods chosen for this research were the t-test analysis and the correlation analysis. The empirical study served as a quantitative discussion on both countries’ e-commerce markets. The analysis of the completed questionnaires provided a better and clear understanding of the buying behaviours and their potential impact on the e-commerce markets in Singapore and Austria. Considering the results from the comparisons, the research has also highlighted some interesting findings and differences in the buying behaviours of Singaporean and Austrian shoppers.

The main purpose of this paper is to identify and investigate the factors that influence the building and managing of luxury destination brands. Based on a review of existing literature, the authors identified eight crucial factors: accommodation quality, quality of gastronomy offers, premium price, service quality, luxury shopping, unique experience, transportation infrastructure, and celebrity. The research was conducted on a sample of 619 respondents from 16 countries. Factor and regression analyses were used. The results indicate that the availability of celebrity and luxury shopping has the strongest significant influence on luxury destination brand building, while the impact of accommodation quality and a premium price is non-significant, and, interestingly, transportation infrastructure has a negative and significant impact. A convenience sample and the possibility of omitting certain factors (e.g. safety) from the research represent the main research limitations. This research contributes to marketing and brand management literature by identifying and investigating the factors that help in building and managing a luxury destination brand, which to date has been neglected in literature.

To date, research on intellectual capital (IC) in tourism has dealt with the supply-side view. This study continues the research into IC and develops a new perspective dealing with the demand side of IC in the accommodation industry, focusing on young consumers. On the theoretical ground, the study adapts the supply-side IC indicators to the demand-side perspective. A convenience sampling approach is used, and data was collected from 150 students representing the youth market. Exploratory factor analysis (EFA) is used to identify the dimensions of human, customer and structural capital of the accommodation industry for the youth market. Five dimensions of IC perceived by the youth market are identified: ‘Employee attitudes towards work’ and ‘Employee qualification’ constitute human capital; ‘Connectedness with guests’ and ‘Accommodation reputation and image’ represent customer capital, and ‘Structural knowledge’ reflects structural capital for youth in the accommodation industry.

This paper aims to explore the effect of the Algiers Stock Exchange listing on real earnings management. The study included 14 non-financial non-listed companies during the period 2015-2019 and six non-financial listed companies during the period 2010-2019. Due to the small number of companies listed on the Algiers Stock Exchange, the period of study was extended in the case of listed companies to provide enough observations. The measurement of real earnings management is based on the model of abnormal cash flows from operations (Roychowdhury, 2006), while the hypothesis testing is based on a model of multiple linear regression. The results indicate that the company size and the nature of financial statement (consolidation) do not have any effect on real earnings management in Algerian companies. The results are not consistent with the author’s hypothesis about the positive effect of stock market listing on real earnings management. The empirical evidence suggests that the Algiers Stock Exchange listing has had a negative effect on real earnings management in Algerian companies. This might be due to the scrutiny of auditors and regulators as the number of companies is easy to control, which decreases the opportunity for Algerian companies to rely on real earnings management in accordance with the opportunistic or informational view.