Template-Type: ReDIF-Article 1.0 Author-Name: Mejra Festić Author-Name: Dejan Romih Title: Cyclicality of the banking sector performance and macro environment in the Czech republic, Slovakia and Slovenia Abstract: An exposure to macroeconomic risk factors across banks is a source of systemic risk that influences the banking sector performance. In this paper, we present some evidence on macroeconomic variables affecting the non-performing loans (NPL) ratio in the Czech Republic, Slovakia and Slovenia. The GDP growth might have improved borrowers' ability to serve their bank loans in Slovenia, meanwhile the accelerating NPL ratio dynamics has failed to support the hypothesis that the GDP growth fosters an improvement in the NPL ratio in the case of Slovakia. Meanwhile deceleration in the NPL ratio on export impulses has supported a procyclical theory in the Czech Republic, Slovakia and Slovenia. The response of non-performing loans to inflation supports the hypothesis about the lowering inflation that decelerates the NPL ratio. Savings have accelerated the NPL ratio in the case of Slovakia and Slovenia. The banking sector performance is possibly reflecting a favourable assessment of the economic growth and an increasing indebtedness of private sector could become causes of concern if the macroeconomic environment should develop less favourably. Keywords: economic growth, non-performing loans, macro impulses, cyclicality Classification-JEL: F47, G15, G21 Pages: 99-117 Volume: 2008 Issue: 2 Year: 2008 File-URL: http://www.vse.cz/pep/download.php?jnl=pep&pdf=323.pdf File-URL: http://www.vse.cz/pep/323 File-Format: text/html Handle: RePEc:prg:jnlpep:v:2008:y:2008:i:2:id:323:p:99-117 X-File-Ref: http://www.vse.cz/RePEc/prg/jnlpep/references/323 Template-Type: ReDIF-Article 1.0 Author-Name: Roman Hušek Author-Name: Václava Pánková Title: Exchange rate changes effects on foreign direct investment Abstract: Foreign direct investment (FDI) is an important phenomenon in international economic relations. Generally, FDI is studied from the point of view of capital and technology transfers to the recipient countries while respecting a basic fact that profit is the main investor's interest. In this paper in Part 2, some representative examples of typical FDI models are presented, whereas Part 3 should justify the specification of a model which is formulated and applied in Part 4. Investors can be driven by the expectation of maximum profit which would be obtained by allocating FDI according to the exchange rate volatility, i.e. after a sudden large devaluation of the host country currency large FDI inflows will follow as future appreciation is expected. Large exchange rate shocks are described with the help of skewness. Negative skewness means that the appreciations occur more often. Reasoning of the model explaining FDI by mean, standard deviation and skewness of changes of exchange rate is provided. An application to two New EU Members and two ASEAN countries is presented using panel data and seemingly unrelated regression technique. Keywords: foreign direct investment, panel data, exchange rate volatility Classification-JEL: C23, F21 Pages: 118-126 Volume: 2008 Issue: 2 Year: 2008 File-URL: http://www.vse.cz/pep/download.php?jnl=pep&pdf=324.pdf File-URL: http://www.vse.cz/pep/324 File-Format: text/html Handle: RePEc:prg:jnlpep:v:2008:y:2008:i:2:id:324:p:118-126 X-File-Ref: http://www.vse.cz/RePEc/prg/jnlpep/references/324 Template-Type: ReDIF-Article 1.0 Author-Name: Adam Geršl Author-Name: Jaroslav Heřmánek Title: Indicators of financial system stability: towards an aggregate financial stability indicator? Abstract: This article sets out to describe and discuss the methodology of selected financial soundness and financial stability indicators, including the attempts to construct an aggregate financial stability indicator. The first part is devoted to discussion of Financial Stability Indicators by the International Monetary Fund and presents also the values of the IMF's core Financial Soundness Indicators for the Czech Republic and other selected countries, using the data from the 2005 pilot study. This part partly covers also other existing approaches to definition and collection of partial financial soundness indicators, such as the indicators regularly assessed by the European Central Bank. In the second part, the article reviews existing approaches to construct an aggregate financial stability indicator. These include alternative approaches using balance sheet and profit and loss data, as well as financial market and regulatory agencies' data. The last part constructs a preliminary composite indicator for the stability of the Czech banking system and discusses its development over time. Keywords: financial stability, banking system, aggregation Classification-JEL: C43, G21 Pages: 127-142 Volume: 2008 Issue: 2 Year: 2008 File-URL: http://www.vse.cz/pep/download.php?jnl=pep&pdf=325.pdf File-URL: http://www.vse.cz/pep/325 File-Format: text/html Handle: RePEc:prg:jnlpep:v:2008:y:2008:i:2:id:325:p:127-142 X-File-Ref: http://www.vse.cz/RePEc/prg/jnlpep/references/325 Template-Type: ReDIF-Article 1.0 Author-Name: Fauziah Md. Taib Author-Name: Anton Abdulbasah Kamil Author-Name: Augustinus Setiawan Title: Non-linear dynamic panel data analysis for debt-equity choice and its impact on moral hazard problems Abstract: Moral hazard agency problems take place when risky debt is issued. The dominant shareholders have opportunities to make decisions which effect wealth transfer. In several recent theories, debt-equity choice, which deals with agency problems assumes that financing and investment decisions are separable. These studies have been criticized due to the fact that both decisions are interdependent. The purpose of the presented paper is to test empirically the moral hazard problem of debt-equity choice in Indonesia. This study provides evidence that the level of debt is not secured by the sufficient collateral and is also not supported by growth opportunities. It seems that Indonesian companies use debt also to finance operations and not only for real investment. Keywords: moral hazard, debt-equity choice, asset substitution problem, Indonesian companies Classification-JEL: C230, O530 Pages: 143-156 Volume: 2008 Issue: 2 Year: 2008 File-URL: http://www.vse.cz/pep/download.php?jnl=pep&pdf=326.pdf File-URL: http://www.vse.cz/pep/326 File-Format: text/html Handle: RePEc:prg:jnlpep:v:2008:y:2008:i:2:id:326:p:143-156 X-File-Ref: http://www.vse.cz/RePEc/prg/jnlpep/references/326 Template-Type: ReDIF-Article 1.0 Author-Name: Juan Carlos Bárcena-Ruiz Title: Are the public firms more innovative than the private ones? Abstract: This paper shows that the public firms can be more innovative and, thus, more efficient than the private firms. To verify this conclusion, a mixed duopoly is considered that allows both the public firm and the private firm to adopt a new technology with a positive fixed cost that reduces the marginal cost of production. The private firm maximizes profits while the public firm maximizes the weighed sum of the consumer and producer surpluses. In this framework, it is shown that if the cost of setting up a new technology takes an intermediate value when the weight of the consumer surplus in social welfare is high enough, the public firm is more innovative than the private one. Moreover, there is at least as much innovation in a mixed duopoly as in a private duopoly if the cost of setting up a new technology is high enough. Keywords: mixed duopoly, innovation Classification-JEL: L13, L33 Pages: 157-167 Volume: 2008 Issue: 2 Year: 2008 File-URL: http://www.vse.cz/pep/download.php?jnl=pep&pdf=327.pdf File-URL: http://www.vse.cz/pep/327 File-Format: text/html Handle: RePEc:prg:jnlpep:v:2008:y:2008:i:2:id:327:p:157-167 X-File-Ref: http://www.vse.cz/RePEc/prg/jnlpep/references/327 Template-Type: ReDIF-Article 1.0 Author-Name: Ismail Issham Author-Name: Abdul Samad M Fazilah Author-Name: Yen Siew Hwa Author-Name: Anton Abdulbasah Kamil Author-Name: Azli Azli Ayub Author-Name: Meor Azli Ayub Title: Economic value added (eva) as a performance measurement for glcs vs non-glcs: evidence from bursa malaysia Abstract: EVA is a useful tool for assessing company performance. It combines factors, such as economy, accounting and market information in its assessment. This study employed EVA in an attempt to compare the companies' performances of GLCs (government-linked companies) and non-GLCs. Based on a 4-year pooled panel data of 37 GLCs and 208 non-GLCs, the results show that companies with government as their stakeholders tend to exhibit lower EVA scores than the companies without government stakeholders in Malaysia. Larger size companies were found to have lower EVA values. Companies which have both the characteristics - which are simultaneously large in size and government-owned, tend to be most adversely affected. Thus, any increment in the size of company for GLCs would decrease or destroy the value of the company, and to a greater degree, than companies without government holding. Keywords: economic value added (EVA), government-linked companies (GLCs), performance, size and performance tool Classification-JEL: C11, C23, G14 Pages: 168-179 Volume: 2008 Issue: 2 Year: 2008 File-URL: http://www.vse.cz/pep/download.php?jnl=pep&pdf=328.pdf File-URL: http://www.vse.cz/pep/328 File-Format: text/html Handle: RePEc:prg:jnlpep:v:2008:y:2008:i:2:id:328:p:168-179 X-File-Ref: http://www.vse.cz/RePEc/prg/jnlpep/references/328