Template-Type: ReDIF-Article 1.0 Author-Name: Václav Žďárek Title: Some thoughts on nominal convergence, its drivers and determinants for the new eu member states preparing the euro adoption Abstract: The article analyses the process of nominal convergence of the new EU member states (NMS) with particular attention paid to some applied and theoretical aspects, which may have impact on the process of the euro adoption. Chapter two addresses selected theoretical and methodological issues connected with the International Comparison Project (ICP). It discusses determinants and influences affecting price level convergence and some issues that have set off new trends, such as the globalization or process of the on-going European integration. This chapter also presents a brief summary of the main trends of price convergence observed by focusing on changes of comparative price levels (CPL) for various disaggregated items of GDP. It also deals with potential issues and problems arising in this context. Chapter three is aimed at an empirical verification of price convergence and at a search for main driving factors using data for the NMS and the old EU member states over 11 years (1995-2006). There are some differences in results depending on the applied econometric method. The most important determinants of price level are GDP and population, the openness and public finance's indicators are not significant. The last section summarises the main findings. Keywords: globalization, nominal and real convergence, relative price level, international comparisons, law of one price, new EU members Classification-JEL: E31, F15, F31, O11, P22 Pages: 291-318 Volume: 2008 Issue: 4 Year: 2008 File-URL: http://www.vse.cz/pep/download.php?jnl=pep&pdf=334.pdf File-URL: http://www.vse.cz/pep/334 File-Format: text/html Handle: RePEc:prg:jnlpep:v:2008:y:2008:i:4:id:334:p:291-318 X-File-Ref: http://www.vse.cz/RePEc/prg/jnlpep/references/334 Template-Type: ReDIF-Article 1.0 Author-Name: Elisa Galeotti Author-Name: Eva Ryšavá Title: The endogeneity problem and fdi in transition: evidence from the privatized glass sector Abstract: This paper analyses the crucial factors determining the foreign direct investment (FDI) going to the privatized glass sector in the Czech Republic. In our research we felt that there was a scant evidence in Central and Eastern Europe of the determinants of foreign direct investments (FDI) at the micro level and we were aware of the endogeneity issue of FDI. The aim of this paper is to fill these gaps. The choice of the glass sector allows for an analysis of a firm's micro characteristics that attract foreign direct investors in an industrial sector, while reducing the impact of macroeconomic factors in their choice. Our econometrical analysis, using original panel data from 1990 to 2006, gives strong evidence that foreign direct investors in the glass sector in the Czech Republic have chosen larger and more profitable firms that were intensively restructured and privatized at the beginning of the transition. Our results support the relevance of the endogeneity issue in the choice of foreign direct investors in transition countries. Keywords: Czech Republic, panel data, performance, foreign investors, endogeneity, glass industry Classification-JEL: C23, C25, F21, F23, G3, L61 Pages: 319-339 Volume: 2008 Issue: 4 Year: 2008 File-URL: http://www.vse.cz/pep/download.php?jnl=pep&pdf=335.pdf File-URL: http://www.vse.cz/pep/335 File-Format: text/html Handle: RePEc:prg:jnlpep:v:2008:y:2008:i:4:id:335:p:319-339 X-File-Ref: http://www.vse.cz/RePEc/prg/jnlpep/references/335 Template-Type: ReDIF-Article 1.0 Author-Name: Petr Kadeřábek Author-Name: Aleš Slabý Author-Name: Josef Vodička Title: Stress testing of probability of default of individuals Abstract: This paper introduces a model for stress testing of probability of default of individuals. The model rests on assumption that the individual defaults if his savings fall below zero. The probability of default is then described as a function of several macroeconomic indicators, such as wages, unemployment and interest rates. Stress testing is carried out by applying exogenous stress scenarios for development of these indicators. The model implies that sensitivity of probability of default to the stress is mainly driven by installment to income ratio and for mortgages also by loan maturity. Hence installment to income ratio is suggested as the appropriate tool to manage credit risk of retail portfolios. Keywords: credit risk, stress testing, banking, probability of default Classification-JEL: E21, E32, G21 Pages: 340-355 Volume: 2008 Issue: 4 Year: 2008 File-URL: http://www.vse.cz/pep/download.php?jnl=pep&pdf=336.pdf File-URL: http://www.vse.cz/pep/336 File-Format: text/html Handle: RePEc:prg:jnlpep:v:2008:y:2008:i:4:id:336:p:340-355 X-File-Ref: http://www.vse.cz/RePEc/prg/jnlpep/references/336 Template-Type: ReDIF-Article 1.0 Author-Name: Erdal Demirhan Author-Name: Mahmut Masca Title: Determinants of foreign direct investment flows to developing countries: a cross-sectional analysis Abstract: The aim of this paper is to explore, by estimating a cross-sectional econometric model, the determining factors of foreign direct investment (FDI) inflows in developing countries over the period of 2000-2004. The study is based on a sample of cross-sectional data on 38 developing countries. We have used average value of all data for the 2000-2004 period. In the models, dependent variable is FDI. Independent variables are growth rate of per capita GDP, inflation rate, telephone main lines per 1,000 people measured in logs, labour cost per worker in manufacturing industry measured in logs, degree of openness, risk and corporate top tax rate. According to the econometric results, in the main model, growth rate of per capita, telephone main lines and degree of openness have positive sign and are statistically significant. Inflation rate and tax rate present negative sign and are statistically significant. Labour cost has positive sign and risk has negative sign. However, both are not significant. Keywords: developing countries, determinants of FDI, FDI flows, cross-sectional analysis Classification-JEL: C21, F21, F23 Pages: 356-369 Volume: 2008 Issue: 4 Year: 2008 File-URL: http://www.vse.cz/pep/download.php?jnl=pep&pdf=337.pdf File-URL: http://www.vse.cz/pep/337 File-Format: text/html Handle: RePEc:prg:jnlpep:v:2008:y:2008:i:4:id:337:p:356-369 X-File-Ref: http://www.vse.cz/RePEc/prg/jnlpep/references/337