Template-Type: ReDIF-Article 1.0 Author-Name: Soo Khoon Goh Author-Name: Koi Nyen Wong Title: Could Inward FDI Offset the Substitution Effect of Outward FDI on Domestic Investment? Evidence from Malaysia Abstract: It is well documented in the literature that Malaysia has become an emerging source of outward foreign direct investment (OFDI) in the region. The drastic increase in its OFDI has raised concerns as to whether the outbound direct investment activities from the country would detract from domestic investment activities, which have been sluggish since the aftermath of the Asian Currency Crisis. Using the autoregressive distrusted lag (ARDL) modelling approach to cointegration, the findings show that there is a long-run equilibrium relationship involving the four variables, i.e. between domestic investment and its determinants such as FDI outfl ows, FDI infl ows and domestic savings. Moreover, this study reveals that the effect on domestic investment by FDI outfl ows is substitutional and inelastic, while that by FDI infl ows is complementary and elastic, implying that the latter can overcome the substitution effect caused by the former if the Malaysian government could formulate pragmatic policies in attracting FDI inflows. Keywords: outward FDI, inward FDI, domestic investment, multinationals, Malaysia Classification-JEL: F21 Pages: 413-425 Volume: 2014 Issue: 4 Year: 2014 File-URL: http://www.vse.cz/pep/download.php?jnl=pep&pdf=491.pdf File-URL: http://www.vse.cz/pep/491 File-Format: text/html Handle: RePEc:prg:jnlpep:v:2014:y:2014:i:4:id:491:p:413-425 X-File-Ref: http://www.vse.cz/RePEc/prg/jnlpep/references/491 Template-Type: ReDIF-Article 1.0 Author-Name: Predrag D. Radojevic Author-Name: Darko Marjanovic Author-Name: Tatjana Radovanov Title: The Impact of Firms’ Characteristics on Export Barriers’ Perception: A Case of Serbian Exporters Abstract: This papers analyses impact of fi rm characteristics, i.e. size, length of exporting experience, capital ownership and type of industry on export barriers´ perception in case of Serbian exporters. This study is aimed at an identifi cation of the barriers to export among examined factors of fi rm´s internal environment, domestic business environment and foreign markets to rank barriers according to their level of impact, to spot differences in evaluation of barriers depending on firm´s characteristics, and to examine correlation between firm´s characteristics and barriers to export. Main hypothesis in this research was that barriers to export for Serbian exporters have been similar to those faced by exporters in other countries, and that the level of their influence depends on firm´s characteristics. The empirical research has been conducted through a survey, using a questionnaire with 178 exporters taking part in it. Collected data have been analysed by descriptive statistics, differences among groups and correlation tests. The results imply that most export barriers refer to domestic business environment and that there is a correlation among firm´s size, length of export experience and capital ownership with certain factors that may cause problems for exporting business. Keywords: export, firm´s characteristics, factors of internal environment factors, factors of domestic business environment, factors of foreign markets, Serbia Classification-JEL: F14, F23, M16 Pages: 426-445 Volume: 2014 Issue: 4 Year: 2014 File-URL: http://www.vse.cz/pep/download.php?jnl=pep&pdf=492.pdf File-URL: http://www.vse.cz/pep/492 File-Format: text/html Handle: RePEc:prg:jnlpep:v:2014:y:2014:i:4:id:492:p:426-445 X-File-Ref: http://www.vse.cz/RePEc/prg/jnlpep/references/492 Template-Type: ReDIF-Article 1.0 Author-Name: Alexandra Ferreira-Lopes Title: The Welfare Cost of the EMU for Transition Countries Abstract: The Czech Republic, Hungary, and Poland are set to join the Economic and Monetary Union (EMU) in the near future. This paper offers a framework for the quantitative evaluation of the economic costs of joining the EMU. Using an open economy dynamic general equilibrium model with sticky prices, we investigate the economic implications of the loss of monetary policy flexibility associated with EMU for each of these economies. The main benefit of this general equilibrium approach is that we can directly evaluate the effects of monetary policy in terms of welfare. Our findings suggest that the Czech Republic and Poland may experience sizable welfare costs as a result of joining the EMU. Results for Hungary are less striking as welfare costs in this country seem to be negligible in the benchmark economy. Nevertheless, costs of joining the EMU are higher if government shocks are important and when the trade share with the EMU is small. Keywords: monetary policy, Czech Republic, Poland, euro, welfare analysis, Hungary Classification-JEL: C68, E52, F41 Pages: 446-473 Volume: 2014 Issue: 4 Year: 2014 File-URL: http://www.vse.cz/pep/download.php?jnl=pep&pdf=493.pdf File-URL: http://www.vse.cz/pep/493 File-Format: text/html Handle: RePEc:prg:jnlpep:v:2014:y:2014:i:4:id:493:p:446-473 X-File-Ref: http://www.vse.cz/RePEc/prg/jnlpep/references/493 Template-Type: ReDIF-Article 1.0 Author-Name: Tomáš Evan Author-Name: Ilya Bolotov Title: The Weak Relation between Foreign Direct Investment and Corruption: A Theoretical and Econometric Study Abstract: Foreign direct investment has become an important factor of development of economies in the last decades. However, its economic nature as well as its relationship with corruption has not yet been clarified in economic literature. Following previous theoretical research, mainly Dunning’s eclectic model, this paper evaluates the econometric relationship between corruption and foreign direct investment by testing three theoretically-based hypo theses: that corruption perception indicator is a stationary variable, that the relationship between corruption and foreign direct investment stock is statistically weak and that changes in foreign direct investment stock do not Granger cause changes in corruption. The verification is based on unit root tests, panel co-integration and Granger causality models performed on data from the Transparency International, the World Bank and the Heritage Foundation and the UN Conference on Trade and Development (UNCTAD) for 94 countries for the years 1998-2007. The results show that there is no significant relationship between the two variables. Keywords: foreign direct investment, corruption, Dunning eclectic model, unit root tests, panel Granger causality test, Choi meta-tests, panel co-integration Classification-JEL: C12, C23, F21, F23 Pages: 474-492 Volume: 2014 Issue: 4 Year: 2014 File-URL: http://www.vse.cz/pep/download.php?jnl=pep&pdf=494.pdf File-URL: http://www.vse.cz/pep/494 File-Format: text/html Handle: RePEc:prg:jnlpep:v:2014:y:2014:i:4:id:494:p:474-492 X-File-Ref: http://www.vse.cz/RePEc/prg/jnlpep/references/494 Template-Type: ReDIF-Article 1.0 Author-Name: Gheorghe Zaman Author-Name: Zizi Goschin Title: Economic Crisis and Wage Divergence: Empirical Evidence from Romania Abstract: This paper addresses the question of convergence in real wages across Romanian counties, while putting a spotlight on the recent economic crisis, which has hit hard the entire economy. Following the main methodological trends in the literature, convergence methods were applied using the traditional cross-section approach. The empirical analysis covering a 21-year period provided clear evidence in favour of β-convergence, but indicated σ-divergence (Galton’s fallacy). Wages’ dispersion seems to rise during the economic crises and persists in the first stage of recovery as well. This finding provides support to Barro and Sala-i-Martin’s theory on the temporary divergence effect induced by economic shocks. Keywords: economic crisis, sigma and beta convergence, real wage, Romania Classification-JEL: J31, O47, R15 Pages: 493-513 Volume: 2014 Issue: 4 Year: 2014 File-URL: http://www.vse.cz/pep/download.php?jnl=pep&pdf=495.pdf File-URL: http://www.vse.cz/pep/495 File-Format: text/html Handle: RePEc:prg:jnlpep:v:2014:y:2014:i:4:id:495:p:493-513 X-File-Ref: http://www.vse.cz/RePEc/prg/jnlpep/references/495 Template-Type: ReDIF-Article 1.0 Author-Name: Hana Zídková Title: Determinants of VAT Gap in EU Abstract: This paper explains the term “VAT gap”, and briefly describes the calculation methods used in existing literature quantifying the VAT gap in various countries of the world. The VAT gap is calculated as the difference between the theoretical VAT liability ascertained from the national accounts and the VAT revenues accrued by the financial authorities. Although VAT gap is not caused by tax evasion only, it could serve as its indicator. Further, it provides a review of scientific papers and various studies that analyse factors influencing the size of the VAT gap, and summarizes the results of these empirical studies. The main purpose of this article is to perform a regression analysis of potential variables explaining the VAT gap in 24 EU Member States in two selected years (2002 and 2006) for which data on the VAT gap was available. Two factors common for both examined years affecting the VAT gap in the surveyed countries were found, being the fi nal consumption of households and non-profit organizations in each state, with a positive impact on the VAT gap, and the share of VAT in GDP, reducing the VAT gap. Other identified variables that would explain the size of the VAT gap were the share of the shadow economy and the standard VAT rate, with a positive impact, and GDP per capita, the share in intracommunity trade, final consumption of restaurant and hotel services, and the number of VAT rates, having a negative impact on the VAT gap. Keywords: tax evasion, tax gap, estimates, determinants of VAT gap, theoretical VAT liability Classification-JEL: H26 Pages: 514-530 Volume: 2014 Issue: 4 Year: 2014 File-URL: http://www.vse.cz/pep/download.php?jnl=pep&pdf=496.pdf File-URL: http://www.vse.cz/pep/496 File-Format: text/html Handle: RePEc:prg:jnlpep:v:2014:y:2014:i:4:id:496:p:514-530 X-File-Ref: http://www.vse.cz/RePEc/prg/jnlpep/references/496 Template-Type: ReDIF-Article 1.0 Author-Name: Tomáš Krabec Title: Asset Valuation Standards: A Functional-Institutional Approach Abstract: The article focuses on the elaboration and research of the real nature of standards of value. The methodology chosen for this paper is mainly based on the late institutional economics and European theories of the economic and legal order, such as the German ordoliberalism. It is argued that standards (International Valuation Standards, European Valuation Standards, IDW S 1 etc.) are not determined by the stage of development of economic theory, but rather by valuation “best practices”. The standards of value, which are normatively defi ned, first enable us to connect the valuation and the valuation purpose. The value standard or the contained value basis establishes the connection between the value and the valuation purpose, and make the estimated value relevant, or subject to the valuation purpose. Further, the purpose of the standards as a set of rules is examined, and the entities involved in the formulation of the standards and its influence are closely connected. There were identifi ed three driving forces shaping the current scope and status of both international and national valuation standards: fi rstly, the state and legislation (hard and soft law), secondly, science providing a methodological background, and lastly, joint interest groups, such as appraisers and appraisers’ associations who are generally responsible for the final versions of the standards. Since Czech commercial law does not precisely address all possible market transactions and applicable standards of value, it is argued that the International Valuation Standards can and should also be applied in the Czech Republic, since their purpose would show its effect in the Czech Republic, too. Other inspiration for business valuation can be found in the German IDW S 1 standard. Keywords: market value, valuation standards Classification-JEL: G39 Pages: 531-540 Volume: 2014 Issue: 4 Year: 2014 File-URL: http://www.vse.cz/pep/download.php?jnl=pep&pdf=511.pdf File-URL: http://www.vse.cz/pep/511 File-Format: text/html Handle: RePEc:prg:jnlpep:v:2014:y:2014:i:4:id:511:p:531-540 X-File-Ref: http://www.vse.cz/RePEc/prg/jnlpep/references/511