Template-Type: ReDIF-Article 1.0
Author-Name: Burak Güris
Author-Name: Muhammed Tirasoglu
Title: The Validity of Purchasing Power Parity in BRICS Countries
Abstract: It is observed that purchasing power parity (PPP) as one of the controversial and most interesting topics of international macroeconomics literature is tested by using different econometric methods for certain countries and/or country groups by many researchers. The validity of PPP is important in terms of being a common exchange rate used in international comparison. In this context, the validity of relative purchasing power parities in the BRICS countries (Brazil, Russia, India, China and South Africa) were analysed for the January 1993-March 2015 period. Non-linear stationarity analysis was used in the study. According to the findings of the analysis, it was concluded that all of the BRICS countries have a non-linear structure; the PPP approach was valid for Brazil and South Africa, but not valid for Russia, India and China in the relevant period.
Keywords: purchasing power parity, BRICS countries, Fourier stationary test, nonlinearity
Classification-JEL: C22, F31
Pages: 417-426
Volume: 2018
Issue: 4
Year: 2018
File-URL: http://www.vse.cz/pep/download.php?jnl=pep&pdf=654.pdf
File-URL: http://www.vse.cz/pep/654
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Template-Type: ReDIF-Article 1.0
Author-Name: Nooraddin Sharify
Title: A Nonlinear Supply-Driven Input-Output Model
Abstract: One of the major limitations of the supply-driven input-output (I-O) Ghosh model concerns its linear production function. Using the I-O table, this paper replaces the linear production function with the Cobb-Douglas (CD) production function within the supply-driven model. The two models are compared both theoretically and empirically. Nonlinear production function, relative substitutability of primary factors, and variability of the proportion of intermediate inputs over product levels are the characteristics of the proposed model. The consideration of sectors’ Solow residual as Total Factor Productivity (TFP) of sectors is yet another characteristics of the proposed model. The model is also plausible in value added and supply shock computations.
Keywords: nonlinear input-output model, Cobb-Douglas production function, Ghosh model, plausible supply-driven input-output model
Classification-JEL: C63, C67, E27
Pages: 494-502
Volume: 2018
Issue: 4
Year: 2018
File-URL: http://www.vse.cz/pep/download.php?jnl=pep&pdf=657.pdf
File-URL: http://www.vse.cz/pep/657
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Template-Type: ReDIF-Article 1.0
Author-Name: Robert Skikiewicz
Author-Name: Krzysztof Blonski
Title: Economic Sentiment Level versus the Quality of Life in European Union Member States
Abstract: The purpose of this paper is to evaluate the interplay between variables pertaining to the satisfaction of life and economic sentiments of citizens of selected European countries. The analysis of the connections will be conducted based on existing subjective primary data. The data in question are results of international comparative surveys (European Social Survey, ESS; the OECD's Better Life Initiative) and results of consumer economic sentiment surveys ordered by the European Commission. The research procedure also benefitted from the selected items of literature available in the form of books and articles. Population economic sentiments are subject to cyclical changes connected with the changes in economic situation in individual countries. The analysis of secondary data allows for the conclusion that there is a statistically significant direct or indirect strong relationship between assessments of life satisfaction and consumer confidence indicator. The grouping of the researched countries based on secondary data has made it possible to capture the similarities between individual states.
Keywords: European Union, life satisfaction, economic sentiment
Classification-JEL: D12, I31
Pages: 379-396
Volume: 2018
Issue: 4
Year: 2018
File-URL: http://www.vse.cz/pep/download.php?jnl=pep&pdf=658.pdf
File-URL: http://www.vse.cz/pep/658
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Template-Type: ReDIF-Article 1.0
Author-Name: Ondřej Částek
Title: Performance Factors of Czech Companies Identified Using Statistical Pattern Recognition: Interpretation of Results
Abstract: The paper interprets factors of corporate performance identified by means of statistical pattern recognition techniques. A Dependency-Aware Feature algorithm with non-linear regression model ranked 74 potential factors of corporate performance according to their contribution to corporate performance prediction. This paper brings consecutive statistical analyses, which interpret the effects of Strategy, FDI, Share of Export, Top Management Performance Pay, and Workers’ Performance Pay on corporate performance. Furthermore, the analyses reveal strong mutual moderating interdependencies. On the national scale, the paper brings evidence that the companies from the industries researched can use the stational techniques to learn about corporate performance factors. On a global scale, the paper introduces the contribution of Dependency-Aware Feature selection in the field of management and confirms the need for a multidimensional contingency approach in researching corporate performance. The results are based on a sample of 432 private limited or joint stock companies located in the Czech Republic operating in the manufacturing and construction industries and employing 50 or more people.
Keywords: corporate financial performance, statistical pattern recognition, dependency-aware feature selection, factors of corporate performance, strategy, FDI
Classification-JEL: L25, M10
Pages: 397-416
Volume: 2018
Issue: 4
Year: 2018
File-URL: http://www.vse.cz/pep/download.php?jnl=pep&pdf=659.pdf
File-URL: http://www.vse.cz/pep/659
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Template-Type: ReDIF-Article 1.0
Author-Name: Kateřina Krchnivá
Author-Name: Danuše Nerudová
Title: The CCCTB Allocation Formula Game: The Performance of Economics Sectors
Abstract: The implementation of the Common Consolidated Corporate Tax Base (hereinafter CCCTB) in the European Union will probably have an impact on tax revenues of the concerned states since the distribution of the group tax base shall reflect the capacity to earn income by individual group members. This is secured by the employing of the allocation formula containing three factors that shall reflect the profit generating process of individual companies. The paper analyses the explanatory power of the proposed CCCTB formula on the data sample of group companies with a link to the Czech Republic - either parent or subsidiary company in the group covered in dataset is tax resident of the Czech Republic. The obtained results are evaluated on the level of individual economic sector with the aim to verify if the proposed CCCTB formula is the most suitable for them, where the sufficiency of the explanatory power of the allocation formula was indicated based on the assigned change of distributed profit to the respective economic sector.
Keywords: common consolidated corporate tax base, formula apportionment, NACE sectors, profit
Classification-JEL: F23, H25, K34
Pages: 427-448
Volume: 2018
Issue: 4
Year: 2018
File-URL: http://www.vse.cz/pep/download.php?jnl=pep&pdf=660.pdf
File-URL: http://www.vse.cz/pep/660
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Handle: RePEc:prg:jnlpep:v:2018:y:2018:i:4:id:660:p:427-448
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Template-Type: ReDIF-Article 1.0
Author-Name: Jelena Zvezdanovic Lobanova
Author-Name: Davorin Kračun
Author-Name: Alenka Kavkler
Title: Institutions as a Mediator of the Effect of Crossborder Mergers & Acquisitions on Domestic Investment
Abstract: In this article we analyse the impact of the interaction between cross-border mergers and acquisitions and the quality of the institutional setting on domestic investment using panel data for 22 European transition countries from 2000 to 2014. We investigate whether the progress and durability of institutional reforms have a crucial influence on the economic performance of crossborder mergers and acquisitions in transition countries. Our empirical findings indicate that contemporaneous cross-border mergers and acquisitions have a crowding-out effect on domestic investment in the year of merger or acquisition, but the influence of their lagged level has a strong crowding-in effect one year later. We find that the overall quality of the institutional setting and the rule of law negatively and significantly affect the relation between this type of foreign direct investment and domestic investment, both in the short and long run. Political stability exhibits a positive and significant impact on domestic investment in the current period and over time.
Keywords: transition countries, domestic investment, cross-border mergers and acquisitions, institutional setting
Classification-JEL: E22, F21, F23, O52
Pages: 479-493
Volume: 2018
Issue: 4
Year: 2018
File-URL: http://www.vse.cz/pep/download.php?jnl=pep&pdf=665.pdf
File-URL: http://www.vse.cz/pep/665
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Template-Type: ReDIF-Article 1.0
Author-Name: Pavel Potužák
Title: Price Level Stabilization: Hayek contra Mainstream Economics
Abstract: The doctrine of beneficial effects of price level stabilization is an integral part of modern mainstream economics. In the 1920s and 1930s, Friedrich August von Hayek questioned this monetary policy regime, and stressed injection effects of the newly created money aimed at price level stabilization in the economy with expanding natural output. This paper compares the Hayekian theory with mainstream economics. A simple graphical apparatus is used to clarify major differences between the two theories. Standard textbook models are applied to show why the Hayekian approach favours secular deflation over price level stabilization which may lead to the boom-bust cycle. The next section presents New Keynesian arguments in favour of stable prices or even low inflation, and it shows why the Hayek recommendations may result in quasi-recession. The “Wicksellian” equation, which relates inflation gap to the real interest rate gap, is derived to reconcile the Hayek approach with the mainstream perspective. Finally, it is demonstrated that New Keynesian price rigidities might be of much lower importance when the decline in prices is caused by technological progress. A gradually falling price level is then identified as a natural response of the price system in the expanding economy.
Keywords: business cycle, price level stabilization, natural rate of interest, Hayek
Classification-JEL: B25, B53, E42
Pages: 449-478
Volume: 2018
Issue: 4
Year: 2018
File-URL: http://www.vse.cz/pep/download.php?jnl=pep&pdf=668.pdf
File-URL: http://www.vse.cz/pep/668
File-Format: text/html
Handle: RePEc:prg:jnlpep:v:2018:y:2018:i:4:id:668:p:449-478
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