Prague Economic Papers, 2014 (vol. 23), issue 4
Original contributions, Original article, Research article
Could Inward FDI Offset the Substitution Effect of Outward FDI on Domestic Investment? Evidence from Malaysia
Soo Khoon Goh, Koi Nyen Wong
Prague Economic Papers 2014, 23(4):413-425 | DOI: 10.18267/j.pep.491 
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 outflows, FDI...
The Impact of Firms' Characteristics on Export Barriers' Perception: A Case of Serbian Exporters
Predrag D. Radojevic, Darko Marjanovic, Tatjana Radovanov
Prague Economic Papers 2014, 23(4):426-445 | DOI: 10.18267/j.pep.492
This papers analyses impact of firm 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 identification of the barriers to export among examined factors of firm'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...
The Welfare Cost of the EMU for Transition Countries
Alexandra Ferreira-Lopes
Prague Economic Papers 2014, 23(4):446-473 | DOI: 10.18267/j.pep.493
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...
The Weak Relation between Foreign Direct Investment and Corruption: A Theoretical and Econometric Study
Tomáš Evan, Ilya Bolotov
Prague Economic Papers 2014, 23(4):474-492 | DOI: 10.18267/j.pep.494
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 hypotheses: 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...
Economic Crisis and Wage Divergence: Empirical Evidence from Romania
Gheorghe Zaman, Zizi Goschin
Prague Economic Papers 2014, 23(4):493-513 | DOI: 10.18267/j.pep.495
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 ß-convergence, but indicated ?-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...
Determinants of VAT Gap in EU
Hana Zídková
Prague Economic Papers 2014, 23(4):514-530 | DOI: 10.18267/j.pep.496
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...
Asset Valuation Standards: A Functional-Institutional Approach
Tomáš Krabec
Prague Economic Papers 2014, 23(4):531-540 | DOI: 10.18267/j.pep.511
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 defined, first enable us to connect the valuation and the valuation purpose. The value standard or the contained value...