Prague Economic Papers, 2018 (vol. 27), issue 1
Original contributions, Original article, Research article
Determinants of Bank Fee Income in the EU Banking Industry - Does Market Concentration Matter?
Karolína Vozková, Petr Teplý
Prague Economic Papers 2018, 27(1):3-20 | DOI: 10.18267/j.pep.645 
In this paper, we analyse the key determinants of bank fee and commission income in the European Union with a special emphasis on market concentration. On a sample of 258 EU banks during the 2007–2014 period, we apply System Generalized Method of Moments. First, we argue that the banks facing higher competition tend to expand more aggressively into non-traditional activities, and therefore they report a higher share of fee income in total income. Second, we found that a higher equity to assets ratio is related with higher shares of fee income since the bank needs more capital to prevent or manage the potential risks of the non-traditional activities....
Is a Model of Comprehensive Regionalism Trade-Increasing for V4 Countries? Sectoral Approach
Iryna Gauger, Katarzyna Sledziewska
Prague Economic Papers 2018, 27(1):21-39 | DOI: 10.18267/j.pep.639
This paper aims to identify the impact of a "deep" (economic union) and "shallow" (Common Commercial Policy) integration on 4 Visegrad countries' trade with the EU and non-EU industrialized countries. Trade flows are analysed on the basis of sectors over the period of 1995-2011: the gravity model also utilizes sectoral value-added and sectoral output as proxies for the market size. The impact of regional trade agreements (RTAs) is evaluated for 17 WIOD sectors based on the research methodology developed by Baldwin (2006), Flam and Nordstrom (2003) and Fernandes (2006). Contrary to the mentioned research studies, this paper uses a more advanced econometric...
Income, Charitable Giving, and Perception Bias
Kun Su, Rui Wan
Prague Economic Papers 2018, 27(1):40-54 | DOI: 10.18267/j.pep.637
This paper analyses income and charitable giving from the perspective of perception bias. We show that perception bias affects charitable giving through its effects on warm glow, while inequality aversion counteracts these effects. Donors' perception bias regarding a recipient's situation does not necessarily decrease their charitable giving. Specifically, perception bias regarding the recipients' effort and life shock decreases donors' charitable giving. Perception bias regarding the recipients' ability decreases donors' giving to charities designed to help low-ability recipients but increases their giving to charities designed to help high-ability...
Risk-Based Investing in the German Stock Market
Jan Bastin
Prague Economic Papers 2018, 27(1):55-72 | DOI: 10.18267/j.pep.643
The article shows properties of risk-based portfolios in the German stock market. Those systematic strategies use different approaches to weight stocks in portfolios. We present theoretical and empirical characteristics of five risk-based equity investments: the equal-weighted, minimum variance, maximum diversification and risk parity (equal risk budgeting and equal risk contribution) portfolios. Risk-based portfolios outperformed the market-cap weighted CDAX index with a lower level of risk in the period 2002–2015. Their excess returns relative to the CDAX index can be explained with Scherer’s five-factor model; with Fama-French and low-risk...
Some Effects of Intellectual Property Protection on National Economies: Theoretical and Econometric Study
Tomáš Evan, Pavla Vozárová, Ilya Bolotov
Prague Economic Papers 2018, 27(1):73-91 | DOI: 10.18267/j.pep.644
This paper aims to theoretically derive and afterwards econometrically assess the impact of intellectual property protection (IPP) on national economies. The authors’ main hypothesis is that by creating a form of non-market protection, IPP limits free competition and has no positive effects on national economies and the world economy in general. The hypothesis is tested through estimation of relationship between charges for the use of intellectual property and 1) gross domestic product, 2) GDP growth, 3) unemployment, 4) exports of high-tech products, 5) FDI outflow, and 6) expenses on research and development in a panel dataset of 146 countries...
Quantile Parameter Heterogeneity in the Finance-Growth Relation: The Case of OECD Countries
Sinem Guler Kangalli Uyar, Umut Uyar
Prague Economic Papers 2018, 27(1):92-112 | DOI: 10.18267/j.pep.646
This paper seeks to investigate the effect of financial development on growth in OECD countries during 1999–2014. The aim of the analysis is to study the dependence of growth on given financial development indicators along quantiles of the conditional growth distribution, taking into account the effect played by each country over time. For the purpose of the empirical analysis, it performed the instrumental variable quantile regression panel data (IV-QRPD) model suggested by Powell (2016). The findings of IV-QRPD model indicated that the effect of finance on growth is changing along quantiles of the conditional growth distribution. That is to...
Effects of EU Expansion on Migrants Employment and Income: A Natural Experiment
Jan-Jan Soon
Prague Economic Papers 2018, 27(1):113-128 | DOI: 10.18267/j.pep.648
With the European Union expansion in 2004 providing a unique form of natural experiment, this paper uses the European Values Study data and the difference-in-differences estimation to identify causal effects of the EU expansion on migrants’ employment chances and income. Estimation results suggest that the expansion has increased migrants’ employment chances and income. The probability of having a full-time employment for a male migrant in the postexpansion period increases by about 7.7 percentage points. The increase in income for male migrants is higher than that of their female counterparts after the expansion. When the income distribution...