Prague Economic Papers, 2005 (vol. 14), issue 4

Original contributions, Original article, Research article

Would Fast Sailing Towards the Euro Be Smooth? What Fundamental Real Exchange Rates Tell Us

Kateřina Šmídková, Aleš Bulíř

Prague Economic Papers 2005, 14(4):291-316 | DOI: 10.18267/j.pep.267  

Computed fundamental real exchange rates in four new EU members point to difficulties in jointly entering the ERM II soon after the EU entry. Three currencies out of the four were overvalued prior to EU entry. Computations suggest that it is unlikely that the Czech, Hungarian and Polish economies will maintain low inflation during 2004 - 2010 and at the same time keep their currencies within the ERM II easily. Moreover, the experience of Greece, Portugal and Spain - viewed through fundamental real exchange rate goggles - indicates more stable real exchange rate paths and smaller currency misalignments prior to euro adoption than can be expected from...

Does Competition Improve Performance? Evidence from the Czech Manufacturing Industries

Andrei Medvedev, Alena Zemplinerová

Prague Economic Papers 2005, 14(4):317-330 | DOI: 10.18267/j.pep.268  

The paper investigates both the impact of domestic and import competition on performance of manufacturing industries in the Czech Republic in 1998 - 2002. Using panel data we found a strong increasing non-linear (diminishing) relationship between performance of manufacturing industries and domestic competition measured by the Herfindahl-Hirschman Index. Import competition measured by an import penetration ratio is negatively related to performance of Czech industries, while foreign direct investments are positively correlated with performance.

A Classification of International Business Strategies in the Czech Republic: A Longitudinal Analysis of Selected Firms

James D. Goodnow, Pavel Vopařil

Prague Economic Papers 2005, 14(4):331-349 | DOI: 10.18267/j.pep.269  

This study is focused on relationship between external and internal impact on decisionmaking influencing international business strategies in transitional economy. Drawing from secondary and primary interview data on international business activities of 18 startups and 20 enterprises operating in the Czech Republic (including firms controlled by both domestic and foreign investors), respectively, the authors propose five strategies. In general, the findings suggest that strategies developed by domestically owned niche-focused or recent startups and those carefully guided by inbound foreign direct investors are more successful. Moreover, the more successful...

Investigating the Economic Impact of Immigration on the Host Country: The Case of Norway

Mete Feridun

Prague Economic Papers 2005, 14(4):350-362 | DOI: 10.18267/j.pep.270  

This article aims at investigating the nature of the causal relationship between immigration and economic development measured by GDP per capita in Norway using Granger causality test. The results on the unit root test indicate that all the series are non-stationary and are in I(1) process. The Johansen cointegration test reveals that there is no cointegration among the data sets. The Granger causality test shows that when the level of immigration increases, GDP per capita also increases. It has also been found that immigration has no impact on unemployment, and vice versa.

Cruel Altruism

Jiří Hlaváček, Michal Hlaváček

Prague Economic Papers 2005, 14(4):363-374 | DOI: 10.18267/j.pep.271  

This article shows that the altruism of the donator could have different forms. The specific form of his optimisation criterion significantly influences his decision making concerning the allocation of his resources among recipients. Moreover, even within one chosen criterion we could report sudden changes in strategy of a rational donator. This donator, even if he is so called ""hard altruist"" (i.e . subject preferring community interests to his individual interests), he could be forced to make a ""gambit"", when he sacrifices one from the subjects supported in favour of survival of the community as a whole. This preferring of whole community to...