Economies

Long-term ratings of companies are obtained from public data plus some additional nondisclosed information. A model based on data from firms’ public accounts is proposed to directly obtain these ratings, showing fairly close similitude with published results from Credit Rating Agencies. The rating models used to assess the creditworthiness of a firm may involve some possible conflicts of interest, as companies pay for most of the rating process and are, thus, clients of the rating firms. Such loss of faith among investors and criticism toward the rating agencies were especially severe during the financial crisis in 2008. To overcome this issue, several alternatives are addressed; in particular, the focus is on elaborating a rating model for Moody’s long-term companies’ ratings for industrial and retailing firms that could be useful as an external check of published rates. Statistical and artificial intelligence methods are used to obtain direct prediction of awarded rates in these sectors, without aggregating adjacent classes, which is usual in previous literature. This approach achieves an easy-to-replicate methodology for real rating forecasts based only on public available data, without incurring the costs associated with the rating process, while achieving a higher accuracy. With additional sampling information, these models can be extended to other sectors. Full article

The significance of the pharmaceutical and commercial sectors in the national economy has noticeably intensified, as a result of the COVID-19 pandemic. The main objective of this study was to gain a better insight into the main management characteristics of the actors in the sector. It was assumed that more efficient management of financial investments (acquisitions, loans) caused higher risk financial investment decisions in the pharmaceutical industry in order to place companies in a better position in view of equity investors, illustrated best as the profitability of equity (ROE). This paper examined one possible means of covering the extremely high indirect costs (R&D, marketing) of pharmaceutical companies, also justified by the restructuring of the industry and the effect of investments in long term financial instruments on the ROE of the same business entities. Built on the EMIS database, the analysis only used the indicators of those companies operating in the pharmaceutical industry in Visegrad countries for 2019. The authors sought to draw conclusions about possible management characteristics of the entire pharmaceutical sector of these countries using cluster analysis and linear regression. The initial assumption, or main hypothesis of the study, was that in one of the countries studied or for those businesses operating above a certain revenue category, the impact of a company’s risk-taking (which can also be expressed in terms of asset-based financial income) on profitability, may appear or intensify. The performed studies did not show a strong correlation between the explanatory and profit variables either at the national level or at the level of groups formed by regional market position. In other words, the extremely high level of indirect costs were mostly covered by sales of successful cash products, and companies not indebted to suppliers undertook significant risks in the field of financial investments, thereby offsetting the positive impact of the latter on earnings. Full article

This study aims to examine the impact of foreign direct investment (FDI), investment in construction and poverty in various countries. The Russian Federation invests heavily in construction and it is located both in Europe and Asia. Russia is usually described as a European country (while 70% of its territory is in Northern Asia, 80% of the population resides in Europe). That is why in this document both developed and emerging countries are considered; the former are represented by the EU members of different economic levels and the latter by BRICS countries. We looked at economically different countries to determine the best differentiated data in order to answer the question: “Why does a high level of poverty persist in Russia if Russian officials have repeatedly reaffirmed their commitment to the implementation of the Sustainable Development Goals (SDGs) by investing heavily in construction and attracting FDI?”. For the estimation, we used an autoregressive distributed lag (ARDL), considering cointegration and heteroscedasticity, in which the current values of the series depend both on the past values of this series and on the current and past values of other time series. Having received statistical data, we were able to compare the economic development of countries with some economic growth theories. 4–5% FDI share of the GDP helps to contain the negative impact of financial crises. Investment in construction supports the economies of countries in the long term and maintains or reduces the poverty level by increasing the assets of the population. Empirical data also helped us to evaluate the economic growth patterns and poverty in these seven countries. China and the Russian Federation will find themselves at different “poles”. China uses several theories and models simultaneously for economic development and poverty reduction and the Russian Federation does not keep to an established theory or a model of economic growth. Full article

We evaluated the movement in the daily number of COVID-19 cases in response to the real GDP during the COVID-19 pandemic in Thailand from Q1 2020 to Q1 2021. The aim of the study was to find the number of COVID-19 cases that could maintain circulation of the country’s economy. This is the question that most of the world’s economies have been facing and trying to figure out. Our theoretical model introduced dynamic stochastic general equilibrium (DSGE) models with a special emphasis on Bayesian inference. From the results of the study, it was found that the most reasonable number of COVID-19 cases that still maintains circulation of the country’s economy is about 3000 per month or about 9000 per quarter. This demonstrates that the daily number of COVID-19 cases significantly affects the growth of Thailand’s real GDP. Economists and policymakers can use the results of empirical studies to come up with guidelines or policies that can be implemented to reduce the number of infections to satisfactory levels in order to avoid Thailand lockdown. Although the COVID-19 outbreak can be suppressed through lockdown, the country cannot be locked down all the time. Full article

A systematic short-term event review of the major events in the South-East Asia Financial crisis is presented in this article. This analysis adds to the existing literature by focusing on the equity market, rather than on the foreign exchange market where there is already abundant literature, as well as going to a granular level with the hope that the analysis of the short-term market reactions can help policy-maker make appropriate decisions understanding the likely implications on the stock market. Short-term movements in the equity market might have very substantial economic impacts on investors and on the broad economy. The existing literature tends to focus on longer time horizons but from an equity investor point of view short-term fluctuations might be equally important or even more. When analyzing longer time horizons these short-term fluctuations, which might cause investors to fully unwind their positions or even bankruptcies, might be average out, underestimating the potential impact on the investor. Given these practical considerations it seems important to carry out a short-term event driven analysis of this crisis. Full article

Previous research in the literature often investigated the associations between management accounting systems and the success of organizations. However, little has been done in regard to the association of business strategies, goals, and firms’ performance while having management accounting tools as mediators. Management accounting systems are classified as traditional and strategic management accounting themes. Each theme, of course, implements different accounting tools. This article explores the degree to which, as mediated by management accounting systems, the business strategies and business goals of large Thai manufacturing companies influence their financial and non-financial performance. To gather the data, a survey questionnaire was developed. Of the 1500 companies selected for inclusion in the survey, 205 provided completed and usable responses for a response rate of 13.67%. Structural equation modeling (SEM) was used to analyze the relationships among the variables. The findings shed some light on what the management of a firm could expect concerning organizational performance from their business strategies, business goals, and the implementation of specific management accounting systems. Corporate strategies and corporate goals had a statistical influence on both the financial and non-financial performance of the large corporations in Thailand when mediated via strategic management accounting systems, while there was no influence when mediated by traditional management accounting systems. A greater understanding of the relationships and effects of which mediators should have been employed in organizations to bring forth business strategies and business goals and generate productive results for organizational performance is provided by this research. Choosing the appropriate performance mediators can help achieve corporate strategies and goals. Full article

Tourism is one of the fastest-growing industries in Europe, with growth mostly centered in major cities and urban locations. Nevertheless, remote destinations can also offer tranquility and accessibility, as well as both unexploited and unknown development potential for active senior travelers. The purpose of this paper is to analyze, on the basis of information gathered from 1705 questionnaires, senior touristic behavior, including motivations and decision-making issues for senior travelers in 11 remote regions of nine European countries (Finland, Latvia, Poland, Slovakia, Hungary, Bulgaria, Spain, Ireland, and Greece). A mixed-methods approach was used to fulfill the research objectives. Both interviews and the survey method were applied to generate data from senior tourists. The present study will focus on the key factors explaining senior tourists’ motivations and barriers to travel. The results of surveys conducted within the TOURAGE project indicate the significant potential of remote regions in the development of senior tourism. For senior respondents, a very important reason for going on holiday is the possibility of enjoying rest and silence. Safety, nature, historical sites, quality of services, and easy transportation connections are the top five attraction factors for seniors when choosing a destination. At the same time, according to the interviews, among the important problems negatively influencing the size of the senior tourism market in remote regions are: difficulties in reaching seniors with tourist offers, a lack of promotion of local tourist products aimed at seniors, and finally a lack of financial resources for the implementation of local projects supporting the development of senior tourism. Full article

The relevance of this study resides in the need to determine the key measures for a more effective application of the mechanism of public–private partnerships (PPP) in the implementation of large-scale infrastructure projects, aimed at developing the innovation potential of the Russian defence–industrial complex (DIC). Through the analysis of foreign practices of the application of PPP in the defence industry, representing a vast body of scientific and popular literature on the development of the defence industry in the U.S. and the countries of Europe and Asia, as well as a review of the domestic regulatory framework, the authors have identified the most common and key problems that are obstacles to the effective and sustainable development of PPP mechanisms, and their application not only in the civil, but also in the defence sector. This work pays specific attention to the requirements that are imposed on public and private partners in the process of implementing PPP projects in the context of SDO performance, along with the risks that are inevitably associated with the activities of each of the parties. As a result, the authors present a graphical interpretation of the algorithm for financing the state defence order (SDO) and disclose the system of interaction between the elements of a given algorithm, as well as formulating an essential recommendation for the further development of PPP in Russia. Full article

The purpose of this paper is to find the relationship between public expenditure in the educational sector and the economic growth in Indonesia since the government decided to spend 20% of the state budget on education. We used time series data from 1988 to 2018 and the Cobb–Douglas production function as an economic theory for measurement. In the methodology, we employed Autoregressive Distributed Lag bound tests to find the relationship between variables. The results show that public expenditure on education has an insignificant relationship in the long- and short-term estimation. However, they both have different directions, which is a positive relationship in long-term and a negative relationship in short-term estimation. Meanwhile, gross fixed capital formation shows a positive relationship, and the labour variable has a negative relationship in the short and long terms. In conclusion, the Indonesian government should manage the education system regarding the relationship between education expenditure and economic growth. Full article

The study of poverty and its quantification is a critical yet unresolved problem in social science. This work seeks to use a new composite indicator to assess poverty as a multidimensional concept. However, subjective decisions, such as various weighting systems on the indicator’s creation, may affect its perception. In order to solve this issue, we propose to use random different composite indicators based on simulated weightings and specifications to get a comprehensive interval-based composite indicator. Our method generates robust and trustworthy measurements based on a meaningful conceptual model of poverty. Furthermore, we use some interval parameters such as the upper bound, center, and lower bound to compare the different intervals related to the different statistical units and rankings to aid in analyzing extreme situations and policy scenarios. In Sicily, Calabria, Campania, and Puglia, we identify urgent circumstances. The findings reveal a consistent indicator measurement and the shadow sector’s influence on the final measurements. Full article

Global liquidity shortage as well as the availability on the market of overpriced assets and derivatives led to the situation where the global economy depends primarily on liquidity, becoming prone to chain-consistent world crises. Only for the last 15 years, the world has witnessed a continuous series of crises. Therefore, the study of the processes and phenomena of crisis is one of the most important scientific and practical tasks. The aim of this work consisted in the development of methods and models for the early detection of crises in the economy. The significance of the work is to develop an econometric model and tools for detection of crisis. Full article

The capacity of multi-regional input–output tables (MRIOTs) to investigate linkages across structures and subnational regions within a country makes them a useful and solid tool of various types of simulations. This study develops MRIOTs for the Polish regions that can be subsequently employed to macroeconomic simulations, including assessing internal policy impulse responses or testing the regional economic resilience to external shocks. For this purpose, we build three macro-regions, discuss how their structural features validate their use to study differentials in economic policy effects or regional economic resilience, and finally, describe the process of constructing the MRIOTs. Full article

The disclosure of integrated reporting elements can reduce information asymmetry for investors when valuing a company. This study aimed to empirically evaluate the effect of manager compensation, directly or indirectly, on firm value, through the mediating role of the disclosure of integrated reporting elements. The research sample included manufacturing companies listed on the Indonesia Stock Exchange (IDX) and the Singapore Stock Exchange (SGX). The method of analysis was PLS-SEM, using the WarpPLS 7.0 application. The results showed that compensation significantly affects firm value and the disclosure of integrated reporting elements. Integrated reporting has a significant positive impact on firm value. In addition, the disclosure of integrated reporting can mediate the impact of manager compensation on increasing firm value. This research theoretically supports agency theory, disclosure theory, and signal theory, although it is not fully applicable to each country or region of the sample company. The current research contributes to the understanding of the importance of a company’s integrated reporting disclosure in improving company value among investors. Integrated reporting describes how a company creates value over time. Our results also suggest that regulators should oblige public companies to disclose integrated reporting. Full article

Capital market integration has become an interesting research topic nowadays. Many studies have tried to explain this phenomenon using various methods. Here, we used sophisticated methods to explain capital market integration. This study aims to scrutinize the Association of Southeast Asian Nations (ASEAN) capital market integration. This study hopefully can enrich the different views regarding the capital market integration and fill the gap left by previous studies. The data used were the stock price index of the monthly closing data of the capital markets in ASEAN countries during the period of January 1999 to December 2020, obtained from Bloomberg and the Indonesia Stock Exchange. Data in this study were analyzed using the wavelet method. The results indicate that there is a long-term integration in the capital markets of ASEAN countries, and the highest level of integration was in the period during and about a year after the global crisis. Using the spectrum analysis, the results show that during period from 2008 to 2010, the level of integration reached its highest level. Full article

The paper assesses social impacts of a mega-dam project (Merowe Dam in Sudan) as perceived by host and affected communities (i.e., upstream, downstream, and relocated residents), which is not commonly seen in the literature. Primary survey and interviews were conducted with 300 residents, government officials, the Dam Implementation Unit (DIU), NGOs and other key informants. Five inter-related areas of impact were scrutinized: (a) displacement of communities; (b) resettlement of displaced communities in a new location; (c) technological factors; (d) social mobility factors; and (e) economic and political institutions. Results show that Merowe Dam exerted positive as well as adverse social impacts on local communities. Increase in home sizes, opportunities for children’s schooling and quality of life improvement ranked as the top three positive impacts with residents located downstream scoring relatively higher than relocated and upstream residents. Relocated residents also showed positive attitudes towards the provision of essential services (schools, health facilities, availability of running water, electricity, marketplace, etc.), thereby enabling them to enjoy and flourish in their social lives. The adverse impacts are centered on intangible factors, such as, sentimental effects closely related to their feelings, loss of history, memories, nostalgia about the old place, and grievances regarding compensation packages and its management. Therefore, it is important to recognize the need for long-term monitoring of the resettlement process and provide emotional support to those displaced and resettled. Furthermore, there is also a need to address the livelihood requirements of local communities in the affected region. Full article

The board of directors’ role is paramount in businesses because it reflects the organisation’s ability to earn investor confidence and improve financial performance. This paper aims to examine the relationship between environmental and social (ES) information disclosure and firm financial performance and the interaction effects of board meetings on the relationship between ES and firm performance in Malaysian publicly traded firms from 2013 to 2017. This article contributes to the theoretical foundations of the agency theory as it relates to the corporate governance function. The agency theory framework is used to capture the inherent interrelationships between the board of directors and firm performance. The study’s findings indicate that a firm’s relationship between ES and financial performance, measured by Tobin Q and return on equity, may be significantly affected by board meetings. Full article

Smart specialization strategies are a new EU approach to cohesion policy, meant to deliver growth and development at EU national and regional level. Bearing in mind its focus on place-based development strategies, this paper intends to shed some light on its appropriateness to tackle uneven development and regional growth divergence. The paper showcases Spanish Extremadura growth trajectory. Extremadura is a poor region in the European context that between 2008 and 2014 diverged from the EU average, despite being eligible for EU funding as a convergence region by cohesion policy. In the 2014–2020 programming period, there was a positive dynamic at the beginning, but from 2017 onwards convergence stopped, which indicates that thematic and regional programmes have not delivered results or have not compensated for higher growth level of other Spanish regions. Moreover, research and innovation strategies for smart specialization (RIS3) seem to have limited impacts on place-based economic transformation in less developed regions. From this example, the suitability of the smart specialisation strategy as the core of cohesion policy in the programming period is discussed. It concludes that this strategy is interesting for intermediate development regions with some industrial base but does not seem appropriate as a convergence driver for poorer regions. Full article

The COVID-19 pandemic has brought economic activity to a near standstill as many countries imposed very strict restrictions on movement to halt the spread of the virus. This study aims at assessing the economic impacts of COVID-19 in the United Kingdom (UK) using artificial intelligence (AI) and data from previous economic crises to predict future economic impacts. The macroeconomic indicators, gross domestic products (GDP) and GDP growth, and data on the performance of three primary industries in the UK (the construction, production and service industries) were analysed using a comparison with the pattern of previous economic crises. In this research, we experimented with the effectiveness of both continuous and categorical time-series forecasting on predicting future values to generate more accurate and useful results in the economic domain. Continuous value predictions indicate that GDP growth in 2021 will remain steady, but at around −8.5% contraction, compared to the baseline figures before the pandemic. Further, the categorical predictions indicate that there will be no quarterly drop in GDP following the first quarter of 2021. This study provided evidence-based data on the economic effects of COVID-19 that can be used to plan necessary recovery procedures and to take appropriate actions to support the economy. Full article

This paper aims to extend the literature on the impacts of China’s policies on the world energy–growth nexus by analyzing the spillover effects of financial development and CO₂ emissions. An autoregressive distributed lag approach was applied to annual series data from 1977 to 2016. Models for four world regions were developed, as well as a global model. The results reveal the traditional feedback hypothesis on the whole, both in the short- and long-run. Additionally, the results support that China’s CO₂ emission and financial development promote world energy consumption. In regard to the four world regions, heterogeneous results were observed. Overall, China’s financial development and CO₂ emissions also have heterogenous worldwide impacts with distinct magnitudes. Accordingly, no country should be indifferent to China’s policies, and independence should be promoted for Europe, Central Asia and Asia Pacific aggregates. Full article