This article investigates the underlying stochastic process generating dangerous rare events, such as financial crises, that occur more frequently than those predicted by models with finite variances. The authors discover that asymmetric Lévy probability distribution function characterized by infinite variance can model several multiple credit ratios used in financial accounting to quantify a firm’s financial health as well as changes of individual financial ratios. The authors also demonstrate, how such continuous credit rating approach and its dynamics can be used to evaluate credit risk.
COBISS.SI-ID: 20361190
The paper refers to the conceptualizations of strategic flexibility, real options, and human resource (HR) options to build a model for valuing future-oriented and organizational flexibility-enhancing aspects of training. The authors apply the Black-Scholes option valuation model and elucidate the model by a case study from the mobile telecommunications industry. In rapidly growing markets based on emerging technology, the generation of HR options based on training should be encouraged.
COBISS.SI-ID: 19133926
An open question in the control literature concerns the role of interpersonal trust in the design and functioning of formal control systems for collaborative settings. The authors find that subordinate’s trust in the superior depends on the formality of the performance evaluation procedure and that this relationship is mediated by managerial perceptions of justice and feedback. The authors also find that formality matters more for trust formation if outputs are less contractible.
COBISS.SI-ID: 18377190
The Kamay and Hill insider trading conviction in Australia highlights many of the issues and problems involved in the prevention, detection and prosecution of insider trading. The case uniquely highlights how ethical behaviour is instilled at home, in school and in society, and the need for ethical responsibility at the personal and organisational level to complement legal rules and enforcement. We use the Kamay and Hill case to explore the reasons behind the failure of the traditional top-down approach to insider trading prevention, where institutional ethical codes of conduct largely reflect and rely upon national rules, norms, and regulation. We propose a bottom-up approach to ensure that individual and organisational behaviour is ethical, where emphasis is not on compliance but on a set of core ethical values that allow individual and corporate expression. It is our strong belief that compliance cannot replace ethics.
COBISS.SI-ID: 23559910
This study evaluates the efficiency of the cyclically-adjusted budget balance (CABB) as the central gauge in the reinforced European fiscal framework for evaluating fiscal discipline. We do this by means of a simulation experiment. We use an estimated DSGE model to simulate all the macroeconomic data needed to assess the CABB according to the official EC methodology. Additionally, the model contains an expenditure fiscal rule that accounts for non-automatic variation in the budget, which allows us to observe the true discretionary measures of fiscal policy. Our results indicate that the EC methodology frequently fails to identify the true fiscal policy stance and also frequently fails to correctly signal potential violations of the SGP limit on structural deficit. In the latter case triggering corrective fiscal contractions to comply with the SGP results in increased macroeconomic instability. In addition, we show that allowing for a bigger role for stability-oriented discretionary policy and thus relaxing the SGP limit on structural deficit could enhance the stabilization efficiency of fiscal policy without reducing the degree of compliance with the Maastricht Treaty. These conclusions apply to small countries in a monetary union as well as large countries with independent monetary policy.
COBISS.SI-ID: 23148518
This article analyzes bank bankruptcy regimes across 142 countries. By employing factor analysis, we identify five main dimensions of bank bankruptcy frameworks: (1) difficulty of forbearance and ease of court appeal, (2) availability of supervisory tools, (3) court involvement, (4) supervisory powers with respect to managers, and (5) supervisory powers with respect to shareholders and preinsolvency phase. We use cluster analysis to identify and group countries according to two prevalent types of bank bankruptcy frameworks: a court-led and administrative bank bankruptcy regime. Administrative bank bankruptcy regimes are associated with less court involvement in the resolution process, less likely forbearance, a higher possibility of court appeal, greater availability of supervisory tools, weaker supervisory powers with respect to managers and stronger supervisory powers with respect to shareholders, and a preinsolvency phase as opposed to the court-led bank bankruptcy regimes. Administrative bank bankruptcy regimes are also associated with fewer creditor rights, less government effectiveness, and lower institutional quality than court-led bank bankruptcy regimes. We find some evidence that the type and main dimensions of a bank bankruptcy regime are related to the occurrence and severity of the global financial crisis.
COBISS.SI-ID: 22101222
The paper studies the growth effects of international financial integration on a group of European countries and links them to the process of euro introduction. A positive influence is not automatic, but must be accompanied by development of domestic financial system. A sustainable process of international financial integration can be an important catalizator of domestic financial sector development. For a group of new EU members, including Slovenia, the process of international financial integration exerts a positive growth influence. The euro will additionally accelerate the integration.
COBISS.SI-ID: 17689830
This article investigates the concept of customer-based brand equity for a tourism destination, which has been introduced into the tourism literature only a few years ago. Specifically, it investigates whether differences between renewal and repeat tourists exist in their evaluation of a tourism destination. A theoretically proposed model, encompassing the dimensions of awareness, image, quality, and loyalty, was empirically verified for the European tourism destination Slovenia from the perspective of German tourists. The results imply that the dimensions of image and quality play the most important role in tourists’ evaluation of a destination, regardless of whether they are first-time visitors or repeaters. Results also reveal differences in importance for the dimensions of awareness and loyalty between renewal and repeat tourists. Drawing on the results, the article offers some implications for tourism organizations in developing and implementing destination marketing strategies in foreign markets.
COBISS.SI-ID: 19607014
In this paper the authors design the neural network consumer credit scoring models for financial institutions where data usually used in previous research are not available. The authors use extensive primarily accounting data set on transactions and account balances of clients available in each financial institution. The authors used a genetic algorithm for variable selection and developed efficient consumer credit scoring models with error back-propagation artificial neural.
COBISS.SI-ID: 17868006
We study market timing and pecking order in a sample of debt and equity issues and share repurchases of Canadian firms from 1998 to 2007. We find that only when firms are not financially constrained is there evidence that firms issue (repurchase) equity when their shares are overvalued (undervalued) and evidence that overvalued issuers earn lower postannouncement long-run returns. Similarly, we find that only when firms are not overvalued do they prefer debt to equity financing. These findings highlight an interaction between market timing and pecking order effect
COBISS.SI-ID: 21083622