Ekonomický časopis/Journal of Economics is a peer-reviewed open-access scientific journal published by the Institute of Economic Research SAS and the Institute for Forecasting (Centre of Social and Psychological Sciences) of SAS. It provides a platform for topics related to socio-economic development and economic policy in the European Union, with a particular focus on the Central European region and an emphasis on the Slovak economy and national economic research. The journal prioritizes contemporary topics in macroeconomic and microeconomic research within the context of major trends such as the economic impacts of the financial crisis, the COVID-19 pandemic, and the war in Ukraine, as well as technological changes (energy transformation, digitalization, robotics/automation, and artificial intelligence), climate change and its effects on socio-economic development, the process of globalization/deglobalization, global financial stability, European integration, macroeconomic developments, monetary and fiscal policy, inflation, regional development, structural reforms, and new methodological approaches in machine and deep learning and their applications in economics and economic policy.
ESG and Geopolitical Shocks: Evidence from the Russia–Ukraine War
This study examines whether European companies with higher ESG ratings are more resilient to geopolitical shocks. We analyze stock price reactions of large European firms in the Euro Stoxx 50 index to the breakout of the Russia–Ukraine war. Portfolios are constructed based on overall ESG scores and individual ESG pillars. The results of event study analysis reveal only limited differences in stock price performance between high- and low-ESG portfolios. While high-ESG firms experience relatively smaller immediate declines, these effects are not persistent. A more nuanced pattern emerges at the pillar level: high-rated Social, Governance, and Controversy portfolios exhibit positive abnormal returns at the event onset, whereas low-rated portfolios show a pronounced decline in cumulative returns. The findings suggest that market reactions to the examined geopolitical shock are primarily driven by macroeconomic and geopolitical factors. ESG metrics should, in those circumstances, be complemented by broader risk measures.
event study, European stocks, Russia-Ukraine war, geopolitical risk, ESG
Copyright (c) 2026 Michala Moravcova, Adéla Skládaná https://creativecommons.org/licenses/by-nc-nd/4.0
Protective Hypothetical Investment Portfolios During the COVID-19 Recession: Comparison with Superinvestors
By examining the portfolios of renowned Superinvestors with different investment strategies, BRK-B of Warren Buffet and ARKK of Cathie Wood, we aimed to design hypothetical resilient portfolios that protect against the damaging effects of recessions. The presented analysis indicates that ARKK significantly outperformed BRK-B during the stability period. However, in the face of the Covid-19 pandemic-induced recession, BRK-B displayed a higher degree of resilience and stability compared to ARKK. All three of our hypothetical portfolios delivered positive returns during both period of stability and recession and outperformed the benchmark. Importantly, our Equally weighted portfolio demonstrated the strongest performance of all the investigated portfolios during the recession. Moreover, our Tangency Portfolio showed relatively high performance along with high stability. It is concluded that an investment approach based solely on diversification, can achieve superior returns, and even surpass the broader stock market with an acceptable level of risk.
Capital Asset Pricing Model, economic recession, resilient portfolio, Superinvestors, diversification
Copyright (c) 2026 Fedor Šimko, Peter Pšenák https://creativecommons.org/licenses/by-nc-nd/4.0
Sustainability versus the dynamic eco-efficiencies of EU countries
In this study, the sustainable efficiencies of 25 EU countries are analyzed, and practicable paths for improvement are offered on a country-by-country basis. Dynamic eco-efficient production is not necessarily sustainable, and countries must therefore ensure the fulfillment of endogenously determined targets through additional measures. As the goals of maximizing production and avoiding pollutants seem to oppose each other, an optimization program with multiple simultaneous objective functions enlarges the dynamic eco-data envelopment analysis concept. The countries’ economies and their impacts on the environment are described in Eurostat and ECB data on the countries’ flow and stock inputs, output, resources for environmental protection, and emissions from 2014 to 2022. The examination reveals that the development of each EU country is far from sustainable. The countries that performed best were those that introduced carbon taxes early on, allowing their economies to largely adapt. The usage of the term “sustainable efficiency” is thus misleading, being used to measure static/dynamic eco-efficiency, without analyzing whether efficient production processes are indeed sustainable. To the best of the author’s knowledge, this is the first measurement of sustainable efficiency. To distinguish the approach developed in this article from traditional models, this study uses the term “conserving efficiency”.
Copyright (c) 2026 Alexander Schnabl https://creativecommons.org/licenses/by-nc-nd/4.0
What Drives High-Quality Insurance Advice? An Analysis of Factors in Insurance Advisory Services
Poor-quality financial advice can have severe consequences for individuals’ financial security and public trust in the insurance sector—yet the drivers of advisory quality remain poorly understood. This paper investigates the factors that influence the quality of insurance advice in Europe, using a survey data on 4,827 insurance intermediaries across 13 countries. We apply the vignette-based methodology to measure the service quality. By evaluating both the accuracy of product recommendations and their alignment with normative utility-based rankings, we examine how intermediary characteristics, firm environment, and performance indicators shape advisory outcomes. The results reveal that while professional training improves advice quality in simple scenarios, it fails to translate into better decisions for complex products. Moreover, usage of digital tools only enhances advice quality when paired with higher education, and self-confidence and signalling may even mask deficiencies in competence. Our findings suggest that improving the quality of insurance advice requires targeted training, smarter technological integration, and a shift from surface-level professionalism toward client-centred advisory practices.
Copyright (c) 2026 Branislav Slobodník, Zuzana Brokešová, Tomáš Ondruška https://creativecommons.org/licenses/by-nc-nd/4.0
External Factors and Domestic Policies: Determinants of Inflation in ECOWAS
Food price inflation remains a critical challenge in ECOWAS, where high import dependence and weak institutional frameworks heighten vulnerability to external shocks. This study examines the determinants of inflation in ECOWAS, with a focus on the asymmetric effects of global food price shocks from 2010 to 2022. We discover that the pass-through of food prices more than doubles in high-inflation environments and heightens during economic recessions. The WAEMU's fixed exchange rate and fiscal rules sever the standard inflationary link between public debt and inflation observed in more flexible regimes. Strong institutional quality provides a universal stabilising effect across all countries. Our findings are consistent with theories of state-dependent amplification, where pre-existing macroeconomic vulnerabilities critically determine an economy's resilience to external shocks.
Copyright (c) 2026 Emmanuel Akuoko-Konadu https://creativecommons.org/licenses/by-nc-nd/4.0
Brigita Schmögnerová: Regulating capitalism. The Politics of Market and Financial Regulation. Springer, 2025
Copyright (c) 2025 Monika Šestáková https://creativecommons.org/licenses/by-nc-nd/4.0
Reconsidering the Time-Series Approach to Estimating Cigarette Price Elasticities when Exploitation of Spatial Variation Appears Unattainable: The Case of Slovakia
Although the current dominant trend in the literature is to analyze cigarette demand through individual consumer microdata, an aggregate country-level approach might be more preferable for countries that legislatively prohibit spatial variation in their prices. This paper, therefore, explores the idea of utilizing the cigarette tax declaration data to estimate a monthly vector error correction model of cigarette prices and volumes taxed in Slovakia for a relatively stable period of Jun 2011 – May 2023. The results are also confronted with alternative estimates using the univariate autoregressive distributed lag model framework. Despite observing volumes of cigarettes stocked by Slovak retailers, after controlling for several exogenous variables, the estimated price elasticity tends to approach magnitudes quite similar to those found in the literature investigating inelastic cigarette demand. Additionally, the paper also provides evidence for measures of tobacco control policy effectiveness regarding the cigarette tax elasticity of volumes stocked by retailers.
Copyright (c) 2026 Filip Ostrihoň https://creativecommons.org/licenses/by-nc-nd/4.0
Exploring the Causal Links between ESG, R&D, and Firm Performance: Evidence from the US Technology and Food Companies
This study examines the causal relationships between ESG (Environmental, Social, and Governance) compliance, R&D expenditures, and financial performance in the technology and food sectors in the US. A panel dataset from 2012 – 2021 from the Thomson Reuters database was analysed for 12 food and 18 technology companies. The findings show that there are different causal relationships between sectors. While R&D investments in the technology sector positively affect firm performance by increasing ESG compliance, firm performance in the food sector directs ESG compliance, encouraging R&D investments. The study emphasizes that sectoral differences should be considered in sustainability and R&D strategies and guides policymakers and managers to develop approaches appropriate to the dynamics of the sector.
Copyright (c) 2025 Semra Boga Sahin, Gozde Bozkurt, Hasan Sadik Tatli, Tom Gillpatrick https://creativecommons.org/licenses/by-nc-nd/4.0
Efficiency Analysis of EU Member States in the Context of Population Aging
The population aging might threaten the economic development and efficiency of EU Member States. Based on the demographic projections, the EU’s old-age dependency ratio (as proxies of population aging) will be almost double – from 31% in 2019 to 57% in 2100. This study focuses on the efficiency analysis of European Union Member States in the context of population aging. Utilizing Data Envelopment Analysis (DEA) and the Malmquist Productivity Index, we evaluated how demographic changes affect the economic efficiency of various EU countries. Our findings reveal that some states, such as the Czech Republic, Germany, and Luxembourg, demonstrate high-efficiency levels when considering demographic factors. The results suggest that technological advancement and innovation are crucial in addressing the challenges associated with population aging.
Copyright (c) 2023 Nikola Soukupova, Marketa Kocourkova, Jana Klicnarova https://creativecommons.org/licenses/by-nc-nd/4.0
The Impact of COVID-19 Fiscal Policy on the Performance of Slovak State Budget in 2020 and 2021
The contribution deals with the Slovak fiscal and budgetary policy as implemented and carried out during and immediately after the initial outburst of the COVID-19 pandemic. Its primary aim is to test the existence of the impact of the pandemic on fiscal developments and to quantify it using the estimate of the overall cash-based performance of the State budget of the Slovak Republic in 2020 and 2021. Next, the paper sets out to analyse the degree of disruption to the Slovak public finances due to the expansive fiscal policy measures aimed at mitigating the pandemic effects in 2020 and 2021 (i.e. stabilising macroeconomic variables). Deviances in the current performance of the Slovak State budget are assessed using the combination of actual values and own forecasts (point estimates), the latter being sourced from the authorial SARIMA-based econometric models applied on the 2010 – 2019 quarterly time series of the Slovak Republic’s State budget cash revenues and expenditures. Particular attention is paid to the associated additional expenditures and/or reduced (missing) budgetary revenues.
Copyright (c) 2023 Zuzana Gdovcova, Vojtech Menzl https://creativecommons.org/licenses/by-nc-nd/4.0
Factors of Tax Evasion: The Case of the Czech Republic
The main goal of this paper is to estimate factors of tax evasion in the Czech Republic. Among other things, tax evasion reduces state revenues which fact leads to a decrease in the quantity and quality of publicly provided goods and services. Therefore it is necessary to ensure that taxpayers comply with their tax obligations. Firstly, we use the monetary method (cash/deposit ratio) to estimate the size of tax evasion in absolute and relative terms. According to our estimates, the extent of tax evasion in the Czech Republic was almost 3.6 percent of GDP in 2021. Secondly, we use multivariate time series cointegration analysis models to analyse the economic, tax, and institutional determinants of tax evasion in the Czech Republic. The factors negatively associated with tax evasion include tax overpayments, VAT revenue, and implementation of tax measures introduced in 2020. The positive impact has GDP, PIT revenue, CIT revenue, inflation, monetary freedom, Gross National Savings, trade freedom, PIT rate, unemployment, and average wage.
Copyright (c) 2023 Katerina Joskova, Savina Finardy, Marketa Artlova https://creativecommons.org/licenses/by-nc-nd/4.0
Determinants of Personal Risk Financing Strategies
Adverse income shocks may have an eminent effect on short-term and long-term financial stability of individuals and households. Optimal response to risk exposure is driven by effectively chosen risk management strategies through combination of insurance, savings and other tools. However, individuals and households do not always make optimal decisions in these situations. The paper investigates the determinants of individuals’ decisions on the implementation of risk financing strategies. We test demographic, economic, and personal characteristics (including risk attitude and financial literacy) with the aim to identify relevant factors associated with different personal risk management behaviour. We use data from the survey in the Slovak Republic. We analyse the use of the two risk financing strategies, risk transfer and self-insurance, in coping with life and health risks of individuals. Our results show that level of financial literacy and risk attitude are important elements in personal risk management decisions, which policy-makers should also reflect on in an effort to ensure the financial stability of individuals and households.
Copyright (c) 2023 Zuzana Brokesova, Tomas Ondruska, Erika Pastorakova https://creativecommons.org/licenses/by-nc-nd/4.0
The Impact of Globalization on Economic Growth in Transition Countries
The paper analyzes the impact of economic, social, and political components of globalization on the gross domestic product of transition countries. Available data from 1995 to 2018 were analyzed for two groups of European transition countries, divided according to geographical criteria into Western Transition (WT) countries and Eastern Transition (ET) countries. Based on the results of the panel ARDL approach, it was shown that economic and social globalization positively impact gross domestic product in both groups of countries in the long-run. In contrast, political globalization hurts the gross domestic product. Dumitrescu and Hurlin’s causality test showed that in WT countries, there is a significant causality from social globalization to gross domestic product and from social globalization to political globalization. In ET countries, there is significant causality from political globalization to economic and social globalization, while economic globalization causes gross domestic product.
Copyright (c) 2023 Bojan Pejovic https://creativecommons.org/licenses/by-nc-nd/4.0
Foreign Bank Origins and Efficiency in the Central and Eastern European Banking Sector
The main goal of this study is to analyse whether the source of capital in foreign participation in the domestic banking markets of countries that joined the EU after 2004 influences the evolution of efficiency levels in domestic banks and, consequently, the efficiency levels within these markets. It assesses the level of activity of foreign commercial banks in the aftermath of the 2008 – 2012 financial crisis and explores its relationship with banking sector efficiency. The study focuses on 13 countries, including Central European, South-Eastern European and Baltic states. Using the Data Envelopment Analysis (DEA) method, the research aims to determine whether foreign banks have gained or lost influence in these markets and the foreign countries that have the best performing banks in these markets. Furthermore, it provides insights into the potential influence of sources of foreign capital on the overall performance of domestic banking markets, indicating how competition could drive high-achieving foreign banks to outperform in their established markets.
Copyright (c) 2023 Artem Piatkov, Ignacio Jimenez-Hernandez, Francisco Javier Saez-Fernandez https://creativecommons.org/licenses/by-nc-nd/4.0
Financing Organic Farming through Crowdfunding: Is the Wisdom of Crowds More Supportive for Mixed Gender Teams?
Organic production is on the upswing, owing to consumer preferences for safer products manufactured with environmentally friendly methods. It is frequently promoted to achieve economic development, poverty alleviation, and female empowerment. Crowdfunding is considered an ideal mechanism for mobilizing financial resources for people with limited access to traditional sources, such as women. This paper aims to analyze the gender gap in organic farming crowdfunding and estimate which characteristics foster the likelihood of crowdfunding success in organic production campaigns. We used a sample of crowdfunding campaigns from the Kickstarter platform and employed a binary logistic regression model to investigate the main research question. Our findings show that the crowd primarily supports gender-mixed teams. We also found that having more information about the campaign and project quality, a more realistic goal, and a shorter campaign duration increases the likelihood of succeeding. This paper contributes to the growing literature and policy initiatives to promote and develop gender equality in crowdfunding.
Copyright (c) 2023 Isidora Ljumovic, Vladan Pavlovic, Goranka Knezevic https://creativecommons.org/licenses/by-nc-nd/4.0
Oil Price and Geopolitics Risk: New Causality Insights in Frequency-Domain
The paper explores the causality between oil price and geopolitical risk at global level by using the short- and long-run test of causality in the frequency-domain, over the period May, 1987 – April, 2020. For robustness checks, alternative tools in time-domain and additional variables are also considered. The key result claims that the oil price is a crucial signal for geopolitical risk on short- (i.e. up to 3 months) and long-run (i.e. more than 9 months) through its threats component. Interesting, no evidence shows that the oil price can explain the geopolitical acts per se. The results remain robust under the influence of global real economic activity in industrial commodity market. Surprisingly, no causality running from geopolitical risk to oil price is found.
Copyright (c) 2023 Mihai Mutascu https://creativecommons.org/licenses/by-nc-nd/4.0
Determinants of Inflation in EU Member States: A Dynamic Analysis of Cost-Push and Demand-Pull Factors
This study investigates the main determinants of inflation in EU member states from 2014 to 2024, focusing on both cost-push and demand-pull factors across new, old, and combined country groups.A dynamic panel model is estimated using the System Generalized Method of Moments (System GMM) to address endogeneity and capture inflation persistence. Key variables include lagged inflation, industrial production, money supply, unemployment, exchange rate, financial index, energy prices, consumer prices, and a structural break dummy. Findings reveal strong inflation persistence in all groups, with lagged inflation highly significant. Energy prices consistently have a positive and significant impact, especially in new member states. Financial factors affect inflation primarily in new countries, while exchange rate impacts are significant only in old countries. Unemployment exerts a weak negative effect. To stabilize inflation, policymakers should focus on managing inflation expectations and carefully monitoring energy price fluctuations, particularly in emerging EU economies.
Copyright (c) 2026 Jordan Kjosevski, Mihail Petkovski, Aleksandar Stojkov https://creativecommons.org/licenses/by-nc-nd/4.0
Business Sustainability Factors of Mining Companies Based on SEM Model
The main goal of the study is to determine the factors of business sustainability, that is, to investigate the effect of knowledge management (KM) on green innovation (GI) and sustainable business (SB), both at the constructs and at the dimensional level, as well as to investigate whether green innovation is a mediator in the relationship between KM activities and SB, and between KM and SB dimensions of mining companies. The research and pilot test were carried out between March and mid-July 2022, and 288 employees from 32 Serbian mining companies were selected using a non-probabilistic convenience sample. The causal relation- ship between KM, GI, and the SB of the mining industry was assessed using the structural equation modeling methodology. The bootstrap procedure was used to assess the indirect effects of KM through GI on SB and its dimensions. The results showed that KM significantly influences GI and SB, both at the constructs and at the dimensional level. In addition, GI significantly determine SB. At the dimensional level, each of the dimensions of KM significantly affects the dimensions of GI and the SB dimensions. The impact of GI dimensions on the SB dimensions are also significant. The relationship between KM and SB, as well as KM and SB dimensions, was found to be partially mediated by GI.
Copyright (c) 2023 Sunčica Stankovič, Violeta Jovanovič, Maja Cogoljevic https://creativecommons.org/licenses/by-nc-nd/4.0
Factors Supporting the Job Satisfaction of the Middle Healthcare Management – The Role of Work Conditions, Managerial Competencies and Social Support
The job satisfaction of middle healthcare managers affects organizational results of healthcare facilities. Purpose of the paper is to explore the relationship between competent leadership and work conditions with the job satisfaction of middle healthcare managers and the role of job autonomy and social support as mediators of this relationship, and to verify the influence of moderators – evaluation and ability of psychological detachment on strength of this relationship. The sample of quantitative questionnaire research consisted of 225 mid-level managers of healthcare facilities in Slovakia. The data were processed using the SPSS 24 software package. The findings show that managerially competent leadership is directly related to the job satisfaction of middle healthcare management. This effect can be strengthened by evaluation of work; psychological detachment has the opposite effect on the researched relationship. Social support and job autonomy act as mediators, the influence of social support is particularly important.
Copyright (c) 2023 Nadežda Jankelová, Zuzana Joniaková, Andrea Čambalíková https://creativecommons.org/licenses/by-nc-nd/4.0
Impacts of Ongoing Global Geopolitical and Economic Turbulences on Exchange Rates: A Case Study of the Australian Dollar
This research investigates the impact of the 2022 Ukraine conflict and subsequent economic sanctions on Russian exports on global supply chains and energy prices. Utilizing daily data from 2022, this study employs time-varying Granger causality and DS-ARDL techniques to analyze the effects of these events on the foreign exchange market. The results reveal a significant relationship between energy price shocks and exchange rates, with the Australian dollar appreciating against Euro, British pound, and Japanese yen. The study suggests that while major consumers of raw materials and energy, like Japan and European nations, face adverse effects due to the conflict, Australia could potentially benefit due to its role as a primary exporter of commodities. These results have noteworthy implications for policymakers and investors, highlighting the need for strategic reassessment of geopolitical risks and their direct and indirect effects on financial markets and economies.
Copyright (c) 2023 Amin Sokhanvar https://creativecommons.org/licenses/by-nc-nd/4.0
Changes in Monetary Policy Responses in the Czech Republic, Hungary and Poland
In this paper, we analyze how the monetary policy responses of the Czech National Bank, the Hungarian National Bank, and the National Bank of Poland have changed over the period from 1996 Q1 to 2022 Q3 using the Kalman filter. Our findings are as follows. Firstly, we identify concealed discretion among the monetary policy authorities, which is traced through significant changes in their monetary policy parameters, highlighting the importance of applying a time-varying estimation framework. Secondly, we observe a decreasing response of policy rates to the inflation gap over the observed period. The reduced response in interest rates aligns with the anchored inflation expectations in the Czech Republic and Poland. Thirdly, the interest rate smoothing parameter has declined over the observed period, reflecting the central banks’ increased willingness to adjust policy rates more vigorously. Additionally, we find a significant decrease in the long-term equilibrium interest rates, indicated by the policy-neutral rate, across the analyzed countries.
Copyright (c) 2023 Tomáš Pokorný, Helena Chytilová https://creativecommons.org/licenses/by-nc-nd/4.0
The Ensuring Knowledge Continuity for Support of Sustainable Business
Changes in approach of management of organizations to human resource management in generations Y and Z are also a very significant trend. An organization must use all possible stimulation tools to ensure knowledge continuity and to help with effective knowledge sharing between generations and support sustainable business. The goal of this article is to identify the benefits that an organization derives from ensuring knowledge continuity, and to identify the strategic documents of an organization that support it and support sustainable business. Data were obtained using quantitative research within selected Czech companies (n = 207) and qualitative research (8 interviews and one focus group). The results showed that 69.6% of the surveyed organizations ensure the knowledge continuity between generations of employees to some (varying) degree, which is influenced by the existence of a human resources management strategy (56.0%) and of an appropriately set organizational culture strategy (52.7%).
Copyright (c) 2023 Hana Urbancová, Roman Zuzák https://creativecommons.org/licenses/by-nc-nd/4.0
Suitability of the Monocentric City Model for Analysing Suburbanization Processes in the Czech Republic
In previous decades, we could see significant growth of population in suburban areas in the Czech Republic, which was connected with significant environmental, social, and economic costs. As the rapid suburbanisation continues, the better understanding of its determinants and estimation of their effects become necessary. In this article, we test the suitability of popular monocentric city model for analysing suburbanization processes in polycentric areas in the Czech Republic, which led to employing data for Czech districts (NUTS 4) in the period 2010 – 2019. The results show that the monocentric city model is suitable for analysing suburbanization in the Czech districts (represented by suburban land growth), as all its determinants (population size, unemployment, and commute costs) with the exception of price of building plots were found to be statistically significant and with expected signs. Moreover, the alternative operationalization of the model provided evidence on the robustness of the results and heterogeneity analysis revealed interesting differences between districts different in urbanisation level and other characteristics. The application of spatial regression revealed a statistically significant spatial spillover effect of the unemployment.
Copyright (c) 2023 Martin Krajčí, Jiří Balcal https://creativecommons.org/licenses/by-nc-nd/4.0
The Impact of Public Governance on Fiscal Pressure in Selected Emerging Countries
The purpose of our article is to assess the effect of diverse indicators pertaining to government quality and risk on fiscal pressure. The analysis focuses on 14 emerging countries in the European Union from 2002 to 2020. The results reveal that public governance indicators account for 51 percent of the variance in fiscal pressure, with the quality of regulations, corruption, and rule of law indicators having the most significant impact. This empirical study addresses an essential concern for policymakers, specifically the quality of public governance and its subsequent influence on fiscal pressure, with direct repercussions on the lives of citizens.
Copyright (c) 2023 Raluca Andreea Ghetu, Cristina Simona Capatina, Petre Brezeanu https://creativecommons.org/licenses/by-nc-nd/4.0
News about COVID-19: Unraveling the Market Reactions and Investor Sentiment across Different Stock Exchanges
This paper examines the impact of news regarding the spread of the coronavirus on stock market returns. We investigate this impact across different geographical regions and behavioral aspects through regression analysis. Specifically, we explore the relationship between stock returns and factors such as investors’ attention, the number of new positive COVID-19 cases and deaths, and government measures implemented during the pandemic. Our findings reveal that news concerning new deaths associated with the virus and attention towards the vaccine significantly affected stock markets in Europe, the United States, and globally. Notably, these effects were observed prior to the approval of the first vaccine. However, our analysis does not confirm these results for the Japanese and Chinese stock markets. As a result, we argue that the Japanese stock market presents an opportunity for diversification during similar shocks. These findings contribute to a deeper understanding of the dynamics between public health crises and financial markets.
Copyright (c) 2023 Peter Albrecht, Lucie Maršálková, Pavel Dorňák https://creativecommons.org/licenses/by-nc-nd/4.0
The Heterogeneity of European Bank Lending and the Role of Economic Policy Uncertainty
The paper examines the relationship between bank lending activity and economic-policy uncertainty, using data from 1998 to 2018 for 7,844 banks from the European Union (28). Our findings demonstrate a negative impact of European uncertainty on bank lending. Importantly, we observe heterogeneity within the EU. While the impact on Western European countries is statistically significant, this effect has not been confirmed for Central and Eastern European Countries. This heterogeneity is also evident using different model specifications.
Copyright (c) 2023 Daniel Pastorek, Dajana Mazurkova https://creativecommons.org/licenses/by-nc-nd/4.0
Institutional Quality and Foreign Direct Investment: Evidence from OECD Countries
The main purpose of this research is to investigate the effect of institutional quality on FDI inflows in the Organization for Economic Cooperation and Development (OECD) countries by using the panel autoregressive distributed lag of pooled mean group (ARDL-PMG) over the period 1996 – 2017. The results reveal that institutional quality is an important factor attracting foreign direct investment (FDI) over the long term to countries with low quality of institutions. In the short term, in contrast, the relationship is not significant. Institutional quality does not play any significant role in attracting FDI to the countries with sound institutions in either long or short terms. When considering components of institutional quality, property rights have the greatest impact on FDI flows. Finally, when considering a non-linear relationship between institutional quality and FDI inflows, we find diminishing returns of institutional quality on FDI flows for the countries with stronger institutions. This paper contributes to the literature by considering both the different individual aspects of institutional quality and a broad composite measure of institutional quality in order to analyse their impact on FDI inflows. Additionally, the study applies the CS-ARDL method as a robustness check, in addition to the ARDL-PMG. The scope of this study is limited as it only examines the impact of institutional quality on overall foreign direct investment (FDI) inflows, rather than analysing sector-specific FDI flows.
Panel Autoregressive Distributed Lag-Pooled Mean Group (ARDL-PMG)
Copyright (c) 2023 Emre Gokceli https://creativecommons.org/licenses/by-nc-nd/4.0
Behavioral Attention by Google Trends: Evidence from the Car Industry
We investigated the link between stock returns of automobile companies, Fama French factors, and behavioral attention, represented by demand for a selected car brand belonging to an automobile company. Using Google search activity, we focus on the impact of searches about car brands on 17 automobile companies from 2004 to 2020. We concluded that even though general intuition provides positive results, negative historical events can result in a fall in prices in some cases. Dieselgate, an event specific to this industry, engulfed the affected company and resulted in an EU-wide scandal; however, the increase in interest did have not the same effect on automobile companies based in other countries.
Copyright (c) 2023 Jolana Stejskalová https://creativecommons.org/licenses/by-nc-nd/4.0
Beneish Model for the Detection of Tax Manipulation: Evidence from Slovakia
To test the usefulness of the Beneish model, we use a unique, not publicly avail- able database from the Financial Administration of the Slovak Republic, aggre- gating the results of all on-site financial inspections conducted by this authority during 2015 – 2019. This database is paired with firm-level accounting data from the Registry of Financial Statements and the Business Register to obtain additional corporate governance data. Our results indicate that (a) the performance of the Beneish model is inferior for the Slovak data; (b) there are several significant financial variables with statistical and economic significance, but their relevance is conditional on the industry group; and (c) corporate governance indicators appear to be more relevant preventive factors of fraudulent behavior, especially foreign ownership, female CEO and corporate social responsibility.
Copyright (c) 2023 Tomáš Bačo, Eduard Baumohl, Matúš Horváth, Tomáš Výrost https://creativecommons.org/licenses/by-nc-nd/4.0
Analyzing the Drivers of the Shadow Economy for the Case of the CESEE Region
This study explores the influence of financial development on the shadow economy, alongside other possible determinants, for the CESEE region. To this objective, we used a panel dataset of annual figures for eleven CESEE countries from 2003 to 2019. To estimate the long-run coefficients, panel FMOLS and DOLS were employed. Our findings suggest that an increase in financial development and tax burden leads to the enlargement of the shadow economy. While improvements in institutional quality, trade openness, and economic freedom reduce the magnitude of the shadow economy. The study’s results offer various policy recommendations that can be used to combat the shadow economy in CESEE countries. Tax policy and institutional reforms are encouraged to promote greater trust within institutions, enabling the shift of economic activities from the shadow to the formal economy.
Copyright (c) 2023 Aysel Amir, Korhan Gokmenoglu https://creativecommons.org/licenses/by-nc-nd/4.0