The paper analyzes rapid growth of credits and its impact on the banking sector and the economy in five new EU member states from 1995 to the 2009. Our estimates support the hypothesis that the growth of credits and the amount of available finance might harm banking performance and deteriorate non-performing loans (NPL) dynamics, most probably due to the overheating of the economies in the five new member states. The pro-cyclicality of banking sector performance and high economic growth is a signal for the overheating. Therefore a slowdown in economic activity is likely to accelerate the growth of the NPL ratio. The paper presents information to the financial system regulator and the management of commercial banks how to deal with the volume of credits to avoid an increase of non-performing loans. The paper has 35 citations in Web of Science (SSCI) and 31 citations in Scopus.
COBISS.SI-ID: 31632429
The transition process of economic systems confirms the well-known fact that it can be split in an early phase of contraction, a subsequent phase of stabilization and the third phase of eventual growth. Paper analyses ?, ß and unconditional convergence of the income level and real per capita GDP level across new EU member states during their integration process in order to become full EU members. We analyse their development during the accession period and discuss their convergence prospects. Results indicate that the level of unconditional convergence was set at 5.07% per year, which confirms assumptions of positive effects of economic integration according to standard neoclassical and Heckscher-Ohlin theory. Consequently, analysing the development of the new EU member countries experiences should give us a perspective on economic development for the countries yet in the process of full or associated membership in the EU. The results can influence the direction of government economic policies of full members of the EU and economic policies of the countries that are to join the EU. The demonstrated processes of convergence also confirm that the cover regulations (EU legislation) have positive impacts on the movement in the same direction and convergence of economic variables analyzed (in the case of the research – on the GDP per capita).
COBISS.SI-ID: 28046637
We contribute to the scant empirical literature on the functioning of courts in the post-socialist world by analyzing civil case disposition in Slovenia. We first characterize basic empirical patterns in modes of civil case disposition in Slovenian local courts. We then examine court-level determinants of the incidence of in-court settlements versus trial-based judgments. Consistent with the theory that both judges and disputing parties take into account their respective private benefits and costs when choosing their preferred mode of case disposition, we find evidence that the incidence of in-court settlements versus trial-based judgments increases with the number of all case filings per judge. Thus, court resources and demand for court services influence not only total court output, as previously established in the literature, but also how cases are disposed of. The article shows to judicial policy how to speed up the resolution of disputes by stimulating the judge who is the crucial person in deciding about the speed of legal proceedings.
COBISS.SI-ID: 14096721
In this article we investigate comovement of the three Central and Eastern European (CEE) stock markets (Slovenia, the Czech Republic and Hungary) with certain developed European stock markets (Austria, France, Germany and the United Kingdom) through the novel approach of maximal overlap discrete wavelet transform (MODWT). We use two features of MODWT to explore energy decomposition of stock market returns at different time scales and to apply the methodology to study comovement between investigated stock markets. We show that most of the energy (variability) of stock market return series is captured by scale 1 (which correspond to 2-4 days return dynamics) and scale 2 (which correspond to 4-8 days return dynamics) MODWT coefficients. MODWT details are used to show that comovement between stock markets is scale dependent and declines from raw (daily) return series to first- and second-scale reconstructed return series. The findings of the survey then have important implications for foreign financial investors who already hold international portfolios that exactly replicate those of non-Czech or non-Hungarian stock markets: international investing in the Czech or Hungarian stock markets with investment horizons corresponding to scale 2 (4 to 8 days) brings greater international diversification benefits than shorter (2 to 4 day horizon) international trading diversification strategies. The Slovenian stock market differs from the Czech and Hungarian markets also in this respect, as when the scale is increased the benefits of diversification are reduced. We also find that the volatility of Slovenian stock index returns is less synchronized with other observed stock return series. The Czech and Slovenian stock markets seem to comove with the Austrian stock market to a greater extent than with other developed stock markets. The article shows that it is, in principle, for effective investment in the European economic area enough if investors know the situation on the major stock exchanges, as the market rates of securities are strongly commoved. Slovenia is here the exception.
COBISS.SI-ID: 11686940
This paper examines the systematic risk and validity of the basic capital asset pricing model of Sharpe (1964), Lintner (1965) and Mossin (1966) in three Central and Eastern European stock markets (i.e. Slovenia, Hungary and Czech Republic). The CAPM is tested on a multiscale basis, building on the Fama and MacBeth (1973) methodology and applying two modern econometric techniques - wavelet analysis and generalized method of moments estimation. Empirical results indicate that the systematic risk and validity of CAPM implications are multiscale phenomena. Empirical evidence in support of CAPM implications in the investigated Central and Eastern European stock markets is found to be weak. The most commonly violated CAPM hypotheses are the zero Jensen's alpha condition, positive market premium, and the non-systematic influence of non-observable variables on the excess returns of stocks in these stock markets. The analysis of the stock market in Slovenia, Hungary and the Czech Republic shows that market risk which cannot be reduced by dispersing investments (systematic risk) can’t be reduced even by using Capital Asset Pricing Model otherwise appropriate for evaluation of long-term investments.
COBISS.SI-ID: 11386908
In the period from 2009 to 2012, the value added among eight major European electricity producing companies on average oscillated around the stagnating trend. Between these companies there were large differences in organizational structure and technology of electricity production. Labor contributes to value added the most in EDF and Vattenfall, while capital contribution to value added is the greatest in Fortum and above average in GEN, Enel and CEZ. From 2009 to 2012 the contribution of labor on average increased, and the contribution of capital decreased. The single exception with opposite changes in production factors' contribution was Enel. Total factor productivity is greatest in RWE, and this company improves it even at the cost of a decline in value added, employment and assets. On the other side EDF and Enel increased their total factor productivity connected with value added growth. The elasticity of labor employment on final electricity consumption is 0.5, on the price of this energy for industrial use is 0.3, and on the labor costs per employee is -0.2. The elasticity of capital (assets) engagement is 0.8 on final electricity consumption, and 0.5 on the prices of electricity for industrial use (total Eurogroup). Importance and impact of the achievement: - Overview of the specifics of the production of electricity (engagement of labor, capital and total factor productivity) in Europe's largest energy companies, information to HSE (Holding Slovenian power plants, Ltd.) that in comparison to competition its total factor productivity is getting worse - in essence, it is a flawed business model of HSE in the field of organization of marketing of energy, and also in the field of financing of their activities. - Assessment of the causes of deteriorating economic results of HSE after the end of the financial crisis; proposal of amendment of the business model of HSE. - Assessment of distinctive specifics of the operation of large energy companies in EU with obviously different technology and business philosophy (orientation toward growth on the one hand, and towards increase in profitability on the other hand).
COBISS.SI-ID: 524867097
Rapid credit growth has been one of the most pervasive developments Central and Eastern Europe in the years before the crisis. We tested the significance of macroeconomic and banking sector variables that stipulate non-performing loan ratios in the Baltic States, Bulgaria and Romania. The increased economic activity improved the loan portfolio quality of the banking sector, as indicated by a lower NPL ratio. Due to a high share of loans denominated in a foreign currency and the fact of productivity gains in the tradable sector, the appreciation of the real exchange rate contributed to an improvement in loan portfolio quality. The article confirms that the non-performing loans decline with the economic growth and rise during the recession, so the static conception of the share of non-performing loans in the business bank’s credit has no specific value.
COBISS.SI-ID: 30481709
The lack of effective judiciary in post-socialist countries has been a pervasive concern and successful judicial reform an elusive goal. Yet to date, little empirical research exists on the functioning of courts in the post-socialist world. We draw on a new court-level panel dataset from Bulgaria to study the determinants of court case disposition and to evaluate whether judicial decision-making is subject to a quantity-quality tradeoff. Addressing endogeneity concerns, we find that case disposition in Bulgarian courts is largely driven by demand for court services. The number of serving judges, a key court resource, matters to a limited extent only in a subsample of courts, a result suggesting that judges adjust their productivity based on the number of judges serving at a court. We do not find evidence implying that increasing court productivity would decrease judicatory quality. The policy implications of our findings are discussed. The analysis of the functioning of the judicial system in Bulgaria, carried out in international cooperation, shows that judges are adjusting their productivity to the number of disputes on the courts and that the system is, at least in quantitative terms, effective.
COBISS.SI-ID: 15327569
Stock market comovements between developed (represented in the article by markets of Austria, France, Germany, and the UK) and developing stock markets (represented here by three Central and Eastern European (CEE) markets of Slovenia, the Czech Republic, and Hungary) are of great importance for the financial decisions of international investors. We applied a maximal overlap discrete wavelet transform correlation estimator and a running correlation technique for the period from 1997 - 2010. By using the rolling wavelet correlation technique, we wanted to answer the question as to how the correlation between CEE and developed stock markets changed over the observed period. In particular, we wanted to examine whether major economic (financial) and political events in the world and European economies (the Russian financial crisis, the dot-com financial crisis, the attack on the WTC, the CEE countries joining the European union, and the recent global financial crisis) have influenced the dynamics of CEE stock market comovements with developed European stock markets. The results show that stock market return comovements between CEE and developed European stock markets varied over time scales and time. At all scales and during the entire observed time period the Hungarian and Czech stock markets were more interconnected to developed European stock markets than the Slovenian stock market was. We found that European integration lead to increased comovement between CEE and developed stock markets, while the financial crises in the observed period led only to short-term increases in stock market return comovements. The results of our paper could impact international investors’ and economic policy designers’ decisions.
COBISS.SI-ID: 11011868
This paper studies the ownership structures of unlisted privatized firms in Slovenia. On the basis of official ownership records for all nonfinancial firms over a six-year period (1999-2004), we explore the factors responsible for the concentration of ownership and for the dissolution of the multiple blockholder structures that these firms were assigned at privatization. We observe significant path dependence: patterns of ownership and control are in part determined by the persistence of the initial privatization owners (state funds, privatization investment funds, employees, and managers) as firm blockholders. We also find that ownership concentrates less in larger, riskier, and better-performing firms. Multiple blockholders remain present in the firms in which the two largest owners are of the same type, which presumably makes it easier for them to control in coalition. Importance/impact: The paper analyzes the second phase of the Slovenian privatization with the concentration of enterprises’ ownership and notes that this did not occur in the case of larger, riskier and successful businesses. The original ownership structure of privatized companies has remained in the cases when there were at least two large owners (block holders) of the same type.
COBISS.SI-ID: 512345980