May 2019

ABSTRACTS 

Returns to Education in South Africa: Evidence from the National Income Dynamics Study​
Craig Depken
Chanda Chiseni
Ernest Ita

Abstract: We utilize two waves of the National Income Dynamics Study in South Africa to estimate the returns to education in 2010 and 2012. We find that during this time period the returns to education were approximately 18% per year of education and that the returns were higher for females relative to males and higher for those living in urban relative to rural areas. The policy implications include a suggestion to continue investment in educational infrastructure, especially in rural areas, so as to increase the returns to education in those areas.

Keywords: instrumental variables; Mincer equations; developing countries

JEL Classification: I26, J31

​Effects of Football Match Results of Croatian National Team on Stock Returns: Evidence from Zagreb Stock Exchange
Tihana Škrinjarić
Patrik Barišić

Abstract: This paper observes short term effects of football match results by focusing on the Croatian national team and stock returns on the Zagreb Stock Exchange. Existing literature identifies psychological factors affecting investor’s sentiment around sporting events on different stock markets. There does not exist any study focusing on the Croatian stock market. Thus, this paper extensively observes such effects for the first time in the literature. Event study methodology, a usual approach of  nvestigating such effects, is used on a sample of 60 stocks on the Zagreb Stock Exchange for the period from 2014 until the end of 2018. The results indicate no significant effects of winning or losing a football match, even when controlling for game being friendly, competitive tournament or qualification one; as well as after controlling for investor’s expectations based upon betting odds. This means that no profitable trading strategies could be obtained around the football match day on the Zagreb Stock Exchange in the observed period for the stocks investigated in this paper.

Keywords: investor sentiment; football results; event study; stock reactions; investor’s expectations; betting odds

JEL Classification: G12, C10, G14


Is Currency Appreciation or Depreciation Expansionary in Kosovo?
Yu Hsing 

Abstract: Applying an extended IS-MP-AS model (Romer, 2000), this paper shows that real depreciation of the euro raises real GDP in Kosovo and that a lower real lending rate in the euro area, a higher real GDP in Germany, a lower real oil price, or a lower expected inflation rate would help increase real GDP. More government deficit spending as a percent of GDP does not affect real GDP.

Keywords: Real depreciation or appreciation; Budget deficits; Interest rates; Oil prices

JEL Classification: F41, E62


Accounting Systems in Poland and Croatia - comparative study
Beata Zyznarska-Dworczak
Ivana Mamić Sačer

Abstract: Central and Eastern European countries undergo many political, structural, social and economic changes. In the past decades such countries, like Croatia and Poland, witnessed a fundamental transformation of their societies and economies, which impacted accounting systems as well. The mail goal of the paper is to research the main differences in accounting systems in the Republic of Croatia and Poland. The research methodology is based on a critical analysis of scholarly literature done by the bibliometric analysis, analysis Polish and Croatian accouting standards and legal acts. Based on inductive and deductive reasoning, the paper reveals key determinants and differences of accounting frameworks in Croatia and Poland. The paper proves that it is crucial to consider economic and cultural differences in comparative international accounting research. Research results of the paper will contribute the international accounting literature but also have an impact on the European Union accounting harmonisation references.

Keywords: Accounting; Croatia; International standards; Poland

JEL Classification: M40, M41, M48, M49, E66


Firm Financial Status and Investment Behaviour: Evidence from Manufacturing Firms in Nigeria
Alarudeen Aminu
Isiaka Akande Raifu

Abstract: The study examines firm’s investment behaviour sensitivity to cash flow before, during and after the recent global financial crisis using the data of 28 firms listed on the Nigerian Stock Market during the period from 2001 to 2012. The contribution of the study to the existing literature rests on using financial crisis as basis for classifying firms as either financially constrained or unconstrained. Employing the panel data and instrumental variable estimation techniques, the study finds that firms’ investment behaviour sensitivity to cash flow was higher during the financial crisis than before or after the financial crisis. In other words, Nigerian firms were highly financially constrained during the last financial crisis.

Keywords: firms’ investment; cash flow; Tobin’s q, panel data analysis; instrumental variables

JEL Classification: C33, C36, G31


A Survey and Analysis of Scholarly Literature in DEA Published by Croatian Researchers: 1978 – 2018
Luka Neralić
Margareta Gardijan Kedžo

Abstract: After its introduction in 1978, Data Envelopment Analysis (DEA) has instantly been recognized as a useful methodology for measuring the relative efficiency of different entities, called Decision Making Units (DMUs), given multiple criteria. Up until nowadays, the popularity of DEA has been growing and a significant number of bibliographical items was published, reporting on both theoretical and empirical results. However, the main applicative area of DEA remained the performance measurement in economics and business. On the 40th anniversary of DEA, the aim of this paper is to present the DEA bibliography of Croatian scientists (up until June 2018). We consider six main categories of DEA-related publications, followed with key statistics and an overview of keywords and research areas. The whole list of DEA-related publications used in this analysis is published online. We believe this research will shed light on the state of DEA in Croatian science and motivate future researches.

Keywords: data envelopment analysis; efficiency; Croatian science; bibliography; survey

JEL Classification: C83, C44, C6


Characteristics of Undeclared Work in Service Sector in Countries of South East Europe
Predrag Bejaković
Ruslan Stefanov

Abstract: The undeclared work is a complex and multifaceted phenomenon that has been present in all countries, regardless of its social and political establishment. Notwithstanding, the empirical evidence suggests that informal economy is more prevalent in countries with lower levels of GDP. Furthermore, the informal economy is present in sectors with lower level of capital and higher level of labour intensity. Therefore, the theory and everyday experience imply that the informal economy is more widespread among the services than the goods sectors. This paper provides an overview on the informal work and unofficial economy in the services sector in the former socialist countries in South East Europe. For the reduction of undeclared activities, it is necessary to simplify the procedures for establishing small businesses, to stabilize the tax system, to ensure high tax morale and trust in society and towards institutions, and to decrease the state regulatory burden.

Keywords: undeclared work; post-transition; South East Europe; service sector

JEL Classification: E 26, L83, O17, Z31


Perception of Social Media as a Source of Relevant Information
Tihomir Vranešević
Nenad Perić
Tajana Marušić
Abstract: Social media today represent a global community of different nationalities - the size of China in terms of population, and social networking sites are online venues where users can create and post content. Social networks have also become one of the most popular ways for people to socialize, connect with friends and family, purchase items and gather relevant information about current and political topics and views. The most popular and biggest social network is Facebook and its influence in every pore of our society is evident, e.g. potential misuse of its user’s data in different purpose including manipulation in political purposes. This paper will also cover the findings of a survey conducted in Croatia and Serbia about the perception of social media and social networks as a source of gathering relevant information.

Keywords: Social media; social network; perception; Croatia; Serbia

JEL Classification: M38