Special Conference Issue 2 2019

Zagreb International Review of Economics and Business
 
 
ABSTRACTS

Analyzing Capital Structure across Industries: Evidence from Croatia
Bisera Karanović
Gordana Nikolić
Goran Karanović

Abstract:  Capital structure refers to the delicate balance between equity and debt that a company uses to finance its assets. It is typically expressed as a debt-to-equity or debt-to-capital ratio, with the components usually located on the right side of the company’s balance sheet. Capital structure can exert great influence on the company’s risk profile and ability to leverage its operations. For this reason, the authors conducted an investigation of the capital structure of 16 joint stock companies listed on the Zagreb Stock Exchange comprising CROBEX, the equity index of Croatia for a three-year period starting in 2015 and ending in 2017. The study demonstrates that many CROBEX-listed companies are very risk averse and choose to remain debt-free. Some are, however, starting to discover the potential offered by financial leverage and have slowly started adjusting their capital structure. In conclusion, capital structure is slowly becoming an issue worthy of discussion on the corporate agendas in Croatia.

JEL Classification: G32, N24, O16

Keywords:  Capital structure, Debt ratio, Leverage, Financial analysis, Croatia

Investigating Service Quality Issues in Higher Educational Context
Vivien Surman
Zsuzsanna Eszter Tóth

Abstract:  Recently, quality issues have been widely addressed in the higher education sector as a result of which the identification and the role of stakeholders have come to the forefront. When evaluating service quality in higher education, three distinct levels of operation could be taken into account, namely, institutional level, program or faculty level and course level, on which the relevant stakeholders perceive service quality by focusing on different attributes. Besides students considered as primary stakeholders, the academic staff is paid considerable attention as they have a direct influence on how students perceive educational service quality. The establishment of a course level service quality framework of a special course is presented in this paper by demonstrating not only the students’ but also the supervisors’ aspects through a student questionnaire, focus group discussions and personal interviews. These approaches resulted in a new, more sophisticated understanding of service quality on course level.

JEL Classification: I21, I23

Keywords:  higher education, service quality, operational levels, focus group, survey

Dividend Policies and Business Groups: the Case of Croatia
Besim Beqaj
Arta Krasniqi
Valon Beqaj

Abstract:  This paper aims to analyse and examine consumer behaviour based on different variables (age, gender, level of education, income, customer care, delivery time), and the impact of those variables on consumer satisfaction on domestic and foreign online services in Kosovo. The data represented in the paper have been collected on 2017 and 2019. The majority of demographic variables (except gender and income) as independent variables have shown to be significant in explaining consumer satisfaction from online services. On the contrary, the level of customers’ gender and income have shown to be statistically insignificant (p=0.143 and p=0.264 respectively; where α=5%). In addition, income has shifted from being insignificant in 2017 to significant in 2019. It can be inferred that the strongest correlation has shifted towards the price level of the 4 P’s of Marketing with total customer satisfaction from online services (r=.996), followed by customer care (r=.990).

JEL Classification: M11, M14, M30, L81

Keywords: the consumer, e-Commerce, customer satisfaction, marketing mix, costumer care

Can Evaluation Trigger Change? The Case of the Interim Evaluation of the Croatian Tourism Development Strategy
Sanja Maleković
Sanja Tišma
Daniela Angelina Jelinčić
Ana-Maria Boromisa

Abstract:  The paper is focused on the results of the first conducted sectoral interim evaluation in Croatia, that of the Croatian Tourism Development Strategy till 2020. The authors reflect on the methodology used, the applied approach, the objectives and scope of the recently implemented interim evaluation of the mentioned Strategy. They comment on the purpose and functions of this sectoral evaluation and observe objectively its role from the point of view of achieving effectiveness, long term, and concrete and sustainable development impacts in the sector of tourism. The main findings of the conducted evaluation are presented, based on a number of held interviews and a survey with the main policy makers, civil servants as well as all key stakeholders in the tourism industry. Particular focus is given to evaluation questions and judgement criteria based on the evaluation criteria of effectiveness, impact and sustainability. The authors indicate some of the positive achievements, and particularly the current problems and challenges in the segment of tourism in Croatia in the period until 2020 and beyond. Along with observations related to the issues of accountability in the sector, the paper also provides reflections on the learning effects as the end result of such an evaluation, contributing to further policy development and policy learning in the sector of tourism. The authors indicate that their experience with this first interim evaluation could serve as a good practice example for conducting similar sectoral evaluations in Croatia as well as a tool for further long term development of tourism in the country, since the sector is of pivotal importance for Croatia’s local, regional and urban development as well as its overall economic competitiveness. Particular attention is given to some of the noted deficiencies and needs for further improvements in this sector, vital for Croatia’s further development. Recommendations are provided for improvements of the overall Croatian tourism development policy, with specific focus on the effectiveness of the so far achieved results as well as sustainable implementation of the Strategy and overall policy, aiming at reaching major and more concrete development impacts in the field of tourism.

JEL Classification: Z32, Z38

Keywords: interim evaluation of a strategic program, tourism policy

Allowed Revenue of Network System Operators in the Croatian Energy Sector and Interest Rate Changes on the Croatian Capital Market​
Tomislav Gelo
Željko Vrban
Dalibor Pudić

Abstract:  The energy sector is characterized by market and monopoly activities. Monopoly activities include network activities, transmission and distribution of electricity, and transport and distribution of natural gas. For this reason, the revenue of the network activities is defined as allowed income, and it is under the control of the national energy regulator. In Croatia, this is the Croatian Energy Regulatory Agency. The allowed revenues of the network system operator in the Croatian energy sector are defined by the methodologies for individual network activities, which are based on the method of eligible costs. Network activities are usually capital-intensive activities. Capital cost is an element of the eligible cost method and is accounted for as a weighted average cost of capital (WACC). WACC affects the allowed revenue of the network system operator and the network tariff. It depends on the interest rates on debt capital, the risk-free rate, the market risk premium and the corporate tax rate. Changing the interest rate on the capital market, which also depends on the credit risk of the country, affects both the change in WACC and the change of tariffs for transport / transmission of energy. Amortization and operating expenses of the network operator, approved by the energy regulator, also have a significant impact on allowed revenues. The impact of the WACC change on the allowed revenue and network tariffs of network system operators has a different impact on the network tariffs, which depends on the structure of the eligible costs of a particular network system operator. Changing WACC affects the changes in tariffs of the network system operator. The aim of the paper is to determine how an interest rate change affects the WACC and how the change in WACC affects the change in the allowed revenue and the network tariff of the gas transport operator and the transmission of electricity in Croatia. The paper will analyse the tariffs of electricity transmission and natural gas transport in Croatia and compare them with those in the European Union.

JEL Classification: D42, G32, L51

Keywords: WACC, interest rate, network system operator, allowed revenue, network tariff