Acta Economica <p>Acta Economica is the scientific journal of the Faculty of Economics, University of Banja Luka, which was launched in 2002, and twice a year it publishes papers from all disciplines that are studied at the undergraduate and graduate studies, and it also follows current events in the field of economic sciences.</p> <p>The journal publishes papers in Serbian language and in leading foreign languages. Empirical researches and theoretical analyses are equally important and they will be published if, in the opinion of the reviewers and editors, they meet the standards of the journal.</p> University of Banja Luka, Faculty of Economics en-US Acta Economica 1512-858X PUBLIC HEALTH EXPENDITURE AND INFANT MORTALITY RATE IN NIGERIA <p>One of the numerous responsibilities of the government of any country is to invest in the various sectors of the economy. This should, however, be channeled to the appropriate sectors, such as the health sector, that will lead to a continual growth of the country. It is in the light of this, that this study looks at government spending on the health sector and its effect on infant mortality rate (INFM) in Nigeria. Health is central to the well-being of the citizens. This study made an attempt to provide empirical evidence of the impact of public health expenditure on infant mortality rate in Nigeria between 1991 and 2018 using time series data. The Fully Modified Ordinary Least Square (FMOLS) analytical method was used to examine the relationships. Various robustness checks were carried out to ensure the reliability of the result for policy makers. Findings revealed that all variables employed positively impacted INFM except for Diphtheria, Pertussis, and Tetanus (DPT) immunization and female literacy rate. It was therefore recommended that more public enlightenments on the importance of taking DPT immunization for infants should be embarked upon for the target audience to be able to produce a positive effect, nursing mothers should be educated more on the need to take good care of their children especially at the early stage and not leave chance to the faith of the day care, all in the name of being literate and answering the call of their job at the expense of their parental role among others.</p> Adeagbo Mathew Oluwaseun Copyright (c) 2020 Acta Economica 2020-12-30 2020-12-30 18 33 79 96 10.7251/ACE2033079O THE INFORMAL ECONOMY AND ECONOMIC GROWTH OF NIGERIA: A TIME-VARYING PARAMETER APPROACH <p>Studies on the relationship between the informal economy and economic growth have been inconclusive as to whether the positive or negative relationship dominates. These results are partly due to the type of estimation technique such as fixed-parameter techniques. Fixed parameter techniques have been used to observe the relationship between economic growth and the informal economy. A caveat to the fixed-parameter estimation techniques used to observe the relationship between the informal economy and economic growth is the inability to account for annual disruptions. This paper seeks to examine the relationship between the informal economy and economic growth in Nigeria in the period from 1991 to 2015 using the Time-Varying Parameter (TVP) model. The TVP model is estimated in two stages. First, an Ordinary Least Squares (OLS) multiple regression is estimated and the outcome is subjected to the flexible least-squares approach. The results show the dominance of the negative effects of the informal economy on economic growth. The outcomes also reveal that overtime movements of time-varying parameters in the informal economy and economic growth are connected with economic and political events. This paper recommends the absorption of the informal economy into the official economy through government policy.</p> Abiola Lydia Aina Copyright (c) 2020 Acta Economica 2020-12-30 2020-12-30 18 33 97 113 10.7251/ACE2033097A SITUATIONAL LEADERSHIP IN SERVICE ORGANIZATIONS <p>The purpose of this paper is to present a situational leadership model. The model is universal and can be applied in small, medium and large enterprises of various industries. Numerous surveys on U.S. Fortune 500 companies and surveys on other companies around the world have shown its universality, but also the need to improve the model. The aim of this paper is to adapt the model to the needs of the service activity that deals with vehicle servicing. The paper presents the hypothesis that by adapting the situational leadership model in service activities, it will lead to better personnel leadership, increased profits and satisfaction of the demands and requirements of stakeholders. We used quantitative and qualitative methodology in our paper. We collected numerical data based on a situational questionnaire, and we collected qualitative data based on interviews with employees and leaders. The results of the conducted research confirm that by adjusting the situational leadership model, the profit of the organization can be improved. The extension of the model refers to the clear definition of business objectives, and the requirements of the CEO that leaders must have the highest knowledge and skills to effectively manage staff in given situations. The limitation of the research refers to a small sample, because we applied and adjusted the model only to one service organization. The originality of the work refers to the adaptation of the model of situational leadership in a service organization that deals with vehicle servicing. For the first time, the development of leaders is assessed in situational leadership models at the request of the CEO. Based on the results, the CEO analyses the development of leaders and the development of employees. To achieve the defined goals, the CEO requires from leaders to be at the highest level of development. Therefore, the introduction of continuous training of leaders is necessary. There are several ways to assess employee development. For the first time, employees are developed based on their ability to perform jobs. Leaders must be able to adapt their leadership style to all employees, to train employees as quickly as possible to perform tasks independently.</p> Zdravko Todorović Boris Todorović Copyright (c) 2020 Acta Economica 18 33 115 129 10.7251/ACE2033115T EFFECTS OF TOURISM DEVELOPMENT ON THE ECONOMY OF BOSNIA AND HERZEGOVINA <p>Bosnia and Herzegovina (BiH) used to be an attractive tourist destination, which existed within the former Yugoslavia, and experienced a real collapse of tourism development after the war in the 1990s. The recovery process required, above all, the establishment of general stability and harmonization of interests of three constituent nations. That is the reason why the focus on general economic and social progress has been present for years, and tourism as an economic branch has been placed on the margins of development plans. The subject of this research is tourism as a facilitator of the development of Bosnia and Herzegovina. The main aim is to present the direct and indirect contributions of tourism to the development of the national economy of Bosnia and Herzegovina. It required the collection of data using classical scientific research methods, and then processing using statistical techniques. The purpose is to provide the insight into the strength and direction of correlation between individual categories in the balance of payments through correlation regression analysis. In addition, the analysis of the impact of tourism on investment, employment and gross domestic product was performed. This paper answers the question whether tourism in Bosnia and Herzegovina stimulates economic development and whether economic development enables the development of tourism.</p> Andrijana Mrkaić Ateljević Srđa Popović Copyright (c) 2020 Acta Economica 2021-04-18 2021-04-18 18 33 131 146 10.7251/ACE2033131A AN INSIGHT INTO POTENTIAL FISCAL IMPLICATIONS OF THE GREAT LOCKDOWN FROM THE PERSPECTIVE OF SMALL STATES <p>The Great Lockdown has caused severe economic distractions to the majority of world countries, and de-globalization trends have started to increase. Globalization was to an extent beneficial for smaller economies, and it was one of the factors contributing to the rise in the number of countries around the world during the last few decades. According to the perceived larger openness and vulnerability of smaller states, it is thus expected that those countries are hit much harder by the economic contraction, as their outputs are much more volatile in relation to the economic cycles. In this context, the paper intends to investigate the exposure of European states to the current lockdown, where the focus is particularly on assessing the fiscal impacts of the lockdown. The main research question is whether there are any differences regarding the fiscal functions of government between smaller and larger states. This is addressed through the cross-national comparative investigation based on data for 44 European countries; and we specifically assess how fiscal activities of government differentiate among smaller and larger states. The results of the study suggest that the effect of the size of the state does not affect the consumption spending of government, but the size variable matters for the transfer expenditures. This piece of research would like to add to the development of the discipline of small state studies, in particular to the issue of their vulnerability and changing global economic environment.</p> Pevcin Primož Copyright (c) 2020 Acta Economica 2020-12-30 2020-12-30 18 33 9 20 10.7251/ACE2033009P INVESTMENT AND ECONOMIC GROWTH: THE EXAMPLE OF BOSNIA AND HERZEGOVINA <p>An investment is a factor of the economic growth and a mandatory constituent in the majority of development models. This study analyzes the impact of the gross investment on the economic growth in Bosnia and Herzegovina (BiH) for the period 2005-2017, and provides the assessment of the interdependence of investment and a newly added value in industry. The relationship between the foreign investment and the economic growth is also included. The dependent variables are the GDP growth rate and the added value in industry (as % of GDP). The independent variables are the total investment rate (as % of GDP) and the foreign investment rate (as % of GDP). The hypothesis is that the gross investment and the foreign investment are positively correlated with the GDP growth rate. The investments contribute to a higher newly added value in industry. The results show that the gross investment is a significant factor of the economic growth because there is a high significance and positive correlation between the observed variables (the total investment and the GDP growth). This shows that the investment growth stimulates the economic growth in Bosnia and Herzegovina. But the dynamic analysis as an investment-GDP ratio shows oscillations. The impact of investments on the share of the newly added value in industry is insignificant and negative. The results of the dynamic analysis are similar. The relationship between the variables of the foreign investment rates and the GDP growth is significant and positive. Although the foreign investments are not sufficient, they still contribute, to a certain extent, to the economic growth of BiH.</p> Jelena Bjelić Copyright (c) 2020 Acta Economica 2020-12-30 2020-12-30 18 33 21 41 10.7251/ACE2033021B THE IMPACT OF DEBT-SERVICING BURDEN ON HOUSEHOLD EXPENDITURE IN NIGERIA: A CASE OF EKITI STATE SENATORIAL DISTRICTS <p>This study employs binary logistic regression technique to explore the impact of household debt-servicing burden on expenditure patterns in South-West geo-political region of Nigeria, using Ekiti State as a case study. Questionnaires were randomly distributed to 2500 households, and the results unveil that households with high income, large family-size and heads within the age group (40 and above) were more susceptible to debtburden. In addition, the paper highlighted that indebtedness compromises the quality of nutrition and health status of household members. Based on the above findings, we conclude that high indebtedness and debt burden trajectories cause deleterious effects on household consumption patterns and overall economic well-being. Thus, household heads should inculcate fiscal discipline which promotes saving culture and averts future shocks that could emanate from precautionary demands. Second, debt providers should regulate loans in cognizance to household repayment capacity and other stipulated policies which break the vicious cycle arising from over-indebtedness, install stability and spur economic development.</p> Amassoma Ditimi Ogbuagu Matthew Ikechukwu Fasina Damilola Copyright (c) 2020 Acta Economica 2020-12-30 2020-12-30 18 33 43 63 10.7251/ACE2033043D ANALYSIS OF SUSTAINABLE GROWTH RATES OF COMPANIES INCLUDED IN THE MIXED HOLDING POWER UTILITY OF REPUBLIC OF SRPSKA <p>This paper analyzes selected data on the performance of companies that are part of the power utility Elektroprivreda Republike Srpske with the aim of determining their sustainable growth rates. The energy sector was chosen because of its importance both for the Republic of Srpska capital market (measured by the participation in the total market capitalization of the Banja Luka Stock Exchange and the basic Stock Exchange index) and the entire Republic of Srpska economy (measured by the participation in gross domestic product). The analysis considered data from published financial statements for 2019, with an emphasis on the following: operating assets, liabilities, capital, operating income and net profit. The dividend policy was also considered, but it was concluded in the paper that none of the observed companies paid dividends from profit for 2019 by the end of this analysis. The research results show that the rate of sustainable growth exceeds 1% in only one case, while in several other cases there are negative rates of sustainable growth caused by the loss in the observed period. Such facts could raise concerns, but also indicate possible directions for future actions in order to improve the performance of the considered companies.</p> Goran Radivojac Aleksandra Krčmar Copyright (c) 2020 Acta Economica 2020-12-30 2020-12-30 18 33 65 76 10.7251/ACE2033065R