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. 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.
University of Banja Luka, Faculty of Economics
Digital Mobile Payment and Economic Growth in Kenya and Nigeria: A Comparative Analysis
Mobile payment technology allows digital transactions via smartphones and tablets using methods like NFC, QR codes, and payment apps. This innovation enables consumers to purchase goods and services without physical cards or cash. The global mobile payment market, valued at $2.98 trillion in 2023, is expected to grow to $27.81 trillion by 2032, changing how customers engage with businesses and manage finances. In Nigeria and Kenya, mobile phones serve as vital tools for financial services, e-commerce, and entertainment. This study aims to compare the adoption of digital mobile payments and their impact on economic growth in these countries. It uses quarterly data from Q1 2010 to Q4 2024 from the Central Banks of Kenya and Nigeria, employing the Auto-Regressive Distributed Lag (ARDL) model for analysis. Unit root tests showed variables were integrated of I(0) and I(1), and co-integration tests confirmed long-term relationships. Findings reveal that mobile money payments significantly influence economic growth in both nations, with mixed short-term effects and a positive long-term correlation. The study recommends collaboration among regulators, mobile network operators, fintech firms, and banks to enhance mobile financial services in both countries.
Copyright (c) 2026 Acta Economica https://creativecommons.org/licenses/by-nc-nd/4.0/
Threshold, Marginal and Interactive Effects Among Economic Variables: an Integrated Panel Data Framework
This paper develops an integrated empirical workflow, referred to as the Interactive Panel Data Framework (IPDF), that systematically combines established panel data methods, such as interaction terms, threshold analysis, and marginal effect computation, within a unified estimation and inference strategy. Rather than proposing a new estimator, the IPDF provides a coherent analytical protocol for jointly evaluating regime-dependent, interaction-driven relationships in macro-panel setting. Using a balanced panel of emerging economies over the period 1980–2023, the study combines interaction terms, dynamic specifications, and nonlinear mechanisms within a unified empirical structure. Monte Carlo simulations and empirical estimations support the robustness of the proposed framework, while homogeneity tests and threshold analysis reveal substantial country-specific heterogeneity. The empirical results indicate statistically significant threshold and conditional marginal effects, showing that the impact of inflation and exchange rates on economic growth varies across regimes and economic conditions. Moreover, the identified interaction effects highlight the importance of jointly evaluating macroeconomic policy variables rather than analysing them in isolation. By integrating interaction effects, marginal responses, and threshold dynamics within a single panel data framework, this study contributes a coherent and policy-relevant empirical approach for analysing nonlinear and regime-dependent macroeconomic relationships in emerging economies.
The Importance of Air Quality Monitoring and the Need to Improve Air Quality Management in Local Self-Government Units (LGUs) in the Republic of Serbia
The paper will examine the economic impact of Local Self-Government Units (LGUs) on the improvement of air quality and environmental protection in cities and municipalities (one city and one municipality from each district, except Belgrade) in the Republic of Serbia. One of the factors affecting life in cities in the Republic of Serbia is air pollution, which can have a negative impact both on the health of residents living there, as well as on those who come for business or tourism. The subject of research in this paper is general data on air quality in LGUs (cities and municipalities) in the Republic of Serbia, as well as planning and the use of funds by competent LGU institutions for establishing and managing air quality. The aim of this paper is to examine whether the competent LGU authorities apply the planning and legislative framework as a basis for effective and efficient air quality management, implement measures and activities to improve air quality, and whether they collect and allocate funds for this purpose. A survey conducted on a sample of 49 LGUs has shown that most of them do not manage air quality adequately. The research has shown that LGUs insufficiently plan and allocate financial resources in their budgets for maintaining air quality. From the accounting perspective, financial resources that LGUs generate from environmental pollution charges and fees for environmental protection and improvement belong to the budget of the local self-government unit and are important in the planning and incurring expenses (costs) for air quality management.
Entrepreneurial Activity as a Function of Sustainable Development: Panel Analysis
The paper studies the impact of entrepreneurial activity on three components of sustainable development: economic, social and environmental. Three distinct variables, i.e. new businesses, established businesses, and ambitious entrepreneurs, represent entrepreneurial activity. Variables, GDP growth rate, modified human development index and carbon dioxide emissions are used to observe sustainable development. The aim of the paper is to determine whether entrepreneurship affects sustainable development and, if yes, in what form. There are three econometric panel models created for research purposes. A panel analysis was performed on a sample of 35 countries over ten years. The results indicated a contradictory impact of the variables used to measure the level of entrepreneurial activity, while none of them showed an effect on overall sustainable development.
Copyright (c) 2026 Acta Economica https://creativecommons.org/licenses/by-nc-nd/4.0
Adoption of Artificial Intelligence and Human Resource Upskilling in Emerging Markets: Evidence from Small and Medium Enterprises in Oyo State, Nigeria
This study investigates how the adoption of artificial intelligence (AI) is associated with workforce upskilling within small and medium-sized enterprises (SMEs) in Oyo State, Nigeria. While AI holds considerable transformative promise for human resource development, a critical knowledge gap persists regarding its regional implementation dynamics, particularly within the context of developing economies. Drawing on an integrated five-theory framework – the Technology Acceptance Model (TAM), the Unified Theory of Acceptance and Use of Technology (UTAUT), the Technology-Organisation-Environment (TOE) framework, Human Capital Theory, and Sociotechnical Systems Theory – this study develops and tests a conceptual model linking three theoretically grounded AI adoption dimensions (organisational integration, AI training programmes, and data-driven decision-making support) to employee skill enhancement outcomes. Employing a quantitative cross-sectional survey design, the structured questionnaires were administered to 135 respondents comprising HR professionals, SME operators, and employees drawn from approximately 72 SMEs across diverse industry sectors in Ibadan Metropolis. Results indicate that AI integration in HR upskilling practices remains largely nascent (M = 2.116). Nevertheless, Pearson correlation and regression analyses revealed significant positive associations between key AI adoption dimensions and employee skill enhancement (R = 0.750, R2 = 0.562, p < 0.001). These associations are interpreted as correlational rather than causal given the cross-sectional design. Prominent barriers include infrastructural inadequacies, educational deficiencies, policy gaps, and socio-cultural resistance. The study concludes with actionable policy and practice recommendations, and acknowledges methodological limitations including common method bias risk, absence of formal EFA/CFA, and cross-sectional design constraints.
A CEEMDAN-LSTM Model for Forecasting the USD/DZD Exchange Rate
This study develops a hybrid forecasting model for the USD/DZD exchange rate by combining Complete Ensemble Empirical Mode Decomposition with Adaptive Noise (CEEMDAN) and Long Short-Term Memory (LSTM) networks to address high volatility and complex temporal dependencies in currency markets. Using 310 monthly observations, the CEEMDAN procedure decomposes the series into five frequency components and a residual, which are modeled by component-specific LSTM networks. The proposed CEEMDAN-LSTM model achieved the lowest forecast errors among the tested models, with a MAPE of 0.4782%, outperforming traditional LSTM and SVM benchmarks. The 12-month forecast suggests relative exchange rate stability, with a slight decline of about 0.48%. The results indicate that decomposing the original series before LSTM modeling improves predictive accuracy by separating short-term noise from medium- and long-term dynamics. The proposed framework may support exchange-rate risk management, hedging decisions, and short- to medium-term planning in emerging-market settings.
The Western Balkans insurance market: competition, concentration and managerial practices
This paper analyses the competition and concetration of insurance markets in Bosnia and Herzegovina, Montenegro, Serbia, and North Macedonia. We measure market structure using the Herfindahl–Hirschman Index (HHI) and market development using premiums per capita (EUR) and the share of premiums in GDP. Country-specific linear time trends are estimated with OLS and heteroskedasticity and autocorrelation-consistent standard errors, complemented with rank-based Kendall and Spearman tests designed for short series and potential nonlinearity. We document statistically significant deconcentration in Montenegro and Serbia, a significant increase in concentration in Bosnia and Herzegovina, and an inconclusive pattern for North Macedonia given the limited availability of data. In parallel, premiums per capita trend upward across all markets, with typical annual growth ranging from roughly 9% (Bosnia and Herzegovina) to 14% (Serbia). Taken together, the results support the hypothesis that higher competition is not directly or uniformly associated with market development over the 2019–2024 window. Policy recommendations emphasize proportionate entry facilitation, conduct-focused supervision, and investment in statistical capacity for line-of-business series and longer time frames.
Does Foreign Direct Investment Complement or Substitute Domestic Investment in Botswana?
The impact of foreign direct investment (FDI) inflows and outflows on domestic investment in Botswana was examined using data for the period from 1990 to 2022. The study was motivated by Botswana’s efforts to attract FDI in support of economic diversification. The question this study sought to answer was: “Does the liberalisation of foreign investment outflows and inflows in Botswana support domestic investment?” The study employed the non-linear autoregressive distributed lag (NARDL) approach to assess whether foreign direct investment complements or the substitutes domestic investment in Botswana. The study found that positive shocks to foreign direct investment inflows complement domestic investment in the short run but substitute it in the long run, while negative shocks to foreign direct investment inflows are insignificant across both time horizons. Positive shocks to foreign direct investment outflows were found to complement domestic investment in the short run but substitute it in the long run. Conversely, negative shocks to foreign direct investment outflows lead to an increase in domestic investment in the long run, although they are insignificant in the short run. Policy implications are also discussed.
MODELLING THE EMISSIONS-INCOME RELATIONSHIP IN EAST AFRICAN COMMUNITY (EAC) COUNTRIES: A PANEL COINTEGRATION APPROACH
This study examines the nexus between economic growth and carbon dioxide (CO2) emissions in East African Community (EAC) countries, with a focus on the role of renewable energy consumption. As EAC countries undergo rapid industrialisation and urbanisation, understanding the impact of economic growth on emissions is critical for shaping sustainable development policies. Using a panel cointegration approach, the study applies the environmental Kuznets curve (EKC) hypothesis to data from six EAC countries, namely, the Democratic Republic of the Congo, Burundi, Rwanda, Kenya, Uganda and Tanzania, for the period from 1990 to 2022. The panel autoregressive distributed lag (ARDL) model is employed, with the pooled mean group (PMG) estimator used to analyse both long-run and short-run dynamics. The results reveal a U-shaped relationship between economic growth and CO2 emissions, challenging the traditional inverted U-shaped EKC hypothesis. The findings suggest that while the early stages of economic growth reduce emissions, emissions begin to rise again beyond a certain income threshold, indicating a potential overdevelopment phase. Renewable energy consumption is found to significantly reduce CO2 emissions; however, its economic benefits are constrained by infrastructural and policy challenges. This study contributes to existing literature by integrating renewable energy into the EKC framework and offers valuable insights for policymakers seeking to balance economic growth with environmental sustainability. The findings emphasise the need for targeted policies to promote clean energy adoption, low-carbon industrialisation and stronger environmental governance across EAC countries.
Copyright (c) 2025 Acta Economica https://creativecommons.org/licenses/by-nc-nd/4.0/
IS DIGITALISATION A CATALYST FOR BRICS COUNTRIES’ EXPORTS? AN EMPIRICAL ANALYSIS
Digitalisation is a key catalyst which transforms international trade by enhancing efficiency, reducing costs, expanding market access and unlocking new opportunities, significantly boosting export performance. Understanding this interplay is essential for Brazil, Russia, India, China and South Africa (BRICS) countries, major players in global trade. This study examines the digitalisation-exports relationship in BRICS, specifically how Information and Communication Technology (ICT) catalyses exports. Using a combination of panel and country-specific autoregressive distributed lag (ARDL) models, this method captures country heterogeneity and both short-term and long-term dynamics. Panel autoregressive distributed lag identifies common BRICS trends, while country-specific autoregressive distributed lag highlights distinctive country effects, strengthening the analysis. Results show that, in the short term, Information and Communication Technology’s effect on exports varies across models. However, in the long term, Information and Communication Technology consistently exerts a statistically significant effect. Findings emphasise digitalisation’s pivotal role in enhancing BRICS exports, particularly long term. Yet, effectiveness differs across countries. Disparities in digital infrastructure, digital literacy and institutional quality suggest digitalisation alone is insufficient. Addressing these challenges enables BRICS to leverage digitalisation and strengthen their position as prominent emerging export countries. This study contributes to the digital economy discourse with empirical evidence-based policy implications.
Analysis of the E?ects of the EU Official Development Assistance to the Western Balkans
Official development assistance (ODA) implies the movement of capital with a minimum of one quarter of grant. It was established in the second half of the previous century, with the aim of getting developed countries to set aside a part of their gross domestic product (GDP) as an aid intended for developing countries. In the European Union, development assistance implies a policy which was established at the very beginning of the integration process, but it was not until the Treaty on the European Union was signed that it obtained its legal basis. Today, the European Union is a key partner of developing countries, and together with member states it ensures more than a half of the ODA assets. The countries of the Western Balkans are categorized among the developing countries and receive aid via loans and grants from developed countries and international institutions. The European Union’s support is divided into the aid intended for the countries that are in the process of accession and the aid which is meant for other, less-developed countries. The distinction between these two forms of assistance is very difficult, because the character of the support changes in the course of accession process. The scientific problem that this paper deals with pertains to identification of the intensity of the European Union Official Development Assistance and the level of development of the Western Balkans. The assets of the European Union’s assistance to the region of the Western Balkans are necessary, yet not sufficient for achieving a higher level of development and the European standards in all directions.
Copyright (c) 2017 University of Banja Luka, Faculty of Economics
Ownership Structure of the Organisation as a Determinant of Human Resource Management in the Context of Transition Countries
Transition period of the post-socialist countries and opening of their markets have led to the positive shift in understanding the role of employees in organizations and the importance of proper management of this specific resource. An important factor in spreading modern principles of human resource management in transition countries is the arrival of foreign companies on their market. In that context, this paper focuses on the relationship between the ownership structure of the organisation and the level of development of the core activities of human resource management. The subject of the empirical research was companies which operate on the territory of the Republic of Srpska, and employ more than 200 employees. Empirical data were collected by using questionnaire, and some of them were generated from the official websites of the observed companies. Testing of hypothesis was performed with the Analysis of Variance. The research results show that in the foreign-owned companies there is a statistically significant di?erence in the level of development of human resources management, compared to the state-owned and national private companies. On the other hand, among foreign-owned companies, which di?er in the country of origin of the majority owner and the number of years in business in the domestic (BiH/RS) market, there is no statistically significant di?erence in the level of development of basic activities of human resource management.
In?ation, Employment and FDI in Bosnia and Herzegovina
The monetary policy of Bosnia and Herzegovina (hereinafter referred to as BIH) operates under the currency board system, responsible for strengthening the market economy and price stability. On the other hand, the economy of BIH is facing long term unemployment, unfavorable business environment and feeble competitive position. Tis discourages economic development. Further retaining the currency board system in BIH attracts great interest. The paper analyzes the relation among in?ation, unemployment and foreign direct investment (FDI). Statistical analysis (coefficient of correlation and simple linear regression (period 2004/2014)) indicates that there is no inversion similar to the Phillips curve between in?ation and unemployment. Tus, it is implied that BIH renounces employment, aggregate demand and economic growth for the sake of stable prices. Moreover, the ratio of in?ation and participation of FDI in GDP is inverse with a negligible correlation. Analyses demonstrate that there is no optimal combination of in?ation and unemployment in BIH that would improve business environment and stimulate FDI and aggregate demand. Correlation and regression analyses fail to provide the arguments to statistically challenge the currency board as the monetary system model of BIH.
The Future of the Euro and Challenges for the Western Balkans
The creation of the euro in 1999 was celebrated as one of the most important events in the European history in the 20th century. Expectations about an increase in welfare were enormous. However, all started to go downhill in the European Union (EU) from the introduction of the euro. Tis downturn started slowly, but subsequently accelerated to the extent that not only the euro, but also the EU is on the brink of collapse. Germany was the only beneficiary of the eurozone, while other countries were without obvious eurozone-related benefits. Greece is in dire economic straits from which there is no exit for at least one generation. Germany has enormous exports surpluses, but some of them will not be paid. Would Germany be better o? without such surpluses? Is the economic marriage in the eurozone becoming dreary and unsustainable? The EU should abandon the euro in order to save the project of European integration. If the Western Balkan countries continue their accession path towards the EU and pay for that enormous price (especially important for Serbia), what will they get in return? They will get an unstable and dangerously unfunctional EU, the EU in which solidarity (one of the prime EU values) is neglected. They will get the EU whose future is in doubt.
Neural Networks in Forecasting Economic Growth as a Convergence Indicator of Integration Process
Economic integration fosters income convergence by eliminating obstacles exchanged among member states, increasing competitiveness, facilitating access to advanced technologies and financial resources, and facilitating access to new knowledge. The result is a faster growth in income of the poorer members and this is one of the main economic reasons in favor of integration. However, each potential member has certain economic resources, a given economic structure that results in a certain growth rate measured by changes in GDP. The paper predicts economic growth using artificial neural networks. The results of the forecast provide a realistic evaluation of “readiness” of a particular economic system to converge to the level of average development (average GDP per capita) by comparing this estimated growth with the average growth rates of member states of integration. The work is based on the hypothesis that it is possible to produce an acceptable model which estimates GDP growth using artificial neural networks. Economic growth forecast is based on the relative contribution of agriculture, industry and services to the growth of gross domestic product. The reliability of the prognostic model of artificial neural networks is based on the error measured at the output layer of the neural network. It can be concluded from the results of the forecast that a neural network can be e?ectively implemented in applications of economic growth estimation.
The paper critically evaluates current regionalization and institutional framework for managing regional development policy in Serbia in the context of joining the European Union. Firstly, the current regionalization in Serbia is presented based on the standards of statistical nomenclature of Territorial Units for Statistics (NUTS) and EUROSTAT methodology. Ten the institutional mechanism for guiding EU cohesion policy in the current budgetary period (2014-2020) is analyzed, as well as the availability and the purpose of EU funds for mitigation of regional disparities in the Member States. The paper points out that from the standpoint of the development needs of the NUTS 2 level in Serbia it might be better to define larger areas for the territorial units NUTS 3 level (administrative districts) instead of the current solutions (counties). The arguments that there is currently no adequate attention of the creators of economic and overall policy regarding the problems of regional development in Serbia are summed up. For more successful integration into the EU, Serbia has to conduct priority activities related to the establishment of an efficient institutional framework composed of various policy instruments, which should provide stability and continuity in regional development. However, a number of current issues are still opened (respect for the territorial aspect in setting development goals, the regional typology according to development criteria, interregional and intraregional relations, overcoming the problem of regional disparities in development). In this sense, the marginalization of these areas in public policy in Serbia is certainly not conducive to significant use of EU funds. In this context, in the coming period in Serbia it is necessary to implement the following processes: (a) completion of a comprehensive and coherent institutional framework for the management of regional policy, (b) the establishment of mechanisms for e?ective management of regional policy, especially to stimulate faster development of areas with specific development problems (c) the efficient use of EU funds and (d) the gradual functional and fiscal decentralization, in order to strengthen the capacity of local government to carry out activities aimed at local economic development. This is especially important if one takes into account the fact that all our regions belong to the first group of EU regions (less developed), because they are below the 75% of development compared to the EU average (the most developed region in Serbia – Belgrade region – has reached development level of about 60% of the EU average). Since 2012 Serbia has not had any strategic document in the Feld of regional development. This indicates that new strategic directions of development in terms of regional dimensions and in the context of the current economic and social developments are not defined. In this context, it is indicative that even in Eurostat Regional Yearbook, which records statistics for the European regions, Serbian regions are not even recognized, because EU funds have not reached agreement on statistical regions with Serbia. Bearing all this in mind, it can be concluded that Serbia is late with preparations in the field of regional policy and coordination of structural instruments. The concluding section contains the recommendations for the regional policy in Serbia in the future (the improvement of inter-municipal cooperation, the implementation of an integrated endogenous approach to development, improvement of regional statistics, better coordination of the work of the national line ministries, strengthening the capacity of local governments, etc.).
The Importance and Opportunities of Autonomous Industrial Policy Management in the Context of European Integration
After a long period in which industrial policy was in a kind of scientific exile, it is once again in the center of interest both to the academic and general public. The last crisis, due to the nature of the causes that led to it, paved the way for the return to the concept of industrial policy in developed countries, significantly changing the angle of observing the e?ectiveness of its application in stimulating economic growth. Along with this process in developed countries, developing countries, especially those with a failed transition, have faced the need to change the existing growth models. A model based on consumption and import has exhausted its potential from the point of its impact on the current economic trends, while in a longer period of time its unsustainability has become more than obvious. The affirmation of a new model based on investment and export presupposes the necessary process of reindustrialization. In this respect, there is a dilemma in what form and in what way it is possible to apply an industrial policy that would be e?ected through the renewal of the production base.
Non-Life Insurance and Economic Growth: the Case of Bosnia and Herzegovina
Vector autoregressive (VARX) models with exogenous variable are commonly used for macroeconomic analyses. They can also be used for examining the relation between non-life insurance and other macroeconomic parameters. Tis model has been applied on examining the relation between non-life insurance and economic growth in the case of Bosnia and Herzegovina. The use of this methodology has confirmed the expectation that in the case of Bosnia and Herzegovina non-life insurance has positive impact on economic growth in the short-run.
Students’ Career Aspirations towards Entrepreneurial and Managerial Jobs: A Comparative Study in Bosnia and Herzegovina, Croatia and Serbia
In conditions of significant high youth unemployment rates in the transition countries of Southeast Europe, the subject of special interest of public administration and the academic community is researching the connection between stimulating entrepreneurial activity and launching independent entrepreneurial ventures and self-employment. Also, the subject of research interest is factors in?uencing the entrepreneurial affinities and intentions of youth, who are finishing the process of formal education and trying to get involved in the world of work, either as employees or employers. The subject research was conducted on a purposive (deliberate) sample of 448 respondents in Croatia, Bosnia and Herzegovina (BiH) and Serbia, collected through online questionnaire, with the aim of comparing career aspirations of youth towards entrepreneurial and managerial jobs. The research is an extension of the interest of the academic community, complements the previous intense research from the region of Southeast Europe and gives a scientific contribution by modifying and testing previously conducted empirical research in BiH and Croatia (Umihani?, ?onlagi? Alibegovi? & Alfirevi?, 2018), extending the sample to Serbia, where significant research of this kind has not been conducted. The results, obtained by using descriptive statistics, analysis of variance (F-Test) and Post Hoc Fisher’s LSD test for testing research hypothesis, indicate that there are significant di?erences in the career orientation of the surveyed students between three observed countries. In Croatia and Serbia, the impact of society and national culture is neither favourable for entering entrepreneurship, nor for a managerial career. Attitudes are somewhat more favourable in BiH, but not significantly more favourable in comparison to Serbia and Croatia.
Copyright (c) 2018 Faculty of Economics, University of Banja Luka
Managerial Ranking and Project Selection
Models of quantification of the risk and return on investment projects are often the subject of observation by the scientific and professional community. In addition to the problem of project selection, managers are increasingly faced with the problem of ranking projects, which usually results from the lack of funds for financing their projects. The economic crisis has led to a growth in distrust, thereby preventing easy access to monetary funds. Therefore, companies increasingly find difficult to obtain the necessary funds to finance investment projects, which obliges managers to rank projects that received a positive rating during the project selection phase. The profitability index is a modern method of evaluation of investment projects, which, besides providing the possibility of selecting projects, allows projects to be ranked as well.
Government Finance Statistics in Bosnia and Herzegovina: How far we have come
Fiscal reporting is the first principle of fiscal transparency. Its main purpose is to present accurate picture of government finance and to provide markets, legislatures and citizens with the necessary information to hold the government accountable. Fiscal reporting is expected to give a comprehensive overview of fiscal activities of the public sector, provide frequent and regular information on relevant, internationally comparable and historically consistent basis, compiled and disseminated in accordance with the international standards. In the last two decades significant changes in this area have begun with the adoption of accrual-based reporting and the extension of the coverage of reports. This paper presents recently developed norms for reporting fiscal statistics and analyses their appliance. In the Analyses it is shown that there has been considerable progress in the development of official public statistics in Bosnia and Herzegovina. Yet, its National Statistical System is confronted with an increasing number of new requirements to align with international recommendations, standards and best practices. The purpose of this paper is to describe the international standards of government finance statistics, analyse the existing system of compilation and dissemination of the official public finance statistics in Bosnia and Herzegovina, compare the state of its compatibility with international standards and highlight challenges and future direction in this statistical area.
Openness of Small Transitional Economies – Revised Analysis after the Global Economic Crisis
The in?uence of the economy’s openness on overall economic growth and development is a widely explored topic among economists with still unclear conclusions. They mainly stem from di?erent ways of measuring the degree of openness of countries. In this paper the openness of the economy towards foreign trade is seen as a share of the amount of import and export of goods in the gross domestic product. A particularly interesting issue is the connection between openness and economic development in the case of small open economies, which in principle are “condemned” to greater openness. The subject of this paper is an analysis of the relation between the country’s openness to foreign trade and economic development on a sample of 23 small and transitional economies. The sample examining the relationship between openness and economic development is based on the Transition Report of the European Bank for Reconstruction and Development with the exclusion of some countries that, according to the definition of a small country in this paper, are not considered small countries. A small economy in this paper is defined as a country whose policy on the world market does not a?ect the formation of world prices, i.e. it is a price taker, and this general part of the definition is based on the definition of a small economy that can be found in Deardor? ’s Glossary of the international economics. For a more precise definition of a small economy, we have adopted an additional threshold according to which a small country is considered to be a country whose share in the world exports and imports does not exceed 1%. In this paper, a method of correlation between variables is used to determine the nature of the relationship that exists between openness and economic development of economies. Economic development is measured by gross domestic product per capita measured by purchasing power parity. It was examined what the nature of this relationship is, and whether there is a di?erence between the relationship of exports and economic development and the relationship of imports and economic development. The results of the research suggest that outward orientation has no alternative in the case of small open economies, but for small economies it is extremely important to distinguish foreign trade ?ows from import and export when considering the degree of their openness. This implies that the results of the analysis have shown there is a much stronger positive correlation between openness measured by the share of exports in GDP and economic development than between openness measured by the share of imports in GDP and economic development, although the latter relation is also positive. The results of the analysis point to the conclusion that export performance of small open economies, which they base the growth of the living standard of their population on, is of the highest importance for them.
Value Added as a Measure of Economic Profit
Economic profit is the concept immanent for the value added. It is an attempt to analyze properly the business success in terms of contribution of profit to the increase in the company value and the stockholders’ wealth. Fundamentally, value added is a measure of the business success where all standard costs and the costs of invested capital are excluded from the realized revenues. Profit as a traditional measure of business success ignores the cost of equity, although equity is the most expensive form of capital. To illustrate better this concept, we made an analysis of the most profitable corporations in Bosnia and Herzegovina listed on Banja Luka and Sarajevo stock exchanges. The analysis showed that the majority of these corporations operate poorly because they do not meet the implicit cost of capital, essentially losing the value of capital entrusted to them by their stockholders. Also, this analysis questioned the importance of the industries which are usually considered to be the most important in BiH economy.
Specificity of Fiscal Policy in the Monetary Union
The condition of the optimal currency area as a theoretical basis of the monetary integration considers the harmonization of the fiscal and monetary policy crucial in achieving the efficient functioning of the monetary union. The issue of sustainability of the monetary union without fiscal union reaches real intensity in times of crisis and market instability. In that context, this paper focuses on the relation of uncoordinated fiscal policies and non-fulfillment of the fiscal criteria of convergence with the functioning and sustainability of the monetary union. The aim of this research is to establish whether, based on the analysed theoretical assumptions and empirical case, the fiscal criteria are respected in practice in the member countries, and how specificity of the fiscal policy in?uences the monetary integration especially in the years of crisis. We started research with the cost-benefit analysis of the monetary union pointing out to the specific costs and benefits occurring when a country joins the monetary union. We examined the fiscal parameters of the convergence criteria of the member states pointing to the problem of heterogeneity of members and deviations from the reference values of the Union. The results show that the metodology used to establish the set norms of the fiscal convergence cannot correspond symetrically to all member countries. The results also point to the fact that, unlike symmetrical, in the emergence of asymmetric shocks, i.e. disorders that a?ect various countries di?erently, membership in the monetary union becomes more expensive because of the inability to conduct monetary policy.
Human Capital, Entrepreneurship and Rural Growth of the Serbian Economy
In the new economy, based on knowledge and innovation, the concept of human capital is becoming an increasingly important factor of growth (and development) not only for urban, but also for rural areas. The studies dealing with the analysis of the available human capital at the local level have highlighted its significant presence in rural areas characterised by a “specific environmental quality”, defined in the literature as rural outdoor amenities. Highly educated individuals who live and work with their families in these areas are responsible for the successful transformation of the local economy, employment growth, the improvement of living standard, development of entrepreneurship, and achievement of high rates of economic growth. This paper is aimed at analysing the relevance of the concept of human capital for rural development, with special emphasis on the rural development of Serbia. The paper presents the results of an empirical study of the model of economic growth of rural areas in Serbia, based on the panel data analysis, during a five-year period. According to the results, human capital and entrepreneurship have a significant impact on economic growth. Additionally, there are significant differences in the rate of economic growth between the rural areas with high and low outdoor amenities in Serbia. Human capital and entrepreneurship are represented in the models of rural economy growth as determinants of the development mechanism through which rural economies grow.
The sharing economy: Uber and its e?ect on taxi companies
The popular ride sharing service Uber has undoubtedly a?ected the taxi industry by o?ering lower prices, faster and more quality service, as well as a higher degree of transparency in terms of choosing drivers and determining fares. A question arises inevitably: does Uber present loyal or unloyal price competition to taxi companies by o?ering signifcantly lower prices, cutting fxed costs and bypassing middlemen? Is there a tax loophole at play? The hypothesis this paper aims to examine is whether Uber is a new way of providing transportation services, thus bringing more transparency and fair competition to the industry, or it is a disruptor on a previously fair market. If the second case is correct, not all hope should be lost – perhaps with the right amount of regulation, Uber could become a new standard in service transportation. This paper is divided into three parts. The frst part brie?y explores the concept of the sharing economy; a relatively new term and even newer foundation for business models of contemporary startups. Special signifcance is given to the reduced costs in companies which operate based on the sharing economy versus the so-called traditional companies. The second part of the paper examines Uber’s business model through costs, the pricing system, driver earnings and working conditions. Finally, the third part of the paper estimates the present and future impact of Uber on traditional taxi companies, taking into account its legal status, competition and the changing labor market.
(In)consistency of the Selection of the Method of Multiplicative Decision-Making
The paper analyzes the main causes of the (in)consistency of the selected method of multiplicative decision-making: data normalization, weight coefficients and the application of the Likert scale for the purpose of measuring quantitative attributes. Normalized data in the methods of multitributive decision making represents the substitute for a subjective attribute ratings by decision makers. Since they are calculated on the basis of mathematical transformations of empirical data, one gains the impression that the choices basen on normalized values are „objective”. Therefore, the sensitivity analysis of the results has dealt exclusively with effects of weight coefficients on the final choices so far, while the potential impact of normalization is complitely ignored; meanwhile, the deformations caused by the normalization of data have been attributed to the effects of weight coefficients and their inevitable subjectivism. We intent to point out at the deformations of empirical values that are the result of normalization and which call into question the application of normalized values as a decision base. It can be proven that the normalized values are an unrealiable information base for decision-making. In addition, the (in)consistency of selection methods of multi-attributive decision-making is also influenced by changes in the method of measuring and formulating attributes.
Copyright (c) 2019 Faculty of Economics, University of Banja Luka
Domains and limitations of the utilization of cryptocurrencies and blockchain technology in international business and financial markets
The subject of this paper is to analyse utilization of cryptocurrencies in international business. The objectives of the research are to provide the scientific and professional public, researchers and practitioners with an overview of current research on blockchain technology in the economy and to determine the impact of the wider use of cryptocurrencies in international business and their impact on the future of financial markets. The research was carried out by using the method of description, literature analysis and research conducted. The selected examples present the possibility for earning, buying and storing cryptocurrencies, paying with crypto-money and investing in them. The research will offer an answer to the research question “What are the advantages and disadvantages of using cryptocurrencies in international payments and what are the security measures of using cryptocurrencies in the future?” In the answer, this paper will present the direction in which the use of crypts will develop in the future. The contribution of the paper is reflected in the presentation of the scope and restrictions on the use of cryptocurrencies in international business, banking and financial markets. Results have shown that blockchain technology has a bright perspective, even though it would not be known today if bitcoin had not gained in popularity. The conclusions suggest that, as long as the transaction costs are lower than the costs of payment transactions, the rational behaviour of legal and natural persons requires encouraging the use of cryptocurrencies in order to reduce the costs of transactions and to overcome the existence of an intermediary.
DEVELOPMENT TRENDS AND INSTITUTIONAL CAPACITIES IN KOSOVO AND METOHIJA IN THE FIRST FIFTH OF THE 21st CENTURY
This paper is about basic development trends in Kosovo and Metohija during the period 2003-2017. The focus is on the missed opportunities for increasing economic and social well-being in the KiM area. Besides this, an important aspect of the analysis carried out in this paper relates to the quality of the state governance and building institutional capacities. In the empirical analysis, three scenarios were used to show the backlog of the KiM area, i.e. the lost GDP per capita of Kosovo* caused by the inability to take advantage of the wider space of our country. The results of the research show that special attention has to be paid to the rule of law, the efficiency of governance and the control over corruption in Kosovo*. The integration of Kosovo* with the educational, research and economic space of Serbia and the EU could lead to the overall progress of our country as a whole.
STOCHASTIC MULTI-ATTRIBUTE UTILITY MODEL
In real situations, the attribute value (mostly variable) can be best represented by introducing the finite number of attribute values level, to which the corresponding probabilities should also be attached. Stochastic Multi-Attribute Utility Model has the ability to analyze such stochastic multi-attribute problems. The choice of one, from the set of available options, is made by choosing the best option based on the maximum expected utility structure. In this paper, we will mention some arguments for the development of the Stochastic Multi-Attribute Utility Model, its advantages (they are closer to reality), disadvantages (analytically difficult technique, subjective assessments of the values of variable attributes), as well as the process of solving the problem.