Does money help predict inflation? An empirical assessment for Central Europe

This paper investigates the predictive ability of money for future inflation in the Czech Republic, Hungary, Poland and Slovakia. We construct monetary indicators similar to those the European Central Bank regularly uses for monetary analysis. We find in-sample evidence that money matters for future inflation at the policy horizons that central banks typically focus on, but our pseudo out-of-sample forecasting exercise shows that money does not in general improve the inflation forecasts vis-à-vis some benchmark models such as the autoregressive process. Since at least some models containing money improve the inflation forecasts in certain periods, we argue that money still serves as a useful cross-check for monetary policy analysis.     

Ruin probabilities under general investments and heavy-tailed claims

In this paper, the asymptotic decay of finite time ruin probabilities is studied. An insurance company is considered that faces heavy-tailed claims and makes investments in risky assets whose prices evolve according to quite general semimartingales. In this setting, the ruin problem corresponds to determining hitting probabilities for the solution to a randomly perturbed stochastic integral equation. A large deviation result for the hitting probabilities is derived that holds uniformly over a family of semimartingales. This result gives the asymptotic decay of finite time ruin probabilities under sufficiently conservative investment strategies, including ruin-minimizing strategies. In particular, as long as the insurance company invests sufficiently conservatively, the investment strategy has only a moderate impact on the asymptotics of the ruin probability.     

A model for identifying and ranking dangerous accident locations: a case study in Flanders

These days, road safety has become a major concern in most modern societies. In this respect, the determination of road locations that are more dangerous than others (black spots or also called sites with promise) can help in better scheduling road safety policies. The present paper proposes a multivariate model to identify and rank sites according to their total expected cost to the society. Bayesian estimation of the model via a Markov Chain Monte Carlo approach is discussed in this paper. To illustrate the proposed model, accident data from 23,184 accident locations in Flanders (Belgium) are used and a cost function proposed by the European Transport Safety Council is adopted to illustrate the model. It is shown in the paper that the model produces insightful results that can help policy makers in prioritizing road infrastructure investments.     

Corporate Reporting in Central and Eastern Europe: Issues,Challenges and Research Opportunities

The purpose of this paper, building upon the papers included in this special section of Accounting in Europe on Corporate reporting in CEE countries and on our knowledge of the region, is to broaden out and open up dialogue and debate about how local institutions are evolving and impact the corporate reporting practices in this under-researched region. We begin by discussing the institutional context for conducting research on corporate reporting by entities in Central and Eastern Europe (CEE), within the broader context of emerging, transitional economies. We also reflect on how research conducted on CEE countries can make a relevant contribution to the international literature, and exemplify by summarizing the research questions and findings of the papers included in the special section. A future research agenda emerges, given the gaps in the international literature and the future research implications suggested in the papers constituting the special section.     

Unraveling the IJV Rationale in Emerging Markets: The Case of Multinational Enterprises in the Russian Construction Industry

ABSTRACT

This article investigates the role of international joint venture strategy of five multinational enterprises in the Russian construction market. Joint ventures play a crucial and specific role for these firms’ strategy in Russia: They serve both as an entry mode and a postentry strategy; facilitate business and guide foreign investors; increase efficiency for further strategy; and help international construction firms overcome the environmental deficiencies. Findings of the article bolster the theory by stressing the facilitating effect of joint venture upon challenges and problems that Western firms meet in emerging market in contrast with more developed economies.     

Social Capital at Work: A Case of Adapting a Norwegian Cooperation Model in Russia

The article examines the process by which the local industry in a city in the Russian North adapted a Norwegian cooperation model. We found that the Russian way to build cooperation, different from the Norwegian practice, was characterized by intertwined personal and organizational ties and by mixed political and business agendas. The data were analyzed with the help of theories of social capital and Scandinavian institutionalism. On the basis of this analysis, we challenge the established view of Russia as a country with low cooperation capacity. Also, we suggest how the Russian cooperation experience can be valuable in the West.     

Human Resource Management in the Building Industry： International Comparison

This paper summarizes the results of the international questionnaire survey which took place at the start of 2013 in order to examine, judge, and compare the implemented concept and procedures of human resource management in the questioned building companies operating in the Visegrad Four countries （the Czech Republic, Hungary, Poland, and the Slovak Republic） and the Federal Republic of Germany, and proposes an optimal approach to human resource management in the context of the current and expected economic development. The questionnaire survey was based on the assumption that effective human resource management is a condition of the successful function of each building company and that human resource management is that area of management which distinguishes the successful building companies from the unsuccessful ones. In total, 202 companies from the Czech Republic, 105 companies from Hungary, 100 companies from Poland, 102 companies from the Slovak Republic, and 99 companies from the Federal Republic of Germany took part in the questionnaire survey. The results of the questionnaire survey showed that among the building companies questioned in individual countries, there was no substantial difference in the overall concept and in the partial procedures of human resource management. The implemented concept and procedures in the questioned building companies show significant merits and surprising shortcomings, whereas it is difficult to prove an unequivocal connection between the efficiency of human resource management and the success of building companies. This relationship is determined by a series of other political, economic, legal, social, cultural, technical, demographic, and natural effects which are not related to the efficiency of human resource management or to the performance of the workforce of building companies.     

Predictability of equity returns during a financial crisis

An occurrence of a market crash or a financial crisis has long been considered a cause of market inefficiency. An inefficient market commonly implies return predictability and the existence of profitable opportunities for traders and speculators. Technical analysis has been a popular tool to identify predictable patterns in asset prices. The usefulness of a large universe of technical trading rules popularized in the existing literature on technical analysis is tested when they are applied to a set of equity markets that are generally considered developed and efficient during the two most recent periods of major financial turmoil: the 1997 Asian financial crisis and the 2008 global financial crisis. Three major statistical deficiencies that existing studies on return predictability are commonly criticized for – data snooping bias, nonsynchronicity bias and transaction costs – have been incorporated in the analysis. Technical trading rules are largely unable to yield abnormal excess returns over the passive benchmark after data snooping bias, nonsynchronous pricing and transaction costs are accounted for. Chaotic price movements typical for a volatile market during a financial crisis are likely to have an adverse effect on the performance of active trend chasing trading strategies.     

Communication Flows in International Product Innovation Teams

Recently, we have witnessed a strong growth in the internationalization of many firms' product development activities. However, the lack of attention devoted by scientific research to the management of international innovation contrasts sharply with the importance attached to it as a cornerstone of international business success. Although several empirical studies and normative theories have specified the communication requirements in innovation teams, an empirically based insight is definitely needed on the communication requirements and requirements that prevail in the complex context of international innovation teams, in which the participants are located in different company units, countries, and cultures. This article addresses the following research question: viewing international innovation as an interfunctional activity, what are the communication requirements an international innovation team is facing, and what are the communication capabilities (interface mechanisms) that may be adopted to initiate, develop, and launch the new product effectively and efficiently? An extensive case study research project was designed to develop a comprehensive theoretical framework. Over a two year time period, the research team has investigated selected innovation projects in four European multinational corporations. The analysis of the case study data suggests five requirements that determine the effectiveness and efficiency of communication in international product development teams: network transparency, knowledge codification, knowledge credibility, communication cost, secrecy. To cope with these communication requirements, organizations may create firm level capabilities (parallel structures, cross‐functional and inter‐unit climate, communication infrastructure, goal congruence) and team level capabilities (core team, team leadership, formalization, procedural justice). The evidence from the in‐depth case study research indicates that these mechanisms provide a parsimonious and powerful approach to address the communication requirements in international product innovation teams. After the information processing framework proposed by Tushman and Nadler [124], the adoption of these mechanisms is expected to improve innovation effectiveness. This holds important consequences for the management of international product innovation projects. First, the innovating firm must balance centralization and decentralization, employ formal as well as informal strategies, and integrate ad‐hoc and permanent strategies. Second, it highlights the critical role of the project leader. Given the fact that companies often select the most available person, rather than the best person for the job, the allocation of light weight project leaders may create heavyweight problems in international teams. Third, following the argument in favor of procedural justice, the absence of involvement may severely hinder cross‐functional commitment to international innovation projects. Fourth, the innovating firm must also actively manage the communication flows with external parties. Failure to do so may result in flawed specifications, and a limited understanding about product design and market strategies.     

The floating stock policy in fast moving consumer goods supply chains

The floating stock distribution concept exploits intermodal transport to deploy inventories in a supply chain in advance of retailer demand. In this way response times are reduced and storage costs can be reduced as well by having products in the pipeline. In this paper we present two mathematical models to analyse this policy with backlogging allowed. The first one tries to optimize the advanced shipping time of containers to intermodal terminal, and the second optimizes the total number of containers in pipeline and terminal. A comparison is made with the simulation outcomes of applying previously developed strategies, which shows that this concept has advantages in inventories over other strategies.