Application of International Financial Reporting Standards in the Transition Economy of Serbia

This paper explores the attitudes of the preparers of financial statements in the emerging economy of Serbia towards International Financial Reporting Standards (IFRS). Our research shows that preparers are mainly satisfied with the quality of IFRS and the environment for IFRS application in Serbia and that they generally support the process of global convergence of financial reporting standards. Nevertheless, we find that there is a need to improve the environment for IFRS application in Serbia, and we identify areas that financial reporting regulators in emerging economies should address when attempting to improve the environment for IFRS application. Our research also shows that perceived IFRS quality is dependent on the preparer's experience in applying IFRS and his or her perceptions of the environment in which IFRS are applied. Perceived IFRS quality and attitudes towards the compatibility between IFRS and the environment for application of IFRS affect the level of support for the global convergence of financial reporting standards.     

Technology,employment and the business cycle in post-transition countries of the EU

This article analyses the importance of technology and non-technology shocks in the business cycles of European Union post-transition countries. Different assumptions of New Keynesian and Real Business Cycle theory are tested. The results demonstrate that a non-technology shock is more important in explaining business cycles in post-transition countries, although a technology shock is not trivial. The technology shock cannot replicate basic business cycle facts observed in the data: it produces a low or negative correlation between employment and GDP, and a strong negative correlation between labour productivity and employment. Technology and non-technology GDP components are analysed in the transition and post-transition period. The results show a non-technology shock was the dominant source of business cycles both during and after the transition period.     

Delegation and commitment in durable goods monopolies

This paper studies a simultaneous-move infinite-horizon delegation game in which the principal of a durable goods monopoly entrusts pricing decisions to a manager who enjoys consuming her monetary rewards but dislikes production effort. The delegation contract allows for continual interference with managerial incentives: in each period the principal rewards the manager according to her performance. We show that when the cost of delegation is low relative to profits, the principal can attain the precommitment price plan in a perfect rational expectations equilibrium. The paper analyzes the robustness of this result under alternative specifications of timing and objectives. We also provide a numerical characterization of the equilibrium strategies for the case of linear-quadratic payoffs.     

Going for gold as a leisure tourism continuum: clustering motivations for gold panning revisit intention

The way in which people use their spare time differs. Leisure activities and tourism are among the most common of these. Gold panning is a rather unusual niche leisure and tourism activity. Despite some differences, leisure and tourism are generally interrelated in many ways, thus gold panning, is a good example of the leisure tourism continuum. In this study, gold panning is considered as a set of leisure activities within the context of tourism. The aim of the paper is to determine the profile of a gold panner based on their motivations. Therefore, respondents are clustered by means of motivation into two homogenous groups defined as ‘nature seekers’ and ‘true gold panners’. The results suggest that the clusters differ significantly with regards to age, education and marital status, but also in terms of the degree of interest in gold and revisit intention. The originality of the research lies in the fact that gold panning as a leisure activity has seldom been explored under the guise of a leisure and tourist context within existing literature, especially through the means of quantitative research.     

Protesting and Justifying: A Latent Class Model for Contingent Valuation with Attitudinal Data

This article develops a latent class model for estimating willingness-to-pay (WTP) for public goods using simultaneously contingent valuation (CV) and attitudinal data to identify individuals with similar characteristics, such as WTP and protest attitudes. We find evidence that the answer to the CV question influences the responses to the attitudinal questions. In our case, this influence reflects rational behavior (budget constraint issues) and justification biases related to protest reasons, such as lack of trust in institutions or fairness issues with respect to the distribution of the burden of preservation. The results from our empirical application confirm the importance of accounting for those biases.     

Bankruptcy spillover effects on strategic alliance partners

This paper examines whether a party to a strategic alliance or joint venture suffers from spillover effects when the other partner files for bankruptcy. We find that the non-bankrupt strategic alliance partners, on average, experience a negative stock price reaction around their partner firm's bankruptcy filing announcement. This negative effect is strongest for longer partnerships and those with higher returns at the announcement of the initial alliance formation. Furthermore, horizontal alliance firms in declining industries have lower returns, indicating that industry conditions can exacerbate expected problems for the non-bankrupt firm. Non-bankrupt partners also experience drops in profit margins and investment levels in the subsequent two years with the worst performance concentrated among the longer-term agreements. There is very little impact on the returns or performance for joint venture partners, which suggests that these agreements are more insulating for the partner firm.     

MIDAS vs. mixed-frequency VAR: Nowcasting GDP in the euro area

This paper compares the mixed-data sampling (MIDAS) and mixed-frequency VAR (MF-VAR) approaches to model specification in the presence of mixed-frequency data, e.g. monthly and quarterly series. MIDAS leads to parsimonious models which are based on exponential lag polynomials for the coefficients, whereas MF-VAR does not restrict the dynamics and can therefore suffer from the curse of dimensionality. However, if the restrictions imposed by MIDAS are too stringent, the MF-VAR can perform better. Hence, it is difficult to rank MIDAS and MF-VAR a priori, and their relative rankings are better evaluated empirically. In this paper, we compare their performances in a case which is relevant for policy making, namely nowcasting and forecasting quarterly GDP growth in the euro area on a monthly basis, using a set of about 20 monthly indicators. It turns out that the two approaches are more complements than substitutes, since MIDAS tends to perform better for horizons up to four to five months, whereas MF-VAR performs better for longer horizons, up to nine months.     

Cycles and multiple equilibria in the market for durable lemons

Summary. The paper investigates the nature of market failure in a dynamic version of Akerlof (1970) where identical cohorts of a durable good enter the market over time. In the dynamic model, equilibria with qualitatively different properties emerge. Typically, in equilibria of the dynamic model, sellers with higher quality wait in order to sell and wait more than sellers of lower quality. The main result is that for any distribution of quality there exist an infinite number of cyclical equilibria where all goods are traded within a certain number of periods after entering the market. Received: December 21, 2000; revised version: September 5, 2001     

Balancing State, Market and Social Justice: Russian Experiences and Lessons to Learn

This article deals with the relations in the triangle state–society–business in modern Russia. It is shown against Russian historical background, that the absolutist state in this country could never be identified with the society and these relations were shaped under its strong domination. The ethics of rule-following characteristic for market economy in general did not develop in Russia. The breakdown of communist Russia and market reforms proceeding since 1992 did not change this situation significantly. The period of political alliance between big business and government was followed by restoration of state dominance in somewhat modified forms. Both periods were characterized by corruption, which contrary to Putin’s slogans, increases in Russia. In the article I show the evolution of Putin administration’s policy which changed from emphasizing and improving legal institutions to selective use of legal norms depending on personal loyalty. Main forms of state exploitation of Russian business are described. The conclusion is that Russian experience of balancing state and market should be called negative.Dr. Vladimir Avtonomov is Professor and Dean of Economic Faculty at State University-Higher School of Economics in Moscow. He is also Head of Department in the Institute of World Economy and International Relations of Russian Academy of Sciences. Among his works are two books on model of man in economics, textbooks in history of economic thought and introductory economics for high-schools. He is a corresponding member of Russian Academy of Sciences and a member of Council of European Society for History of Economic Thought (ESHET).