Institutional deficit and health outcomes in post-communist states

In this paper we draw upon the unique natural experiment of post-communist transitions to show how the interaction between democratization and economic liberalization impacts health. We argue that, if occurring simultaneously, these transformations reduce overall uncertainty and thus improve health. Two concrete mechanisms are at work: first, people suffer less from stress-related diseases, and second, they start investing more in their own health. To capture the proposed theoretical mechanisms, we use stress-caused mortality and private expenditures on health as our dependent variables. Empirically, we employ mediation analysis with country and time fixed effects. We find that, ceteris paribus, democratization and economic liberalization exert a cumulatively positive impact upon health. Our findings should be relevant to other countries that undergo politico-economic transitions.     

Innovation of IT metasystems by means of event-driven paradigm using QDMS

Globalisation of world economy brings new and more complex demands to business systems. In order to respond to these trends, business systems apply new paradigms that are inevitable reflecting on management metasystems – quality assurance (QA), as well as on information technology (IT) metasystems. Small and medium enterprises (in particular in food industry) do not have possibilities to access external resources to the extent that could provide adequate keeping up with these trends. That raises the question how to enhance synergetic effect of interaction between existing QA and IT metasystems in order to overcome resource gap and achieve set goals by internal resources. The focus of this article is to propose a methodology for utilisation of potential of quality assurance document management system (QDMS) as prototypical platform for initiating, developing, testing and improving new functionalities that are required by IT as support for buiness system management. In that way QDMS plays a role of catalyst that not only accelerates but could also enhance selectivity of the reactions of QA and IT metasystems and direct them on finding new functionalities based on event-driven paradigm. The article tries to show the process of modelling, development and implementation of a possible approach to this problem through conceptual survey and practical solution in the food industry.     

“Too big to fail”? The Agrokor case and its impact on West Balkan economies

From about April 2017, Agrokor became the main economic topic in the Balkans. Once the greatest pride of the Croatian economy, it became a serious problem for its government. Its systemic importance for the country and the region required an immediate legislative solution. The Government had Parliament pass a special law intended to save this company. The special law on the procedure of extraordinary administration in companies of systemic importance adopted in April 2017 is an interesting example, because it introduced a new insolvency procedure titled “extraordinary administration” clearly following the example of the Italian Legge Marzano, which was adopted in order to save the Parmalat group in 2003. It also represents an example of a collision of legislation in the case of cross‐border insolvency proceedings inside and outside of the European Union, where different jurisdictions have diverging standpoints on the question of its recognition as a foreign insolvency procedure. However, once the rescue proceedings began, numerous (and some dubious) interests of the different stakeholders came to the light. The government tried not only to rescue the company and its assets throughout the Balkans region but also to acquire control of it. This was especially visible through the prerogatives of the extraordinary commissioner, formally appointed by the court, but in fact a government official. Creditors at risk, mainly Russian and Italian banks, filed lawsuits to prevent the selling of the debtor's assets. At the end, the majority creditors called to vote on the settlement agreement became the new owners of the company. However, Agrokor is still far from the end of the crisis. It has more than 60,000 employees in the region and their destiny depends on the outcome of the crisis. In more recent times, the case also revealed major political scandals.     

Market undervaluation of risky convertible offerings: Evidence from the airline industry

We assess market valuation of airline convertible preferred stocks using a contingent claims valuation model that was extensively tested by Ramanlal et al. (Rev Quant Financ Account 10:303–319, 1998). Our sample consists of 4,096 daily price observations of 11 convertible preferred stocks issued by the U.S. airlines in 1980–1991. For each convertible we estimate daily model prices for 2 years after issuance and compare them with market prices by calculating pricing errors. While the entire sample’s mean pricing error is found to be negative 3.8%, the panel data analysis and the mean pricing errors of the sub-samples indicate that the undervaluation is much more severe in the first 6 months of trading. The results suggest that airlines leave about 10% on the table when they raise capital by issuing convertible securities.