HRM as a Significant Factor for Achieving Competitiveness through People: The Croatian Case

This paper evaluates the quality of human resource management (HRM) in Croatia because excellent human resource (HR) policies, programs and activities enable enterprises to maximize their workforce productivity. The research was conducted in enterprises with more than 200 employees. The value of HRM was assessed using the HR audit approach. Fifty-five HR indicators were analyzed from the top 10 Croatian HR enterprises to serve as benchmarks for the final sample of 80 enterprises. Results indicate Croatian enterprises have deficient HR practices, on average. Independent sample t-tests showed 61.82% of HR indicators were significantly better in the benchmark firms. Consequently, HRM in Croatia can not be considered solid ground for achieving competitiveness through people.

Consumer confidence as a GDP determinant in New EU Member States: a view from a time-varying perspective

This paper offers a pioneer attempt to unveil the time-varying impact of consumer confidence on GDP growth. The empirical analysis is based on a state space model with time-varying coefficients, which is employed on a dataset from 11 New EU Member States. It is shown that the impact of consumer confidence (reflecting the overall uncertainty level in the country) skyrockets in the 2008 Great Recession, providing evidence that the recent crisis was to some extent psychologically governed. After that, the influence of consumer confidence on GDP mostly stabilizes at earlier levels. The EU accession seems not to play an important role in the observed relationship. The obtained conclusions are quite robust across countries and remain intact upon the inclusion of additional control variables in the model. A possible solution for keeping the psychological determinants of the crisis under control is a prompt, coherent, and clearly communicated crisis management policy, which might help preventing a momentous drop of consumer confidence and overall uncertainty.     

Antecedents and outcomes of fashion innovativeness in retailing

Challenging market conditions force the fashion industry to find new ways of introducing new products, adjusting and stimulating unplanned purchases within fashion stores. Fashion innovativeness and visual merchandising play a key role in this challenge. This study examines how fashion innovativeness is related to motivational factors for shopping and actual unplanned purchases in fashion retailing. It also investigates the moderating effect of visual merchandising on the relationship between fashion innovativeness and unplanned purchases. The data, obtained through a consumer survey, were analysed using factor analyses and structural equation modelling. The results show that fashion innovativeness is positively affected by sexual attraction, shopping for recreation, recognition enhancement, and aesthetic expression, and positively influences unplanned purchases. The link between fashion innovativeness and unplanned purchases is moderated by visual merchandising. This study also provides recommendations for retailers on increasing unplanned purchases in their stores using the concept of fashion innovativeness.     

The antecedents of SME innovativeness in an emerging transition economy

Understanding forces that contribute to the success of small and medium enterprises (SMEs) is very important, as these enterprises are vital for both developed and developing economies. Since innovativeness is among the most important means through which such businesses contribute to economic growth, numerous research studies were conducted to determine which factors positively impact SME's innovative efforts. This is an even more important issue for developing economies, where SMEs are often faced with inadequate infrastructure. Since there is a lack of studies on SME innovation in developing economies, often policy in such countries is based on findings from developed countries.In this paper, we explore factors that drive innovation activities in SMEs in a small emerging transition economy (Croatia), and compare it with findings from developed economies. In addition to factors used in most previous studies, we consider market scope, firm's market orientation and presence of strategic, managerial and marketing changes. We find that most factors that were found to be important in developed economies are important in developing economies as well. In addition to that, market scope was discovered to be a very important factor in both product and process innovation. Implementing corporate changes has positive impact on radical product innovation while implementing new organizational structures has positive effect on incremental innovation. When investigating determinants of product innovation, we distinguish new products of low novelty from new products of high novelty, and show that they need to be supported by different policies. To gain additional insight in innovation efforts, we examine obstacles to innovation. We find that firms that report facing obstacles are not less likely to innovate less, which suggests that innovators are able to work around obstacles without damaging effects to innovation. This study is based on a postal survey of 448 SMEs in Croatia, which was performed in 2004.     

The Role and Current Status of IFRS in the Completion of National Accounting Rules – Evidence from Croatia

Abstract

We examine the changes in Croatian accounting regulation, in the context of 2013/34/EU Directive implementation and analyse indirect effects of IFRS on national reporting regulation for non-listed companies. The main goal is to determine the level of conformity between Croatian accounting rules and IFRS as adopted by EU. Analysis shows that IFRS are used in the great extent as a source for provisions in Croatian Financial Reporting Standards (CFRS). There are only a few major differences between Croatian financial reporting standards and IFRS. However, there are a number of IFRS standards that are considered not to be relevant in the context of CFRS, as CFRS are intended to be used only by SMEs. Nevertheless, the management is permitted to use provisions and guidance from IFRS, if CFRS provisions are not applicable to a certain transaction or event.     

A note on essential smoothness in the Heston model

This note identifies a gap in the proof of Corollary 2.4 in Forde and Jacquier (Finance Stoch., 2011) which arises because the essential smoothness of the family (X _t /t) _t≥1 can fail for the log-spot process X in the Heston model, and it describes how to circumvent the issue by applying a standard argument from large deviation theory.     

The Responsiveness of Corporate Investments to Changes in Corporate Income Taxation During the Financial Crisis: Empirical Evidence from Slovenian Firms

I examine the responsiveness of corporate investments to changes in corporate income taxation during the financial crisis. When investigating tax effects in financially constrained firms, the model of investment demand needs to be extended to include an additional channel through which taxes could affect investments. I model the tax effects via two transmission channels, the traditional user cost of capital channel and the cash flow channel, which is crucial for financially constrained firms. The empirical results show that corporate investments in financially constrained firms do not respond to changes in corporate income taxation through the user cost of capital channel, but there is strong evidence of the effect that materializes through the cash flow channel.     

Variable neighborhood search heuristic for nonconvex portfolio optimization

Abstract

In this article we consider a portfolio optimization problem under multiple real-world constraints, such as: cardinality constraints, tracking error, active share, and turnover. We propose a heuristic based on variable neighborhood search (VNS) that effectively addresses additional constraints that introduce non-convexities. In the VNS-based heuristic, several neighborhood structures are introduced and fast local search is implemented. We develop a VNS portfolio rebalancing framework (VNS-PRF) with two rebalance strategies. Data sets provided by a financial investment firm are used to evaluate the validity and reliability of the proposed VNS-PRF. Computational experiments and different portfolio performance measures indicate that our approach is able to obtain solutions with competitive quality and can be applied on large-scale data sets.     

Parisian options with jumps: a maturity–excursion randomization approach

This paper introduces an analytically tractable method for the pricing of European and American Parisian options in a flexible jump–diffusion model. Our contribution is threefold. First, using a double Laplace–Carson transform with respect to the option maturity and the Parisian (excursion) time, we obtain closed-form solutions for different types of Parisian contracts. Our approach allows us also to analytically disentangle contributions of the jump and diffusion components for Parisian options in the excursion region. Second, we provide numerical examples and quantify the impact of jumps on the option price and the Greeks. Finally, we study the non-monotonic effects of volatility and jump intensity close to the excursion barrier, which are important for shareholders’ investment policy decisions in a levered firm.