Challenges of Contemporary Economics

Issues

full text available abstract only
Volume 13 (2019) Volume 12 (2018) Volume 11 (2017) Volume 10 (2016) Volume 9 (2015) Volume 8 (2014) Volume 7 (2013) Volume 6 (2012) Volume 5 (2011) Volume 4 (2010) Volume 3 (2009) Volume 2 (2008) Volume 1 (2007)

Volume 13 Issue 2 (2019)

Investigating the Influence of Tourism on Economic Growth and Climate Change – The Case of Croatia original article

pp. 111-122 | First published in 30 June 2019 | DOI:10.5709/ce.1897-9254.302

Zvonimira Šverko Grdić, Maja Gregorić, Marinela Krstinić Nižić

Abstract

In Croatia, tourism is one of the most important economic activities, accounting for 2.1% of total tourist flows in the European Union and 18% of the total Croatian gross domestic product. Economic development and tourism flows are influenced by the increasing intensity of climate change, leading to a need to adapt to new business conditions to minimize the negative and maximize the positive effects. The objective of the current study is to empirically research the role of tourism in the Croatian economy for the period 2004-2015 and the impact of climate change on tourist flows. To investigate experts’ opinions on the impact of climate change on Croatian tourism, this study employs a qualitative approach to obtain comprehensive insights into tourism, climate change and scientific research. By conducting in-depth interviews with experts and identifying the challenges posed by the current impact of climate change on Croatian tourism, the authors gain deeper insights into tourism development and climate change that reflect the current situation in Croatia. The results indicate that climate change will not have a negative impact on Croatian tourism in the near future. However, after 2050, a number of adaptation measures will be required to maintain the current tourism status.

Keywords: economic development, tourism, climate change, Croatia

Creative Commons License
This work is licensed under a Creative Commons Attribution 4.0 International License .

Inflation, Inflation Uncertainty, and Growth: Evidence from Ghana original article

pp. 123-136 | First published in 30 June 2019 | DOI:10.5709/ce.1897-9254.303

Bernard Njindan Iyke, Sin-Yu Ho

Abstract

Inflation and inflation uncertainty are critical factors influencing the functioning of markets and thus the efficient flow of economic activities. In this study, we investigated the effects of inflation and inflation uncertainty on growth in Ghana. Unlike the majority of the previous studies, we distinguished the short-run effects of inflation and inflation uncertainty on growth from the long-run effects. Also, unlike the previous studies, we examined whether increases in inflation uncertainty have the same effects on growth as decreases in it. By applying linear and nonlinear specifications to a data set covering the period 1963 to 2015, we found that inflation has both short and long-run negative effects on growth. Inflation uncertainty has a differential short-run effect and a negative long-run effect on growth. Increases in inflation uncertainty hurt growth, while decreases may reverse this pattern, albeit slowly. Both inflation and inflation uncertainty are critical determinants of growth in the country. To promote growth, policymakers should continue to pursue a low inflation target while ensuring minimal inflation uncertainty.

Keywords: Inflation; Inflation Uncertainty; Growth; Ghana

Creative Commons License
This work is licensed under a Creative Commons Attribution 4.0 International License .

Salvaging the EU: Two-Speed or Dual-Track Reform? original article

pp. 137-146 | First published in 30 June 2019 | DOI:10.5709/ce.1897-9254.304

Steven Rosefielde

Abstract

In the most recent decade, the European Union has shown itself to be less robust than globalists imagined. Globalists believed that supranationality was weatherproof – that it would always outperform national alternatives and would survive adversity. Economic stagnation and Brexit belied these expectations. This essay investigates one aspect of the EU’s supranational plight: incompatible goals and the difficulty of mutual accommodation, especially during hard times. EU supranationalists contend that the shared dreams assure harmonious results, but experience reveals that supranational government is shakier than advocates claim because shared ideals and benefits have not been enough for members to put aside conflicting national interests. These rivalries do not doom the European Union’s globalizing project, but they do expose the vulnerabilities of its premises. Supranational union is proving to be unsatisfactory to both many centralizers demanding “more Europe” and decentralizers insisting on “less Europe”. EU leaders are aware of the problem but are wedded to a one-track, two-speed supranational approach that is destined to fail. A dual-track supranational solution analogous to China’s “one country, two systems” offers a better alternative.

Keywords: European Union, Reform, Dual-Track

Creative Commons License
This work is licensed under a Creative Commons Attribution 4.0 International License .

Growth Dynamics of Value-Added Tax Revenue in Ghana original article

pp. 147-174 | First published in 30 June 2019 | DOI:10.5709/ce.1897-9254.305

Francis Kwaw Andoh, Nehemiah E. Osoro, Eliab Luvanda

Abstract

The introduction of the value-added tax (VAT) to replace the sales tax in 1995 was one of the key policy steps undertaken by the government of Ghana (GoG) to further deepen and sustain the efficiency of Ghana’s tax system to boost tax revenue. This study uses quarterly data from 2000 to 2014 and employs dynamic ordinary least squares (DOLS) and Divisia Index approaches to examine the growth of Ghana’s VAT revenues and how this growth is affected by discretionary tax measures. On the whole, the study finds that all of the measures of VAT revenue (total VAT, domestic VAT, and import VAT) have experienced some growth. Growth in total VAT and import VAT is driven strongly by growth in the base, while that of the domestic VAT is driven by both discretionary tax measures and the tax base. Discretionary tax measures are found to have a depressive effect on both total VAT and import VAT revenue growth.

Keywords: value-added tax, consumption tax, tax collection and fiscal policy

Creative Commons License
This work is licensed under a Creative Commons Attribution 4.0 International License .

The Effects of Relative Strength of USD and Overnight Policy Rate on Performance of Malaysian Stock Market – Evidence from 1980 through 2015 original article

pp. 175-186 | First published in 30 June 2019 | DOI:10.5709/ce.1897-9254.306

Abdul Razak Abdul Hadi, Eddy Tat Hiung Yap, Zalina Zainudin

Abstract

The study is carried out with the objective of testing the efficient market hypothesis (EMH) at the semistrong form level. As such, the study employs two publicly available data variables – the exchange rate (RM/USD) and short-term interest rate as proxied by the overnight policy rate (OPR). The extent to which these variables influenced the performance of Bursa Malaysia (KLCI) over the past 35 years, from January 1980 to June 2015, is examined. Using monthly data, the entire study period is divided into three subperiods – the full sample period, the sample period that excludes the duration of capital control and the sample period of FBMKLCI (from July 2009 to June 2015). Deploying the Johansen-Juselius cointegration test, the study shows the presence of a long-run equilibrium relationship between KLCI and the two control variables over the full sample period and sample period, excluding the period of capital control. From the long-run regression, the effect of OPR on Bursa Malaysia is consistent over all three subperiods. This is a clear indication that the interest rate regime has a significant influence on Bursa Malaysia. Interestingly, there is no equilibrium relationship, and dynamic relationships exist between FBMKLCI and the two explanatory variables over the FBMKLCI sample period. These findings support our notion that Bursa Malaysia is unquestionably semistrong form efficient. It is now evident that FBMKLCI is the most exogenous variable of all.

Keywords: Stock Market Performance, Efficient Market Hypothesis, Macroeconomic Variables, Vector Error Correction Modeling, Johansen-Juselius cointegration test

Creative Commons License
This work is licensed under a Creative Commons Attribution 4.0 International License .

Firm Performance and Family Related Directors: Empirical Evidence from an Emerging Market original article

pp. 187-204 | First published in 30 June 2019 | DOI:10.5709/ce.1897-9254.307

Hafezali Iqbal Hussain, Azlan Ali, Hassanudin Mohd Thas Thaker, Mohsin Ali

Abstract

Board composition is central to the worldwide corporate governance reforms that have taken place in recent years. The strong emphasis on director independence and board leadership is now part of all corporate governance regimes, including the regimes which has been introduced in Malaysia. It is the effectiveness of such provisions in the Malaysian business environment that provides the motivation for this paper. The literature shows mixed findings on the issues of board independence and board leadership. Our paper studies the role of directors with family connections and its impact on financial outcomes. We find that firms with a high presence of family related directors exhibit superior accounting profitability. However, such dominance is negatively viewed by the market (firm performance based on market measures), indicating that markets tend to perceive that domination of family members on the board could potentially lead to expropriation of wealth at the expense of other shareholders. Our results are supported by additional robustness tests. The findings provide interesting insights into the governance mechanisms of firms in an emerging market and its consequences for investor perceptions. Further implications are also discussed.

Keywords: Firm performance, family related directors, corporate governance, board structure, board composition

Creative Commons License
This work is licensed under a Creative Commons Attribution 4.0 International License .

Determinants of Banking Efficiency for Commercial Banks in Indonesia original article

pp. 205-218 | First published in 30 June 2019 | DOI:10.5709/ce.1897-9254.308

Heti Suryani Fitri Sulaeman, Sri Mulyantini Moelyono, Jubaedah Nawir

Abstract

This study analyzes internal and external factors that affect banking efficiency by using quarterly data for 2013-2017. The sample includes conventional and Islamic commercial banks. Hypothesis testing uses the Tobit regression model. The results show that the loan to deposit ratio/ financing to deposit ratio (LDR/FDR), the net interest margin/net operating margin (NIM/NOM), the capital adequacy ratio (CAR), and economic growth have a significantly positive effect on the efficiency of commercial banks. The NIM/NOM, the BI-rate, and the inflation have no effect on the efficiency of commercial banks. According to another analysis, factors that influence the efficiency of the results show that in conventional commercial banks, the LDR, the CAR, economic growth, and inflation have a significantly positive effect on the efficiency of conventional commercial banks. In contrast, the NIM has a significantly negative effect. Meanwhile, for Sharia commercial banks, the FDR, NPF, the CAR, economic growth and inflation have a significantly positive effect, and the BI-rate has a significantly negative effect.

Keywords: Bank efficiency, Data Envelopment Analysis (DEA), Commercial Banks

Creative Commons License
This work is licensed under a Creative Commons Attribution 4.0 International License .