CE Special Issue - COVID-19
Challenges of Contemporary Economics


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Volume 14 (2020) 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 7 Issue 4 (2013)

Reflections on the Eurozone’s Challenges original article

pp. 5-24 | First published in 30 December 2013 | DOI:10.5709/ce.1897-9254.120

Marta Götz


This paper considers the primary challenges faced by the Eurozone and caused by the 2008+ crisis. It suggests that one should distinguish among institutional, conceptual (model/paradigm) and real economic challenges. As a factor that influences progress in other areas, the latter topic is a special focus. It shall be stressed that the classification advanced in this paper is only one of many possibilities. The division into three groups may help navigate the discussion on problems that are occurring or likely to occur in the Eurozone. However, the intertwined character of these challenges and their interdependence is also stressed. Generally, it seems reasonable to agree that the institutional and conceptual challenges will persist and that no easy solution can be expected soon. A simple evaluation of the Eurozone’s macroeconomic stability based on available forecasts results in several tentative, overly optimistic conclusions that a slightly increasing internal cohesion is underway. More macroeconomic harmony can be expected. However, bold institutional reforms are required.

Keywords: convergence; Eurozone; macroeconomic indicators; institutions; 2008+ economic crisis

Organizing for Competitiveness – Structural and Process Characteristics of Organizational Design original article

pp. 25-40 | First published in 30 December 2013 | DOI:10.5709/ce.1897-9254.122

Tomislav Hernaus, Ana Aleksic, Maja Klindzic


An emerging multidimensional approach to organizational design outlines the need for the alignment of relevant structural and process characteristics of organizations. However, neither the interaction of these characteristics nor their role and importance for organizational competitiveness is properly examined in the literature. Therefore, the main goal of this paper is to investigate the relationship between the structural and process characteristics of organizational design to determine how and to what extent these characteristics contribute to achieving a competitive advantage. The field survey was conducted on a cross-sectional sample of 134 Croatian companies. The research findings outlined the need for a new organizational design approach that emphasizes both the vertical and horizontal dimensions of design solutions. This paper contributes to previous research by showing that organizational design represents a source of competitive advantage only if structural and process characteristics are commonly designed. In addition, we confirmed that although structural characteristics are usually more often addressed, it is process characteristics that make a difference.

Keywords: organizational design; structural characteristics; process characteristics; competitive advantage; Croatia

The Contribution of Intellectual Capital to Value Creation original article

pp. 41-56 | First published in 30 December 2013 | DOI:10.5709/ce.1897-9254.121

Elena Shakina, Angel Barajas


This paper studies the marginal contribution of intellectual capital (IC) components to company value using a hedonic pricing framework. The ANOVA is used to identify group differences among different national markets and industries. Two models have been developed to reflect the time effect: one related to the immediate creation of value and another for the long term. As could be expected, the contribution of IC to companies’ value creation differs significantly between countries and industries. Both models, short- and long-term, are significant and with a normal explanatory power. We have found both positive and negative coefficients. Human capital plays a critical positive role in value creation in the short term. Structural and relational capital becomes more relevant in the long term. However, in the long term, the results obtained regarding the effect of human capital are unclear.

Keywords: intellectual capital; hedonic price; contribution; value creation; EVA©; FGV©

Theoretical and Practical Aspects of Logistic Quality Management System Documentation Development Process original article

pp. 57-72 | First published in 30 December 2013 | DOI:10.5709/ce.1897-9254.123

Linas Šaulinskas, Narimantas Kazimieras Paliulis, Ieva Meidutė-Kavaliauskienė


This paper addresses aspects of logistics quality management system documentation development and suggests models for quality management system documentation development, documentation hierarchical systems and authorization approval. It also identifies logistic processes and a responsibilities model and a detailed document development and approval process that can be practically applied. Our results are based upon an analysis of advanced Lithuanian and foreign corporate business practices, a review of current literature and recommendations for quality management system standards.

Keywords: quality; standard; logistic process; process map; process hierarchy; document development; document hierarchy; optimization

Searching for Political Fiscal Cycles in Hungary original article

pp. 73-98 | First published in 30 December 2013 | DOI:10.5709/ce.1897-9254.124

Endrit Lami, Drini Imami


Hungary has had a remarkably high public debt throughout the transition, and it has continued to increase during recent years, exceeding 80% of the GDP. Its debt and fiscal deficit were the highest among the Visegrád countries during the transition. One factor triggering the debt increase may be elections-related fiscal policies. By analyzing quarterly data for Hungary, we found clear empirical evidence of fiscal expansion before elections and contractions afterwards. These events are widely known as political fiscal cycles. We observed statistically significant incremental increases in fiscal deficits as elections approach, both in nominal and in GDP ratios, followed by contractions after elections. Thus, it can be concluded that incumbents in Hungary are engaged in opportunistic political fiscal cycles by embracing expansionary fiscal policy before parliamentary elections. Our findings also suggest that political fiscal cycles in Hungary may be an underlying factor contributing to the accumulation of public debt.

Keywords: political fiscal cycles; deficit; Hungary

Evidence of Dividend Catering Theory in Malaysia: Implications for Investor Sentiment original article

pp. 99-110 | First published in 30 December 2013 | DOI:10.5709/ce.1897-9254.125

Mamunur Rashid, Fauzias Mat Nor, Izani Ibrahim


This study investigates the key determinants of corporate performance in Malaysia. Using panel data (2002-2007) of 361 companies listed in Malaysia, the study finds dividend per share, use of debt, number of board members, and last year’s performance to be the most significant determinants of corporate performance across four selected industries: trading or services, property, consumer products, and industrial products. This study also finds that dividend per share is influenced by market performance and is followed by last year’s dividend and size of the dividend. These findings exhibit the presence of dividend catering incentives. As such, market demand for dividends drives corporate dividends. The study concludes that investor sentiment influences corporate decisions in Malaysia.

Keywords: dividend catering theory; investor sentiment; Malaysia

Educational Vouchers: Freedom to Choose? original article

pp. 111-122 | First published in 30 December 2013 | DOI:10.5709/ce.1897-9254.126

Jordan Reel, Walter E. Block


Milton Friedman is famous for his book title: “Free to Choose.” He also favors educational vouchers, which denies the freedom to choose to people who do not wish to subsidize the education of other people’s children. Thus, he is guilty of a logical contradiction. Why is it important to assess whether Friedman’s views on educational vouchers are logically consistent with his widespread reputation as an advocate of free enterprise, and, thus, freedom to chose? It is important to assess all figures in political economy, and indeed all of scholarship, for logical consistency. It is particularly important to do so in the present case, given the prestige in certain quarters accorded to this Nobel prize-winning economist. We argue in this paper that Friedman’s reputation for logical consistency, and adherence to the philosophy of laissez faire capitalism, are both overblown. Our solution to this challenge is to completely privatize education. Friedman does not advocate that vouchers be utilized for food, clothing or shelter; we see no relevant difference in the case of education. What is the justification of the undertaken topic? This topic is important because education of the next generation is crucial for the upkeep and improvement of society. What is the aim of the present study? It is to demonstrate that the solution offered by M. Friedman and R. Friedman (1990) is highly problematic. What is the methodology used in the study? We quote from this author, and criticize his analysis. What are our main results and conclusions/recommendations? We conclude that the last best hope for the educational industry is laissez faire capitalism, not the mixed economy recommended by Friedman.

Keywords: economic freedom; choice; school vouchers; Milton Friedman

Is It Possible to Apply Multidimensional Graphical Methods in The Teaching and Learning of Economics? original article

pp. 123-138 | First published in 30 December 2013 | DOI:10.5709/ce.1897-9254.127

Mario Arturo Ruiz Estrada


This article explores the effectiveness of applying a new multidimensional graphical method to the teaching and learning of economics. In essence, the paper extends the significance of multi-dimensional graphs to study any economic phenomenon from a multidimensional perspective. The paper proposes the introduction of a new set of multidimensional coordinate spaces that should clearly and logically propose the effective visualization of complex and dynamic economic phenomena into the same graphical space and time with which the effectiveness of multidimensional graphs for real practical purposes can be evaluated. From the analyses carried out, which are based on both primary and secondary data sources, the article argues that multidimensional graphs can actually be evaluated to understand the degree of their effectiveness in visualizing economic problems affecting society on different levels.

Keywords: multidimensional graphs; economics teaching; GDP graphical analysis