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Ovidiu Stoica, Editor-in-Chief) (Napoleon-Alexandru Sireteanu) Mon, 27 Jun 2022 07:20:29 +0000 OJS 60 Exchange Rate Synchronization for a Set of Currencies from Different Monetary Areas <p>The degree of co-movement between currencies remains an important subject for international trade and monetary integration across countries. However, the economic literature has given limited answers about the directional relationships among currencies, and whether they have a leader or a driver. Using the Hodrick-Prescott filter and the wavelet methodology, this paper analyzes exchange rate synchronization for a set of twelve currencies belonging to different monetary areas covering the period between January 1980 and July 2020. The empirical results reveal that: i) the U.S. dollar still plays an essential role as a foreign exchange anchor; ii) the euro shows an out-of-phase relationship with the vast majority of currencies, including with the other European currencies; iii) the British pound seems to have departed significantly from the European single currency; iv) the Brazilian real leads the Chinese yuan for most of the sample, and both currencies record great dissimilarities with the other currencies; v) in the absence of short-term foreign exchange market frictions, average bilateral distances between currencies are smaller, and vi) during the international financial crisis, exchange rates became more synchronized.</p> Antonio Portugal Duarte, Nuno Baetas da Silva Copyright (c) 2022 Antonio Portugal Duarte, Nuno Baetas da Silva Mon, 27 Jun 2022 00:00:00 +0000 Determinants of Advancement in Information Communication Technologies and its Prospect under the role of Aggregate and Disaggregate Globalization <p>Globalization has been witnessed to bring numerous benefits to the advancement in information communication technologies. However, to analyze this relationship mostly aggregate globalization and country-specific studies have been conducted, without considering the importance of disaggregate globalization for advancement in information communication technologies. Therefore, this article aims to examine the impact of aggregate and disaggregate globalization on the advancement of information and communication technologies (ICT) in the case of 87 developed and developing countries for 2000-2019. Panel least square and pairwise Dumitrescu-Hurlin panel causality tests have been used for empirical analysis. We have divided our empirical analysis into six models, i.e. aggregate globalization model for whole sample countries, disaggregate globalization model for whole sample countries, aggregate globalization model for developed countries, disaggregate globalization model for developed countries, aggregate globalization model for developing countries, and disaggregate globalization model for developing countries. Our estimated outcomes of the aggregate globalization model for the whole sample countries and developing countries show that globalization has a positive and significant impact on the advancement of information and communication technology. Our outcomes show that economic globalization, social globalization, political globalization, and availability of physical capital have a positive and significant impact on the advancement of ICT in developing countries. In the case of developed countries, aggregate globalization, political globalization, and social globalization reduce the advancement of ICT, whereas the availability of physical capital and economic globalization are raising the advancement of ICT. The results of the causality test show that all the variables have a causal relationship with each other except some variables of developed countries in the disaggregate globalization model. Our outcomes recommend that developing countries should promote aggregate and disaggregate globalization to achieve the desired level of ICT.</p> Marc Audi, Amjad Ali, Razan Al-Masri Copyright (c) 2022 Marc Audi, Amjad Ali, Razan Al-Masri Mon, 27 Jun 2022 00:00:00 +0000 The Influence of Critical Audit Matters in the US on the Informativeness of Investors <p>In 2017, the PCAOB announced its new audit standard, AS 3101. One requirement is reporting critical audit matters (CAMs), starting June 30, 2019, for large accelerated filers. Using US data of CAM, we investigate whether the reporting of CAMs is informative for investors using a difference-in-differences approach and we use as proxies for investors’ informativeness, absolute abnormal returns and abnormal trading volume. Our motivation is to assess the relevance and the effectiveness of a new regulation aiming to improve audit quality. Overall, our findings provide some indications that the first-time implementation of CAMs might lead to investors avoiding those companies presumably because of uncertainty about the information being released. We also investigate the content of the CAM paragraph and do not find that the number, categories, or firm-specific/industry-common CAMs are value-relevant for investors. The results of this study provide insight into the new US auditor standard and the value-relevance of CAMs for investors. We suggest that standard setters should aim to improve the auditor report to make it more informational. Overall, our paper provides some evidence on the implementation and communicative value of the new CAM reporting, suggesting that CAMs are not informative for investors. We argue that this is the case potentially due to the additional information from CAMs which leads to complex information or information overload making investors less reluctant to invest on the companies with a significant number of CAMs reported.</p> Emil Spaargaren, Alexandros Sikalidis, Georgios Georgakopoulos, Chris Grose Copyright (c) 2022 Emil Spaargaren, Alexandros Sikalidis, Georgios Georgakopoulos, Chris Grose Mon, 27 Jun 2022 00:00:00 +0000 Drivers of Sustainable Entrepreneurial Intentions in the Case of Serbian Students <p>The present research aims to establish the antecedents of sustainable entrepreneurial intention, having as reference theoretical framework the model of entrepreneurial event and the model of planned behavior, integrated and adapted to the context of sustainable entrepreneurship.</p> <p>At the level of investigated population, consisting of 150 students from two Serbian universities, the empirical results emphasized that: personality traits and environmental values are significant and direct predictors of behavioral characteristics; entrepreneurial education and behavioral characteristics have an indirect influence on sustainable entrepreneurial intention being mediated by the desire and feasibility of sustainable entrepreneurship perceived by respondents.</p> <p>As theoretical utility of the research, the current study is among the few that tried to integrate and expand two competing models in order to establish the antecedents of sustainable entrepreneurial intent. The research model adopted variables specific for the two models and integrated personality traits, environmental values and entrepreneurial education in order to establish direct and indirect determinants of sustainable entrepreneurial intention.</p> <p>At practical level, the validation of the research model emphasizes the utility of stimulating youth’ sustainable entrepreneurial intention and applicability for future academic research endeavors. In order to stimulate sustainable entrepreneurial intentions, the validated research model indicates to governmental and university decision makers the need to implement programs promoting environmental values and integrating sustainability into the entrepreneurial education of youth.</p> Renata Nițu-Antonie, Emőke-Szidónia Feder, Kristina Stamenovic Copyright (c) 2022 Renata Nițu-Antonie, Emőke-Szidónia FEDER, Kristina Stamenovic Mon, 27 Jun 2022 00:00:00 +0000 Is Economic Freedom a Moderator of the Relationship Between Bank Capital and Profitability? <p>The study uses the GMM and panel OLS framework on the data of the US banks over the period ‎from 2002 to 2019 to reveal the moderating role of economic freedom on the ‎relationship between bank capital and ‎profitability. The overall findings show that ‎economic freedom and bank capital positively influence ‎banks' profitability. The results reveal that economic freedom positively (negatively) moderates the relationship between risk-based (traditional) capital ratio. Furthermore, the results also find heterogeneity in the relationship across different market conditions (before and after crisis) and bank characteristics (well or undercapitalized, high and low liquid banks). The results ‎remain robust for ‎alternative methodology and proxies. The heterogeneity of findings has ‎implications for ‎policymakers in banking for the improvement of the financial system.</p> Faisal Abbas, Shoaib Ali Copyright (c) 2022 Faisal Abbas, Shoaib Ali Mon, 27 Jun 2022 00:00:00 +0000 An Assessment of Institutional Improvements in Romania and Bulgaria Following EU Accession <p>The purpose of this paper is to analyse to what extent accession to the European Union affected the quality of institutions in Romania and Bulgaria. In order to measure these effects, indicators of perceived corruption have been built based on data from the Life in Transition surveys I, II, III, conducted by the European Bank of Reconstruction and Development. Under the specifications of a difference-in-differences methodology, evidence of a reduction in small acts of corruption has been discovered for both countries, with larger effects in Bulgaria. In regards to high level corruption, Romania proved to be successful in tackling this dimension nine years after the accession, while for Bulgaria the evidence suggests an unfavourable deterioration over time.</p> Dragos Dinca Copyright (c) 2022 Dragos Dinca Mon, 27 Jun 2022 00:00:00 +0000 Asymmetric Information and Agency Cost of Financial Leverage and Corporate Investments: Evidence from Emerging South-East European Countries <p>In this paper, we investigated the impact of financial leverage on investment decisions on a sample of 811 firms from ten emerging South-Eastern European countries (Bosnia and Herzegovina, Bulgaria, Montenegro, Croatia, Greece, Romania, North Macedonia, Slovenia, Serbia and Turkey). We apply a panel regression model involving investment ratio as a dependent variable, leverage as independent variable, and control for several firm characteristics that closely determines the corporate investments. The results of the analysis show that leverage is negatively related to investment in the companies in SEE. But only long term debt has a stronger negative impact on investment for firms with low growth opportunities than for firms with high growth opportunities. These findings show supportive evidence of agency theories of corporate leverage, especially with the debt overhang theory, but did not give strong validation that leverage has a disciplining role for firms with low growth opportunities in SEE emerging markets. In addition to leverage, we found that corporate investments in the SEE countries decrease significantly with tangibility and the company size. Corporate investments in the SEE countries increase significantly with cash flow, sales, non-debt tax shield and profitability. Overall, the results slightly defer with those from the research on the case of developed markets.</p> Aleksandar Naumoski, Sasho Arsov, Violeta Cvetkoska Copyright (c) 2022 Aleksandar Naumoski, Sasho Arsov, Violeta Cvetkoska Mon, 27 Jun 2022 00:00:00 +0000