Showing papers in "Procedia. Economics and finance in 2014"

Judgment Scales and Consistency Measure in AHP

Abstract: The Analytic Hierarchy Process (AHP) is widely used method in multiple-attribute decision making. In the recent literature many authors used different judgment scales which influenced the results and decisions. In this paper the author reviews and discusses effects of utilization of various judgment scales on priority estimation in AHP. There has been studies that have been concerned with the comparison of judgment scales but there were no studies concerned with consistency measures that are needed. The goal of this paper is to compare and discuss the application of various judgment scales on the results in particular practical example that has been used in previous paper by Saaty (2003) . Thus the focus of the paper is to analyze the impact of using different judgment scales on the resulting priorities and consistency to default scale as proposed by Saaty. Results suggest that judgment scales have a profound impact on criteria priorities but not on ranking of criteria. However, the consistency varies among applied judgment scales. Authors calculated the values of random index needed for calculation of the consistency index in AHP for all concerned scales. Based on them the consistency index was computed and compared. Both consistent and inconsistent Saaty matrices were used for comparison.

Economic Development and Entrepreneurship

Abstract: Several dynamic forces, such as technological disruption, fluctuating economies or demographical changes, have brought new opportunities and threats for organizations, and transformed societies from all over the world. In order to cope with these shifting forces, governments, public and private organizations, and the public are more and more aware of the importance of entrepreneurship. Entrepreneurship is a multifaceted phenomenon, being analysed as a process, a resource or a state-of-being. According to the Schumpeterian view, the entrepreneurial process constitutes one of the key factors in the economic development of a country/region. However, researchers have expressed different views about the relationship between the stages of economic development and entrepreneurship during the time. The aims of the paper are to examine in brief the concepts of economic development and entrepreneurship, and to emphasize the role of entrepreneurship in economic development. The methodological approach is literature review. Our paper provides a theoretical model that highlights some of the main factors involved in the relationship between entrepreneurship and economic development. More than ever in the history, economic development and entrepreneurship have become strongly interconnected.

Workforce Diversity: A Key to Improve Productivity☆

Abstract: Workforce diversity means similarities and differences among employees in terms of age, cultural background, physical abilities and disabilities, race, religion, gender, and sexual orientation. No two humans are alike. People are different in not only gender, culture, race, social and psychological characteristics but also in their perspectives and prejudices. Society had discriminated on these aspects for centuries. Diversity makes the work force heterogeneous. In current scenario, employing diversified workforce is a necessity for every organization but to manage such diversified workforce is also a big challenge for management. This paper critically analyses the workforce diversity and its impact on productivity of an organization. The researcher after examining the literature and various research papers, concluded that workforce diversity is strength for any organization but people still stick to their views related to caste, religion etc and so consider diversity as a problem but if managed properly, can increase the productivity.

Macroeconomic and Bank-specific Determinants of Household's Non-performing Loans in Tunisia: A Dynamic Panel Data

Abstract: Using the dynamic panel data methods estimated over 2003–2012 on around 16 Tunisian banks, the current paper attempts to examine the determinants of households’ non-performing loans (NPLs). The main objective is to investigate the potential effect of both macroeconomic and bank-specific variables on the quality of loans. Our results indicate the extent to which households’ NPLs in the Tunisian banking system can be explained particularly not only by macroeconomic variables (GDP, inflation, interest rates) but also by bad management quality.

The Relationship between Life Expectancy at Birth and Health Expenditures Estimated by a Cross-country and Time-series Analysis

Abstract: In the last years, most countries experienced improved health outcomes as longevity increased steadily and infant mortality rate decreased, along with a growth of the health expenditures. The paper aims to analyze the relationship between the dynamics of the inputs and the outputs of health care systems. The input of the health care system is expressed by health care expenditures per capita (current US$) and the output of the health care systems is expressed by life expectancy at birth (years). The data are collected for 175 world countries, grouped according to the geographic position and income level, over 16 years (1995-2010). We apply a panel data analysis to estimate life expectancy by a function of health expenditures. The obtained results show a significant relationship between health expenditures and life expectancy. Country effects are significant and show the existence of important differences among the countries.

The Impact of Person Organization Fit on Job Satisfaction and Performance of the Employees

Abstract: Human Resource is considered to be a vital source of growth for the organizations, for best utilization of human resource it is essential to align the knowledge, skills and abilities possessed by the employees with the assigned roles in the organization. The present study reveals the relationship between person organization fit, job satisfaction and job performance. This study indicates that there is a relationship between person organization fit and job satisfaction and job performance. While the relationship between job satisfaction and job performance is also positive. Person organization fit is an important antecedent of performance. Job performance of employees plays a crucial factor in determining an organization performance. Logically, the better a person ‘fits’ with his job, the less adjusting he will have to do (Roberts & Robins, 2004).

The Concept of Vulnerability and Resilience

Abstract: Vulnerability has been defined as the degree to which a system, or part of it, may react adversely during the occurrence of a hazardous event. This concept of vulnerability implies a measure of risk associated with the physical, social and economic aspects and implications resulting from the system's ability to cope with the resulting event. Concepts of resilience take two broad forms, namely (1) Hard resilience : the direct strength of structures or institutions when placed under pressure. In the disaster context, resilience is often treated as the simple inverse of fragility. Engineers, for example, often refer to increasing the resilience of a structure through specific strengthening measures to reduce their probability of collapse with respect, for example, to earthquake intensities, wind loading or other physical stresses. As resilience increases, the degree of damage for a given intensity hazard decreases. (2) Soft resilience : the ability of systems to absorb and recover from the impact of disruptive events without fundamental changes in function or structure. While the old car or carriage built on rigid supports would certainly end up with some broken axles when driving along some bad roads, the modern car can easily absorb the same impacts with its suspension system (springs or hydraulic systems). Thus, people with direct access to capital, tools and equipment, and able-bodied members are the ones which are most resilient when a disaster strikes. This paper shows how soft or hard resilience may be introduced in a system after it is analysed to determine its vulnerability.

Business Models for the Internet of Things Environment

Abstract: Over the past few years, the widespread use of the Internet and rapid development of Internet-based technologies has resulted also into shorter life cycles of product and services, requiring thus faster changing business models. This paper provides an overview of business models for Internet of Things, Services and People applications. The concept of the Internet of Things and Services envisions physical devices and appliances to be used as easily as a web service and seamlessly integrated into networked applications with required functionality. Technologically this concept is clear, and several smart applications are currently under development (see e.g. iCore, Hydra, Confidence or IoT@Work projects). However, the business perspective of information as an asset in its own right remains an open issue. To handle this issue we apply an originally value-based requirement technique, e3-value, to model value creation and value exchange within an e-business network of multiple business actors. Using this approach the business activity can be reduced to its core elements, which in the simplest case comprise the value proposition, distribution channels and the customers of the company, explaining how a multi-actor network creates, distributes and consumes value by production of a good or providing a service.

The Efficiency of Healthcare Systems in Europe: a Data Envelopment Analysis Approach

Abstract: This paper aims at evaluating the efficiency of public healthcare systems in Europe by applying a nonparametric method such is Data Envelopment Analysis. For this purpose, statistical data for 30 European states for 2010 have been used. We have selected three output variables: life expectancy at birth, health adjusted life expectancy and infant mortality rate and three input variables: number of doctors, number of hospital beds and public health expenditures as percentage of GDP. Findings reveal that there are a number of both developed and developing countries on the efficiency frontier, while the great majority of the countries in the sample are inefficient.

Determinant Factors of the Capital Structure of a Firm- an Empirical Analysis☆

Abstract: This paperwork investigates the relative importance of five factors upon the capital structure decisions of Romanian firms listed at the Bucharest Stock Exchange and operating in the construction sector of the industry. The analysis is based on panel data estimations on a sample of 20 companies, observed during three years (2009-2011). Traditional explanatory variables are adopted in the study, including profitability, company size, tangibility of assets, liquidity and asset turnover. By employing the ordinary least squares method and the fixed effects model, simple and multiple linear regressions are obtained. These are further selected and interpreted in order to determine the influence of the independent variables upon the leverage of a company. The results show that profitability and liquidity ratios are negatively affecting the total debt ratio of Romanian companies. The tangibility of assets is also having a negative impact on leverage, strengthening the findings of previous empirical studies which claim that this indicator moves in opposite direction with the debt ratio of companies located in developing countries. On the other hand, the size of a company and its asset turnover have a positive correlation with leverage. The explanatory variable which has the highest impact on the capital structure choices is profitability.

Impact of R&D and Innovation on High-tech Export

Abstract: Economic recovery and the re-launching of sustainable economic growth in EU, particularly in countries such as Romania, are to a large extent sustained by the stimulation of exports and, especially, high-tech exports. Different authors have proved, in theoretical as well as empirical approaches, the relation between some indicators of innovation performance and volume and performance of high-tech exports. In this paper, we intend to assess, at the European level, the relationship between medium and high-tech exports, on one hand, and some of the main determinants of innovation, on the other hand. The volume of research-development expenditure, both public and private, the human resources employed in knowledge intensive activities or the propensity for international commercial relation have been assumed as important causal factors for increasing high tech export in EU countries. The results of the econometric analysis conducted in this paper confirm a causal relationship between the independent variables mentioned above and the EU high-tech exports level. The specific variations at country level are also displayed. Research results also confirm a positive correlation between total R&D expenditure volume and the level of high-tech exports, with variability between countries. The influence of private R&D expenditure on high-tech exports is stronger than public R&D expenditure. Under current European and national policies for increasing the intensity of R&D funding, raising the average EU level of R&D expenditure to the target of 3% of GDP, and particularly the EU average of private R&D expenditure to 2% of GDP, may significantly boost exports and competitiveness. Romanian export policy and R&D and innovation policy should be correlated in order to maximize effects in both policy fields.

An Overview of the Design of Disaster Relief Shelters

Abstract: Disaster relief (DR) shelters play a vital role in large-scale disasters and are an important part of disaster response and recovery. DR shelters are used to provide private and secure places for people to live who have left or lost their usual accommodations as a result of some form of disaster. DR shelters not only provide immediate and short-term shelter for the victims of a disaster, but they also help them to recover from the trauma of a disaster as well as provide a base to start the process of rehabilitation. A review of the literature, case studies, guidance, and reports relating to the design of DR shelters indicates that their provision and performance are not currently as effective as they could be. A lack of adequate consideration with regard to climatic conditions, locally available materials and skills, cultural and social issues, delays, cost constraints, and poor location selection for DR shelters have each been identified as sources of poor performance contributing to an unacceptable standard of living. Moreover, there seems to be a lack of sufficient consideration with regard to the design of DR shelters for future storage and re-use. The principal aim of this research is to examine the extent to which environmental, economic, technical, and sociocultural criteria affect the provision and performance of DR shelters, and how such factors might be taken into account in the decision-making and design processes of such shelters.

Banks’ Profitability in Selected Central and Eastern European Countries☆

Abstract: In this study we assess the main determinants of banks’ profitability in five selected CEE countries over the period from 2004 to 2011. The sample contains 143 commercial banks from Romania, Hungary, Poland, Czech Republic and Bulgaria. We use as proxy for banks profitability the return on average assets, the return on average equity and net interest margin. The results show us that the empirical findings are consistent with the expected results. Management efficiency and capital adequacy growth influence the bank profitability for all performance proxies, while credit risk and inflation determine only the ROAA and ROAE. We notice that banks with higher capital adequacy are more profitable.

Human Capital, Economic Structure and Growth

Abstract: Human capital is usually viewed as one of the key determinants of competitiveness and economic growth. However, recent statistical data about unemployment and growth in EU have revealed some weak spots of this traditional view. The human capital itself seems not to be a guarantee of economic stability and presumable quick recovery from crisis. On the contrary we see countries like Spain or Cyprus where the level of human capital, expressed as a percentage of tertiary educated population, is relatively very high but the unemployment reaches critical levels and economic growth is weak or negative. In this article we continue with our previous research and show that human capital must reflect the economic structure to foster the economic growth. Otherwise it might only cause higher level of unemployment due to crowding out effect and imbalances on the labor market. We also deal with responses of regional economies on recent economic crisis, when we show asymmetric responses based on structural differences and human capital endowment.

Cloud Computing for Higher Education Institutes: Architecture, Strategy and Recommendations for Effective Adaptation

Abstract: Due to the prevailing financial crisis and the growing needs, higher education (HE) institutes are facing challenges in providing necessary IT support for educational, research and development activities. Cloud Computing (CC) environment can rescue HE institutes from the above mentioned challenges The HE institute must exploit the opportunities afforded by CC while minimizing the associated security risks to allow access to advanced IT infrastructure, data centers, and applications and protect sensitive information. In this paper, CC architecture for HE institute containing the various deployment models, Service Models and user domain is proposed. For smoothing the migration from traditional system to CC based system a five phase strategy is presented. We finally provide the recommendations for a successful and efficient migration from traditional to cloud based system.

Foreign Direct Investments, Exports, and Economic Growth in Croatia: A Time Series Analysis☆

Abstract: This paper studies the relationship between foreign direct investments, exports, and economic growth in Croatia using annual time series data for the period 1994-2012. Several econometric models are applied including the bounds testing (ARDL) approach and the ECM-ARDL model. The results confirm a bidirectional long run and short run causal relationship between exports and growth. These results offer new perspectives and insight for a new policy in Croatia for a sustainable economic growth.

Determinants of Foreign Direct Investment in EU Countries – Do Corporate Taxes Really Matter?

Abstract: The inflows of foreign direct investment (FDI) are often seen as one of the factors increasing the economic growth of the country. Therefore, considerable attention is paid to examining of its determinants, of which corporate taxes is often seen as one. However, there is mixed evidence of the relationship between corporate taxes and FDI in the empirical literature. The main aim of our paper is to identify the key determinants of FDI in EU countries based on panel data regression models. Moreover, we focus our attention particularly on effective and statutory corporate tax rates and their impact on FDI. On the one hand, our results suggest that there is no statistically significant effect of corporate taxes on FDI. On the other hand, we find a significant effect of labour costs, openness of the economy, firing costs, GDP per capita and public debt in the country. There is also some evidence of a negative impact of the financial and economic crisis on FDI inflows in the EU.

The Role of Internal Audit in Fraud Prevention and Detection

Abstract: This article aims to not just briefly describe the role of the internal audit in the detection of possible frauds, but also to highlight its importance in preventing the commission of frauds in any economic entity. Moreover, the analysis intends to especially point out the advantages that an internal audit can offer to the management of an economic entity and its partners, and to the society as a whole as well. Starting from the premise that auditors are not the adversaries of an entity, one should remember that: the internal audit is a function of assistance offered to the leadership of that entity in order for them to better manage their activities; it expresses judgments on all decisions taken by the leadership that ensure the normal and efficient functioning of its activities; and its objective is to create added value.

Challenges in Creating a Disaster Resilient Built Environment

Abstract: With the increase in occurrences of high impact disasters, the concept of risk reduction and resilience is widely recognised. Recent disasters have highlighted the exposure of urban cities to natural disasters and emphasised the need of making cities resilient to disasters. Built environment plays an important role in every city and need to be functional and operational at a time of a disaster and is expected to provide protection to people and other facilities. However, recent disasters have highlighted the vulnerability of the built assets to natural disasters and therefore it is very much important to focus on creating a disaster resilient built environment within cities. However the process of making a disaster resilient built environment is a complex process where many challenges are involved. Accordingly the paper aims at exploring the challenges involved in building a disaster resilient built environment. Paper discusses the findings of some expert interviews and three case studies which have been conducted in Sri Lanka by selecting three cities which are potentially vulnerable to threats posed by natural hazards. The empirical evidence revealed, lack of regulatory frameworks; unplanned cities and urbanisation; old building stocks and at risk infrastructure; unauthorised structures; institutional arrangements; inadequate capacities of municipal councils; lack of funding; inadequacy of qualified human resources; and corruption and unlawful activities as major challenges for creating a disaster resilient built environment within Sri Lankan cities. The paper proposes a set of recommendations to address these prevailing concerns and to build a more resilient built environment within cities.

Efficiency of the Czech Banking Sector Employing the DEA Window Analysis Approach

Abstract: The aim of this paper is to apply the Data Envelopment Analysis (DEA) window analysis on the data of the Czech commercial banks and to examine the efficiency of the Czech banking sector during the period 2003–2012. The paper employed an extended DEA approach, specifically DEA window analysis for the efficiency assessment of commercial banks in the Czech Republic. It is based on panel data for the period from 2003 to 2012. Data Envelopment Analysis has become a popular approach in measuring the efficiency of banking industry. We use the DEA window analysis based on an input oriented model to measure banking efficiency. In the analysed period, the average efficiency under constant return to scale reached 70–78% and average efficiency under variable return to scale reached 84–89%. The most efficient bank was GE Money Bank and the lowest efficient bank was Ceskoslovenska obchodni banka. The group of large bank (Ceskoslovenska obchodni banka, Ceska spořitelna and Komercni banka) was lower efficient than other banks in the banking industry. The reasons of the inefficiency of the group of large banks were the excess of deposits in balance sheet and inappropriate size of operation.

Impact of Supply Chain Collaboration on Value Co-creation and Firm Performance: A Healthcare Service Sector Perspective

Abstract: The healthcare sector is facing spiralling cost burden and the hospitals are finding tough time to provide quality care at affordable cost. The focus has shifted from managing procurement to managing relationships. This study conceptualizes supply chain collaboration (SCC) and its components in the context of healthcare service sector (hospital supply chain). The theoretical base of this paper lies in the relational view and the service dominant logic theory. Using a service dominant logic (SDL) lens, the study aims at establishing SCC as an antecedent to value co-creation (VCC); where VCC acts as a mediator in the relationship between SCC with firm performance. The study also aims at introducing the conceptual construct of relationship complexity level and attempts at investigating its influence on the framework relationships. The study by establishing parallels between the relational view and the SD logic view rationally converges to show that collaboration is the final prescribed outcome. The study logically puts forth a set of propositions that offers an enticing scope of further empirical investigation through testable hypotheses.

Marketing Mix for Next Generation Marketing

Abstract: Marketing mix has under gone a sea change in last few decades. Every stake holder involved in the marketing process looks for ‘Value’. The customer enters in the marketing process for better ‘value’ for his money through ‘Value to Customer’. The marketers would like to concentrate on the ‘valued customer’. The prime objective of any business is to sought value from the business ‘value to the marketer’. The marketer and customer would like to keep society's interest intact through ‘Value to society’. The new marketing mix model even though is at conceptual level but it certainly answers many questions of modern marketers which are not answered by traditional theories of marketing mix.

A Causal Relationship between Foreign Direct Investment, Economic Growth and Export for Slovakia☆

Abstract: The aim of this paper is to analyse the relation between foreign direct investment, economic growth and export in Slovakia. Estimation of effects on economic growth was performed for Slovakia in the period 2001-2010. The co-integration method and vector error correction model were applied on quarterly data. The results confirm the existence of long-term causal links between variables studied in Slovakia. We reveal a positive impact of foreign direct investment and positive impact of export on gross domestic product. On the basis of the research method and by means of available time series, the generally accepted opinion about the foreign direct investment positive effect on economic growth of a country was proved.

Business Ethics and Corporate Social Responsibility – Is there a Dividing Line?

Abstract: There is growing research in all areas of ethics and CSR that govern the activities of a firm and the value systems that underlie their business activities. In our paper we have explored the concepts of Business Ethics and Corporate Social Responsibility with a perspective that meaningfully CSR should be seen in the context of an overall paradigm of Business Ethics. We have studied CSR through the framework of the stakeholder theory of the firm and posit that CSR as practiced today is a subset of Business Ethics with other dimensions of an overall ethics framework still uncovered.

Family Businesses in the New Economy: How to Survive and Develop in Times of Financial Crisis

Abstract: The family businesses play an important role regarding the dynamism and strength of the European economy, long-term stability and sustainability. Many of the challenges facing family businesses also concern Small and Medium Sized Enterprises (SMEs), but due to the fact that family businesses involve three overlapping elements (the family, the business, and the ownership) they are different from other types of businesses. In Europe the family business sector is dominated by particularly micro enterprises with less than 10 employees and SMEs. Across Europe around 70-80% of all enterprises are family businesses. The current financial crisis has influenced negatively the majority of business activities and many family businesses found themselves in a new turbulent financial environment where uncertainty dominates and the market characteristics are radically reversed. This paper recognizes the importance of family businesses in both the Finnish and the Greek economy and the need for in-depth research about the dynamics of family businesses, the difficulties they face (strategy, succession, internal conflicts etc.) and factors influencing their survival (endurance) and sustainability. Despite the differences in economic structure and culture both Finland and Greece are small countries in the outskirts of Europe with a high percentage of family businesses. Finland counts on a highly industrialized manufacturing sector and is one of the economically and politically most stable countries in the world, whilst Greece relies on the service sector and in particular on tourism. Currently a cross-cultural study between Greece and Finland is undertaken. It includes an extensive literature review for deeper understanding of the research variables. In addition it incorporates a qualitative and quantitative research methodology. This paper describes mainly the results of a qualitative study carried out in 60 family businesses in the North-western part of Thessaloniki, Greece. The aims of the study were to record the new conditions that prevail concerning business operations in family businesses. The main findings from our study show that family businesses can combine sentiments with business dexterity and create unique dynamics towards business decisions. The financial crisis can be perceived as pushed “opportunity” in many functional areas of the business for reformation towards business sustainability and the creation of competitive advantage. It converts into a cause of reorganization of business plans and helps the company to adopt more formal management procedures for decision making. The combination of emotion with entrepreneurship also brings family members around a common goal of survival and due to the two separate systems of “family” and “business” resulting in a dynamic growth in the middle of the crisis. The adoption of a lean and flexible budget is an important parameter in responding to the financial crisis. Family firms have the advantage of being motivated and supported by all family members who are involved in the family business (e.g. willingness to work long days under difficult conditions with limitedly rewards), while in non-family businesses such commitment is more difficult to obtain. Other incentives for surviving the financial crisis can be contributed to the considerable consequence that a failure of a family business may have on the leader; there is a high risk regarding the family property, negative publicity of the family's name, and the sense of cancellation of the family's legacy. Managers of a non-family business do not encounter such pressures.

Leadership Competencies Profiles and Managerial Effectiveness in Greece

Abstract: This paper investigates the association of leadership roles’ competencies as well as managerial effectiveness profiles with gender and job outcomes (job satisfaction and performance). In addition, the influence of leadership competencies on individual effectiveness of managers is explored, providing a course for action toward managerial excellence. Drawing upon a sample of 132 male and female managers in Greek firms, a structured questionnaire was developed adopting the Competing Values Framework (CVF) in order to measure both leadership roles’ competencies and managerial effectiveness. Results revealed that managers characterized by high levels of job performance excel in practicing all leadership competencies, while gender does not exert significant impact. A similar pattern emerged for managerial effectiveness profiles. Moreover, leadership competencies associated with the innovator, director and mentor roles found to contribute most to managerial effectiveness, thus specific directions for managerial action has been derived.

FDI and Economic Growth, the Case of Romania☆

Abstract: The importance and the effects of FDI attracted, rightly, the interest of all the states and resulted in a fierce competition for the foreign capital. The impact of FDI inflows on the host country can be traced to the macro and microeconomic level. The impact of FDI on host economies, is often positive, manifesting differently depending on the area and the region of the foreign investment. The impact of foreign investment on host countries depends largely on the quality and quantity of the inflows. In the Romanian economy, until 2000, the foreign direct investment level has been reduced. Apparently Romania attracted less FDI inflows than other emerging economies or EU economies. This paper aims to research if in the Romanian economy, there is a link between FDI inflows and GDP growth, more if the FDI have a positive impact on economic growth namely GDP growth.

The Relationship between Insurance and Economic Growth in Romania Compared to the Main Results in Europe – A Theoretical and Empirical Analysis

Abstract: The correlation between insurance and economic growth has been analyzed by many authors at the international level, thus there are a lot of studies seeking to assess the causal relation between macroeconomic performance and the size of the insurance sector. The insurance becomes a major component in certain economies, consequently the weight of insurance to the GDP of every country being over 10% in some European countries (such as the Netherlands, the United Kingdom and Finland), and it is even higher as the economic development is higher. We can say that the percentage in GDP of a country is the measure of the development of that respective state. The purpose of this paper is to establish the correlation between insurance and economic growth in Romania, by taking into consideration the share of gross premium written to GDP (insurance penetration), and the average value of the insurance premium paid by an inhabitant across one year (insurance density), as insurance indicators. The methodology of our research employs statistical methods concerning the analysis between the GDP and insurance indicators. The results obtained will be compared with those obtained on other markets.

Remittances as an Economic Development Factor. Empirical Evidence from the CEE Countries

Abstract: Empirical studies on remittances revealed their key role for the household consumption of the receiving families, as well as their investment potential with direct influence on economic development in emigrant's country of origin. This paper focuses on the second approach by treating remittances as capital flows that have macroeconomic growth potential. Aiming to test this hypothesis, we constructed a two growth models that include remittances as the variable of interest, alongside the traditional production factors. The models have been tested using aggregate data that cover ten countries in Central and Eastern Europe (CEE) over 1995-2011. Panel estimation methods were employed to account for potential cross-section heterogeneity. The main result is the significant positive influence of remittances on both absolute and relative GDP growth in our panel of CEE countries.

Monte Carlo Method in Risk Analysis for Investment Projects

Abstract: Risk assessment for environmental projects consists of studying the probability that projects will achieve a satisfactory performance for threshold - values of internal rate of return (IRR) or net present value (NPV). Risk analysis identifies and estimates risks and their level as well as measures considered to mitigate their negative impact. Quantitative risk analysis is performed for estimating the risk of the project by numeric resources. Monte Carlo simulation method can be widely applied in this area due to the advantages recognized both by practitioners and the academic community. By using this method, the distribution of all possible outcomes of an event is generated by analyzing a model several times, each time using random input values selected from the probability distributions considered normal of the components that comprise the model.