Search results for: financial losses

Authors: Ioan Popa, Cristiana Tudor, Radu Lupu

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The interdependences among stock market indices were studied for a long while by academics in the entire world. The current financial crisis opened the door to a wide range of opinions concerning the understanding and measurement of the connections considered to provide the controversial phenomenon of market integration. Using data on the log-returns of 17 stock market indices that include most of the CEE markets, from 2005 until 2009, our paper studies the problem of these dependences using a new methodological tool that takes into account both the volatility clustering effect and the stochastic properties of these linkages through a Dynamic Conditional System of Simultaneous Equations. We find that the crisis is well captured by our model as it provides evidence for the high volatility – high dependence effect.

Keywords: Stock market interdependences, Dynamic System ofSimultaneous Equations, financial crisis

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Authors: E. Mulliner, V. Maliene

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The concept of housing affordability is a contested issue, but a pressing and widespread problem for many countries. Simple ratio measures based on housing expenditure and income are habitually used to defined and assess housing affordability. However, conceptualising and measuring affordability in this manner focuses only on financial attributes and fails to deal with wider issues such as housing quality, location and access to services and facilities. The research is based on the notion that the housing affordability problem encompasses more than the financial costs of housing and a households ability to meet such costs and must address larger issues such as social and environmental sustainability and the welfare of households. Therefore, the need arises for a broad and more encompassing set of attributes by which housing affordability can be assessed. This paper presents a system of criteria by which the affordability of different housing locations could be assessed in a comprehensive and sustainable manner. Moreover, the paper explores the way in which such criteria could be measured.

Keywords: Affordable housing, attributes, housing affordability, sustainable communities

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Authors: Zh.Mingaleva, K.Balkova

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Innovations and innovative activity get the increasing value for successful financial and economic activity of the countries and regions. The level of innovative sphere development determines place of a country or a region in world economy and forms a basis of steady economic growth. This article is devoted to different aspects of organization of the national economic safety in the conditions of innovative development, its problems, risks and threats. Economy can be considered as aspiring for transition to innovative way only with finding of economic safety: financial independence, power stability and technological progress. There are statistical indicators, defining the level of economic security and factors, threatening economic safety of the state. The research is based on the analysis of factors and indicators in conditions of innovative development. The paper is illustrated by the examples of possible estimated system of the economic safety level.

Keywords: Economic safety, innovative activity, innovative development, innovative economy

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Authors: Krisada Sungkhamanee

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The objectives of this research are to search the management pattern of Bang Khonthi lodging entrepreneurs for sufficient economy ways, to know the threat that affects this sector and design fit arrangement model to sustain their business with Samut Songkram style. What will happen if they do not use this approach? Will they have a financial crisis? The data and information are collected by informal discussions with 8 managers and 400 questionnaires. A mixed methods of both qualitative research and quantitative research are used. Bent Flyvbjerg-s phronesis is utilized for this analysis. Our research will prove that sufficient economy can help small business firms to solve their problems. We think that the results of our research will be a financial model to solve many problems of the entrepreneurs and this way will can be a model for other provinces of Thailand.

Keywords: Bang Khonthi, Lodging Business, Sufficient Economy.

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Authors: Tomohiro Ando, Satoshi Yamashita

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The objective of this study is to propose a statistical modeling method which enables simultaneous term structure estimation of the risk-free interest rate, hazard and loss given default, incorporating the characteristics of the bond issuing company such as credit rating and financial information. A reduced form model is used for this purpose. Statistical techniques such as spline estimation and Bayesian information criterion are employed for parameter estimation and model selection. An empirical analysis is conducted using the information on the Japanese bond market data. Results of the empirical analysis confirm the usefulness of the proposed method.

Keywords: Empirical Bayes, Hazard term structure, Loss given default.

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Authors: Marko Čular

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The aim of this paper is to raise general awareness of transparency importance for audit firms and for audit services’ users. This paper analyzes transparency of audit firms that audited financial statements of listed companies, for year 2011 and 2012. We use this two years because in the meantime Code of Ethics for Professional Accountants has been adopted. This paper investigates whether transparency reports of audit firms are in accordance with the Croatian Audit Act and whether there is a difference on transparency in observed years. For this paper quality index of transparency report and financial indicators of audit firms are used to get conclusion about condition of audit firms transparency reporting. Results of our study indicate that audit firms are not fully transparent, looking for both years. Transparency of audit firms in 2012 has improved significantly, compared with transparency in 2011.

Keywords: Transparency report, Index quality of transparency report, Croatian Audit Act, Code of Ethics for Professional Accountants.

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Authors: Seham Ghalwash, Ayman Ismail

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Resources are crucial to the development and sustainability of social ventures. Thus, resources and resources scarcity are central concepts to study and understand the phenomenon of social entrepreneurship specially in developing countries where resources are very limited. Social entrepreneurs in developing countries face bigger challenges because financial resources are scarce. The empirical findings in this paper suggest that social enterprises in poor resources environments survive and grow because of the existence of social and human capitals in which they serve as prerequisites for the physical resources required for sustainability. This research paper explores how governments and policymakers might take nativities to support and foster social entrepreneurial activities in a resource-constraints environment reflecting on the experiences of Egypt-based social enterprises.

Keywords: Social ventures, financial constraints, intangible resources, scarce resources, legitimacy, developing countries, Egypt.

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Authors: György Á. Horváth, Piroska Harazin

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The transition to sustainable development requires considerable investments from stakeholders, both financial and immaterial. However, accounting for such investments often poses a challenge, as ventures with intangible or non-financial returns remain oblivious to conventional accounting techniques and risk assessment. That such investments may significantly contribute to the welfare of those affected may act as a driving force behind attempting to bridge this gap. This gains crucial importance as investments must be also backed by governments and administrations; entities whose budget depends on taxpayers- contributions and whose tasks are based on securing the welfare of their citizens. Besides economic welfare, citizens also require social and environmental wellbeing too. However, administrations must also safeguard that welfare is guaranteed not only to present, but to future generations too. With already strained budgets and the requirement of sustainable development, governments on all levels face the double challenge of making both of these ends meet.

Keywords: Accounting, Administration and Government, RiskAssessment, Sustainable Development

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Authors: David Calderón Villegas, Thomas Kalitzky

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Run-of-river (RoR) hydropower projects represent a viable, clean, and cost-effective alternative to dam-based plants and provide decentralized power production. However, RoR schemes’ cost-effectiveness depends on the proper selection of site and design flow, which is a challenging task because it requires multivariate analysis. In this respect, this study presents the development of an investment decision support tool for assessing the optimal size of an RoR scheme considering the technical, environmental, and cost constraints. The net present value (NPV) from a project perspective is used as an objective function for supporting the investment decision. The tool has been tested by applying it to an actual RoR project recently proposed in Colombia. The obtained results show that the optimum point in financial terms does not match the flow that maximizes energy generation from exploiting the river's available flow. For the case study, the flow that maximizes energy corresponds to a value of 5.1 m3/s. In comparison, an amount of 2.1 m3/s maximizes the investors NPV. Finally, a sensitivity analysis is performed to determine the NPV as a function of the debt rate changes and the electricity prices and the CapEx. Even for the worst-case scenario, the optimal size represents a positive business case with an NPV of 2.2 USD million and an internal rate of return (IRR) 1.5 times higher than the discount rate. 

Keywords: small hydropower, renewable energy, RoR schemes, optimal sizing, financial analysis

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Authors: Isaias Ramirez, Jose Luis Silva, Carlos Gonzalez, Gustavo Candelaria, Jose Pepe Rasgado, Carlos Carrillo

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This paper presents the experience in an eLearning training project that is being implemented for electrical planning engineers from the national Mexican utility Comision Federal de Electricidad (CFE) Distribution. This modality is implemented and will be used in the utility for training purposes to help personnel in their daily technical activities. One important advantage of this training project is that once it is implemented and applied, financial resources will be saved by CFE Distribution Company because online training will be used in all the country; the infrastructure for the eLearning training will be uploaded in computational servers installed in the National CFE Distribution Training Department, in Ciudad de Mexico, and can be used in workplaces of 16 Distribution Divisions and 150 Zones of CFE Distribution. In this way, workers will not need to travel to the National Training Department, saving enormous efforts, financial, and human resources.

Keywords: Moodle, eLearning, corporate training, electrical planning engineer.

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Authors: Noor A. Auzairy, Rubi Ahmad, Catherine S.F. Ho, Ros Z. Z. Sapian

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This paper is to explore the relationship and the level of stock market integration of the Asian countries, primarily concentrating on Malaysia, Thailand, Indonesia, and South Korea, with the world from January 1997 to December 2009. The degree of short-run and long-run stock market integration of those Asian countries are analyzed in order to determine the significance of series of regional and world financial crises, liberalization policies and other financial reforms in influencing the level of stock market integration. To test for cointegration, this paper applies coefficient correlation, univariate regression analyses, cointegration tests, and vector autoregressive models (VAR) by using the four Asian stock markets main indices and the MSCI World index. The empirical findings from this work reveal that there is no long-run stock market integration for the four countries and the world market. However, there is short run integration.

Keywords: Asia, integration, relationship, stock market.

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Authors: Hung T. Tsou, Hsuan Y. Hsu

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Service innovations are central concerns in fast changing environment. Due to the fitness in customer demands and advances in information technologies (IT) in service management, an expanded conceptualization of e-service innovation is required. Specially, innovation practices have become increasingly more challenging, driving managers to employ a different open innovation model to maintain competitive advantages. At the same time, firms need to interact with external and internal customers in innovative environments, like the open innovation networks, to co-create values. Based on these issues, an important conceptual framework of e-service innovation is developed. This paper aims to examine the contributing factors on e-service innovation and firm performance, including financial and non-financial aspects. The study concludes by showing how e-service innovation will play a significant role in growing the overall values of the firm. The discussion and conclusion will lead to a stronger understanding of e-service innovation and co-creating values with customers within open innovation networks.

Keywords: e-Service innovation, performance, open innovation networks, co-create value.

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Authors: F. Niazkar, N. Arab-Moghaddam

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In this research, effort was made to identify and evaluate barriers to the development of entrepreneurship among Iranian entrepreneur women who were graduated from universities. In this study, perspectives of thirty-seven available entrepreneur women were examined. In order to prepare questionnaires and receive knowledge about barriers among these women, seven cases of entrepreneur women took part in in-depth interviews. Then, to evaluate the importance of barriers, the researchers made a questionnaire with closed questions in which the barriers were classified into the following categories: personal-familial barriers; socio-cultural barriers; economic-financial-commercial barriers; and structural barriers. Entrepreneur women were requested to rate the importance of each item. The results indicated that there were different obstacles among entrepreneur women. The order of the important barriers was as fallow: economic-financial-commercial, structural, socio-cultural, and personal-familial.

Keywords: Barriers to Entrepreneurship, Entrepreneur Women

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Authors: G. Arslan, S. Kivrak

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Achieving success is a highly critical issue for the companies to survive in a competitive business environment. The construction industry is also an area where there is strong competition due to a large number of construction contractors. There have been many factors such as qualified employees, quality workmanship and financial management that can lead to company success in the construction industry. The aim of this study was to investigate the critical factors leading to construction company success. Within this context, a survey was carried out among 40 Turkish construction companies which are located in the Northwest region of Turkey. In this survey, top-level managers and owners of the companies were interviewed. The interviews took place over a five month period between January and May 2007. Finally, the ranking of the critical success factors has been determined by using the Simple Multi Attribute Rating Technique (SMART). Based on the results, business management, financial conditions and owner/manager characteristics were determined as the most important factors to company success.

Keywords: Company success, construction, organization, success factors.

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Authors: Mariam Vardiashvili

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The economic value of the asset impairment process is quite large. Impairment reflects the reduction of future economic benefits or service potentials itemized in the asset. The assets owned by public sector entities bring economic benefits or are used for delivery of the free-of-charge services. Consequently, they are classified as cash-generating and non-cash-generating assets. IPSAS 21 - Impairment of non-cash-generating assets, and IPSAS 26 - Impairment of cash-generating assets, have been designed considering this specificity.  When measuring impairment of assets, it is important to select the relevant methods. For measurement of the impaired Non-Cash-Generating Assets, IPSAS 21 recommends three methods: Depreciated Replacement Cost Approach, Restoration Cost Approach, and  Service Units Approach. Impairment of Value in Use of Cash-Generating Assets (according to IPSAS 26) is measured by discounted value of the money sources to be received in future. Value in use of the cash-generating asserts (as per IPSAS 26) is measured by the discounted value of the money sources to be received in the future. The article provides classification of the assets in the public sector  as non-cash-generating assets and cash-generating assets and, deals also with the factors which should be considered when evaluating  impairment of assets. An essence of impairment of the non-financial assets and the methods of measurement thereof evaluation are formulated according to IPSAS 21 and IPSAS 26. The main emphasis is put on different methods of measurement of the value in use of the impaired Cash-Generating Assets and Non-Cash-Generation Assets and the methods of their selection. The traditional and the expected cash flow approaches for calculation of the discounted value are reviewed. The article also discusses the issues of recognition of impairment loss and its reflection in the financial reporting. The article concludes that despite a functional purpose of the impaired asset, whichever method is used for measuring the asset, presentation of realistic information regarding the value of the assets should be ensured in the financial reporting. In the theoretical development of the issue, the methods of scientific abstraction, analysis and synthesis were used. The research was carried out with a systemic approach. The research process uses international standards of accounting, theoretical researches and publications of Georgian and foreign scientists.

Keywords: Non-cash-generating assets, cash-generating assets, recoverable value, recoverable service amount, value in use.

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Authors: K. N. Kiran, S. Anish

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It is well known that secondary flow loses account about one third of the total loss in any axial turbine. Modern gas turbine height is smaller and have longer chord length, which might lead to increase in secondary flow. In order to improve the efficiency of the turbine, it is important to understand the behavior of secondary flow and device mechanisms to curtail these losses. The objective of the present work is to understand the effect of a stream wise end-wall fence on the aerodynamics of a linear turbine cascade. The study is carried out computationally by using commercial software ANSYS CFX. The effect of end-wall on the flow field are calculated based on RANS simulation by using SST transition turbulence model. Durham cascade which is similar to high-pressure axial flow turbine for simulation is used. The aim of fencing in blade passage is to get the maximum benefit from flow deviation and destroying the passage vortex in terms of loss reduction. It is observed that, for the present analysis, fence in the blade passage helps reducing the strength of horseshoe vortex and is capable of restraining the flow along the blade passage. Fence in the blade passage helps in reducing the under turning by 7⁰ in comparison with base case. Fence on end-wall is effective in preventing the movement of pressure side leg of horseshoe vortex and helps in breaking the passage vortex. Computations are carried for different fence height whose curvature is different from the blade camber. The optimum fence geometry and location reduces the loss coefficient by 15.6% in comparison with base case.

Keywords: Boundary layer fence, horseshoe vortex, linear cascade, passage vortex, secondary flow.

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Authors: R. S. Quintal, J. L. Tesch Santos, M. D. Davis, E. C. de Santana, M. de F. Bandeira dos Santos

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The objective is to identify the contributions from the introduction of the computerized system deal within the Accounting Department of Brazilian Navy Financial Directorship and its possible effects on the budgetary and financial harvest of Brazilian Navy. The relevance lies in the fact that the management process is responsible for the continuous improvement of organizational performance through higher levels of quality in their activities. Improvements in organizational processes have direct effects on crops cost, quality, reliability, flexibility and speed. The method of study of this research is the case study. The choice of case study attended, among other demands, a need for greater flexibility to study processes related to a computerized system. The sources of evidence were used literature, documentary and direct observation. Direct observation was made by monitoring the implementation of the computerized system in the Division of Management Analysis. The main findings of the study point to the fact that the computerized system may contribute significantly to the standardization of information. There was improvement of internal processes in the division of management analysis, made possible the consolidation of a standard management and performance analysis that contribute to global homogeneity in the treatment of information essential to the process of decision making. This study has limitations related to the fact the search result be subject exclusively to the case studied, and it is impossible to generalize to other organs of government.

Keywords: Process Management, Management Control, Business Intelligence.

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Authors: Cristian Păuna

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In the first decades of the 21st century, in the electronic trading environment, algorithmic capital investments became the primary tool to make a profit by speculations in financial markets. A significant number of traders, private or institutional investors are participating in the capital markets every day using automated algorithms. The autonomous trading software is today a considerable part in the business intelligence system of any modern financial activity. The trading decisions and orders are made automatically by computers using different mathematical models. This paper will present one of these models called Price Prediction Line. A mathematical algorithm will be revealed to build a reliable trend line, which is the base for limit conditions and automated investment signals, the core for a computerized investment system. The paper will guide how to apply these tools to generate entry and exit investment signals, limit conditions to build a mathematical filter for the investment opportunities, and the methodology to integrate all of these in automated investment software. The paper will also present trading results obtained for the leading German financial market index with the presented methods to analyze and to compare different automated investment algorithms. It was found that a specific mathematical algorithm can be optimized and integrated into an automated trading system with good and sustained results for the leading German Market. Investment results will be compared in order to qualify the presented model. In conclusion, a 1:6.12 risk was obtained to reward ratio applying the trigonometric method to the DAX Deutscher Aktienindex on 24 months investment. These results are superior to those obtained with other similar models as this paper reveal. The general idea sustained by this paper is that the Price Prediction Line model presented is a reliable capital investment methodology that can be successfully applied to build an automated investment system with excellent results.

Keywords: Algorithmic trading, automated investment system, DAX Deutscher Aktienindex.

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Authors: Rabih Ghostine, Craig Kapfer, Viswanathan Kannan, Ibrahim Hoteit

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Urban flooding resulting from a sudden release of water due to dam-break or excessive rainfall is a serious threatening environment hazard, which causes loss of human life and large economic losses. Anticipating floods before they occur could minimize human and economic losses through the implementation of appropriate protection, provision, and rescue plans. This work reports on the numerical modelling of flash flood propagation in urban areas after an excessive rainfall event or dam-break. A two-dimensional (2D) depth-averaged shallow water model is used with a refined unstructured grid of triangles for representing the urban area topography. The 2D shallow water equations are solved using a second-order well-balanced discontinuous Galerkin scheme. Theoretical test case and three flood events are described to demonstrate the potential benefits of the scheme: (i) wetting and drying in a parabolic basin (ii) flash flood over a physical model of the urbanized Toce River valley in Italy; (iii) wave propagation on the Reyran river valley in consequence of the Malpasset dam-break in 1959 (France); and (iv) dam-break flood in October 1982 at the town of Sumacarcel (Spain). The capability of the scheme is also verified against alternative models. Computational results compare well with recorded data and show that the scheme is at least as efficient as comparable second-order finite volume schemes, with notable efficiency speedup due to parallelization.

Keywords: Flood modeling, dam-break, shallow water equations, Discontinuous Galerkin scheme, MUSCL scheme.

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Authors: Shaya Alshahrani

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Perceived risks play a major role in consumer intentions, behaviors, attitudes, and decisions about online shopping in the KSA. This paper investigates the influence of six perceived risk dimensions on Saudi consumers: product risk, information risk, financial risk, privacy and security risk, delivery risk, and terms and conditions risk empirically. To ensure the success of this study, a random survey was distributed to reflect the consumers’ perceived risk and to enable the generalization of the results. Data were collected from 323 respondents in the Kingdom of Saudi Arabia (KSA): 50 who had never shopped online and 273 who had done so. The results indicated that all six risks influenced the respondents’ perceptions of online shopping. The non-online shoppers perceived financial and delivery risks as the most significant barriers to online shopping. This was followed closely by performance, information, and privacy and security risks. Terms and conditions were perceived as less significant. The online consumers considered delivery and performance risks to be the most significant influences on internet shopping. This was followed closely by information and terms and conditions. Financial and privacy and security risks were perceived as less significant. This paper argues that introducing adequate legal solutions to addressing related problems arising from this study is an urgent need. This may enhance consumer trust in the KSA online market, increase consumers’ intentions regarding online shopping, and improve consumer protection.

Keywords: Perceived risk, consumer protection, online shopping, Saudi Arabia, online contracts, e-commerce.

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Authors: Sara Sallam, Mohamed Taqi, Naoual Belouaggadia

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Solar thermal power plants using parabolic trough collectors (PTC) are currently a powerful technology for generating electricity. Most of these solar power plants use thermal oils as heat transfer fluid. The latter is heated in the solar field and transfers the heat absorbed in an oil-water heat exchanger for the production of steam driving the turbines of the power plant. Currently, we are seeking to develop PTCs with direct steam generation (DSG). This process consists of circulating water under pressure in the receiver tube to generate steam directly into the solar loop. This makes it possible to reduce the investment and maintenance costs of the PTCs (the oil-water exchangers are removed) and to avoid the environmental risks associated with the use of thermal oils. The pressure drops in these systems are an important parameter to ensure their proper operation. The determination of these losses is complex because of the presence of the two phases, and most often we limit ourselves to describing them by models using empirical correlations. A comparison of these models with experimental data was performed. Our calculations focused on the evolution of the pressure of the liquid-vapor mixture along the receiver tube of a PTC-DSG for pressure values and inlet flow rates ranging respectively from 3 to 10 MPa, and from 0.4 to 0.6 kg/s. The comparison of the numerical results with experience allows us to demonstrate the validity of some models according to the pressures and the flow rates of entry in the PTC-DSG receiver tube. The analysis of these two parameters’ effects on the evolution of the pressure along the receiving tub, shows that the increase of the inlet pressure and the decrease of the flow rate lead to minimal pressure losses.

Keywords: Direct steam generation, parabolic trough collectors, pressure drop.

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Authors: Petr Teply

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While the form of crises may change, their essence remains the same (such as a cycle of abundant liquidity, rapid credit growth, and a low-inflation environment followed by an asset-price bubble). The current market turbulence began in mid-2000s when the US economy shifted to imbalanced both internal and external macroeconomic positions. We see two key causes of these problems – loose US monetary policy in early 2000s and US government guarantees issued on the securities by government-sponsored enterprises what was further fueled by financial innovations such as structured credit products. We have discovered both negative and positive lessons deriving from this crisis and divided the negative lessons into three groups: financial products and valuation, processes and business models, and strategic issues. Moreover, we address key risk management lessons and exit strategies derived from the current crisis and recommend policies that should help diminish the negative impact of future potential crises.

Keywords: exist strategy, global crisis, risk management, corporate governance

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Authors: Ichiro Mukai

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The purpose of this study is to investigate whether firms applying International Financial Reporting Standards (IFRS), provide high-quality and comparable earnings information that is useful for decision making of information users relative to firms applying local Generally Accepted Accounting Principles (GAAP). Focus is placed on the earnings quality of listed firms in several developed countries: Australia, Canada, France, Germany, Japan, the United Kingdom (UK), and the United States (US). Except for Japan and the US, the adoption of IFRS is mandatory for listed firms in these countries. In Japan, the application of IFRS is allowed for specific listed firms. In the US, the foreign firms listed on the US securities market are permitted to apply IFRS but the listed domestic firms are prohibited from doing so. In this paper, the differences in earnings quality are compared between firms applying local GAAP and those applying IFRS in each country and industry category, and the reasons of differences in earnings quality are analyzed using various factors. The results show that, although the earnings quality of firms applying IFRS is higher than that of firms applying local GAAP, this varies with country and industry category. Thus, even if a single set of global accounting standards is used for all listed firms worldwide, it is difficult to establish comparability of financial information among global firms. These findings imply that various circumstances surrounding firms, industries, and countries etc. influence business operations and affect the differences in earnings quality.

Keywords: Accruals, earnings quality, IFRS, information comparability.

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Authors: D. A. Farinde

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One of the most significant threats to the economy of a nation is the bankruptcy of its banks. This study evaluates the susceptibility of Nigerian banks to failure with a view to identifying ratios and financial data that are sensitive to solvency of the bank. Further, a predictive model is generated to guide all stakeholders in the industry. Thirty quoted banks that had published Annual Reports for the year preceding the consolidation i.e. year 2004 were selected. They were examined for distress using the Multilayer Perceptron Neural Network Analysis. The model was used to analyze further reforms by the Central Bank of Nigeria using published Annual Reports of twenty quoted banks for the year 2008 and 2011. The model can thus be used for future prediction of failure in the Nigerian banking system.

Keywords: Bank, Bankruptcy, Financial Ratios, Neural Network, Multilayer Perceptron, Predictive Model

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Authors: Margaret F. Shipley

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Fuzzy logic can be used when knowledge is incomplete or when ambiguity of data exists. The purpose of this paper is to propose a proactive fuzzy set- based model for reacting to the risk inherent in investment activities relative to a complete view of portfolio management. Fuzzy rules are given where, depending on the antecedents, the portfolio size may be slightly or significantly decreased or increased. The decision maker considers acceptable bounds on the proportion of acceptable risk and return. The Fuzzy Controller model allows learning to be achieved as 1) the firing strength of each rule is measured, 2) fuzzy output allows rules to be updated, and 3) new actions are recommended as the system continues to loop. An extension is given to the fuzzy controller that evaluates potential financial loss before adjusting the portfolio. An application is presented that illustrates the algorithm and extension developed in the paper.

Keywords: Portfolio Management, Financial Market Monitoring, Fuzzy Controller, Fuzzy Logic,

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Authors: Beata Wentura-Dudek

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In the United States in 2007-2010 before the crisis, the US labour market policy focused mainly on providing residents with unemployment insurance, after the recession this policy changed. The aim of the article was to present quantitative research presenting the most effective labor market instruments contributing to reducing unemployment during the crisis in the USA. The article presents research based on the analysis of available documents and statistical data. The results of the conducted research show that the most effective forms of counteracting unemployment at that time were: direct job creation, job search assistance, subsidized employment, training and employment promotion using new technologies, including social media.

Keywords: United States, financial crisis, unemployment, employment promotion, social media, job creation, training, labour market, employment agencies, lifelong learning, job search assistance, subsidized employment, companies, tax.

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Authors: T. Miková

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This paper analyzes the effect of a single uniform accounting rule on reporting quality by investigating the influence of IFRS on earnings management. This paper examines whether earnings management is reduced after IFRS adoption through the use of “loss avoidance thresholds”, a method that has been verified in earlier studies. This paper concentrates on two European countries: one that represents the continental code law tradition with weak protection of investors (France) and one that represents the Anglo-American common law tradition, which typically implies a strong enforcement system (the United Kingdom).

The research investigates a sample of 526 companies (6822 firm-year observations) during the years 2000 – 2013. The results are different for the two jurisdictions. This study demonstrates that a single set of accounting standards contributes to better reporting quality and reduces the pervasiveness of earnings management in France. In contrast, there is no evidence that a reduction in earnings management followed the implementation of IFRS in the United Kingdom. Due to the fact that IFRS benefit France but not the United Kingdom, other political and economic factors, such legal system or capital market strength, must play a significant role in influencing the comparability and transparency cross-border companies’ financial statements. Overall, the result suggests that IFRS moderately contribute to the accounting quality of reported financial statements and bring benefit for stakeholders, though the role played by other economic factors cannot be discounted.

Keywords: Accounting Standards, Earnings Management, International Financial Reporting Standards, Loss Avoidance, Reporting Quality.

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Authors: Marijana Ivanov, Roman Šubić

Abstract:

This study analyzes the critical gaps in the architecture of European stability and the expected role of the banking union as the new important step towards completing the Economic and Monetary Union that should enable the creation of safe and sound financial sector for the euro area market. The single rulebook together with the Single Supervisory Mechanism and the Single Resolution Mechanism - as two main pillars of the banking union, should provide a consistent application of common rules and administrative standards for supervision, recovery and resolution of banks – with the final aim of replacing the former bail-out practice with the bail-in system through which possible future bank failures would be resolved by their own funds, i.e. with minimal costs for taxpayers and real economy. In this way, the vicious circle between banks and sovereigns would be broken. It would also reduce the financial fragmentation recorded in the years of crisis as the result of divergent behaviors in risk premium, lending activities and interest rates between the core and the periphery. In addition, it should strengthen the effectiveness of monetary transmission channels, in particular the credit channels and overflows of liquidity on the money market which, due to the fragmentation of the common financial market, has been significantly disabled in period of crisis. However, contrary to all the positive expectations related to the future functioning of the banking union, major findings of this study indicate that characteristics of the economic system in which the banking union will operate should not be ignored. The euro area is an integration of strong and weak entities with large differences in economic development, wealth, assets of banking systems, growth rates and accountability of fiscal policy. The analysis indicates that low and unbalanced economic growth remains a challenge for the maintenance of financial stability and this problem cannot be resolved just by a single supervision. In many countries bank assets exceed their GDP by several times and large banks are still a matter of concern, because of their systemic importance for individual countries and the euro zone as a whole. The creation of the Single Supervisory Mechanism and the Single Resolution Mechanism is a response to the European crisis, which has particularly affected peripheral countries and caused the associated loop between the banking crisis and the sovereign debt crisis, but has also influenced banks’ balance sheets in the core countries, as the result of crossborder capital flows. The creation of the SSM and the SRM should prevent the similar episodes to happen again and should also provide a new opportunity for strengthening of economic and financial systems of the peripheral countries. On the other hand, there is a potential threat that future focus of the ECB, resolution mechanism and other relevant institutions will be extremely oriented towards large and significant banks (whereby one half of them operate in the core and most important euro area countries), and therefore it remains questionable to what extent will the common resolution funds will be used for rescue of less important institutions. Recent geopolitical developments will be the optimal indicator to show whether the previously established mechanisms are sufficient enough to maintain the adequate financial stability in the euro area market.

Keywords: Banking Union, financial integration, single supervisory mechanism (SSM).

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Authors: Shahram Nowrouzieh, Abbas Rezaei Asl, Mohamad Ali Jafari

Abstract:

Cotton, as a strategic crop, plays an important role in providing human food and clothing need, because of its oil, protein, and fiber. Iran has been one of the largest cotton producers in the world in the past, but unfortunately, for economic reasons, its production is reduced now. One of the ways to reduce the cost of cotton production is to expand the mechanization of cotton harvesting. Iranian farmers do not accept the function of cotton harvesters. One reason for this lack of acceptance of cotton harvesting machines is the number of field losses on these machines. So, the majority of cotton fields are harvested by hand. Although the correct setting of the harvesting machine is very important in the cotton losses, the morphological properties of the cotton plant also affect the performance of cotton harvesters. In this study, the effect of some cotton morphological properties such as the height of the cotton plant, number, and length of sympodial and monopodial branches, boll dimensions, boll weight, number of carpels and bracts angle were evaluated on the performance of cotton picker. In this research, the efficiency of John Deere 9920 spindle Cotton picker is investigated on five different Iranian cotton cultivars. The results indicate that there was a significant difference between the five cultivars in terms of machine harvest efficiency. Golestan cultivar showed the best cotton harvester performance with an average of 87.6% of total harvestable seed cotton and Khorshid cultivar had the least cotton harvester performance. The principal component analysis showed that, at 50.76% probability, the cotton picker efficiency is affected by the bracts angle positively and by boll dimensions, the number of carpels and the height of cotton plants negatively. The seed cotton remains (in the plant and on the ground) after harvester in PCA scatter plot were in the same zone with boll dimensions and several carpels.

Keywords: Cotton, bract, harvester, carpel.

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Authors: Nhien-An Le-Khac, Sammer Markos, M-Tahar Kechadi

Abstract:

Today, money laundering (ML) poses a serious threat not only to financial institutions but also to the nation. This criminal activity is becoming more and more sophisticated and seems to have moved from the cliché of drug trafficking to financing terrorism and surely not forgetting personal gain. Most international financial institutions have been implementing anti-money laundering solutions (AML) to fight investment fraud. However, traditional investigative techniques consume numerous man-hours. Recently, data mining approaches have been developed and are considered as well-suited techniques for detecting ML activities. Within the scope of a collaboration project for the purpose of developing a new solution for the AML Units in an international investment bank, we proposed a data mining-based solution for AML. In this paper, we present a heuristics approach to improve the performance for this solution. We also show some preliminary results associated with this method on analysing transaction datasets.

Keywords: data mining, anti money laundering, clustering, heuristics.

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