rss_2.0Croatian Review of Economic, Business and Social Statistics FeedSciendo RSS Feed for Croatian Review of Economic, Business and Social Statistics Review of Economic, Business and Social Statistics Feed the diverse efficacy of artificial neural networks and logistic regression: A comparative analysis in predicting financial distress<abstract> <title style='display:none'>Abstract</title> <p>The prediction of financial distress has emerged as a significant concern over a prolonged period spanning more than half a century. This subject has garnered considerable attention owing to the precise outcomes derived from its predictive models. The main objective of this study is to predict financial distress using two types of Artificial Neural Networks (ANN) compared to the Logistic Regression (LR), and this will be done by relying on the data of 12 Algerian companies for the period 2015-2019. The reason for choosing these two types of networks in particular, is attributed to the fact that Elman Neural Network (ENN) is commonly used network, in contrast to the Feed-forward Distributed Time Delay Neural Network (FFDTDNN). Regarding the choice of these companies as a study sample, can be attributed to the similarity in the temporal range covered by their financial statements, coupled with their approximate parity in terms of asset size. This study concluded that the ENN model outperformed the LR model in predicting financial distress with a classification accuracy of 100%. On the other hand, the LR model outperformed the FFDTDNN with a classification accuracy of 83.33%. Therefore, it can be asserted that ANNs cannot be regarded as superior to Logistic Regression (LR) in all statuses. Instead, it is accurate to affirm that specific types of ANNs exhibit greater efficacy than LR in predicting financial distress, while other types demonstrate relatively diminished effectiveness.</p> </abstract>ARTICLEtrue Business Incubators and Digital Entrepreneurship: The case of Digital Incubation Center in Qatar<abstract> <title style='display:none'>Abstract</title> <p>This study examines the role of digital business incubators, focusing specifically on the Qatar Digital Incubation Center (DIC), in fostering digital entrepreneurship. The methodology used is qualitative, employing content analysis to interpret textual and visual data from sources such as online databases, documents, reports, and academic research papers. International benchmark reports are used to assess Qatar's global ranking in research, development, innovation, and digital entrepreneurship. The findings highlight Qatar's commitment to digital transformation and its efforts to create a supportive ecosystem for entrepreneurship. They underscore Qatar's dedication to driving innovation through investments in telecommunications, information technology, education, and initiatives like the Qatar National Research Fund. Qatar's digital competitiveness is evident through its ICT infrastructure, extensive 5G implementation, and initiatives like the Smart Qatar Program. The DIC plays a pivotal role in supporting digital entrepreneurs by providing resources, mentorship, and a collaborative environment. By collaborating with government agencies, academic institutions, and industry partners, the DIC contributes to the growth and success of digital startups, fostering innovation, and positioning Qatar as a hub for digital entrepreneurship and technological innovation. This study provides valuable insights into the development of Qatar's digital entrepreneurship ecosystem and the significance of digital business incubators, including the DIC.</p> </abstract>ARTICLEtrue between foreign trade performance and exchange rate volatility: Panel ARDL approach<abstract> <title style='display:none'>Abstract</title> <p>The purpose of this study is to analyse the influence of exchange rate shocks on foreign trade (exports and imports) of fifteen economies within the ECOWAS sub-region. To accomplish the goal of this paper, Autoregressive Distributed Lag (ARDL) procedure was employed to investigate the impact volatility in the exchange rate market has on foreign trade in both long- and short-term with data between 1980 and 2020. To compute volatility, it relied on the GARCH (1, 1) model which predicted the conditional variances as proxy for volatility. Our empirical results are distinguished into export model and import model, and reveal that volatility in exchange rate influence foreign trade performance (exports and imports) negatively in the short-run, though statistically insignificant. The impact however becomes positive in the long run, and statistically significant for the two models. These results signpost that while the volatilities in foreign exchange market appear to deteriorate the international trade of these economies in the short-term, it substantially and significantly causes its improvement in the long-term. Hence, our results validate the J curve effect in the case of these ECOWAS economies. Policy implication from the findings suggests that to develop a robust international trade and ultimate economic growth, it is recommended that policymakers of these economies maintain a short-term stability in their foreign currency markets by way of adopting some intervention measures.</p> </abstract>ARTICLEtrue the impact of family stressors on financial behavior: A study of Croatian youth<abstract> <title style='display:none'>Abstract</title> <p>This paper examines the relationship between family stressors and subsequent financial behavior of young individuals in Croatia. Previous research indicates that family stressors are associated with increased levels of financial stress, resulting in impulsive purchases, risky financial behavior, and increased debt. More specifically, family stressors during youth are shown to significantly affect an individual's financial behavior later in life. Research has shown that youth family stressors, such as poverty, parental divorce, and parental unemployment, can lead to financial stress and affect financial behavior in adulthood. This paper provides an illustrative review of the Family Stress Model (FSM) framework to understand how family stressors influence youngsters in the financial domain. Using regression modeling, we estimate that family stress significantly impacts the financial behavior of young individuals in Croatia. Specifically, the study finds that family stress is negatively associated with responsible financial behavior. These findings have important implications for policymakers and practitioners, particularly those involved in financial education and family support programs, highlighting the need to address family stress as a potential risk factor for poor financial outcomes among young individuals. It is important to recognize the relationship between youth family stressors and financial behavior and work on managing both to improve financial well-being in adulthood.</p> </abstract>ARTICLEtrue impact of public debt on economic growth in Côte d'Ivoire: New evidence from linear and non-linear ARDL approaches<abstract> <title style='display:none'>Abstract</title> <p>This study examines the symmetric and asymmetric impact of public debt on economic growth in Côte d'Ivoire using time series data from 1972 to 2021. The analyses were performed using both linear and nonlinear autoregressive distributed lag (ARDL) models. The study also utilised the bounds F-test for cointegration, the Brock-Dechert-Scheinkman (BDS) nonlinearity test, and the Wald test for asymmetries. The findings of the bounds F-test provide support for both linear and nonlinear cointegration. The BDS test results indicate that the series are nonlinear, while Wald test results revealed an asymmetric relationship between public debt and economic growth in Côte d'Ivoire in the short run and symmetric relationship in the long run. Estimation results for the symmetric ARDL regression model provide no evidence of a statistically significant impact of public debt on economic growth, regardless of whether the analysis was conducted in the short run or long run. The NARDL findings indicate that, on average, positive changes to public debt lead to economic decline in the long run, while negative changes cause an economic upturn in the short run. The findings also show that GDP growth responds rapidly and strongly to negative changes in public debt. Therefore, the study encourages the government of Côte d'Ivoire to be cautious about public debt rise because it was established that they have a negative impact on economic growth. Negative changes in the public debt can serve to minimise the uncertainties in the business environment, thus promoting private, public, and foreign direct investments.</p> </abstract>ARTICLEtrue study on the reaction of the Balkan stock markets to the conflict between Russia and Ukraine<abstract> <title style='display:none'>Abstract</title> <p>The aim of this paper is to examine the reaction of South Eastern European stock markets to the armed conflict between Russia and Ukraine. With a sample of seven stock market indices, the event study methodology is applied to examine the influence of the conflict between two countries on European ground over stock indices of emerging markets in South Eastern Europe. Results indicate that beginning of the conflict in late February brought a very strong significant price correction and stock markets in the examined countries became maximum oscillatory and subjected to light and rapid changes on a daily level. The findings contribute to the research on economic impact of the armed conflict by providing empirical evidence that conflict between two European (Non-European Union members) countries has spill-over effects on stock markets on other European (European Union members and Non-European Union members) countries. The findings have important implications for portfolio diversification and thus can serve in the asset allocation decision of investment managers.</p> </abstract>ARTICLEtrue understanding of linear regression among economics students at the university center of Tipaza, Algeria<abstract> <title style='display:none'>Abstract</title> <p>Solving problems related to econometrics requires a good knowledge of regression analysis concepts. The objective of this study is to evaluate students’ difficulties resulting from the lack of knowledge of regression analysis concepts among economics students enrolled in the Master’s cycle at the institute of economics at the university center of Tipaza (Algeria). In order to analyze students’ answers, a typical correction was prepared based on professors’ answers to this questionnaire. The procedure consists of comparing students’ key answers with their corresponding typical answers to see how near or far it is from the right answer. In order to see whether the difficulties are originated from the same students, we analyzed the association between answers based on Multiple Correspondence Analysis (MCA) method. The principal results showed that difficulties resulting from the lack of knowledge of regression analysis concepts were prevalent among students. Their main causes were strongly related to misunderstanding, misconceptions and confusions. MCA analysis indicated that students can be categorized according to their answers into four groups: a very weak group, a weak group, an average group and a good group. We concluded that the difficulty of solving problems in the context of linear regression among students is the result of a lack of knowledge of regression concepts coupled with the inability to explain them.</p> </abstract>ARTICLEtrue development and economic growth in Botswana: New evidence from disaggregated data<abstract> <title style='display:none'>Abstract</title> <p>In this study, the causal relationship between financial development and economic growth in Botswana is re-examined using disaggregated data from 1980 to 2020 on financial development. The importance of financial development and economic growth in achieving Sustainable Development Goals (SDGs) cannot be overemphasised. The study used the Autoregressive Distributed Lag (ARDL) approach to cointegration and the ECM-based Granger causality test to examine this linkage. Financial development is measured at an aggregate level by the Financial Development Index (FDI) and at a disaggregate level by the Financial Institution Index (FII) and Financial Market Index (FMI) from the International Monetary Fund (IMF) financial development index database. The study failed to find any causality between financial development and economic growth during the study period. The results apply, irrespective of proxy used to measure the level of financial development and the time frame. This finding points to the importance for Botswana to continue with the Vision 2036 and the National Development Plans that focus, among other goals, on economic growth, to realise an increase in gross fixed capital formation and financial development.</p> </abstract>ARTICLEtrue distance application in the ranking of Group 8 and European Union countries by level of development<abstract> <title style='display:none'>Abstract</title> <p>According to the analyses published by the international organizations, the most developed countries are those from Group 8. The group of highly developed countries is in matter, which consists of: Japan, USA, Russia, Great Britain, Italy, Germany, France and Canada. The goal of the work is to determine the ranking list of the selected countries according to the level of development in 2021 based on a certain number of macroeconomic factors. For the purposes of realizing the formulated goal, the I distance method was applied. A decision for the I distance method comes from the fact that this model satisfies all the conditions characteristic for the nature of distance, that is, for the multidimensional phenomenon of development. Based on the ranking list of Group 8 countries, the United States of America is in the first place, followed by Germany, France, the United Kingdom, Italy, Canada, the Russian Federation and Japan. Speaking about the EU countries, the Netherlands has the highest level of development according to the selected indicators, followed by Ireland, Belgium, Spain, Poland, Sweden, Austria, Denmark, Czech Republic, Luxembourg etc. The coming future will probably bring changes when it comes to the ranking on the ranking list. Changes can be expected due to the war events, demographic trends, technological achievements, and generally the replacement of the leading positions when it comes to resources. Namely, it is certain that the countries that adapt faster to other energy sources as well as to more economical use of the existing ones, will have a leading role on a global scale.</p> </abstract>ARTICLEtrue pandemic impact on investment prospective in selected CEE stock markets: A stochastic dominance approach<abstract> <title style='display:none'>Abstract</title> <p>The COVID-19 pandemic and its impact on the stock markets in the Central and East European (CEE) countries have been investigated in many papers, but mostly from the perspective of the market connectedness and the spillovers. None of the existing researches addressed the potential changes in the investors’ utility in a certain market caused by the pandemics. Therefore, this paper compares investors’ prospective in the periods before and during the pandemics in the selected CEE markets in terms of their utility and provides a new aspect to this research field. The analysis includes Bosnia and Herzegovina, Bulgaria, Croatia, Czech Republic, Hungary, Poland, Romania and Serbia. By using the first two degrees of the stochastic dominance (SD) criteria, market returns before and during the pandemics are compared in order to find dominant (efficient) investment alternative for all investors who prefer greater return and smaller variance (risk averters). This procedure is executed within a certain market and between different markets in these two periods. The results indicate that there is no dominance between pre-pandemic and pandemic returns for all CEE markets when the whole distribution is observed, indicating that the markets generally recuperated in the mid-run. The dominance relations can be found only in the trimmed series. Moreover, it is possible to find CEE markets which dominate over some other, in both pre-pandemic and pandemic period, representing a better investment opportunity for all risk averters.</p> </abstract>ARTICLEtrue housing price nexus<abstract> <title style='display:none'>Abstract</title> <p>Tourism’s positive and negative externalities are of an extreme social and economic importance for the tourism dominant countries. In particular, studying tourism’s impact on housing prices has experienced increased interest over the past decade as it has a relevant influence on real estate economics and housing market development, which spills over the entire economy. Considering the limited existing literature, the objective of this paper is to provide an overview of the previous studies, which summarizes prevailing findings about the impact of tourism on housing prices with respect to three different streams: tourism activity, tourism accommodation capacity and tourism amenities. This paper offers a comprehensive theoretical background and clear-cut insight in tourism’s impact on housing prices, with a great attention to possible issues that may emerge due to tourism heterogeneity across countries. For the same reason, it is beneficiary not only to real estate agents but likewise to decision makers in tourism industry.</p> </abstract>ARTICLEtrue spillover effect of European Union funds between the regions of the new European Union members<abstract> <title style='display:none'>Abstract</title> <p>As the differences between the regions are more pronounced than among the countries, NUTS 2 regions of the new members that joined the EU after 2000 are considered. Due to the presence of externalities between the regions, the Solow growth model using interregional externalities is used. This is modelled by spatial econometrics, the method of maximum likelihood. According to previous research, the effects of European funds in the EU on reducing disparities are not unique, but contradictory. From the mentioned research for new members, we can conclude that the research shows a positive effect of European funds on growth rates. There is a noticeable lack of research analyzing the impact of EU funding on new members after the 2008 crisis, including their mutual regional interaction. The aim is to determine the impact of EU funding on reducing regional disparities as measured by GDP per capita. The paper shows that an increase in European funding increases growth rates, thus contributing to the reduction of interregional disparities. European funding, which is mostly targeted at less developed regions, represents an opportunity for new members and potential new members to move closer to more developed old members. The spillover effect of European funds represents the key contribution to the positive effect of EU funds, i.e. the advantage of the application of spatial econometrics. Also, these spillovers have proven to be an important factor whose omission in models estimated by the OLS leads to bias. Regional externalities should be taken into account in regional divisions by regional policymakers, and in creating the distribution of funds for the next programming period. The effect of funding in the region itself without the spillover effect does not contribute to reducing disparities, which represents a future opportunity, especially for the poorest regions, such as the regions in Bulgaria and Romania.</p> </abstract>ARTICLEtrue influence of recurrent property income and expenditure on house prices in European Union countries: Evidence from a panel model<abstract> <title style='display:none'>Abstract</title> <p>Land value capture can be defined as a policy approach that allows communities to restore and reinvest land value increases that result from public investment and other government actions. For that reason, public action should generate public benefit. The recurrent property tax, one of many tools for land value capture, is the foundation of a stable, enduring revenue source that supports the provision of essential housing and amenities services. This empirical paper aims to examine the influence of recurrent property tax income, and general government spending on housing and community amenities on house prices. To assess the hypothesized direction of the effects, yearly data structured in a balanced panel on a sample of 26 European Union economies from 2010 to 2019 was used. Fixed effects regression model with Driscoll and Kraay standard errors was employed and the results confirmed a negative but statistically insignificant effect of increased property tax revenue on house prices, while increased expenditure on housing and amenities confirmed a positive and statistically significant effect on house prices dynamics in European Union countries.</p> </abstract>ARTICLEtrue the effect of public debt on inflation symmetric or asymmetric? Evidence from the Gambia<abstract> <title style='display:none'>Abstract</title> <p>Several studies have identified the impact of total public debt on inflation. These studies are based on the assumption of a symmetric relationship between these variables. However, because different governments react to changes in total public debt (positive or negative) differently, this study employed the nonlinear autoregressive distributed lag (NARDL) technique to investigate the nature of the link between total public debt and inflation in the Gambia for the period from 1978 to 2019. The results indicate an asymmetric relationship between total public debt and inflation, irrespective of whether the analysis was conducted in the short run or long run. The coefficient of a positive shock in total public debt is statistically significant in the short run and in the long run, suggesting the inflationary effect of positive variation in total public debt in the Gambia. On the other hand, the effect of a negative shock is not statistically significant in the short run or in the long run. These findings reinforce the need for government to approach increase in public debt with caution to minimise volatility in inflation. Overall, this study provides a fresh insight into the optimal estimation technique for testing the public debt–inflation nexus through a nonlinear approach.</p> </abstract>ARTICLEtrue and cash-based earnings management in Algeria: substitution or complementary<abstract> <title style='display:none'>Abstract</title> <p>Managers are often employed many alternatives for earnings management following their objectives or the financial reporting objectives; the commonly used are the accrual-based and cash-based earnings management. The literature reveals that managers adopt the two strategies in different ways, suggesting a mixed relationship between them. Hence, this study investigates the relationship between the two strategies of earnings management in Algeria, whether it is a substitute or complementary. The study included 30 Algerian companies during 2011-2019, so a total of 270 firm-year observations were employed. Accrual-based earnings management was measured through the modified-Jones model, while cash-based earnings management was measured through the abnormal cash flows model. According to the results, Algerian companies engage more in accrual-based earnings management and employ the two strategies as substitutes, which explains the strong and negative effect of accrual-based on cash-based earnings management. We argue that companies engage first in accrual-based earnings management, and then they shift towards cash-based earnings management due to auditors’ scrutiny. Furthermore, we found a positive and a medium effect of return on equity on cash-based earnings management, which reflects the managers’ desire to adjust operating cash flows consistent with the reported earnings. Finally, the results indicated that company ownership, company listing, and the nature of financial statements do not affect cash-based earnings management.</p> </abstract>ARTICLEtrue bootstrapped principal components analysis for logistic regression<abstract> <title style='display:none'>Abstract</title> <p>Principal components analysis (PCA) is often used as a dimensionality reduction technique. A small number of principal components is selected to be used in a classification or a regression model to boost accuracy. A central issue in the PCA is how to select the number of principal components. Existing algorithms often result in contradictions and the researcher needs to manually select the final number of principal components to be used. In this research the author proposes a novel algorithm that automatically selects the number of principal components. This is achieved based on a combination of ANOVA ranking of principal components, the bootstrap and classification models. Unlike the classical approach, the algorithm we propose improves the accuracy of the logistic regression and selects the best combination of principal components that may not necessarily be ordered. The ANOVA bootstrapped PCA classification we propose is novel as it automatically selects the number of principal components that would maximise the accuracy of the classification model.</p> </abstract>ARTICLEtrue determining the operational self-sufficiency of microfinance institutions<abstract> <title style='display:none'>Abstract</title> <p>The main aim of this paper is to explore the factors determining Microfinance institutions (MFIs) self-sufficiency. The data on selected variables for this research were obtained from the public MIX Market Database and cover the year of 2017. The empirical model is constructed with application of a Principal Component Analysis (PCA) and Logistic regression analysis. Sample is consisted of 342 MFIs from all around the world, with 21 independent variables grouped into eight factors/components, and OSS (operational self-sufficiency) as dependent variable. The obtained results suggest that higher revenue and MFIs profitability combined with decrease of credit risk lead to higher probability of MFI to be self-sufficient. These results also confirm widespread belief that MFIs will not be able to achieve their social goals without achieving sustainable profitability. In addition, results also confirm importance of MFIs core mission as with increase in outreach, probability of MFIs achieving self-sustainability also increases.</p> </abstract>ARTICLEtrue debt and inflation dynamics: Empirical evidence from Zimbabwe<abstract> <title style='display:none'>Abstract</title> <p>The study seeks to empirically test the hypothesis that public debt has a significant influence on inflation in Zimbabwe, covering the period 1980-2020. The study was motivated by recent trends in public debt and domestic inflation in Zimbabwe, and the need to guide debt-inflation related policy. These latest trends have started to ring alarming bells, which raises questions on the effectiveness of fiscal and monetary policies in bringing macroeconomic stability in the country. Applying the Autoregressive Distributed Lag (ARDL) bounds testing procedure to cointegration and an error correction mechanism (ECM), expanded by incorporating structural breaks, the study finds evidence in support of positive and significant impact of public debt on inflation dynamics in Zimbabwe, particularly in the long run. Based on the findings, public debt dynamics matter for inflation process in Zimbabwe. That is, fiscal policy can be considered to be an important determinant of the effectiveness of monetary policy in Zimbabwe. Therefore, the government should be mindful of increases in public debt as this was found to be inflationary.</p> </abstract>ARTICLEtrue impact of foreign capital inflows on poverty in Vietnam: An empirical investigation<abstract> <title style='display:none'>Abstract</title> <p>This study investigates the impact of foreign capital inflows on poverty in Vietnam, using annual time series data from 1990 to 2018. The study was motivated by the need to establish if burgeoning foreign capital inflows in Vietnam can support the poverty alleviation agenda. Foreign direct investment (FDI) and external debt were used as proxies for foreign capital inflows; and infant mortality rate, Human Development Index (HDI) and household consumption expenditure were used as poverty proxies. Using the autoregressive distributed lag (ARDL) approach, the study found foreign direct investment to reduce poverty in the short run and long run when household consumption expenditure was used as a poverty measure. However, the study found FDI to worsen poverty in the short run when infant mortality rate and HDI were used as poverty proxies. The study found external debt to have poverty mitigating effect in the short run regardless of the poverty measure used and in the long run only when household consumption expenditure was used as a poverty measure.</p> </abstract>ARTICLEtrue pre-pandemic role of customer online satisfaction in price determination: evidence from hotel industry<abstract> <title style='display:none'>Abstract</title> <p>This study examines the importance of online reviews for price determination in the hotel industry in the pre-pandemic period. The research is conducted for Croatian small open economy with a developed tourism sector. The paper fills the gap in existing literature by using multivariate principal component analysis to group various customer satisfaction categories in the hotel industry and assessing the relationship between customer satisfaction and hotel price. The conducted empirical analysis points to a positive statistically significant relationship of guest satisfaction and hotel prices. Moreover, linear regression modelling is conducted separately for four-star and five-star hotels. The estimated impacts are statistically significant and positive, but the effects are twice as strong in five-star hotels then in four-star hotels. The obtained results indicate that hotel star rating impacts the strength of the relationship between hotel prices and guest satisfaction. Recognizing the link between hotel ratings, online reviews and pricing is essential both for hotel managers and customers. Hence, the paper provides valuable conclusions from the aspect of supply and demand side in the hotel industry.</p> </abstract>ARTICLEtrue