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Factors that Determine the Capital Structure: An Empirical Study on Low-cost Airlines

Abstract

The purpose of this study is to identify the factors that determine the capital structure of low-cost airlines. Accordingly, it is aimed to test the factors that determine the capital structure in low-cost airlines in the context of capital structure theories. In the study, 15 airline companies, which had continuous financial data during the 2004-2015 period, were examined empirically. Panel data analysis was used as a method in the study. Findings of the study show that low-cost airlines generally operate based on the trade-off theory while borrowing in the short-term and based on the pecking order theory while borrowing in the long-term.

Open access
Finance-Growth Nexus Revisited: Empirical Evidence from Six Countries

Abstract

This paper investigates the dynamic causal relationship between bank-based financial development and economic growth, and between market-based financial development and economic growth in six countries during the period from 1980 to 2012. The causal relationship was found to vary largely across countries and over time. In general, bank-based financial development seems to Granger-cause economic growth in the UK and only in the long run in Australia. However, there is a feedback loop in Brazil and Australia, but only in the short run for the latter. In Kenya, South Africa and USA, the results support the neutrality hypothesis. The study results further indicate short-run unidirectional causality from market-based financial development to economic growth in the USA. Evidence of the feedback loop was found in Kenya, while the demand-following hypothesis found support only in South Africa and Brazil. However, the neutrality view was supported in Australia and the UK.

Open access
High-Dividend Portfolios with Filters on the Financial Performance and an Optimization of Assets Weights in a Portfolio

Abstract

This paper is dedicated to the investigation of the strategies related to the high-dividend portfolio investment. The aim of this research is to increase the high-dividend portfolio efficiency by adding some filters and optimization weights of the assets in the portfolio. In order to achieve this goal, the authors complement the classical version of the «Dogs of the Dow» strategy with financial indicators ROA and P/E with equal and optimized weights of the assets in each portfolio. Two additional parameters are also used in the process of testing: the number of stocks and the month of the annual portfolio rebalancing. Thus, the obtained models have high-quality advantages in comparison with the traditional concept of high-dividend investing, eliminating its inherent disadvantages and providing higher rates of return.

Open access
The Importance of Intangible Assets in the Hotel Industry: The Case of Croatia and Slovenia

Abstract

Studies show an increasing importance of intangible assets (hereinafter IA) and a positive relationship between IA and company performance. The purpose of this paper is to analyse the importance of IA for Croatian and Slovene hotel companies and to find out whether companies with a higher share of intangibles are also more profitable. The analysis is based on publicly available financial statements for the five-year period, from 2011 to 2015. The results show that the average share of IA presented in the balance sheets of the analysed hotel companies is low in both countries. Moreover, we could not find a statistically significant relationship between the share of IA and the selected financial performance indicators. The results of our study show that despite the emphasised importance of IA in literature, the publicly available financial data of the selected hotel companies provides very limited information on IA for external stakeholders.

Open access
Strengthening the Team Performance through Personality and Emotional Intelligence: Smart PLS Approach

Abstract

The aim of the current study is to analyze the relationships of Emotional Intelligence (EI) dimension and Personality (P) traits of individual towards Team Performance (TP). The current study analyses the effect of Emotional Intelligence (Goleman, 1995) and personality (Big Five personality; Gosling et al., 2003) traits for Air India employees’ Team Performance. This study has used a simple random sampling method with a sample size of one hundred and twenty five employees from Air India. The Current study uses Smart PLS based Structural Equation Modeling approach and the results shows that Personality and Emotional Intelligence affects the team performance by 72.080% which is a considerable effect and this concludes that EI is a vital factor and it is considered as work place glue of individual personality and team performance of the contemporary organization..

Open access
Hedging effectiveness for international index futures markets

Abstract

This paper investigates the hedging effectiveness of the International Index Futures Markets using daily settlement prices for the period 4 January 2010 to 31 December 2015. Standard OLS regressions, Error Correction Model (ECM), as well as Autoregressive Distributed Lag (ARDL) cointegration model are employed to estimate corresponding hedge ratios that can be employed in risk management. The analyzed sample consists of daily closing market rates of the stock market indexes of the USA and the European futures contracts. The findings indicate that the time varying hedge ratios, if estimated through the ARDL model, are more efficient than the fixed hedge ratios in terms of minimizing the risk. Additionally, there is evidence that the comparative advantage of advanced econometric approaches compared to conventional models is enhanced further for capital markets within peripheral EU countries

Open access
Inner Life, Meaningful Work, Conditions for Community, and Organisational Citizenship Behaviour

Abstract

This paper investigated the relationship that exists among inner life, meaningful work, conditions for community, and organisational citizenship behaviour amongst Nigerian academics. The study embraced a quantitative approach using survey research design, which is ex post facto in nature with the engagement of quantitative and correlational methods. Thus, a convenience sampling technique was utilised to administer 328 questionnaires amongst the academics of two Nigerian public universities. Three hypotheses were stated and tested using inferential statistics tools via the IBM Statistical Package for the Social Sciences (SPSS) version 20 and the Analysis of Moment Structure (AMOS) version 22. The multivariate statistical processes used in this paper are confirmatory factor analyses, structural equation modelling, as well as model fit indices. The results indicated an insignificant positive relationship between inner life and organisational citizenship behaviour. However, it was evident that a strong positive relationship existed between conditions for community and organisational citizenship behaviour. In contrast, the study revealed that there was no significant relationship between meaningful work and organisational citizenship behaviour. Therefore, this paper concludes that the management of universities should always communicate the mutual benefit of engaging in organisational citizenship behaviour to the members of their staff through effective conditions for community, such as aiding of staff personal growth and fair evaluation of work.

Open access
Latvian High-Tech Industry: Trends and Developments

Abstract

The paper covers analysis of high-tech industry development in Latvia, as well as its facilitating and restricting factors. High-tech industries become more important in Latvia both in terms of export share and generated value added; also the number of enterprises and employees is increasing. A stable political system, enabling business environment, a relatively low corporate income tax rate, and government aid are considered as some of the most important facilitating factors. The paper emphasizes the government’s role in promoting and developing the high-tech manufacturing. The most significant limitations are the lack of skilled specialists and sophisticated real estate space, and the remote industrial supply companies and the service centres. Recommendations are given on the possible development directions, including improvements in manufacturing infrastructure, enhancements of the skill level of the labour force, and bringing up a new generation of entrepreneurs.

Open access
Stock Market Volatility Measure Using Non-Traditional Tool Case of Germany

Abstract.

This study examines the stock market volatility of German bench-mark stock index DAX 30 using logarithmic extreme day return. German stock markets have been analyzed extensively in literature. We look into volatility issue from the standpoint of extreme-day changes. Our analysis indicates the non-normality of German stock market and higher probability of negative trading days. We measure the occurrences of extreme-day returns and their significance in measuring annual volatility. Our time series analysis indicates that the occurrences of extreme-days show a cyclical trend over the sample time period. Our comparison of negative and positive extreme-days indicates that negative extreme-days overweigh the positive extreme days. Standard deviation, as measure of volatility used traditionally, gives altered ranks of annual volatility to a considerable extent as compared to extreme-day returns. Lastly, existence of extreme day returns can be explained by past period occurrences, which show predictability.

Open access
Comparing Simple Forecasting Methods and Complex Methods: A Frame of Forecasting Competition

Abstract

The gross capital formation (GCF), which helps to gradually increase GDP itself, is financed by domestic savings (DS) in both developed and developing countries. Therefore, forecasting GCF is the key subject to the economists’ decisions making. In this study, I use simple forecasting methods, namely dynamic relation model called “Autoregressive Distributed Lag Model (ARDL)”, and complex methods such as Adaptive Neuro Fuzzy Inference System (ANFIS) method and ARIMA-ANFIS method to determine which method provides better out-of-sample forecasting performance. In addition, the contribution of this study is to show how important to use domestic savings in forecasting GCF. On the other hand, ANFIS and hybrid ARIMA-ANFIS methods are comparatively new, and no GCF modeling using ANFIS and ARIMA-ANFIS was attempted until recently to the best of my knowledge. In addition, Autoregressive Integrated Moving Average (ARIMA) method and Vector Autoregressive (VAR) model serve as benchmarks, allowing for fair competing for the study.

Open access