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The Dividend Policy of Companies Listed on the Warsaw Stock Exchange

Abstract

Dividend policy is created and formulated by companies. For this reason, the focus of the analysis is on the message conveyed by the information on the dividend payout, the relationship between the dividend and financial indicators, the continuity of the payout and the amount of the dividend itself. Decisions on the dividend payment include two basic issues: what portion of profits should be paid out over a certain period of time and whether the company should maintain a steady and stable growth rate. If a steady and stable growth rate is maintained, then the level of earnings will increase from year to year. This phenomenon is confirmed by the growing number of companies paying dividends. The purpose of the article is to indicate significant differences in stock prices before the dividend payment and after the dividend payment, and to indicate significant differences in stock prices before the announcement of the dividend right and after the announcement of the dividend right.

Open access
Monte Carlo Simulation Approach to Calculate Value at Risk: Application to WIG20 and MWIG40

Abstract

This paper reports our estimates of the Value at Risk using Monte Carlo simulations for which we developed a computer program. Our approach involves obtaining Monte Carlo parameters by fitting real historical data of different periods to probability distributions. We applied the algorithm to the WIG20 and mWIG40 stock indices, and performed simulations for the Value at Risk at 95% and 99% confidence intervals over six estimation periods ranging from 1 trading day to 250 trading days. This approach was evaluated using the percentage failures and the Kupiec Proportion of Failures test. Our results indicate that this method is highly influenced by the choice of past historical and estimation period lengths considered. Overall, we observed that the Monte Carlo computational scheme is a reliable method for quantifying VaR when parametrized well.

Open access
Performance Changes Around Banks Mergers and Acquisitions: Evidence from Poland

Abstract

This study investigates the influence of M&A on the performance of banks operating in Poland. We use a sample of 14 transactions that occurred in the Polish banking sector from 2001 to 2015. Our data set includes pre and post-merger accounting information covering a period of two years before and after the merger. We follow Pilloff’s [1996] approach to determine the average performance changes measured with ROAA and ROAE. According to the research results, M&As transactions seem to affect profitability as both ROAA and ROAE means change. However, these changes do not follow the same trend. The correlations between the acquirer’s pre-merger weighted performance measured with ROAA and ROAE and merger-related changes in performance are significant and negative. The same situation is observed as regards the target pre-merger weighted performance measured with ROAE and merger-related changes in performance. The results also suggest that large acquirers are associated with less successful M&A.

Open access
R&D Expenditure and the Role of Scientists

Abstract

An effective knowledge-based economy requires regular cooperation between science and business. This is possible thanks to enterprises that create and implement innovations The paper focuses on the recognition of R&D expenditure. This aims to verify if firms with a scientist on their board are more likely to invest in the R&D. We conduct a tobit panel analysis of over 18,000 Polish private firms combined with data on patents and scientists employed at universities. The findings show that firms with scientists on the supervisory board are likely to invest more in R&D. However, these investment in R&D of firms with a scientist on the board are financial constraint. Their growth depends on access to finance. Therefore, institutions in Poland should support and promote cooperation between science and business, aiming for the realization of the implementation research. This approach requires updated regulations in the accounting area relating to the recognition of R&D inputs and outcomes.

Open access
Theory and Practice of Innovation Development in the Banking Sector

Abstract

The aim of this article is to systematise the approach to innovation in the economic theory and to define the indicators used to measure the innovativeness of world economies. The considerations are focused on innovation in the banking sector as it is one of the most innovative sectors worldwide. The identification of the stages of innovation development in this branch is worth emphasising, along with the description of its economic and legal determinants.

Open access
The Use of Operational Cash Flow in the Estimation of Accrual-Based Earnings Management

Abstract

One of the most important analytical spheres enabling the diagnostic estimation of intentional changes in a company’s financial result is the area of accrual adjustments of net profit, separated in the cash flow statement prepared using the indirect method. The special cognitive value of accrual differences can be seen when the structure of total accruals is separated by those adjustments that are not directly related to the real activity of the enterprise, and are the result of subjective accounting choices. The main objective of the article is to present the selected econometric models used for examining accrual-based earnings management phenomenon in Poland. The analysis includes following regression models, namely: the Jones model, the Kasznik model, the Dechow-Dichev model and the McNichols model. The empirical studies were conducted among listed companies qualified for the Warsaw Stock Exchange indices: WIG-20 and mWIG-40, whose shares were traded for at least ten years in 1998-2017.

Open access
Causality Analysis Between Stock Market Indices

Summary

The paper examines relationships between selected stock market indices in Western Europe, Central Europe, and the United States. The study focuses on two periods, from January 1998 to August 2006 and from September 2006 to December 2016. The first one includes stock quotes from before the financial crisis while the second one covers the crisis and changes in the economic situation in post-crisis years. Relationships between stock market indices in developed economies were more frequent and durable than in Central Europe, although they were subject to changes. In our investigation into Granger causality relationships we observed changes in these relationships and in their direction for stock markets in Central Europe, while bidirectional relationships between indices in developed economies remained stable over time. Changes in relationships between indices, in particular long-term interdependences, may result from the impact of the 2008 financial crisis. The increased number of causality relationships for the markets in Central Europe may testify to the advancing integration of the EU common market.

Open access
Cost Analysis in the Audit of Selected Companies in Poland

Abstract

The aim of the article is to present the issues related to the work of auditors in the area of cost analysis as an element of the financial statement in an enterprise. Empirical studies were conducted on the basis of the financial statements published by selected companies listed on the NewConnect market in 2017, as well as the audit reports issued for those companies. The partial goals include the assessment of the percentage of certain types of opinions issued by independent auditors reviewing the financial statements of selected companies listed, as well as the identification of the areas regarding costs of activities, which are most often described in the explanations or qualified opinions in the research sample under analysis. The undertaken research are preliminary and in the future should be carried out on a larger research sample divided into industry sectors

Open access
Economic Factors in the Process of Calculation of Annuities in Bodily Injury Compensation Claims Under Liability Insurance

Abstract

The article constitutes a legal and economic discussion of the economic factors which may and should be taken into account while calculating the benefits compensating the loss of income of the injured and of their families in case of death. The analyzed benefits are an important element of compensation of economic loss in personal injury cases where the compensation is the duty of the perpetrator (or the entity responsible for him/her) within the system based on tort liability. In light of the ubiquitous nature of TPL insurance, the payer is usually the insurance company liable under the granted guarantee. The scope of such cover results from the contract and/or legal acts. The subject calculation was based on an actuarial annuity which also takes into account the likelihood of the claimant and his/her relatives living until the subsequent periodical payments. The applied calculation is of an illustrative nature with regard to the considerations of the relevant economic assumptions made at the time of loss calculation. The discussion carried out in the article concerns the size and value of the economic factors that can be used in this model.

Open access