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Abstract

Business transfer as a research topic awakened the interest of researchers in the past few decades. Business transfer is defined as a change of ownership of any firm to another person or legal entity assuring the continuous existence and commercial activity of the enterprise, and it encompasses different kinds of transfers both to family and non-family members. Ageing and consequently retirement are often mentioned as the reasons for entrepreneurs’ exits from the companies and intention to initiate the business transfer process. A successful business transfer process is one of the key prerequisites for long-term sustainability of small and medium-sized enterprises. There is a significant number of ageing business owners in Croatia who will exit their companies in the coming years. Considering the number of these entrepreneurs and the influence their exits can have on company stakeholders and national economy in general, it is of great importance to better understand the factors that can influence the choice of their exit strategies. The aim of the paper is to provide an understanding of the dilemmas that the ageing entrepreneurs face when considering different exit modes. The data for the study was collected through in-depth, semi-structured interviews conducted with six ageing business owners. The analysis of the interviews enabled the identification of the challenges that ageing entrepreneurs face in the business transfer process: emotional attachment to the firm, strong preference for family succession and concerns about financial security after retirement. Some of these challenges are a result of the undeveloped business transfer ecosystem, strong tradition and cultural values that imply family succession as the only acceptable exit strategy for retiring company owners in Croatia.

Abstract

Crises cause attentiveness in our society and awaken, depending on the degree of consternation, our ongoing interest. These events include financial crises, phenomenal incidents that shock the economic world and pose significant challenges for the governments. Two crises which stand out in this context are the Great Depression in 1929 and the financial crisis in 2007/2008. In addition to the comparative approach, the paper focuses directly on the typical repetitive mechanism (“recurrent pattern of banking and sovereign debt crises” (Reinhart & Rogoff, 2011): overheating, the forming of a bubble and the bursting of the bubble, largely started in the USA. Specific aspects included in this research area are crisis management in the decades mentioned above, the role of governments and banks, as well as the observation as to which crisis can be expected next. We can conclude that the current monetary systems led by complex financial instruments and addicted to low interest rates are prone to deliver another serious financial crisis.

Abstract

Model M means being young and being a role model for others in finding innovative employment or creating one’s own employment, and thus becoming and remaining an active citizen. In years 2012-2018, IRDO – Institute for the Development of Social Responsibility – implemented the project Model M Slovenia. The project started in the Podravje region, in years 2012-2014, with a small amount of money invested by the local community (The City Municipality of Maribor). Later (in years 2016-2018), it became a nation-wide Slovenian project funded by the EU’s Social Fund and the Republic of Slovenia. The purpose of the project was to empower youth with training, networking, counselling and active participation in the society to create their own models of success. In this paper, we present the Model M method (MMm) that we have developed through the Model M Slovenia project and its social impact on the employment of youth in Slovenia. With the Social Return on Investment (SROI), a method for social impact measurement, we present how the funds invested in the local pilot project were later multiplied tenfold on a national level within the project Model M Slovenia. The originality of the MMm, as presented in this paper, is in its requisitely holistic approach to youth training in terms of personal and social responsibility. The MMm is accelerating the (self) employment of youth and other unemployed persons. The MMm was created by a team of business practitioners and social responsibility researchers. Their aim was to practice and develop social responsibility, interdependence and requisitely holistic approach as a systemic behaviour, suggested by the global humankind in the ISO 26000 guidance standard.

Abstract

The spatial structure of the world is unequal, centres and peripheries alternate. There are significant social and development differences between countries in the world, but there is also an unequal development within the countries. The main purpose of the regional policy is to reduce spatial inequalities by catching up the underdeveloped areas. Nowadays, in the era of the Fourth Industrial Revolution, technological progress creates possibilities for developing regions to catch up, because new technologies require new skills that are less dependent on factor endowments of countries. Most economies are unable to create new technologies because they do not have the appropriate resources or their institutional environment does not favour innovation. However, technological progress can also be observed in these countries by adopting and applying new technologies effectively. This research aims to illustrate the regional differences in the conditions of technological progress in Europe, using multivariate statistical methods. Based on the European Regional Competitiveness Index, the research question to be analysed is whether new technologies may be able to decrease spatial differences. We compare the European regions in the field of innovation in order to highlight the critical areas that can promote or prevent the reduction of inequalities.

Abstract

The paper is intended to provide information on the trade war between China and the USA. It analyses the consequences of the trade dispute, discusses the impact on an Austrian company in the steel sector, gives an overview of possible strategies with which companies can reduce the negative effects of tariffs and discusses strategies that are good options for companies in the steel industry. The methodology applied included theoretical and empirical research based on quantitative analysis as well as quantitative research in the form of expert interviews. The results show that the trade war between China and the USA was in full swing until January 2020. The impacts do not only affect the parties involved, but also other parties such as the EU. Companies can use a variety of strategies to mitigate the negative effects of trade wars. The best strategy for a company depends on the structure of the company, its products and its competitors. The paper adds new insights to the existing literature on the trade war between China and the US and its effects, strategies to mitigate the negative effects of tariffs and discussions on optimal strategies for companies in the steel industry.

Abstract

Government purchases represent an important part of the world economy. Selling to the public sector is a key business activity for certain industries or service providers. The public procurement segment’s attractiveness is also underlined by the security of payment and large extent of supplies. With globalisation as a worldwide phenomenon, businesses do not have to rely only on domestic institutions; they can enter international B2G markets as well. However, the ability of private companies to do business with foreign governments is limited by various national legislations as governments settle the procurement regulation with respect to their national interests. In the following overview article, the authors analyse the two main and typical procurement types – traditional procurement and public-private partnership – with regard to recent development trends, international regulatory framework, opportunities and barriers to entry for European businesses. The main goal of the paper is to define, based on this analysis, the main differences and possible synergies of the traditional procurement and public-private partnership while focusing on cross-border contracts. This paper can be regarded as useful for business, academia as well as the public sector.

Abstract

The energy sector is characterized by market and monopoly activities. Monopoly activities include network activities, transmission and distribution of electricity, and transport and distribution of natural gas. For this reason, the revenue of the network activities is defined as allowed income, and it is under the control of the national energy regulator. In Croatia, this is the Croatian Energy Regulatory Agency. The allowed revenues of the network system operator in the Croatian energy sector are defined by the methodologies for individual network activities, which are based on the method of eligible costs. Network activities are usually capital-intensive activities. Capital cost is an element of the eligible cost method and is accounted for as a weighted average cost of capital (WACC). WACC affects the allowed revenue of the network system operator and the network tariff. It depends on the interest rates on debt capital, the risk-free rate, the market risk premium and the corporate tax rate. Changing the interest rate on the capital market, which also depends on the credit risk of the country, affects both the change in WACC and the change of tariffs for transport / transmission of energy. Amortization and operating expenses of the network operator, approved by the energy regulator, also have a significant impact on allowed revenues. The impact of the WACC change on the allowed revenue and network tariffs of network system operators has a different impact on the network tariffs, which depends on the structure of the eligible costs of a particular network system operator. Changing WACC affects the changes in tariffs of the network system operator. The aim of the paper is to determine how an interest rate change affects the WACC and how the change in WACC affects the change in the allowed revenue and the network tariff of the gas transport operator and the transmission of electricity in Croatia. The paper will analyse the tariffs of electricity transmission and natural gas transport in Croatia and compare them with those in the European Union.

Abstract

Capital structure refers to the delicate balance between equity and debt that a company uses to finance its assets. It is typically expressed as a debt-to-equity or debt-to-capital ratio, with the components usually located on the right side of the company’s balance sheet. Capital structure can exert great influence on the company’s risk profile and ability to leverage its operations. For this reason, the authors conducted an investigation of the capital structure of 16 joint stock companies listed on the Zagreb Stock Exchange comprising CROBEX, the equity index of Croatia for a three-year period starting in 2015 and ending in 2017. The study demonstrates that many CROBEX-listed companies are very risk averse and choose to remain debt-free. Some are, however, starting to discover the potential offered by financial leverage and have slowly started adjusting their capital structure. In conclusion, capital structure is slowly becoming an issue worthy of discussion on the corporate agendas in Croatia.

Abstract

This paper discusses the harmful tax practices of multinational enterprises (MNEs) and the fight of international organizations against them. We focus on the anti-tax base erosion and profit shifting project (anti-BEPS project) of the Organisation for Economic Co-operation and Development (OECD), namely its 15 actions, which we present in the first part of the paper, using descriptive and analytical methods. In the second part, we use critical and synthetic methods to assess how the selected aspects of multinational business will be impacted with described actions. Our conclusions show that MNEs will have to adapt their business structures and plans according to new tax regulations, which will also lower their profit levels due to unavailability of established harmful tax structures for lowering their tax bases. At the same time, our results indicate that the legal approach in introducing new measures on the subject field, lead to legal uncertainty in tax matters. Due to the scope of analysed problems, it was impossible to introduce individual problems in depth; however, we provide readers with the general characteristics and goals of introduced actions that are necessary for understanding our evaluation of their impact on certain fields of international business. Our paper contributes to literature and practice, as it provides general insight into recent and important international tax law developments that enterprises will have to consider when doing business across borders.

Abstract

The paper is focused on the results of the first conducted sectoral interim evaluation in Croatia, that of the Croatian Tourism Development Strategy till 2020. The authors reflect on the methodology used, the applied approach, the objectives and scope of the recently implemented interim evaluation of the mentioned Strategy. They comment on the purpose and functions of this sectoral evaluation and observe objectively its role from the point of view of achieving effectiveness, long term, and concrete and sustainable development impacts in the sector of tourism. The main findings of the conducted evaluation are presented, based on a number of held interviews and a survey with the main policy makers, civil servants as well as all key stakeholders in the tourism industry. Particular focus is given to evaluation questions and judgement criteria based on the evaluation criteria of effectiveness, impact and sustainability. The authors indicate some of the positive achievements, and particularly the current problems and challenges in the segment of tourism in Croatia in the period until 2020 and beyond. Along with observations related to the issues of accountability in the sector, the paper also provides reflections on the learning effects as the end result of such an evaluation, contributing to further policy development and policy learning in the sector of tourism. The authors indicate that their experience with this first interim evaluation could serve as a good practice example for conducting similar sectoral evaluations in Croatia as well as a tool for further long term development of tourism in the country, since the sector is of pivotal importance for Croatia’s local, regional and urban development as well as its overall economic competitiveness. Particular attention is given to some of the noted deficiencies and needs for further improvements in this sector, vital for Croatia’s further development. Recommendations are provided for improvements of the overall Croatian tourism development policy, with specific focus on the effectiveness of the so far achieved results as well as sustainable implementation of the Strategy and overall policy, aiming at reaching major and more concrete development impacts in the field of tourism.