Editorial introduction

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The aim of this paper is to investigate interdependencies between the WIG20 index and economic policy uncertainty (EPU) related keywords quantified by a Google Trends search index. Tests for two periods from January 2015 till December 2019 and from June 2016 till May 2021 have been performed. This allowed the period of relative stability from the time of economic shock caused by the COVID-19 pandemics followed by various restrictions imposed by the governments to be distinguished.
A bivariate VAR model to selected search terms and the value of the WIG20 index was applied. After using AIC to establish the optimal number of lags the Granger causality test was performed. The increased empirical relationship has been confirmed between twelve EPU related terms and changes in the WIG20 index in the second period versus six terms for the pre-COVID period. It was also found that in the post-COVID period the intensity of reverse relations increased.
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Department of Operations Research and Mathematical Economics

Poznań University of Economics and Business

How Google Trends can improve market predictions— the case of the Warsaw Stock Exchange

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The paper employs a threshold regression framework conditioned by two COVID-19 related proxies, to investigate whether Bitcoin and Ether exhibit short-term safe haven or diversifier features for stock and bond markets. Both cryptocurrencies fulfil a diversifier role for the responsible investments represented by sustainable stock market indices, a safe haven role for major bond markets and a mixed role for a selection of representative stock market indices. Furthermore, in times characterized by an increasing number of COVID-19 daily cases or deaths the statistical relationship between both cryptocurrencies and the main financial market determinants weakens.
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Are cryptocurrencies safe havens during the COVID-19 pandemic? A threshold regression perspective with pandemic-related benchmarks

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The aim of the article is to examine the influence of institutional investor ownership on real earnings’ management (REM) practices through a meta-regression analysis (MRA) based on a sample of 225 estimations from 19 articles. Some of the available research suggests a mitigating role for institutional investors who can serve as external monitors and thus reduce earnings’ management activities which could have a negative impact on the company’s value. The results obtained from the basic model confirmed neither the hypothesis about the influence of institutional ownership on REM, nor the hypothesis about the existence of a significant publication bias. Using an augmented MRA model conclusions in different areas associated with structural and methodological heterogeneity were drawn. Differences in the impact of institutional ownership on real earnings’ management in different regions of the world, a dependence of the results on different data characteristics and differences in the results depending on whether the article was published in a top journal or not were found.
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Institutional investors and real earnings management: A meta-analysis

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Banks and financial intermediaries are exposed to market risk. The aim of the paper is to explore the implications of legal requirements on market risk valuation. The focus is on the calculation of the permissible weighting factor of the concept of value-at-risk (VaR). When measuring market risk, banks and financial intermediaries may deviate from equally weighting historical data in their value-at-risk calculation and instead use an exponential time series weighting. The use of exponential weighting in the value-at-risk calculation is very popular because it takes into account changes in market volatility (immediately) and can therefore quickly adapt to VaR. In less volatile market phases this leads to a reduction in VaR and thus to lower own funds’ requirements for banks and financial intermediaries. However, in the exponential weighting a high volatility in the past is quickly forgotten and the VaR can be underestimated. To prevent this banks and financial intermediaries are not completely free to choose a weighting (decay) factor. The exchange rate between Polish zloty and euro is used to estimate the value-at-risk as an example and exceptions to the general legal requirements are also discussed.
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Market risk, value-at-risk and exponential weighting

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The aim of this study is to investigate the influence of military expenditure on the relationship between terrorism and investment in twenty-four African countries for the period 2001 to 2018. The study utilizes fixed effects regression with Driscoll and Kraay standard error and cushions the effect of simultaneity and reverse causality using the lags of the regressors as instruments. The empirical results reveal the negative effect of terrorism on both domestic investment and foreign direct investment (FDI). The study further reveals a negative net effect of military expenditure on the relationship between terrorism and investment. Furthermore, it was discovered that a threshold of 2% to 5% of military expenditure in GDP is required for military expenditure to offset the negative effect of terrorism on FDI. The study recommends that counter-terrorism initiatives be tailored more towards inclusive growth policies, increasing access to education, and improving the quality of governance.
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Terrorism and investment in Africa: Exploring the role of military expenditure

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The aim of this study is to analyse changes in employment and their determinants in twenty sectors of economic activity in Poland during the COVID-19 pandemic. The study focuses on the direct short-run employment effects. The changes in employment in the pandemic period (restricted to 2020q2–2021q2) with the changes in the pre-pandemic period (2015q1–2020q1) are compared. Statistics Poland and Eurostat are the sources of data. The analyses are based on quarterly and annual frequencies and cover the period from 2015q1 to 2021q2. Changes in employment are explained by the changes in gross value added, the differences in elasticities of employment with respect to the gross value added and the impact of the pandemic period. The results suggest that employment was affected by a reallocation shock—a decrease in employment that occurred in some sectors (e.g. arts, entertainment and recreation) was associated with an increase in other sectors (e.g. human health and social work activities).
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Sectoral changes of employment in Poland during the COVID-19 pandemic: Are reallocation shock effects applicable?

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The primary aim of the paper is the empirical verification of the hypothesis on the convergence of real GDP <italic>per capita</italic> of the regions (NUTS-2) in Poland and the catch-up effect of Eastern towards Western Poland. The empirical study is based on a relatively new analytical approach of Phillips and Sul convergence tests which consider significant differences in technological advancement between regions. The results show that the convergence hypothesis was rejected in the group of all regions of Poland and the group of Western Poland regions. Convergence was confirmed in the group of Eastern Poland regions. The strict catch-up effect of the Eastern towards the Western Poland regions was not observed. Nevertheless, thirteen of seventeen regions of Poland were characterised by convergence but within distinct convergence clubs. The identification of convergence clubs, however, was not determined by a sharp East-West Poland dividing line.
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Is the division of Western and Eastern Poland still valid? The evolution of regional convergence in Poland

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Economics and Business Review

The aim of Economics and Business Review is to provide a platform for academicians from all over the world to share, discuss and integrate their research in the fields of economics and finance, including both behavioural economics and finance, with a key interest in topics that are relevant for emerging market economies. The journal welcomes submissions of articles dealing with micro, mezzo and macro issues that are well-founded in modern theories or based on empirical studies and which are valuable for an international readership.   The journal is published in English. Texts are double-blind peer-reviewed by independent specialists from Polish and foreign academic centers. The journal is open for contributions from economists and management specialists both from Poland and abroad.  Economics and Business Review is scored 70 points in the Ministerial List of Journals.  The journal is edited and published in the paper form and also presented on-line.  This journal is the open access and non-profit enterprise.  The journal have no articles processing charges (APCs) nor article submission charges.  Archiving  Sciendo archives the contents of this journal in Portico - digital long-term preservation service of scholarly books, journals and collections.  Plagiarism Policy  The editorial board is participating in a growing community of Similarity Check System's users in order to ensure that the content published is original and trustworthy. Similarity Check is a medium that allows for comprehensive manuscripts screening, aimed to eliminate plagiarism and provide a high standard and quality peer-review process. 