SciPap, Volume 30, Issue 2 (2022)

https://doi.org/10.46585/sp3002


Open Access Article SciPap-1599
Evolution and Structure of Public and Private Funding of Clusters in Europe: Results of Three Original Independent Questionnaire Surveys
by Peter Burger

Abstract: Data collected from three self-administered questionnaire surveys conducted in 2011, 2016, and 2022 are used in this scientific paper. The paper aims to analyse the revenue structure of European clusters and focus on identifying possible differences in their funding in 2011, 2016, and 2022. Over eleven years, the revenue structure of clusters has changed to some extent, and the evolution and extent of these changes are the subjects of this paper. At the same time, it is necessary to determine whether the relatively high level of dependence of European clusters on public resources continues to persist or decreases or increases over time. The results show that the differences in the funding of the clusters studied in the selected years are statistically significant. The share of public and private funds has varied particularly over the last five years, and the share of public resources in cluster budgets has been steadily increasing. When comparing the shares of different public and private funding types, significant differences were observed for most clusters during the period under review. One of the few resources that have had a constant representation in cluster budgets over the whole period is the EU Structural Funds and Community Programmes, whose share in the budgets of European clusters has fluctuated only slightly, according to our statistical survey. Similarly, there has been no change in the share of credit instruments, such as bank loans, in cluster budgets. This share is consistently meagre in all three questionnaire surveys, which means that European clusters hardly use this funding source.
Keywords: Clusters, Cluster Policies, Financing Clusters, Public/Private Resources, Financial Structure
JEL classification: O31, O38, R58

Open Access Article SciPap-1598
The Right Time for General Road Tax: Evidence from the Czech Republic
by Petr David

Abstract: Road transport is a source of emissions of which nitrogen oxides (NOX), particulate matter (PM2.5), and carbon dioxide (CO2) emissions are most damaging. The economic inefficiency caused by not including the emission externalities of vehicle operation in prices can be improved by using a vehicle use tax. In the Czech Republic, however, a large part of the vehicle fleet is exempt from this tax, which is thus not general. This part of the fleet thus escapes taxation, for which there is no economic justification. To identify the actual ratio of emissions indicators of operating fleet segments in relation to vehicle use tax we use unique dataset composed of national emissions inventories data of the Copert program, road vehicle register data and vehicle testing stations data. It is also possible to quantify emissions production and determine the external costs of NOX, PM2.5, and CO2 generated by road transport segments in the Czech Republic. It was found that half of the production of the emissions in road transport in the Czech Republic representing almost 60% of the environmental costs were not covered by the existing tax due to the exclusion of part of the vehicle fleet from this taxation, especially private passenger vehicles.
Keywords: Road Transport, Mileage, Emission, Vehicle Use Tax, Environment
JEL classification: H21, H23

Open Access Article SciPap-1568
The Influence of COVID-19 Pandemic on Digital Transformation Process and Strategic Management in a SMEs in the Czech Republic
by Tomáš Červinka, Petr Novák

Abstract: In this qualitative study, we provide insight to the influence of COVID-19 pandemic on the digital transformation process and strategic management in SMEs in the Czech Republic. Digital transformation is perceived as a driver of growth and competitiveness, defined by new technologies and approaches, and strongly connected with strategic management and strategic approach. Drawing on SME employees experience with recent pandemic situation, we analysed and addressed the factors that influence digital transformation process and strategic management to reveal and describe, what drives or slows the process. Our findings have been founded on several case studies carried out in SME organizations via series of interviews that involved employees of various level and specialization. Results reveal that influence of pandemic on digital transformation process and strategic management may vary according to individual experience, which opens the possibility for contextualization and further research using quantitative methods. The results indicate that the influence of covid19 pandemic on strategic management and digital transformation process generated both positive and negative experience. It was perceived as an accelerator of change, speeding up rigid or long-postponed processes and implementations, but also carrying negative effects as employee attrition, loss of morale and motivation and resignation. This research contributes to prior literature on digital transformation and strategic management by investigating the influence of unprecedent events of multinational impact on SME digital transformation process.
Keywords: Strategic Adaptability, Qualitative Interpretative Research, Competitive Advantage., Change Management, Covid-19, Strategic Management, Digital Transformation
JEL classification: M10, M54, O31

Open Access Article SciPap-1565
Sensitivity of Economic Branches to Changes in Production Volumes
by Dagmar Čámská, Jiří Klečka, Hana Scholleová

Abstract: The paper aim is to verify industry sensitivity to changes in production volumes (sales). Sensitivity confirmation is not based on the data describing economic downturn but on permanent internal industry factors. Internal factors take into consideration cost dependency on changes in output quantity produced. Ex ante analysis would discover why some industries would be more vulnerable than the others when significant economic disruption occurs. It has a serious impact on industry performance and business competitiveness position. The examined sensitivity will be expressed by the indicator degree of operating leverage (DOL). The verified assumption should classify neutral industries as sectors with low sensitivity and cyclical branches as industries with high sensitivity. The research is based on the data of more than 1,000 enterprises belonging to four industry sectors. Cyclical industries are represented by CZ-NACE 29 Manufacture of motor vehicles, trailers and semi-trailers and CZ-NACE H Transportation and Storage. Neutral sectors are symbolized by CZ-NACE 10 Manufacture of food products, CZ-NACE 20 Manufacture of chemicals and chemical products. Research conclusions are not demonstrable because initial assumptions were not confirmed and significant differences between cyclical and neutral industry branches were not unexpectedly detected using DOL. It demonstrates that examined issue is more complex and the monitored economic environment does not stay stable even during a period of macroeconomic stability.
Keywords: Cz-Nace, Impact On Profitability, Changes In Sales, Degree Of Operational Leverage, Czech Republic
JEL classification: D24, M21, P42

Open Access Article SciPap-1564
Transparency in Local Government in Vietnam
by Nguyen Trong Binh, Nguyen Quang Giai

Abstract: While it is only one of the features of good local governance, the transparency of local government promotes citizen participation, enhances accountability, enforces the rule of law, social justice association and control corruption. Therefore, institutional reform to enhance the transparency of local government is one of the important issues that Vietnam has attached great importance to in recent years. Based on a theoretical framework and data from the Provincial Public Administration and Governance Performance Index (PAPI), this paper analyzes the transparency of local government in Vietnam from 2011 to present. Research results show that although the transparency of local government in Vietnam has improved, it still does not meet the requirements. Although the construction and improvement of legal institutions to improve the transparency of local governments has been highly valued, the effectiveness of the implementation of legal institutions in this area is still not high. Local government transparency is tied to citizen participation and government accountability, but not to other aspects, such as public administrative procedures, quality of public services and control corruption.
Keywords: Vietnam., Papi, Open Government, Good Governance, Local Government, Transparency
JEL classification: H76

Open Access Article SciPap-1560
Effect of Diversity Management on Organizational Trust, Employee Innovative Behavior, and Employee Engagement: Evidence from Indonesia
by Anastasia Mariana Derita Batmomolin, Muhammad Sadikin, Jimmy Hadi, Andreas Gunawan P, Stefanus MS Sadana

Abstract: Internationalization and economic globalization cause diversity in organizations to be higher, thus requiring a diversity management approach. This quantitative study aims to analyze the effect of diversity management on organizational trust, employee innovative behavior, and employee engagement. Data were collected using a questionnaire involving 115 employees of a large private bank in Jakarta, Indonesia. Analysis of research data using structural equation modeling (SEM) with SmartPLS software. The results showed that diversity management has a positive effect on organizational trust, employee innovative behavior, and employee engagement. Organizational trust has a positive effect on employee innovative behavior and employee engagement. Organizational trust mediates the effect of diversity management on employee innovative behavior and employee engagement. Diversity management is very important for organizations today because it can promote organizational trust, create employee innovative behavior and strengthen employee engagement, so every organization needs to establish policies regarding diversity management practices and consistently make it happen.
Keywords: Employee Engagement, Indonesia, Diversity Management, Organizational Trust, Employee Innovative Behavior
JEL classification: M14, O15

Open Access Article SciPap-1557
Competitiveness of Human and Business in Terms of Stock Market Analysis
by Ihor Hurnyak, Pedro Pardal, Jakub Horák, Veronika Machová

Abstract: The competitiveness of modern human and business are inextricably linked with the work of the stock market. In some cases, easily could be detected a correlation between trends or tendencies of the stock market and the directions of transformation of human behavior. What should people and businesses be like to maintain this competitiveness at the proper level? According to the authors, it is the developed stock market as instrument of modern society that provides the answer to this question. Through the analysis of stock markets tendencies, this research aims to find evidence that confirm the new characteristics of human life in the fields of education, healthcare, communication, commerce, and interaction with virtuality. Most researchers focus separately on the study of human behavior and the functioning of the stock market. We analyze the relation between both dimensions, assuming that the stock market can be considered, for developed countries, through the small investors voting as public preferences and goals reflection. Evidence from statistical analysis of the stock market confirmed the following characteristics of modern human: faster dissemination of knowledge, e-commerce acceleration, influencing interpenetration of the Internet communications, in depth virtualization, and accelerated circulation of information flows. Operating within such flows of change allows people and businesses to remain competitive at the appropriate level.
Keywords: Remote Education, Virtualization, Pandemic Influence, New Human, Stock Market, Competitiveness
JEL classification: M21, D02, D91, I21

Open Access Article SciPap-1554
EU Cohesion Policy in the Czech Republic and Poland: Comparison of Intervention Areas Among Regions
by Lenka Smékalová, Filip Kučera

Abstract: The cohesion policy of the European Union represents a significant part of its budget and delivers interventions across all regions of the EU. There is little consensus on its efficiency, and its links to fostering convergence on the regional level are uncertain. Nevertheless, regions were shown to benefit from policy interventions promoting their growth and development. The main objective of the policy is to reduce regional disparities that exist among lagging and other, more developed regions. Therefore, this paper focuses on the deliverance of the cohesion policy in Central and Eastern European countries, Poland and the Czech Republic. It explores the support of thematic interventions across its regions in the 2014-2020 period. Findings point out different thematic support of Polish regions according to their relative advancement. Lagging regions of Poland received more substantial support related to promoting the endogenous potential for development and increase in quality of human capital. In contrast, the Czech regions were treated comparably regardless of their development stages. This points to different approaches to implementing the cohesion policy in these countries
Keywords: Lagging Regions, European Structural And Investment Funds, Poland, Cohesion Policy, Regional Development, Czech Republic
JEL classification: J18, R11, R58

Open Access Article SciPap-1528
Impact of Company-Specific Determinants on Corporate Cash Holdings: Evidence From South-East European Countries
by Aleksandar Naumoski, Vesna Bucevska

Abstract: This paper investigates the impact of intercompany determinants on corporate cash holdings in South East Europe. We researched a large sample of companies listed on the stock exchanges. We found that SEE companies’ cash holdings on average is 6.94% of the total assets, which is lower than in developed countries. Intercompany determinants have a significant impact on the company’s cash holdings. Our results suggest that cash holdings are positively affected by the size of the firms, cash flow, cash flow uncertainty, debt maturity, and growth opportunities. Cash holdings are negatively affected by the net working capital, financial leverage, and capital expenditures. SEE companies operate in underdeveloped financial markets with limited access to finances, and their cash holding decisions are mostly determined by the transaction motive. Our findings indicate that companies in SEE do not pursue a cash optimization policy. They largely follow the pecking order pattern and the cash holding of the firm is mostly determined by means of the relationship between the capital investments and internally generated funds.
Keywords: Transaction Motive, Pecking Order, Trade-Off Theory, South East Europe, Cash Holdings
JEL classification: G3, G32

Open Access Article SciPap-1491
Growth vs. Value: The Effect of the Covid-19 Pandemic
by Barbara Rasiova

Abstract: Growth and value are popular terms in the lexicon of finance. For many years, scholars and investment professionals have claimed that value strategies outperform the growth ones, even in major market declines. However, since the early 2010’s, this seems to no longer hold, as growth strategies consistently generate superior returns. With declaration of Covid-19 as a pandemic, stock markets across the world were confronted with immense uncertainty. Taking the recent trend reversal in outperformance into consideration, such economic climate sparks interest in the differences in the response of growth and value strategies. Using log returns data for value and growth portfolios during the 2010-2021 period, this study provides empirical evidence that value portfolios show greater sensitivity to the Covid-19 pandemic. While findings show that the pandemic had a profound impact on the performance and riskiness of both portfolios, they clearly indicate higher volatility, frequency of extreme losses and average loss in the value portfolio, which further extends the growth outperformance to market downturns.
Keywords: Loss, Growth, Return, Pandemic, Value, Risk
JEL classification: G1, G11, G14

Open Access Article SciPap-1490
Size, Value Effects and the Explanatory Power of Pricing Models: Evidence From BSE Listed Indian Industries
by Bhumiswor Sharma, Srikanth P, Suresha B

Abstract: The firm size and value anomalies are the global-level counterpart for explaining the cross-sectional variations of equity returns. The purpose of this paper is to examine the size, value effects and the explanatory power of three well-known pricing models – CAPM, three-and five-factor across and within 15 Indian industries. The study considers all firms listed on the Indian largest stock exchange, BSE (Bombay stock exchange), between 1999-2021 by developing portfolios using firm size/value, size/investment and size/profitability risk characteristics. The study employs both univariate and multivariate methods, including time-series, GRS statistic, and cross-sectional models within and across industries' portfolios. Results indicated that size and value effects exist in almost all industries, presenting that size and value anomalies are the most prominent determinants for industry-level equity returns. In addition, the profitability and investment effects were also investigated; however, the results are mixed by industry to industry. In the case of the explanatory power of pricing models, the five-factor performs much better within and across industry portfolios than other pricing models; however, the models' effectiveness varies by industry. We also reported that investors who seek to allocate funds within and across the industries tend to be expected reasonably stable returns and conceivably predictable; findings of this study contribute to the existing literature on assets pricing and portfolio management to the emerging markets.
Keywords: India, Time-Series Models, Cross-Sectional Models, Stock Market, Portfolio Management, Asset Pricing
JEL classification: C21, C22, G11, G12

Open Access Article SciPap-1467
Does Idiosyncratic Risk Affect Earnings Quality? Evidence from Indonesia
by Yuni Yuni Pristiwati Noer Widianingsih, Doddy Setiawan

Abstract: This study examines whether idiosyncratic risk significantly affects earnings quality in non-financial companies listed on the Indonesia Stock Exchange. Research on developing countries, especially Indonesia, which links idiosyncratic risk and earnings quality, has not been widely conducted. This is interesting because the characteristics of the markets in developing countries are different from those in developed countries. This study uses the dependent variable of earnings quality, which is the residual value of the Kasznik and Dechow–Dichev model, and idiosyncratic risk, which is measured based on the Capital Assets Pricing and Fama–French models. The overall results indicate that high idiosyncratic risk is associated with low earnings quality (large residual value). Robustness tests are also conducted based on groups of positive and negative profit companies, as well as industry groups. The same results were obtained for each earnings component, namely, innate and discretionary factors. These findings contribute to the development of firm-specific risk literature as an additional analytical tool to assess earnings quality based on accrual rates. This allows regulators and standard-setters to provide more relevant information regarding investment decisions.
Keywords: Idiosyncratic, Return, Earnings Quality, Accrual, Discretionary Accrual
JEL classification: M41, G3