Economic Analysis <p><strong>Economic Analysis</strong>&nbsp; is a scientific journal published by the Institute of Economic Sciences (IES). It is published twice a year (in June and in December) in English, in printed and e-version. Economic Analysis's <strong>mission</strong> is to inform scientific and professional public about the results of original research in the field of economics, as well as about the positive public policies intended for surpassing the identified challenges.</p> <p>Since 2018, the journal is ranked as the leading national journal (M51) in the filed of economics and organizational science according to the decree of the Ministry of education, science and technological development of the Republic of Serbia.</p> <p><strong>For any information, you can contact us on e-mail <span style="text-decoration: underline;"></span></strong></p> en-US <p>Once the manuscript is accepted for publication, authors shall transfer the copyright to the publisher. If the submitted manuscript is not accepted for printing by the journal, the authors shall retain all their rights. The following rights on the manuscript are transferred to the publisher, including any supplementary materials and any parts, extracts or elements of the manuscript:</p> <ul> <li>the right to reproduce and distribute the manuscript in printed form, including print-on-demand;</li> <li>the right to print prepublications, reprints and special editions of the manuscript;</li> <li>the right to translate the manuscript into other languages;</li> <li>the right to reproduce the manuscript using photomechanical or similar means including, but not limited to photocopy, and the right to distribute these copies;</li> <li>the right to reproduce and distribute the manuscript electronically or optically using and all data carriers or storage media, and especially in machine readable/digitalized form on data carriers such as hard drive, CD-ROM, DVD, Blu-ray Disc (BD), Mini Disc, data tapes, and the right to reproduce and distribute the article via these data carriers;</li> <li>the right to store the manuscript in databases, including online databases, as well as the right to transmit the manuscript in all technical systems and modes;</li> <li>the right to make the manuscript available to the public or to closed user groups on individual demand, for use on monitors or other readers (including e-books), and in printable form for the user, either via the Internet, online service, or via internal or external networks.</li> </ul> <p>Authors reserve the copyright to published articles and have the right to use the article in the same manner like third parties in accordance with the licence&nbsp;<strong>Attribution-Non-Commercial-Non-Derivate 4.0 International (CC BY)</strong>. Thereby they must quote the basic bibliographic data of the source article published in the journal (authors, article title, journal title, volume, pagination).</p> (Jelena Banović) (Srđan Jurlina) Mon, 09 Dec 2019 12:02:24 +0000 OJS 60 A Comparative Study of Minimum Wage and Employment in China and in the United States <p>In this paper, we use regression models to analyze and compare the effect of a change in real minimum wage on employment rate both in China (the largest emerging market) and in the United States (the largest developed country). The longitudinal data we use is from 2000 to 2016 published by both countries. After controlling for unobserved heterogeneities by using the fixed effect estimations, the results show a significant and negative correlation between real minimum wage and employment rate in both countries, with a smaller and weaker effect of real minimum wage in China. It indicates that employment in China is less responsive to a change in minimum wage because of its unique economic system. In addition, We find that the effect of minimum wage on employment rate turns into insignificant in recent years in China since 2008, which is the opposite of and different from the situation in the U.S.</p> Jianfeng Yao, Duanxiang Fu ##submission.copyrightStatement## Mon, 09 Dec 2019 11:10:17 +0000 Gauging the Effects of Modern Payment Technologies Adoption on the Demand for Money in Nigeria <p>In contrast to the global intermediate goals of monetary policy, “financial exclusion” remains prevalent. Therefore, using the Nigerian economy as a point of reference, this paper attempts to shed more light on the role played by modern payment technologies in promoting financial inclusion, especially as it relates to the provision of currency in the hands of the Nigerian public for liquidity services during the period 2009:Q1 to 2017:Q4. In actualizing this objective, the Johansen cointegration method is employed to test for cointegration alongside vector error correction modeling (VECM) techniques, while the Gregory-Hansen cointegration method is employed to test for structural breaks and regime shifts. Subsequently, empirical results from the Johansen cointegration test and the normalized cointegrating coefficients of the estimated vector error correction model (VECM) reveal that real currency in the hands of the Nigerian public is positively cointegrated with real modern payment technologies transactions as well as real Gross Domestic Product (GDP), but negatively cointegrated with real savings interest rates, real quarterly time deposits interest rates, and inflation rate. On the other hand, empirical results from the Gregory-Hansen cointegration method indicate further that there are no structural breaks or regime shifts in the cointegrating coefficients during the period 2009:Q1 to 2017:Q4. In conclusion, the existence of a positive relationship between real modern payment technologies transactions and real currency in the hands of the Nigerian public implies that the former are partly responsible for the growth of the latter, thereby indicating that modern payment technologies are effective in promoting financial inclusion by providing access to liquidity services. Based on this finding the study recommends that the adoption of modern payment technologies should be promoted in order to further extend liquidity services to financially excluded Nigerians.</p> Tersoo Iorngurum ##submission.copyrightStatement## Mon, 09 Dec 2019 11:11:53 +0000 Post-Merger Performance in Financial Service Industry: A Case of the Republic of Serbia <p>The main objective of this paper is to analyze key financial performance indicators in certain financial institutions after mergers and acquisitions (M&amp;A) with foreign organizations in the Republic of Serbia. The main actors in these M&amp;A activities were banks. Our research and analysis covers the period from 2002 when M&amp;A processes were intensified by the end of 2017. The results obtained indicate that the arrival of foreign banks led to the consolidation of the Serbian financial services market. Numerous strategic advantages have been achieved and lot of weaknesses from the paste have been eliminated. However, when analyzing the most important profitability ratios (ROA, ROE, NIM), a slightly different picture is obtained. Compared with the banks that came through greenfield investments and a group of domestic banks, this group of banks made slightly lower performances.</p> Dejan Erić, Ivan Stošić, Vuk Dapčević ##submission.copyrightStatement## Mon, 09 Dec 2019 11:13:19 +0000 The Offer of Financial Derivatives in the Banking Sector of the Republic of Serbia <p>The paper examines the results of the research conducted in the Serbian banking sector considered the only counterparty to companies in the derivative OTC market given that Serbia’s financial system is bank-based. The primary objective is to assess the total level of derivative instruments demand in Serbia and types of derivatives offered by banks. Besides, we also aim to determine the reasons that limit the most the development of the domestic derivatives market and that impact bank activities aimed at attracting derivative business and its development phases. In addition, we explored the expertise of banking sector employees in the financial derivatives field, most often in the Treasury Department. We endeavoured to ascertain the number of staff working in departments in charge of derivatives trading, their professional skills and expertise, qualifications, training and certificates. We have analysed the reasons that most severely restrict the development of the domestic derivatives market and possibilities and limitations of introducing the derivatives market as an unregulated segment on the Belgrade Stock Exchange.</p> <p>This paper also gives a comparative overview of the use of derivatives from the banks’ viewpoint between the banking sectors in Serbia and Bosnia and Herzegovina (BiH) so as to determine the level of derivative instruments demand, types of derivatives offered by the banking sector and possibilities and limitations of introducing the derivatives market as a market segment on stock exchanges in Serbia and Bosnia and Herzegovina.</p> Mina Kobilarev, Branko Živanović ##submission.copyrightStatement## Mon, 09 Dec 2019 11:14:44 +0000 Market Analysis on the Presence of Social Responsibility in Companies in Bosnia and Herzegovina <p>Corporate social responsibility implies that all transactions in the Company executed with respect to the economic legal and ethical principles. In Bosnia and Herzegovina, a relatively small number of companies expanding their economic objectives of socio - economic and included in solving social problems. Due to technical - technological progress changes occur rapidly and result in a large number of social problems that can return a negative impact on business operations. There is a wide choice of alternatives by which companies can do business socially responsible, and each of these alternatives offers a number of benefits for all involved (company, non-profit organizations and consumers). The subject of this thesis involves, on the one hand corporate social responsibility, and on the other the success of the company. Corporate social responsibility will be examined through economic, social, environmental and ethical dimension. The aim of this thesis is to theoretically position management and social responsibility as part of the management functions in the work of the business entity.</p> <p>Corporate social responsibility means a commitment the company management to take actions that will improve the welfare of the entire society and the business system. It represents a global business imperative and the idea that it is impossible to ignore. One can say that it is a successful company that simultaniously takes account of its economic, social and environmental impact, and socially responsible business is the business model and management style in which profit is realized in a socially responsible manner.</p> <p>Development of the concept emerges as a new way of doing business in global companies that are exposed to risks due to non implementation of environmental policy and employees.&nbsp; In future many of global companies that apply the concept of corporate social responsibility, because in it they can provide&nbsp; an effective means for gaining competitive advantage.</p> <p>The concept of corporate social responsibility is not just a passing fad, but an imperative in the business world all the companies that will sooner or later have to accept if they are to keep their place in the business scene. This business concept brings multiple benefits, not only for companies, but also in world integrity</p> Mirjana Štaka ##submission.copyrightStatement## Mon, 09 Dec 2019 11:15:49 +0000 Ageing and Productivity <p>The Portuguese labour force is ageing rapidly, corresponding to an increase in the share of older cohorts in the workforce, and there are no prospects that this situation will slow down. This study carries out an empirical analysis of the impact of workforce ageing on labour productivity in the Portuguese economy considering data for the period 1971-2017. We investigate the main channels through which these demographic changes affect labour productivity, the accumulation of factors of production, physical or human capital, and total factor productivity (TFP), based on a Cobb-Douglas production function. The results from the estimation of our VAR model defined according to the aggregate production function that includes the capital-output ratio, educational attainment, TFP and an indicator of workforce ageing, and the corresponding impulse-response functions analysis do not allow us to identify any impact of the growth rate in the proportion of older workers on the growth rate of labour productivity. For the time being it thus seems that workforce ageing has not posed a serious threat to the Portuguese economy, but this situation could rapidly change in the near future given the dismal demographic forecasts that project that the Portuguese population will decrease from 10.5 millions of people in 2012 to 8.6 millions in 2060 (INE 2014).</p> Mariana Monteiro, Marta C. N. Simões ##submission.copyrightStatement## Mon, 09 Dec 2019 11:17:21 +0000 Comparative Analysis of High Technology Exports and Selected Innovation Indicators for Serbia and CEE Countries <p>The article reports on comparative analysis of high technology exports and selected innovation indicators for Serbia and three CEE countries – Hungary, Romania and Bulgaria for the 2011-2015 period, with an aim to provide an insight on the innovation potential of Serbia. The analysis is based on data publicly available at Eurostat and the Global Innovation Index rankings. The selection of countries for country comparison is based on many similarities such as historical circumstances and geographical position. HTP exports are exports of high technology products as a share of total exports.&nbsp; As for innovation indicators, the article considers the Global Innovation Index (GII) which provides metrics about innovation performance of countries and economies, as well as values of selected inputs contained in the innovation pillar of the GII such as costs, R&amp;D investment (total by sector) and number of researchers (in total and by sector). The analysis shows that there are considerable differences between Serbia and the three CEE countries. The analysis results are divided into three groups according to impact on the HTP export. The first group refers to innovation indicators with significant impact on HTP exports such as GDP, number of researchers, the GII rank and R&amp;D costs in the business enterprise sector. The second group are innovation indicators with significant impact on HTP export such as total R&amp;D costs, and finally the third group are innovation indicators with little impact on HTP export.</p> Darko Marjanović, Deniz Ahmetagić, Isidora Beraha ##submission.copyrightStatement## Mon, 09 Dec 2019 11:18:37 +0000 Characteristics of Marketing Communication Strategy of a Small Enterprise <p>The subject of this paper is the analysis of the characteristics of the market communication strategy used by small businesses. The aim of the paper is to highlight the importance of modern information technology in market communication, that is, to emphasize its role in creating effective solutions for promotional activity of small organizations. The study assumes that, due to certain resource constraints, small businesses are forced to create unique approaches to communicating with the market and, in the process, rely primarily on the resources they have in abundance - creativity and innovation. Desk-research method was used in the paper, primarily analyzing papers and publications from scientific journals and other professional literature in the field of marketing, as well as official data, databases and reports of relevant institutions. Pointing to the basic advantages achieved by applying modern forms of market communication, the paper could contribute to the improvement of the market communication practice of smaller business systems</p> Marija Lazarević-Moravčević ##submission.copyrightStatement## Mon, 09 Dec 2019 11:19:38 +0000 Environmental and Financial Performance: Review of Selected Studies <p>The main objective of this paper is to examine selected literature on the relationship between environmental performance and financial performance on firm-level. Specific objectives are defined in accordance with the observed group of environmental performance measures. We decided to investigate environmental performance measured that refer to pollutant emissions, waste, and environmental disclosures. Examined studies cover different periods, regions, and companies. In observed literature, we found mixed results. The results depend on many factors such as the used environmental measures, the financial performance measure, the control variables, the industry type, and the characteristics of companies.</p> Slavica Stevanović, Olivera Jovanović, Aida Hanić ##submission.copyrightStatement## Mon, 09 Dec 2019 11:20:41 +0000 The Modelling of Tax Influence on Macroeconomic Framework in Spain <p>The study provides an empirical analysis of tax impact on selected macroeconomic aggregates in Spain from 1996 to 2016. The objective of this research is to determine how tax forms effect on macroeconomic framework of Spanish economy. The analysis includes the impact of direct taxes such as personal income tax, corporate income tax and tax on property as well as social contributions. On the other hand, gross domestic product per capita, unemployment, inflation, investment and government expenditures are selected as the main macroeconomic determinants and present dependent variables in defined models.&nbsp; Results of defined model show that tax revenue growth, personal income tax, tax on property and social security contributions significantly affects the gross domestic product per capita. Further, personal income tax and corporate income tax have a significant impact on unemployment, investment and government expenditures. Findings show that the intensity of personal income tax' effect is higher on investment and government expenditures compared to corporate income tax. In addition, present tax structure does not have a significant effect on inflation, which can be explained by fact that indirect taxes are more related to inflation than direct taxes.</p> Vera Mirović, Branimir Kalaš, Jelena Andrašić ##submission.copyrightStatement## Mon, 09 Dec 2019 11:21:59 +0000 Concentration Measuring Techniques in Banking Sector-Lorenz Curve and Gini Coefficient <p>The paper presents the indicators of market concentration in the banking sector with a focus on the Lorenz curve the Gini coefficient. The authors present the results of the empirical research of concentration levels in the banking sector in selected countries in the CEE region (Serbia, Croatia, Montenegro, Bosnia and Herzegovina, Macedonia, Bulgaria, Romania and Albania) in the period 2007-2012. The level of market concentration can be exploited and operationalized by using different concentration indicators. The contribution of this research is reflected in the comparative empirical analysis of the results of our previous research that was focused on quantification of the most frequently used indicators of concentration (Concentration ratio 4 and Herfindal-Hirshman index), and the results obtained using the Lorenz curve and the Gini coefficient.</p> <p>The paper analyzes the level as well as variability of these indicators and tests the degree of their correlation. Individually observed, concentration indicators have relatively low capacity to present the real nature of competition in the banking sector in the analyzed countries as well as to provide a good estimate of possible future trends. The results of our analysis indicate that, for the purpose of a more precise and better understanding of the relevant issues of market concentration in the financial sector, several indicators of concentration need to be analyzed simultaneously. Additionally, improvement of methodology should provide a more reliable basis for a precise definition of adequate policies and legislation in this area.</p> Maja Dimić, Svetislav Paunović ##submission.copyrightStatement## Mon, 09 Dec 2019 11:24:01 +0000 Theoretical and Practical Foundations of Inflation Targeting with Special Emphasis on the Experience of Serbia <p>Compared to the 1970s when the inflation rate in most countries reached double digits, nowadays we are facing low inflation rates globally. Inflation targeting, as a monetary policy strategy, appeared in late 1980s in the period when other strategies proved to be insufficiently effective. The first country to apply inflation targeting strategy in 1989 was New Zealand. Since then, 64 countries<a href="#_ftn1" name="_ftnref1">[1]</a> have implemented the inflation targeting. The concept of inflation targeting as a strategy for conducting monetary policy in Serbia was introduced in August 2006. When choosing the appropriate strategy to ensure price stability, the NBS relies on the experiences of other countries, especially Central and Eastern European countries. Accordingly, the paper aims to present the genesis of the development of the inflation targeting strategy, as well as the impact of applying this strategy on reducing global inflation. A special segment of this paper is devoted to the analysis of the experiences of Serbia in terms of applying the inflation targeting strategy.<a href="#_ftnref1" name="_ftn1"></a></p> Milena Lazić, Ivana Domazet ##submission.copyrightStatement## Mon, 09 Dec 2019 11:25:15 +0000