Journal of Contemporary Economic and Business Issues

THE RELATIONSHIP BETWEEN ECONOMIC GROWTH, OIL PRODUCTION, ENERGY CONSUMPTION AND CARBON DIOXIDE EMISSIONS: EVIDENCE FROM SELECTED OPEC COUNTRIES

Anh Tru Nguyen — 2020-03-02

The article aims to investigate the relationship between economic growth, oil production, energy consumption and CO2 emissions in five OPEC countries for the last four decades (1978–2017). We found that per capita energy consumption has a negative relationship with per capita GDP while per capita CO2 emissions positively affect per capita GDP. Per capita GDP negatively affects oil production, but per capita energy consumption has a positive relationship with oil production. Further, per capita CO2 emissions have a positive relationship with oil production. Per capita energy consumption negatively influences per capita CO2 emissions. We also found that there is a directional relationship running from per capita GDP to oil production, per capita energy consumption and per capita CO2 emissions and from per capita CO2 emissions to per capita energy consumption. The Johansen co-integration test shows that there is a long run relationship among variables. Our finding supports the conservation hypothesis that means the growth of GDP in these countries is found as a result of increasing energy consumption.

THE IMPACT OF DIVIDEND POLICY ON PRICE-TOEARNINGS RATIO – THE CASE OF WESTERN EUROPE

Simona Nikolovska

In a world full ofstudiesdealing withthe relationshipof price-to-earnings ratio and the dividend payout ratio, rarely noticeable are those examining the possibility that this relationship may be nonlinear.Although rare, studies that aim to fill this gap focus solely on the US capital market. The lack of those kinds of studies alongside with the absence of studies for Europewas main incentive for this paper. Therefore this paper aims to examine the conditional and nonlinear relationship between price-toearnings ratio and dividend payout ratio where by the inclusion of various factors the non/linearrelationship is conditioned on the comparative levelsof return on equity and the required rate of return. In order to explore this relationship, a fixed effects panel regression model is used. Main findings are based on an examination of an annual data of 69 companies from 11 European countries in the period from 2014 to 2018. The results show positive relationship and convexity between the price-to-earnings ratio and the dividend payout ratio, leading to the conclusion that European investors prefer dividends and “award” the increase in the dividend payout with increased priceto-earnings ratio. The findings imply that financial managers of Western European companies should pay more attention to the reduction of the payout ratio.

FINANCIAL CRISIS IMPLICATIONS ON THE FISCAL AND MONETARY POLICY OF EU COUNTRIES WITH ECONOMETRIC MODELING SUPPORT

Marijana Ilieva

The financial crisis that hit Europe in 2008 affected many spheres of the EU members’ economies. It had drastic effects on the countries’ economic activity, consumer spending, banking system liquidity, as well as negative impacts on interest rates and budget balances of the EU member states. This paper will examine the reaction of the EU member counties to the financial crisis, specifically, the use of fiscal and monetary policy to deal with such negative shock, with greater emphasis on the econometric support and background of these practices. Although extensive research and conclusions can be made by analyzing the response and results of the policies to the financial crisis, this paper aims to provide concrete econometric support to some of the practices derived from the crisis. Econometric modeling will be carried out in order to give stronger support to previous statements concluded in the paper and test relationships between certain variables. All econometric analyzes were made using the EViews software package.

DETERMINANTS OF NON-PERFORMING LOANS AND THE RELATIONSHIP WITH MACROECONOMIC FACTORS: EVIDENCE FROM SOUTHEASTERN EUROPE

Maja Ristevska

Despite significant progress in this area, the problem of non-performing loans continues to receive central attention in the banking systems of the SEE countries after the 2008/2009 crisis, reducing the profitability and resource utilization of banks. The purpose of this paper is to investigate the determinants of non performing loans and their effect on the macroeconomic situation in Southeast Europe. First, in order to test the relationship between credit risk and certain balance sheet and macroeconomic indicators, we create a model that uses annual panel data for 5 Southeast European countries for the period 2008-2017. The results show that profitability has a negative impact on nonperforming loans, while credit growth and capitalization rate have a positive and statistically significant impact on the nonperforming loan portfolio. The second part of the econometric analysis consists of examining the cointegration, i.e. long-term and short-term relationships between non-performing loans and macroeconomic variables. The results imply that in conditions of higher unemployment, slower economic growth and falling prices, credit risk increases in the long run. Such conclusions are robust when using alternative valuation methods on the longterm relationship. However, in the short run, only GDP has an inverse statistically significant relationship with nonperforming loans, while unemployment and inflation have proved to be statistically insignificant, although the relationship between them and nonperforming loans has the same direction as in the long- run model. Such conclusions are generally consistent with both the theory and the numerous studies that have been done on this topic.

CLUSTER ANALYSIS OF SEPARATE INDICATORS OF THE BANKING SYSTEMS OF NORTH MACEDONIA, THE EU MEMBER STATES AND THE BALKAN COUNTRIES

Emilija Stojanova Ivanovska

In this paper, a multivariate analysis of the computer statistics, i.e. the Cluster analysis of the banking system concentration indicators and the financial intermediation and portfolio quality indicators by applying the complete linkage and the Ward’s linkage method are presented.
The main idea is to find out whether the level of banking system concentration and degree of financial intermediation in banking system of North Macedonia is similar or closer to any of the EU Member States or the Balkan countries. Furthermore, since the appropriately modified analyses were performed also with the structural indicators of the banking system and results obtained 10 years ago, the objective is to see whether there are any positive shifts in the similarity of the analysed characteristics of the banking system in North Macedonia to a particular country or group of countries.
In the conducted cluster analysis made by applying the method of complete linkage to the indicators of concentration of the banking sector, North Macedonia is grouped first with the Slovak Republic and then with Croatia which means that the similarity of the values of these indicators of these countries is the largest. Regarding the outcome of the second cluster analyses, of the indicators of financial intermediation and portfolio quality by using two comparative clustering methods, North Macedonia is grouped with Montenegro in the penultimate cluster and then this cluster is grouped with Serbia, which confirms that the level of financial intermediation in these Balkan countries is lower compared to the EU Member States, but on the other side the quality of the portfolio is good.