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Vol.3 No.1
March 2015

 Page Number

 Article Information

1-12

Comparing the Effect of Global Crisis 2008 on the Economic Performance of Turkey with EU Member States: Factor Analysis and TOPSIS Application    

Selay Giray 

DOI: 10.15604/ejef.2015.03.01.001

Abstract

The purpose of this study is to rank Turkey and EU member states according to their economic performances and generally analyse the structure of this ranking pre-crisis, crisis period, and post crisis periods in 2008. The data received in the time period between 2006 and 2012 are used within the scope of this study, 6 economic indicators are based, and the economic performance of Turkey is compared with the performance of European Union member states by using Factor Analysis and TOPSIS method. In the introduction, the information about economic crises is given and the reasons behind the Global Crisis in 2008 are examined by explaining the crisis itself in the following sections and the effects of the crisis on Turkey are summarised. In the second section of the study, the works reached as a result of reviewing the literature are found, and the importance, purpose and scope of the study are explained and the information about the data set used is provided in the third section. The information related to the Factor Analysis used in the study and the TOPSIS method is provided in the fourth section. The fifth section under the heading of “Empirical Findings” is death into two separate sub headings. In the first sub heading, the findings of Factor Analysis from multivariate statistical analysis techniques and in the other sub heading, the findings of TOPSIS are included. The relevant findings are interpreted. In the conclusion section, the findings acquired as a result of Factor Analysis and TOPSIS techniques applications are evaluated comparatively, and the results are examined in terms of Turkey and periods (pre-crisis, crisis period, and post crisis).

Keywords: Global Crisis 2008, Factor Analysis, TOPSIS, EU Member States, Economic Performance

13-21

Assets Held for Sale and Discontinued Operations – Evaluation of Liquidity – Determination of Ratio – or Necessity of Adjustment?

Grazyna Voss and Piotr Prewysz-Kwinto

DOI: 10.15604/ejef.2015.03.01.002

Abstract

The change in the use of an asset results from economic conditions and requires that a company revalue the asset and adjusts its value by costs of sale or liquidation. The current value of the asset determined in that way influences the financial result of the company and enables the movement of value from non-current assets to current assets. This change has an impact on the evaluation of financial situation and financial ratios. The aim of this article is to describe principles of measurement and presentation of assets held for sale and application of financial analysis in order to assess risks by potential investors. The purpose of this work constitutes part of a wide-ranging discussion on the directions of changes in financial reporting and principles of effective investing.

Keywords: Non-Current Assets Held for Sale, IFRS, Accounting Liquidity, Financial Risk, Investment Decisions, Adjustments and Exclusions

22-27

E.U. versus O.E.C.D. Taxation – An Extended Overview for Direct Taxes and Social Contributions

Paula Lazar and Maria-Oana Filipescu

DOI: 10.15604/ejef.2015.03.01.003

Abstract

In a borderless world governed by the mobility of production factors, especially of capital and work force, and characterized by the common markets, taxation/fiscal policy represents a key component of the economic reform and will have a profound impact upon the future of the global economy. For the European Union that still wishes to be seen as a unitary state/force, the complex taxation processes are leaving deep marks upon the business environment development. The OECD countries might not aim the complex coordination processes that define the European Union, but the taxation processes are not without effect upon the business environment development in OECD member states. This paper aims to present a detailed overview of the direct taxation systems – direct taxes and social contributions – at both European and worldwide levels by breaking it down to taxpayer level in order to underline the dynamics and complexity of the taxation process that affect the business environment development. Furthermore, the paper will highlight the impact that the financial crisis had had and still has upon the taxation systems – reducing the fiscal burden upon corporate taxpayer and shifting the burden upon the personal taxpayers.

Keywords: Taxation Systems, Direct Taxes, Social Contributions, Financial Crisis

28-37

The Propensity to Tax Competition: The Case of Implementation Local Tax Policy by Polish Local Governments

Artur Walasik

DOI: 10.15604/ejef.2015.03.01.004

Abstract

The study is dedicated to identify the main factors determining the propensity of local authorities to compete for the access to the limited as well as mobile sources of local tax revenue. The success of such an activity should be discussed in relation to the stabilization of local budget revenues; hence it seems that the barriers of leaving tax jurisdiction could be better index to evaluate of the efficiency of local tax policy. The theoretical approach is based on the assumption that, if central government provides limitations of the right to improve local tax policy means (the scope of local tax jurisdiction), the local governments should focus on both the efficient acquiring the sources of tax revenues, and the stabilization of tax revenues in the future, in particular by the implementation of the barriers of leaving tax jurisdiction. The paper suggests studying a propensity to tax competition. The article formulates desideratum of the efficiency of spending on acquiring the sources of tax revenue, in particular, the need to identify the barriers to leave tax jurisdiction is suggested. The first and foremost way to build the barrier to leave tax jurisdiction could be reducing tax liabilities by local tax authorities, in particular by introducing local tax reliefs and local tax exemptions, as well as lowering local tax rates. Hence, the model of local authorities’ competition for local tax resources could be proposed. The empirical studies are dedicated to identify the actual propensity of Polish local government to execute the legal ability to impose tax policy instruments. The inquiry is based on comparing the fiscal consequences of implementing local tax policy within two groups of local authorities: small towns and countries (gminas) and medium-size towns and big cities (cities with powiat status).  The period under investigation contains 14 fiscal years, started 2000 and finished in 2013. The method is based on the analysis of the structure and tendency of fiscal consequences of the decisions of local tax authorities.

Keywords: Local Finance, Local Taxes, Tax Competition

38-50

An Empirical Study of the Correlation between the Monetary Aggregates and the Price Level in Euro Area in the Years 2004 – 2013 

Ludomir Slahor, Daniela Majercakova, and Alexandra Mittelman

DOI: 10.15604/ejef.2015.03.01.005

Abstract

The historical evidence suggests a high correlation between changes in the stock of money per unit of output and changes in prices in the same direction. The goal of this paper is to analyze the correlation between the monetary aggregates and the price stability before, during and after the financial and debt crisis in the European Monetary Union. For this purpose, firstly, the paper includes some basic theoretical aspects, secondly, practical analysis based on the Pearson product-moment correlation coefficient as a degree of the dependence between the monetary aggregate M3 and the harmonized index of consumer prices. The main task of the present paper is, accordingly, to consider, if there is any relationship between these variables, and whether there is any substantial reason for modifying the current mainstream mode of the policy analysis. The data were obtained from the data warehouses of the European Central Bank and the Statistical Office of the European Community (Eurostat). The obtained data were split up into 4 segments by the timetable of the period before the crisis, during the first and the second stage of the crisis and after the crisis. The base for the analysis was the quantitative theory of money, which states that money supply has the direct, proportional relationship with the price level. In general, we were able to identify the existence of very strong dependency between the content of monetary aggregate M3 and the price level measured by HICP, especially in the case when the data were not influenced by the seasonal aspects and within the delay of one month.  It means that the transmission of monetary policy of ECB reacted relatively fast. On the other hand, the rapidity of transmission of monetary policy and its effectiveness is still not at the same level as it was in the period before the crisis and the influence of the crisis is still strongly visible.

Keywords: Monetary Aggregates, Money Supply, Inflation, Price Level, Correlation, Euro Area

51-56

Aviation Accidents and Stock Market Reaction: Evidence from Borsa Istanbul

Ender Demir

DOI: 10.15604/ejef.2015.03.01.006

Abstract

Behavioral finance literature shows that a variety of mood variables affect the stock prices. Aviation accidents are uncommon that generally cause a high number of casualties. Therefore, they have a strong social repercussion in the country. This negative sentiment driven by bad mood might affect the investment decisions of investors. This study examines the effect of aviation accidents on Borsa Istanbul Index and Borsa Istanbul Transportation Index. Turkish aviation companies had only 5 serious accidents from 1990 to 2013. On the contrary to the previous findings, it is found that the aviation disasters do not have any effect on the stock market.

Keywords: Mood Variable, Aviation Accidents, Borsa Istanbul, Behavioral Finance

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