Summаry: This paper examines the factors that determine the profitability of the banking sector in
The high degree of innovation of a country's economy has a stimulating effect on the growth of its productivity levels, which are vital for the profitability of its companies. In this way, ampler innovation backs the organic growth of companies and outlines their long-term competitiveness, including competitiveness at the macro level. Furthermore, having a higher profit level, companies could pay higher net salaries to their employees. It plainly indicates the connection between the innovative processes in the companies themselves and their employees' income levels. This paper aims to test whether this relationship has a proper stronghold in the business practice of The Western Balkans countries: Bosnia and Herzegovina, Serbia, Montenegro, North Macedonia and Albania. Various benchmarks taken from relevant international reports are used as analysis tools. The obtained results will serve as a starting point for considering and conceiving a future efficient platform of public policies supporting the expansion of innovation and technological capacities of companies in the economies of the countries included in this analysis.
This paper seeks to examine the determinants of the profitability of the B&H banking sector, using an empirical framework that incorporates the traditional SCP - structure conduct-performance and ESX efficiency hypothesis. The main goal of this paper is to measure the level of concentration and investigate how concentration and other determinants influence the profitability of the banking sector in Bosnia and Herzegovina for the period from 2008 to 2017. We also tried to determine whether the profitability of the banking sector is more contributed by concentration, i.e. enlargement of the banking market (SCP) rather than increased efficiency of banking organization (ESX). For this purpose, we use a sample of 26 banks from B&H, and our empirical research is based on panel data analysis. The performance of the banking sector is measured by the conventional return on assets (ROA). Besides concentration as a main industry-specific factor, profitability determinants include bank-specific and macroeconomic profitability factors. Obtained results reveal that concentration has positive impacts on B&H banking profitability. But when we talk about competing concentration hypotheses, the paper results here generally support the ESX efficiency hypothesis rather than the traditional SCP approach. It was confirmed that credit risk, deposit risk and cost to income ratio from bank-specific variables, and GDP growth rate from macroeconomic variables have a statistically significant influence on banking performance.
This paper analyzes the interdependence between stock market indices and exchange rates in four transition countries: Croatia, Serbia, Hungary and the Czech Republic. The analysis is based on monthly data for the nominal exchange stock market indices and nominal exchange rates over the period from March 2010 to March 2015. The main objective of this work is to determine whether the exchange rates had a significant impact on future trends in the capital markets and vice versa. Empirical analysis has shown that the series are stationary in the first differences, and using both Engle-Granger cointegration and Granger causality test it has been shown, as well, that there is neither long-run nor short-run relationship between these two variables. In other words, it means that prediction of movement of one variable cannot be based on past values of other variable
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