G30 - Corporate Finance and Governance: GeneralReturn

One of the key motives for the functioning of all entities in a market economy is to achieve its economic goals and to ensure an influence on other entities. This is the reason why the market does not function as the sole criterion for checking the effects of the entities on the society. The effectiveness of the functioning of all economic entities remains a constant requirement and also covers entities in the non-profit sector. The paper discusses the current topic of streamlining the functioning of the non-profit sector. Its objective is to introduce a multi-criteria methodology through which the providers of funds (ministries, foundations, donors, etc.) would be able to evaluate whether non-profit organisations applying for funding are the most credible among the providers, guaranteeing the use of the resources provided to meet the organisations' declared objectives. The methodology is called "credibility analysis of non-profit organisations". The methodology was tested in the area of cultural non-profit organisations. The first step of the research included 95 cultural non-profit organisations. We plan to develop this pilot research in other areas of non-profit activities.

In the conditions of the new economy, business investment in information and communications technology (ICT) has proven to be critical for company development. The main reason is that performance in other business areas is becoming gradually dependent on ICT. The theoretical part of the paper, based on a literature review, discusses the state of the art in the field related to the impact of ICT on selected non-financial performance areas. The aim of the empirical part is to analyse the relationship between the degree of ICT implementation and production quality, customer, and human capital. We employ a questionnaire among industrial companies in the Czech Republic in order to test these relationships. The analysis finds statistically significant relationships between the examined constructs. Our findings suggest that the quality of ICT has a significant impact on production quality, customer and human capital.

The study focuses on solutions to energy problems in East Germany and Czechoslovakia within the limits of their own and Comecon primary sources. It analyzes the dependence on the oil and gas import from the Soviet Union and the differences in energy policies of the governments in Berlin and Prague. The work underlines the importance of brown coal reserves for the national economies of the countries in question and the difficulties building the fuel and energy bases in smaller European countries. It outlines the bias of the East German energy structure in contrast to the Czechoslovak efforts for stratification. In both countries, construction of nuclear power plants was designed and subsequently executed: Rheinsberg, Greifswald in the GDR; Jaslovské Bohunice and later on, Mochovce and Dukovany in the CSSR.The cooperation problems among so-called socialist countries in energy industries are mentioned, as well as the results of their discussions: the Druzhba pipeline or the mutual construction project of the Khmelnytskyi nuclear power plant.

After the 1989 Velvet Revolution, the transformation to a market economic system, and mainly the formation of new income sources and the process of a significant differentiation in wages, has caused crucial changes to the income distribution. There have been systematic changes in the model parameters as well as changes manifesting the increasing numbers of discrepancies between empirical and theoretical income distributions: these have caused a contamination of the model. This paper concentrates on the verification of the validity of the statistical model of income distribution used in the Czech Republic at present. In order to consider as precisely as possible the suitability of log-normal distribution as the proper model for income distribution used in the Czech Republic, the optimisation of parameters is necessary. The accuracy of the model construction is crucial and is given, to some extent, by the sensitivity and adaptability of procedures used for estimation of the model parameters. The paper shows methods usable for the achievement of this goal and presents results obtained by their application on data files from the years 1996-2005.

Cattle-breeding is one of the most important economical sectors in Bolivia. Its total contribution to Bolivian GDP is 2%. In spite of that, so far, it has not been able to establish stable trade relations with foreign markets.
The analysis of supply and demand of meat during the period 2000-2005 in the Bolivian market has shown that this sector has big perspectives of growth especially due to observance of the veterinary standards. Increase of exports of meat during the upcoming years might lead to a substantial increase of income to the Bolivian economy.
Among the competitive advantages of the Bolivian cattle-breeding belong: lower production costs compared to those in Brazil or Argentina, and above all those of Australia and United States - the biggest exporters of meat in the world. It's fundamental to add that Bolivia dispose of enormous amount of areas that is suitable to cattle breeding. Moreover, its price is much lower then in any other region country.

The world raw material market has undergone a great change in the recent years. One of the essential reasons is the rapid economic growth of many former developing countries such as China, India, Indonesia, Brazil, Vietnam, etc. These countries were historically and typically producers and exporters of many raw materials but now they also consume or even import them, because the consumption of all raw materials is increasing rapidly in these young, densely populated and rapidly developing countries. In relation to this trend, the nominal prices of various commodities have reached wholly new levels. In the 1970s - and mainly in the 1980s and 1990s - many Western European countries adopted as a main motto of their national resource strategies something like, 'We do not really need national mining of natural resources, we are not to destroy our environment; the absolute majority of required resources will be brought from non-European territories.' But the name of the problem is not 'mining production' but 'consumption', which is still increasing in the developed countries, too. The result of these mistaken strategies was that the raw materials are mined in Third World countries with much more serious environmental impacts compared to Europe. A rightful question comes to mind: Do European countries need different resource politics in the 21st century?

Measurement of customer satisfaction or dissatisfaction is an important factor in corporate development. Deep insight into the crucial factors that have an influence on customer satisfaction and result in repeated purchases plays a critical role. The connection between customer satisfaction and its profitability for the company is discussed in many studies. They focus on the confirmation of the existence of a relationship between the rate of customer loss and a company's efficiency. In addition to the measurable effects in the financial sphere, every customer is also an important source of qualitative effects that are difficult to evaluate.

Real options as a right to future decision-making based on additional information from outside a company can be found everywhere, every company has the flexibility, but its value depends on volatility. It order to utilize it some selection is necessary as working with real options may bring more benefits than expenses. The first degree of selection is not caringe for decisions at high certainty or at risk with zero volatility, where the option value is close to zero. Real options give some answer as classical methods of DCF where decision-making cannot be deferred. As for options in low-budget projects, it may happen that the estimation of the project value will be higher than the direct capital costs. Real options are not a new method: they only enlarge the scale of classical methods, giving the possibility to evaluate a company's opportunities. Especially New Economy companies often use options without knowing their values, which could bring better efficiency to their decision-making processes.

The paper focuses on possibilities of the qualitative risk analysis of a project, which appears scarcely in literature compared to the more sophisticated techniques of risk analysis, such as simulations. Identified are elementary processes of risk analysis ranging from the risk identification to the determination of significance of a risk factor by means of visualization and of scoring.

The article analyses reasons for state regulation, and deals with present regulatory projects aimed at ensuring increased stability of financial, or more precisely, insurance markets, especially with respect to securing an adequate level of consumer protection and lowering information asymmetry. In more detail, the authors pay attention to the fundamentals of the Solvency II regulatory requirements for insurance firms that operate in the European Union and highlight some unanswered questions of practical implementation and limits of this framework. Moreover, they deal with other regulatory issues and terms (the use of "unknown unknowns" etc.).

Income valuation is a fundamental valuation approach. One question still open is the discount rate calculation. One factor impacting the discount rate is a capital structure. Nevertheless, the structure has to be in market values. It means that the knowledge of the result is a precondition for the calculation. The solution lies in an iterative technique based on recursive progress. It is also necessary to select suitable reagency functions expressing relations between equity cost and leverage ratio. The traditional reagency function is employed according to MM II, whereas the modified reagency function is derived by other authors. In addition, the article analyzes main factors impacting the size of error arising when discount rate calculation using a DCF method is not based on capital structure in market values. This analysis is made for both MM and modified reagency functions.

The article deals with fragmentation and unity prospects of the world economy with respect to the role of its main centres (Europe/EU, East Asia, America). From the view point of the process of the running multilateral liberalisation the world economy was formed as relatively unified at first after World War II. However, regionalisation intensified in 1990s and since then stronger fragmentation has become a natural element of the world economy globalization as "new regionalism". Theoretically, the fragmentation process can be explained by Viner's customs union theory as well as later by the regionalism domino theory developed by many authors. Concerning the role of individual centres, despite its present differentiation, Europe (EU), is more unified than the other regions. However, with its deep integration concept and trade diversion stemming from a high intratrade rate, Europe contributes rather to the world fragmentation. East Asia represented by ASEAN keeps still sticking to the shallow integration, co-operating with non-member partners. The group represents best the open regionalism characteristics, currently not strengthening the world economy fragmentation. The American area remains still relatively fragmented despite the U.S. effort to create a wide integration zone similar to NAFTA. The American region appears more open than Europe with respect to the intratrade share, nevertheless, its integration structure is still in progress; and its impact on the solution of the world economy fragmentation-unity dilemma is uncertain.

Some theories consider the possibility to multilateralize regional approaches and to establish global system of rules based on regionalism. These tendencies are also tailored on international trade. Nevertheless, the fundamental problem of the multilateral trading system in the framework of the World Trade Organization is the extent of policy space, which states' governments do not want to give in favor of global trade governance. Although the multilateral trading system and further multilateral trade liberalization face many challenges, regionalism is not an alternative that could help government to pursue their trade interests. On the contrary, bilateral Preferential Trade Agreements harm competition, distort business environment and undermine the multilateral trading system.

Article provides short overview and analysis of fundamental concepts of logic of John Stuart Mill as presented in his monumental work - System of Logic. At beginning Mill's approach to semantics is presented, following with his theory of proposition. Next section deals with reasoning and is generally focused on Mill's interpretation of syllogism. Final part of text introduces problem of necessary truths and analyses Mill's approach to theorems of arithmetic, geometry and logic.

The essay is the contribution to analysis of the determination and addition of the utility. There are shown the contradictions between quantitative and qualitative thinking about the problems of utility for the individual and for multitude people in society. In this interpretation rised also the contradictions between subjective preference of value and quality of the happiness.

The article deal with the main direction of view to the corporate strategy: resourced based view and structured based view. Each of them emphasizes the different area by influencing corporate strategy. The strategic analysis includes both view. The difference is visible in the stressing the importance the corporate resources and abilities of environmental aspects.

The short characteristics of the transport economics and transport system. The assumed development of the demands and supllies of the transport. The transport services like the factor of the development of society and companies. The specification of the necessary level of the transport services in society. The objective of this article is to create the decision methodology and perspektives of the transport utility based on the hamonising conditions in the firms to make possible rational transport services.

The regression model with categorical dependent variable is a natural generalization of the model with binary dependent variable. It is based on the use of baseline logits. For its building and for the evaluation of its quality, analogous procedures to the case of binary dependent variable are applied. When the categories of dependent variable are ordered (ordinal variable) the construction of model can be based on adjacent or cumulative logits or on proportional odds. The way of building of the model influences the meaning and the interpretation of its parameters.

This article takes focus on the main basic elements of panel data analysis, fixed effects and random effects models, dynamic panel data models. The last part of this article is about possibilities of testing panel data unit roots with a notice about the usage of the application software and special languages in the area of panel data.

The content of this paper is characterization the spectral properties of stationary models - namely autoregression model AR(p), model of moving averages MA(q) and mixed models ARMA(p,q). There is the clear relationship between spectral density and autocorrelation function of these stationary models. The spectrum has the typical shape for different models. This shape depends on sign of parameters. On other side, from shape of spectrum we cannot derive the accurate type of model, because the different models have the similar shape of spectrum. But the shape of spectrum is very important complementary information that can through many things prompt.

Robust design reduces excessive process variation. Identification of dispersion effects plays an important role in it. Two main approaches are used to analyze the experiment where levels of noise factors are changed on purpose. Either the function of sample variance computed from replications over various levels of the noise factors, or response values themselves are modelled. The presence of heteroscedasticity may complicate the identification of dispersion effects. The aim of the simulation study described in the paper was to compare various ways of modelling heteroscedasticity and the efficiency of both main approaches. We confined ourselves to the assumption of normal random errors and used the t-test to identify the dispersion effects.

Probability modeling may be approached in several principally different ways. One of such possibilities to achieve the aim is approximation of empirical distribution by means of an already known distribution (i.e. a parametric model). This paper focuses first on description of methods that may be used for modeling in practice and further on construction and verification of validity of one of present models of income distribution in the Czech Republic - logarithm-normal model with three parameters.

Real estate investment trusts (REIT) in USA have been imposed a 95% required minimum dividend payout ratio. Empirical observations have proved that this limit is not sufficient to explain REIT's dividend policies. Most of them pay out more than required by tax law. Imperfect information and agency costs are hypothesized to be the explanation. Therefore, possible factors for identifying of agency costs are introduced - type of investment fund, ROA, Tobin's Q, asset growth, debt to asset - ratio. Finally, authors of empirical research have proved at least partial impact of agency costs on dividend. This article deals with possibilities of avoidance of tax burden on dividend income by levering of portfolio and conversion of dividends to capital gains. Furthermore, loan funds can be invested in life insurance to hold the risk of portfolio at the level of unlevered portfolio. There are other financial instruments such as building saving or pension insurance, which can be also used to unlever the portfolio.

The main aim of the paper is to present the most important conflicts of interest between "agents and principals" as well as the mechanisms for limiting these conflicts. The reduction of free cash flow through the use of debt, and the use of protective bond covenants, are important means of reducing agency costs. It is pointed out that new equity dilutes the holdings of managers with equity interests, increasing their motive to waste resources, while debt reduces free cash flow, and the opportunity for managers to waste resources. Various types of protective covenants are presented in the paper. Because shareholders must pay higher interest rates as insurance against their own selfish strategies they frequently make agreements with bondholders in the hope of paying lower interest rates. These agreements are incorporated as part of the loan document between shareholders and bondholders. These protective covenants should reduce the costs of bankruptcy and ultimately increase the value of the firm.

The most important competitive advantage performance driver is ability to manage a company. This ability depends on the quality of managerial decisions. There's a chance and must in comtemporary world to react to changes in business environment. The goal of this article is to introduce one of the dynamic tools that corresponds to today's challenges. We introduce the Dynamic Scorecard INFA implemented into strategic management simulator. A company is seen via System dynamics point of view and company performance is incorporated as a result of company behavior measured and managed by financial and non-financial indicator.

The paper focuses on how risk management may influence the value of a company. Situation is discussed with models of Modigliani - Miller - Fama and their assumptions in the background. After the basic explications of the afore mentioned models and of the decision-making rule for investments, particular states where risk management may add value are analyzed. An attention is paid mainly to costs of taxation and financial distress, underinvestment and asset substitution.

The paper is concerned with the dynamic risk measures, e.g. with the estimation of the dynamic VaR and the dynamic ES. After general introduction into the problematic of risk management we describe the methods that are essential for the whole estimation and computation process. At first we introduce very popular time series ARMA-GARCH models and also comment the assumptions of the model that seems to be unrealistic. Due to this fact we introduce EVT models, specifically the POT model. The POT model is able to approximate the far ends of distribution, which are crucial for the estimation equation of quantile based measures. In the last but not least paragraph there is direct estimation of both the dynamic VaR and the dynamic ES. In the last paragraph we discuss possible shortcomings of the proposed model for longer time horizon of prediction and the topic for possible research is indicated.