Authors:David Mareš; Martin Janíčko Abstract: This paper explores the relationship between the performance of the Czech automotive industry and the performance of the Czech macroeconomy with an objective to fill in some existing gaps in the research on this topic. An overreliance on one sector could have harmful consequences for the competitiveness of the entire economy but sometimes also for the sector itself, particularly in the long run. We test several hypotheses in this context using two frameworks: a vector autoregression model with exogenous drivers and a vector error correction model, both built on quarterly time series data in the period ranging from 2000 to 2017 and validated out-of-sample on the 2018 and 2019 data. The results suggest that the macroeconomy appears to some extent forecastable by the performance of its automotive sector. This is further supported by the fact that the forecasting performance of the selected models looks reasonable. Likewise, the results show that the key variables proxying the performance of the automotive industry tend to converge to a long-run equilibrium or at least exhibit a long-run relationship with and/or vis-à-vis the selected macroeconomic indicators. This finding is in line with the fact that the automotive sector has an important position in the Czech economy also from a longer-term perspective. Yet, we have not found that the macroeconomy would be overreliant on automotives in general terms. Implications for Central European audience: The text brings potential value for the Central European audience by drawing attention to the palpating discussion among policymakers, scientists, and the media about the reliance of the macroeconomy on the automotive sector. Hence, it suggests how independent individual economic policies may ultimately be, also depending on the share of the automotive industry on total output. It is also useful for the top management of the firms in the large automotive firms, be it producers or suppliers, as they may observe how the interconnections with the outer economy might look like. Likewise, for the banking sector, the paper disentangles potential issues with concentration risk and conveys information about industry-specific lending. Finally, the paper provides the Central European readers with information about how the linkages in the automotive industry can be viewed as a whole. Citation: Central European Business Review 2022, 11(2) PubDate: 2022-05-19 DOI: 10.18267/j.cebr.285
Authors:Vít Hinčica; Anna Svobodová, Hana Řezanková Abstract: The paper assesses the perception of clothing products' quality using two independent samples of Czech respondents answering a questionnaire. It fills the current research gap in revealing how the quality of clothing products is currently perceived by different socio-demographic groups and whether other factors neglected previously (e.g., type of store, store's trade name, etc.) contribute to the perceived garment quality. The results show that age plays an important role in assessing some of the parameters by which people define whether garments are quality garments. This demographic criterion also influences the intensity of quality consideration when people buy a product, but no statistically significant dependence was found for the intensity of quality consideration when people buy a clothing product. These and other papers' results may help companies in the clothing industry, and the related sectors better comprehend how different categories of people determine garment quality. Implications for Central European audience: Businesses active in the apparel and fashion industries may better understand the current preferences of Czech customers regarding their clothing quality perceptions. The results could also be useful for managers in other countries of the Central-European region. Citation: Central European Business Review 2022, 11(2) PubDate: 2022-05-19 DOI: 10.18267/j.cebr.292
Authors:Phuong Tran Huy; Thi Ngoc Quynh Dinh Abstract: This article aims to investigate the impact of training perception on work engagement. In addition, self-efficacy and organisational based self-esteem are hypothesised as mediators of the above relationship. Data were collected from employees in Vietnam using a self-administered questionnaire survey. Path analyses with Structural Equation Modelling (SEM) were used to verify the proposed relationships. The results show that both perceived training benefits and transfer of training significantly and positively influence work engagement. In addition, organisational based self-esteem partially mediates the impact of perceived training benefit on work engagement. Self-efficacy mediates a portion of the effects of the transfer of training on work engagement. The results add to the existing literature on the determinants of work engagement and on the consequences of the transfer of training. The findings also provide insight into the conditions for effective training in organisations. Implications for Central European audience: Developing an engaged workforce is a vital task to all organisations. However, data showed that the work engagement level in Europe is low, especially in Central Europe. The results of the study provide insight into the determinants of employee engagement at work. In addition, like Vietnam, most countries in Central Europe have been in transition from former central-command systems to market economies. The application of contemporary Western human resource practices needs special consideration to ensure its effectiveness. The current study may supply some empirical implications for both academics and practitioners. Citation: Central European Business Review 2022, 11(2) PubDate: 2022-05-19 DOI: 10.18267/j.cebr.286
Authors:Marian Holienka; Diana Suchankova, Peter Psenak Abstract: Failure is an inseparable part and probably the most likely outcome of entrepreneurial activity. Fear of failure is among the key factors that hinder individual entry to the entrepreneurial path. While entrepreneurship literature mostly deals with its consequences, considerably lower attention has been paid to understanding its drivers. This is especially true in the Central European region, Slovakia not being exempt. Thus, our paper aims to fill this gap by analysing factors driving the entrepreneurial fear of failure among non-entrepreneur individuals in Slovakia. In doing so, we rely on the 2019 Global Entrepreneurship Monitor data for Slovakia and employ the ordinal logistic regression to test the hypothesised drivers of fear of failure among non-entrepreneur individuals. Our findings suggest that perceived entrepreneurial self-confidence and perceived ease of starting a business significantly reduce fear of failure. These factors are rather of an intrinsic and individual nature (the 'I can do it' factors). Further, in the case of non-entrepreneurs, these self-assessments usually result from expectations rather than from their own actual experience. Yet, the expectations themselves seem to be strong enough to affect the perceived level of fear of failure. We attribute this effect to the so-called failure feedback - an indication of a potential failure. Implications for Central European audience: Our study contributes to the debate on drivers of individual involvement in entrepreneurship and their specificity in the Central European context. We shed more light on factors influencing the fear of failure - one of the strongest barriers hindering individuals from starting a business. Despite focusing on Slovakia only, our study brings this topic to the table in the region. We contribute to the body of knowledge by suggesting potential patterns behind the fear of failure formation among the non-entrepreneur population, encouraging further investigation in the region and beyond, and proposing the practical implications for entrepreneurship policy, education, and training. Citation: Central European Business Review 2022, 11(2) PubDate: 2022-05-19 DOI: 10.18267/j.cebr.287
Authors:Dušan Steinhauser; Zuzana Borovská Abstract: The purpose of this research is to investigate the relationship between the institutional environment of the studied countries and the Coface Country Risk Assessment. To meet this object, we used quantitative methods in the form of descriptive and regression analysis. The result was an evaluation of the actual Coface Country Risk Assessment and its value prediction for chosen countries. The authors quantified the impact of the institutional environment using The Heritage Index of Economic Freedom subindexes on the risk assessment indicator of the major private insurance company Coface, which is not so often used in the scientific sphere and is regularly updated. The results suggest a positive correlation between the Coface Country Risk Assessment and Government Integrity, Fiscal Health, Financial Freedom and Property Rights. Although Tax Burden is a statistically significant factor, its parameter was detected with an unexpected sign. For this reason, authors abstracted from it. Subindexes Government Spending, Business Freedom, Monetary Freedom, Trade Freedom, and Investment Freedom were statistically insignificant. Control variable Public Debt as a share of gross domestic product was insignificant as well. Implications for Central European audience: The article applies the Coface Country Risk Assessment, which has so far been rarely used in the scientific literature. We present the current and predicted values of the Central European Countries, but also the countries interesting from their point of view due to trade and investment opportunities. Many countries, including those in Central Europe, show differences between actual and predicted values. Citation: Central European Business Review 2022, 11(2) PubDate: 2022-05-19 DOI: 10.18267/j.cebr.288
Authors:Egidijus Kundelis; Renata Legenzova, Julijonas Kartanas Abstract: Tax avoidance became a frequently observed practice in a global business environment. Multinational enterprises (MNEs) employ differences between statutory tax rates of their home countries and countries of their subsidiaries, aiming to achieve the effective tax rate being lower than the statutory one. MNEs enable tax avoidance practices via multiple channels, transfer pricing and debt shifting being among the most popular among them. The goal of this article is to evaluate if MNEs operating in Lithuania, a small open economy of Central and Eastern Europe (CEE), are engaging in tax avoidance practices, and if yes, what channel debt shifting profit shifting or both are employed. Our research is built on the data for the years 2010-2018 and analyses 3,563 MNEs and local companies operating in Lithuania. Results of the conducted regression analysis rejected the impact of differences in tax rates between MNEs and their subsidiaries in Lithuania on their leverage. Therefore debt shifting across the sample companies was not evident. On the contrary, analysis of profit shifting evidence among sample companies proved the significant influence of transfer mispricing practices on earnings of Lithuanian subsidiaries of MNEs'. Such results may imply that in Lithuania, corporate tax avoidance of MNEs occurs via the channel of profit shifting rather than debt shifting. We suggest that this is related to the specifics of small economies commonly characterised by lower tax rates, underdeveloped financial markets and lower tax avoidance costs. Implications for Central European audience: Previous tax avoidance and profit shifting research mainly analysed the United Kingdom, Germany and other large countries in Europe, leaving a gap in research on small economies, especially those in CEE. Lithuania, similar to the other CEE open economies, is competing for attracting foreign investment, which makes it relevant to understand if and how the country's tax system is exploited in the corporate governance practices of MNEs. Citation: Central European Business Review 2022, 11(2) PubDate: 2022-05-19 DOI: 10.18267/j.cebr.290
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