Issue 4, 2023

This study aims to test the validity of the Fama-French Five-Factor Model (FF5F) for Turkey. Within the scope of the study, throughout 468 weeks between September 2009 and August 2018, the returns over the risk-free interest rate of 18 different intersection portfolios are used based on value, profitability, and investment factors. A total of 8424 portfolios (18 portfolios x 468 weeks) are generated in the study. As a result of the analyses, it is determined that the Five-Factor Asset Pricing Model is valid for Borsa İstanbul. Subsequently, it is concluded that the Fama-French Five-Factor Model has a higher explanatory power in describing the stock returns of the portfolios formed with stocks of small-scale companies compared to the portfolios formed with stocks of large-scale companies. The findings are consistent with the literature.
Keywords: CAPM; Fama-French Five Factors Model (FF5F); Stock Returns; Borsa İstanbul
JEL: E44; G11; G12

The banking sector in India plays a crucial role in economic growth. A bank provides an opportunity for investments to encourage economic growth and the potential to yield higher returns. In this study, we develop a bankruptcy prediction model by using machine learning (ML) techniques, namely logistic regression, random forest, and AdaBoost, and compare these models with those developed using deep learning (DL) techniques, namely the artificial neural network (ANN). ANN results in the highest accuracy and the most favourable prediction model for bankruptcy. Data used in this study are collected from survived and failed private and public sector banks from India from March 2001 to March 2018. For bankruptcy prediction, we use the bank’s macroeconomic and market structure-related features. The feature selection technique ‘Relief algorithm’ is used to select useful features for the bankruptcy prediction model. Because failed banks in comparison with survived were less in the dataset, the issue of imbalanced cases may have arisen, in which case most ML and DL techniques do not perform well. Thus, we convert the dataset into a balanced form by using the synthetic minority oversampling technique (SMOTE). The results of this study can help in performing financial analyses of banks and thus have significant implications for their stakeholders.
Keywords: Bankruptcy; Imbalanced Data; SMOTE; Relief Algorithm; Deep Learning; Artificial Neural Network
JEL: G21; G28; G34

The aim of this article is to evaluate the nonlinear impact of ICT on the profitability of commercial banks in Vietnam and determine the ICT threshold for banks to gain additional profits from this investment. The research sample was selected by purposive sampling method, including 25 commercial banks in the period 2010-2020. The estimation results according to the 2-step system GMM indicate that ICT has a U-shaped nonlinear effect on profitability, and profitability will be lowest when the readiness index for ICT development and application reaches 0.6052 according to the derivative method, if this level is exceeded, ICT will have a positive impact on profitability and vice versa.
Keywords: Commercial Banks; ICT; Nonlinear impact; Profitability
JEL: G20; G21; G32

The research aimed at the construction of the ranking of the human capital index in the regions of the Russian Federation based on the available data on the significant factors of sustainable development. Based on the premise that the components of the Human Capital Index calculated by the World Bank coincide with the Sustainable Development Goals from Agenda 2030 “Transforming our world”, the authors construct a Regional Rating of Human Capital Development in Russia using measurable indicators for 85 Russian regions for Targets 3 and 4 from National Sustainable Development Goals Indicator Set. The indicators were grouped into three pillars (subsets): Health, Education and Living standard, each pillar consisting of 2-4 sub-pillars and 2-6 indicators. All data for the indicator’s calculation is taken from official statistics. No expert assessment is used. The research methodology is based on generalized modified principal component analysis (GMPCA), verified by the authors' previous research. The study reflects an integrated approach to assessing the efforts of Russian regional authorities in human capital development. The research lays the foundation for regular analysis of the rating and dynamics of its components in the Russian regions, which will allow for an assessment of the current state and potential of human capital development in Russian regions and can serve to improve regional socio-economic policy.
Keywords:  principal components analysis; human capital; rating of regions
JEL: С38; E24; Q01; R11

Effective and transparent communication among publicly owned organizations is considered crucial for enhancing the staff’s performance and accomplishing strategic priorities. The paper examines the Post of Kosovo, as a major public enterprise and looks at internal communication and its impact on employees' efficiency. Drawing on survey analysis and interviews, we find that the Post of Kosovo, as a public enterprise applied a closed type of hierarchical management, with no formal structure of communication in the organizational scheme. Our findings indicate that communication in the Post of Kosovo is characterized by a lack of transparency, control and manipulation, and centralized decision-making structures. It also indicates that communication has a direct impact on employee motivation and overall organizational performance. Thus, the findings of the study contribute to the existing literature on public enterprise management in transition societies and provide valuable insights into how internal communication can be used as an important tool for organizational success.
Keywords: public enterprise; internal communication; efficiency; the Post of Kosovo
JEL: L32; M12; M14; P31

The paper proposes a new approach to measuring the quality of human capital in chemical (petrochemical) industry enterprises. At present, various qualitative and quantitative methods are presented in academic literature. However, measuring human capital quality in the case under consideration is complicated due to certain industry-specific features including difficulties in obtaining statistics.
The methodology presented in this research is an assessment of human capital based on the weighted factors that have the strongest impact on the formation of enterprise personnel according to the authors and further comparison of final indicators with the quality rating table. Thus, the given technique has a comparative nature and can be applied to rank enterprises that operate in the industry analyzed in the study. In general, the theoretical part of the methodology may include n factors.
Thus, to test the methodology, the factors mostly affecting human capital formation as well as available in terms of collecting the statistical data are considered. Those factors include: the share of internal R&D expenditures, the share of personnel who attended advanced training, the share of personnel with higher education, and the share of personnel with secondary vocational education.
Keywords: human capital; R&D (research and development); qualification; higher and secondary vocational education; assessment; rating; weighting factors
JEL: M12; M50; M52

Service quality is essential to create client satisfaction by keeping existing clients and gaining new ones in any business and especially in the tourism sector. The main objective of this paper is to analyze the relationship between service quality and client satisfaction and to pinpoint key components of them in the growth and sustainable tourism. Data has been collected from foreigners who have visited hotels in Kosovo and also from domestic tourists. The distributed questionnaire is a mixed questionnaire, which includes a combination of open and closed questions. A total of 30 hotels, divided into seven regions have been chosen to send questionnaires. Participants included in the study were 300 clients who received services in the mentioned hotels. The data was collected from clients who visited hotels in Kosovo during 2020-2021. The hotels were selected mainly based on their categorization, insisting that in the research we have hotels categorized between 3-5 stars. Client data is obtained in two ways: from their hotel estimates, by e-mail, and from the visitors, we found at the hotel during the event. The collected data were processed in SPSS and presented in tabular form. Data were analyzed using quantitative techniques. The ordinary Least Square (OLS) estimator model is used to analyze the relation between dependent and non-dependent variables. Results – Clients choose the hotel mainly online or according to their experience during the preliminary visits. The main reason for the visit was rest and recreation, their treatment was friendly and efficient, the services were provided on time and the cleanliness and comfort were rated as excellent as the food and drinks. In the conclusion is stated that clients have made it clear that the quality of services and satisfied clients can greatly influence the development of sustainable tourism. Age, gender and origin don’t have a significant role to determine client satisfaction.
Keywords: tourism; service quality; client satisfaction; marketing; development
JEL: Z30; Z31; Z32; M31; M32

The increasing need for innovative ideas, technologies and products leads to the usage of new approaches and methods fostering innovative work. As it is found, the sharing economy covers not just consumption and customers’ behaviour, but finance (crowdfunds), research (co-creation areas), entrepreneurship (co-working areas) and etc. As academic entrepreneurship often is not given priority in the university policy and goals, the paper aims to present specific requirements of the specific open space inside the universities /open entrepreneurial academic centre/ that uses co-working and co-creation approaches. Thus, the paper is focused on the basics of open entrepreneurial centres (paragraph 1), indicators for their entrepreneurial success (paragraph 2) and organization of the crowd-working space (paragraph 3).
Keywords: academic entrepreneurship; co-creation; co-working
JEL: I23; O31; O36

The article presents the effect of the financial discount rate on key financial indicators in the cost-benefit analysis used in the assessment of public investment projects – financial net present value, financial internal rate of return and financial gaps. It then estimates the Weighted Average Cost of Capital as an alternative approach for determining the discount rate. The model builds on the debt/equity ratio in the overall project investment portfolio and Capital Asset Pricing Model based on: (1) the return gained from investment in risk-free instruments; (2) the risk premium for the state (the so-called asymmetric state-related risk); (3) the business risk premium; (4) the project asymmetric risk premium. The model is then applied to an environmental investment project in Bulgaria.
Keywords: discount rate; weighted average cost of capital; cost-benefit analysis; public infrastructure financing; revenue-generating projects
JEL: H43; H54

This article improves the methodological approaches to the formation of diagnostic audit of forestry enterprises on the basis of international standards FSC and SA 8000. Three components of the audit and corresponding groups of indicators are proposed as: institutional (including indicators of compliance with the current legislation, organizational structure and management system effectiveness requirements), social (indicators of labour safety, personnel safety, corporate social responsibility, interaction with stakeholders), environmental (indicators of forest management, forest protection, economic measures implementation and their impact on the environment). The methodology was tested on the materials of the state enterprise "Kivertsivske Forestry". The results show that whilst enterprises mainly operate in accordance with the social responsibility principles, but there are identified several positions that need to be improved.
Keywords: social responsibility; forestry enterprises; international standards; diagnostic audit
JEL: M14; Q23; H83

This study adopts the model of CB’s balance sheet and government budget identity developed by Klein & Neumann (1990) to investigate the question of “Will the effect of monetary seigniorage on CPI inflation and real GDP growth be differentiated based upon the adopted monetary policy regime and the initial source of seigniorage?” The study compares Egypt and Qatar, as both countries apply asymmetric monetary policy regimes. Conclusions by structural VAR model are: (i) monetary seigniorage does not affect either CPI inflation or GDP growth in Egypt. The opposite is true in the case of Qatar. (ii) in contrast to the case of Qatar, the mechanism of the money supply channel is broken in Egypt because the central bank of Egypt applies a sterilization policy to maintain dual objectives for monetary policy, namely foreign exchange rate and inflation rate.
Keywords: Monetary Seigniorage; Fiscal Seigniorage; Structural VAR Model; Central Bank’s Balance Sheet
JEL: E31; E42; E51; H68; C32