Božidar Jaković

Selection of variables for credit risk data mining models: Preliminary research

Credit risk is related to the risk of the borrower that the lender will not be able to return their debt including interest. Numerous researches have been conducted in the area of credit risk, both using classical models such as Altman Z-score and using machine learning methodology. However, the research using the data from Croatian financial institutions is scarce, especially research focused on the selection of the demographic and/or behavior variables. In addition, it is important to develop robust models that estimate credit risk as accurately as possible. The goal of this research is to develop a data mining model for prediction of credit risk, using the data from Croatian financial institutions on defaulted clients (demographic and behavior data). Decision tree models are constructed for the prediction of credit risk. Different algorithms for the variable selection are evaluated based on the classification accuracy of the decision trees developed based on the selected variables.

Exploring impact of economic cost of violence on internationalization: Cluster analysis approach

Companies have to deal with many different challenges in their environment every day. In this article, focus is given to inspecting the impact of the economic costs of violence on 119 countries worldwide. In the analysis, the CAGE model, which consists of four complex domains: Cultural, Administrative, Geographic, and Economic differences, is used to group countries according to their development level and the level of violence costs. However, in the clustering analysis, except the CAGE variable, 10 additional variables describing development level and the economic costs of violence are used as well. According to the conducted nonhierarchical cluster analysis, in which a k-means approach was used, six groups of countries are recognized. Most countries can be found in the cluster of developing countries with low economic costs of violence. So, the results pointed out that, despite the low economic costs of violence, a large number of countries are still struggling with other key environmental challenges that prevent them from achieving their full economic development potential.

Development Practices of Embedded Systems: SMEs in SEE countries

Abstract Background: Embedded systems are evolving in their use based on the increased trend of merging software with hardware appliances. The market for the embedded systems development is rapidly increasing and this is one of the possible new markets for software firms striving for new competitive advantage. Objectives: The goal of the paper is to explore embedded systems development practices of Croatian firms and compare them with the practices of the firms from South Eastern European (SEE) countries. Methods/Approach: The survey was conducted using the sample of SME software firms and the data on embedded systems development practices have been analysed. Practices of Croatian firms were compared with practices of other firms from SEE countries. Results: Results of the survey revealed that in comparison to their counterparts from SEE countries, Croatian firms involved in embedded systems development utilise cutting-edge technology and processes to a lower extent. Conclusions: Cutting-edge technology and processes are prerequisites for attaining the level of productivity in software production that is sufficient to ensure maintaining cost competency. However, SMEs are yet to fulfill their market potentials