Jelena Stankevičienė

The evaluation of bank performance using a multicriteria decision making model: a case study on Lithuanian commercial banks

Abstract The paper presents an attempt to adopt a muticriteria decision making approach, particularly the Analytical Hierarchy Process (AHP) model, and to evaluate the performance of banks. The model is based on a system of various qualitative and quantitative criteria and their mutual relations. A system of indicators is created and described and each indicator is assigned a different degree of significance taking into account the needs and priorities of both internal and external evaluators. Model adaptation to Lithuanian market and an empirical test enabled to compare banks between each other, reveal their ranking and identify the banks taking leading positions in the market. The conducted research has concluded that the Analytical Hierarchy Process (AHP) model is appropriate for using it in the process valuating bank performance.

Innovative application of contemporary management methods in a knowledge-based economy – interdisciplinarity in science

Interdisciplinarity, which is a part of the research paradigm in all fields of science, constitutes a real challenge in research. It manifests itself particularly in the diversity of the undertaken research topics, in the variety of the adopted research approaches (theoretical, methodological, normative, empirical-descriptive), and in the flexibility and the ability to see both the scientific problems as well as the economic and social needs. The ability to cross the boundaries between the fields of technical and social sciences, to identify problems and to seek solutions at the frontiers of scientific disciplines, the eagerness to work in research teams diverse in terms of competence, age and skills, creating conditions for both the personal development and that of individual team members, breaking the stereotypical ways of thinking in the process of solving problems and anticipating future events are all features of an academic culture nurtured by Professor Joanicjusz Nazarko. The paper highlights the research of Professor Joanicjusz Nazarko, presents a review of his extensive scientific work and lists some of his publications.

Measuring bank efficiency: DEA application

AbstractThe paper aims to improve the methodology of measuring efficiency of Latvian banks. Efficiency scores were calculated with application of non-parametric frontier technique Data Envelopment Analysis (DEA). Input-oriented DEA model under Variable Returns to Scale (VRS) assumption was used. Potential model variables were selected based on the intermediation and profitability approach. Fourteen alternative models with different inputs-outputs combinations were developed for the research purposes. To substantiate the variables selection for DEA model the received data was processed, using such methods, as correlation analysis, linear regression analysis, analysis of mean values, and two-samples Kolmogorov-Smirnov test. The research results assisted the authors in providing general recommendations about the variables selection for DEA application in the Latvian banking sector. The present research contributes to the existing analytical data on bank performance in Latvia. The empirical findings provide a...

Dependence of sustainability on country risk indicators in EU Baltic Sea region countries

Country risk and economic sustainability become more and more important in the contemporary economic world. This paper proposes the analysis on relationship between country risk and economic sustainability in EU Baltic Sea region countries, based on statistical data of the year 2012. Investigations and calculations of rankings for country risk and sustainability were made and the results were optimized by implementing MOORA (Multi-Objective Optimization by Ratio analysis) and MULTIMOORA (MOORA plus Full Multiplicative Form) methods. Furthermore, correlation analysis was prepared and the informative results were obtained. Starting with a system of 8 alternative responses on 21 objectives (indicators), from several approaches the unambiguous results were obtained, which could be engaged in the process of creating new model for country risk assessment and its dependent sustainability indicators for EU Baltic Sea region countries.

Motives for Participation in the Sharing Economy - Evidence from Lithuania

Abstract Information and communication technologies enable the emergence of a new phenomenon called the “sharing economy”. An increasing number of articles in the media as well as debates about the positive and negative aspects of the sharing economy show a growing interest in the subject. The paper aims to review the different approaches to the definition of the sharing economy and to present the authors’ views on the concept. The reviewed literature reveals the main drivers for participating in the sharing economy. A survey was conducted to learn more about the motives of Lithuanian people participating in this concept. The survey reveals the following leading factors of using the sharing economy platforms: an easy way to make extra money; supporting individuals and/or small/independent companies; meeting new people and having an interesting experience/doing something most people haven’t tried yet. The survey also reveals that most of the respondents prefer to own things rather than share them. Despite the widespread popularity of the sharing economy platforms in the world, this phenomenon is in its infancy in Lithuania.

Determinants of self-employment among Polish and Romanian immigrants in Germany

AbstractThis empirical study investigates the determinants of self-employment propensity of Polish and Romanian immigrants in Germany. The German economy is an important object of analysis, as it is the most important destination for international migrants in the European Union. In the paper, we use the recently collected M sample of the German Socio-Economic Panel to examine which personal, country of birth-specific socio-economic and cultural factors influence the self-employment propensity of immigrants. The results of binominal logit regression show that the Central European migrants exhibit different self-employment propensity than migrants from former Yugoslavia, Russian and Kazakhstan, Turkey and Italy, with the self-employment aversion especially strong among Romanians. These differences remain substantial even after controlling for social and human capital endowment of the individuals. This study offers important policy recommendations, showing the potential obstacles in encouraging entrepreneuri...

Earnings response coefficients in the Greek market

The paper explores the relationship between accounting information and stock returns of the companies listed on the Athens Stock Exchange (ASE) in the period 1998--2008. Publicly available financial data on the companies included in the ASE during 1998--2008 have been collected and processed. The data sample consists of 245 companies and varies from 2,166 to 1,441 firm-year observations. The research methodology has been based on the extension of the model introduced by Kothari and Sloan (1992) and investigates whether the level of earnings divided by price at the beginning of the stock return period is associated with returns in the context of ‘prices lead earnings’ using annual and quarterly data. Cross-sectional regression analysis points to a significant relationship between earnings and returns on measurement windows of one year and longer. Similar results have been found in the case of a cumulative model where earnings are aggregated up to four years; however, relationship in the short measurement window up to three quarters has resulted in low earnings response coefficients.

Sustainable value creation: coherence of corporate social responsibility and performance of socially responsible investment funds

This article analyses the coherence of corporate social responsibility of companies and the performance of socially responsible funds, as such companies include elements of corporate social responsibility in their investment strategies and the funds tend to include more socially responsible companies in their portfolio. In addition, the ability of these variables to create sustainable value is considered. A methodology for the evaluation of sustainable performance of socially responsible investment funds is proposed in the article. The application of the proposed methodology reveals the importance of being responsible from the social and ecological standpoints and provides evidence of the existence of a relationship between these variables and value creation. The study shows that there exists a relationship between the sustainable performance of companies and the financial results of socially responsible investment funds. The investigation has proven that variables such as intellectual capital, social and ecological performances of companies have a major impact on the performances of socially responsible investment funds. It has been noticed that the method is sensitive to the availability of social and ecological performance information, which is represented by companies in their sustainability reports.

Implementation of Multi-Objective Evaluation Method in Public Debt Risk Management

The paper is devoted to propose a public debt risk assessment model, which allows predicting countrys economic well-being trends. The proposed model evaluates different aspects of public debt-related structural indicators. Introduced debt risk assessment model uses MULTIMOORA multi-objective evaluation method. Study is based on the 2005-2010 European Union macroeconomic structural indicators. The data analysis indicates EUs ability to cope with the increasing level of public debt and predict long term fiscal consequences. Evaluation of research results enables to use multi-objective evaluation method to determine the risk of public debt. A ranking index which shows early warning signs of fiscal indebtedness problems for European Union countries is introduced in the paper. Periodical use of proposed model would help to predict incoming recessions and to implement specific fiscal policies in time to prevent them.

Financially Constrained Firms: The Impact of Managerial Optimism and Corporate Investment on Inefficiencies Leading to Low Market Valuation - The Case of Greece

Financial constraints in capital markets can underline the macroeconomic effect of fluctuations in investment to cash flow and liquidity which has as a result several firms to reduce their access to low-cost finance. The examination of this aspect in detail determines the magnitude of the effects of internal finance on investment. Diversification as an underlying factor of financial constraints can create several costs. Diversified firms have the tendency to overinvest in lines of business which display poor investment opportunities. Diversification indeed reduces value. This loss in value is found mainly for firms of all sizes having managers with a higher level of optimism. The link between optimism and corporate investment is more pronounced in financially constrained firms. When the wedge between the internal and external cost of funds increases, a firm is considered to be more financially constrained. Managers are undisputedly optimistic and firms with optimistic managers tend to invest more. The investment of firms with optimistic managers is more sensitive to cash flow especially for financially constrained firms. Analysing a sample of listed companies in Greece, it is found that the higher the managerial optimism, the lower the excess value of a firm. Optimism and financial constraint measures are based on the insider stock transaction behaviour of all senior managers they have to report to the Hellenic Capital Market Commission. These findings show that the investigation of decision-making processes in Greece is crucial.