JEM Vol. 34(4), 2018


All articles of this journal are licensed under a Creative Commons Atribution-NonCommercial International License

You can use CC-licensed materials as long as you follow the license conditions.
BY – You may adapt, remix, transform, and build upon the material when proper attribution to the original source is provided (Attribution).
NC - You may adapt, remix, transform, and build upon the material only for any non-commercial purposes (NonCommercial).




Krzysztof Borowski
2018; 34(4): 5-38;

Aim/purpose – The primary aim of the paper is to verify the hypothesis on the normal distributions of 65 stock index returns, while the secondary aims are to examine normal distributions for specific years (for six indexes) and for bull and bear markets (for DJIA), demonstrate that the distribution of rates of return for individual indexes can be normal in short time intervals, and then rank analyzed indexes according to the proximity of the distribution of their rates of return to the normal distribution.
Design/methodology/approach – The research sample consists of the value of 65 stock indexes from various time intervals. The sample includes both developed markets and emerging markets. The following rates of return were tested for the normality of the rate of return distribution: close-close, open-open, open-close and overnight, which were calculated for daily, weekly, monthly, quarterly and yearly data. Statistical tests of different properties and forces were used: Jarque–Bera (JB), Lilliefors (L), Cramer von Mises (CVM), Watson (W), Anderson–Darling (AD). In the case of six indexes of developed markets (DJIA, SP500, DAX, CAC40, FTSE250 and NIKKEI225), normality tests of rates distribution were calculated for individual years 2013-2016 (daily data). In case of the DJIA index, the normality tests of the distribution of returns for individual bull and bear markets were analyzed (daily data, rates of return close-close). In the last part of the paper the analyzed indexes were ranked due to the convergence of their return to normal distribution with the use of the following tests: Jarque–Bera, Shapiro–Wilk and D’Agostino-Pearson.
Findings – The distribution of daily and weekly returns of equity indexes is not a normal distribution for all analyzed rates of return. For quarterly and annual data compression the smallest number when there were no reasons to reject the null hypothesis was observed for overnight returns compared to close-close, open-close and open-open returns. For the daily, weekly and monthly overnight rates of return, the null hypothesis was rejected for all analyzed indexes. The following general conclusion can be formulated: the higher the data compression (from daily to yearly), the fewer rejections of H0 hypothesis. The distribution of daily returns can be normal only in given (rather short) time intervals, e.g., particular years or up or down waves (bull and bear markets). The position of the index in the ranking is not dependent on the date of its first publication, and hence on the number of rates of return possible to calculate for analyzed index, but only on the distribution of its rates of return.
Research implications/limitations – The main limitations of the obtained results are different time horizons of each of the analyzed indexes (from the first date in a data base until 30.06.2017). The major part of the returns of the analyzed indexes differs from the normal distribution, which question the possibility of unreflective implementation in practice of economic such models as CAPM and its derivatives, Black–Scholes options valuation, portfolio theory and efficient market hypothesis, especially in long time horizons.
Contribution/value/contribution – The contribution of this paper is verification of the statistical hypothesis regarding normal distribution of rates of return: (1) other than close-close, i.e. open-open, open-close and overnight with the use of various statistical tests, various data compression (daily, weekly, monthly, quarterly, yearly) for 65 indexes, (2) for six stock exchange indexes in each of the years from the period of 2013-2016 (daily data) and (3) for individual up and down waves for the DJIA index (daily data). In addition, other papers focused only on one or two statistical tests, while five different tests were implemented in this paper. This paper is the first to create a ranking of stock market indexes due to the normal distribution.

Keywords: financial markets, distribution of rate of returns, capital market efficiency.
JEL Classification: G10, G14.


Justyna M. Bugaj  , Radosław Rybkowski
2018; 34(4): 39-57;

Aim/purpose – The aim of the paper is to identify key indicators from selected interna-tional rankings that might be used while formulating a university’s strategy; especially in the context of Polish higher education regulations and requirements.
Design/methodology/approach – The paper is based on literature review, accompanied by qualitative-comparative analysis of the most popular international rankings of universities; comparative analysis is also applied to methodologies accommodated by these rankings and to the organization of their output.
Findings – Modern universities face growing pressure from the intensifying processes of internationalization and have to search for effective methods of increasing their competitive advantages worldwide. Thus, a well-defined and implemented strategy should play a significant role in this process.
Research implications/limitations – The very recent discussions concerning the pro-posed new Polish Law on higher education and science prove that there is still limited understanding of the importance of university strategies. The government emphasizes the significance of improving international competitiveness of Polish higher education institutions; thus, the proper use of international rankings seems to be vital in responding to governmental visions. The research findings should help universities in the develop-ment and execution of strategies.
Originality/value/contribution – The paper combines analysis of international rankings and strategy development/formulation. Therefore, it might be a useful tool for the administration of Polish universities and should help in understanding of university organization.

Keywords: strategic management, university, strategic goals, international rankings, internationalization.
JEL Classification: M19; M29.


Ogochukwu Augustine Isimoya, Olubayo Thomas Olajide, Akinwunmi Kunle Onafalujo 
2018; 34(4): 58-80;

Aim/purpose – The study examined the causal relationship between Performance Related Pay (PRP) and Organizational Commitment (OC) in the Nigerian insurance industry.
Design/methodology/approach – The study adopted a quantitative research approach to validate the relationship; through the administration of structured self-report questionnaire to the senior staff in Nigerian insurance industry. A sample size of 217 respondents completed the questionnaire and data was quantitatively analyzed using descriptive statistics, Pearson correlation and multiple regression analysis.
Findings – Results of the study show that PRP components, like Merit-Based Pay (MBP) Performance Appraisal (PA) and Supervisor’s Support (SS) were correlated moderately and positively with affective OC, at 95% confidence level. In addition, the regression analysis revealed that variances in OC dimensions – affective, continuance and normative-respectively, were explained by the variance in PRP components (MBP, PA, and SS).
Research implications/limitation – The study revealed that PRP is positively correlated with OC in the Nigerian insurance industry. Thus, insurance management should motivationally reward their talented employees to earn their commitment. However, the study only focused on insurance industry.
Originality/value/contribution – Empirically, the study attempted to quantify the causal relationship between PRP and OC in Nigeria. The results of the study suggest that PRP strongly predicts OC in the Nigerian insurance industry.

Keywords: Organizational Commitment (OC), Performance Related Pay (PRP).
JEL Classification: M, M12, M52.


Magdalena Karczewicz
2018; 34(4): 81-102;

Aim/purpose – The purpose of this study was to create the delimitation of Szczecin’s regional retail functions impact range on both Polish and German borderlands.
Design/methodology/approach – The aim of this study was achieved by: (a) a social study – carrying out a survey among 326 consumers (West-Pomeranian residents) (b) field research – conducting statistics of vehicle registration plate in five shopping malls in Szczecin and one in Schwedt (city in German borderland), which enabled the re-searcher to create maps of retail interactions and (c) spatial analysis – distribution of shops and shopping malls, inventory of facilities.
Findings – The result of the study is a delimitation of three zones (on cross-border area) where Szczecin impact spans considering retail functions and shopping migrations.
Research implications/limitations – Results may serve as a basis for determining trends in shopping migrations on researched area. The results of the survey, which give information about cross-border consumer behavior and directions of shopping migra-tions, constitute a contribution for practitioners.
Originality/value/contribution – It is one of a few empirical studies on regional retail functions impact range in the cross-border region.

Keywords: retail trade, regional place, shopping centre, borderland, cross-border region.
JEL Classification: O0, O1, R0, R1.


Kambale Kavese, Jean Luc Erero
2018; 34(4): 103-127;

Aim/purpose – Diagnostics of fiscal challenges facing the Eastern Cape Province’s (one of the nine South African provinces) economy reveals a reduction in the number of tax payers, a decrease in the Eastern Cape revenue share, a growing government expenditure but declining revenue, low growth path, high levels of unemployment, poverty and income inequality. To address these challenges, fiscal policy-makers endorsed efficiency in government revenue collection which, if well managed, will increase revenue by 1.5 percent. This study seeks to investigate the impact of fiscal expansion in the Eastern Cape economy.
Design/methodology/approach – This study uses the Social Accounting Matrix (SAM- -Leontief Model) to assess the impact of efficiency in revenue collection in the Eastern Cape Province. The model provides demand-side tax multipliers. The methodology used to develop the SAM database is in line with the most recent 2008 System of National Accounts (SNA) released by the United Nations (SNA 2008) and international best practices.
Findings – Tax micro-simulations results indicate that an additional R 1 (one Rand) in the fiscus will have positive impact on economic growth, employment creation, poverty reduction and income inequality.
Research implications/limitations – SAM is described as the presentation of SNA accounts in a matrix which elaborates the linkages between the Supply and Use Tables and institutional sector accounts. In many instances, SAMs have been applied to an analysis of interrelationships between structural features of an economy and the distribution of income and expenditure among household groups. The limitation of the model is that it assumes constant return to scale and full employment. Nonetheless, SAM is the economic tool, best when used as a database for a computable general equilibrium model.
Originality/value/contribution – The study recommends the use of this method for assessing the impact of regional economy on the entire country because it is a square matrix that quantitatively captures the transactions that occurred between the production sector, private (households), public (government) institutions, other factors, and the rest of the world. This technique is used for the first time to analyze the economy of the Eastern Cape Province in South Africa.

Keywords: fiscal policy, social accounting matrix (SAM), Eastern Cape Province, South Africa.
JEL Classification: C63, E62.


Piotr Lityński
2018; 34(4): 128-146;

Aim/purpose – The conceptualization of the estimation of spatial dysfunctionality costs.
Design/methodology/approach – An innovative method of estimating costs due to spatial dysfunctionality was proposed, including costs directly incurred and the time lost.
Findings – A modern system of integrated planning requires costs projections that justify the necessary changes in space and convince the public and competently independent territorial authorities in the metropolis to take them accordingly. The dysfunctionality of space exposes a society to high costs. On the example of the Cracow Metropolitan Area, costs only from commuting to work amount to PLN 114.7 billion (2018-2030).
Research implications/limitations – The results of research indicate the geographical directions in which the investments of public authorities operating in the metropolitan area should concentrate. For the accuracy of the projections presented, it would be essential to increase the frequency and scope of Central Statistical Office research on commuting to work.
Originality/value/contribution – The presented study is part of a few Polish studies in the field of estimating the costs of spatial phenomena – especially in terms of mobility costs. The proposed method of the research attempts to fill the gap in estimating the costs of commuting by taking into account the costs of car amortization. Thus far, research in the field of travel costs has focused merely on fuel costs.

Keywords: costs, predictions, commuting, households, Cracow Metropolitan Area.
JEL Classification: R31, R32.


Abiodun Popoola
2018; 34(4): 147-169;

Aim/purpose – The purpose of this paper is to investigate the relationship between financial strength and policy outcomes of central banks in Africa. This is against the background of challenging policy tasks facing African central banks and the fact that they increasingly have to respond to occurrences that stem from the volatile global financial system.
– Three panel regression models were developed and estimated to capture the effects of the financial strength of the central banks of ten selected countries on their inflation outcomes, official exchange rate, and interest rate. Annual data derived from the balance sheets of ten African central banks as well as macroeconomic variables from World Development Indicators for the period 2000-2014 were used for the empirical analysis.
Findings – This study found out that: central bank financial strength is not a significant determinant of inflation outcomes in African countries; central bank financial strength has a significant impact on the determination of official exchange rate in Africa; and central bank financial strength is not a significant factor in the determination of interest rates by central banks in Africa.
Research implications/limitations – A major implication is that central bank financial strength is necessary for result-oriented exchange rate policy in African countries. How-ever, studies employing other estimation methods may make for more robust results. Also, the inclusion of central banks that report the results of their operations in other languages apart from English may make for better generalization.
Originality/value/contribution – This study is unique in that it has focused exclusively on central banks of countries in Africa. It has also added value by considering the effect of central bank financial strength not only on inflation, but also on exchange rate and interest rate which are issues of serious concern in developing countries.

Keywords: central bank financial strength, policy, inflation, exchange rate, interest rate.
JEL Classification: E52, E58.


Anna Prończuk
2018; 34(4): 170-183;

Aim/purpose – The purpose of this paper is to understand possible methods of identifying churn risk in small and medium-sized start-up companies.
Design/methodology/approach – This paper describes the case study of a German IT start-up company and its churn risk identification approach. All presented insights are based on the company’s internal documentation. Additionally, the author conducted online surveys addressing 50 client teams asking them to assess the occurrence probability of the most common risk. The surveys have been conducted every month (August-November 2017) with 16 middle and upper managers.
Findings – Based on the research findings, it has been found out that consideration of customer opinions and estimations is very important to prevent the potential churn and strengthen marketing controlling systems. When a company aims to start tracking potential risks, it is recommendable to focus on small steps and continue adding additional risk factors that need to be tracked.
Research implications/limitations – This case study shows that a customized churn risk identification system does not have to be very advanced or sophisticated. The most important aspect of an effective churn risk identification system is its ability to be fully implemented, controlled, and corrected in case of any methodological issues or inconsistencies. However, the core key performance indicators should not be assessed based on the internal input, as self-evaluation approach tends to be very error-prone and subjective.
Originality/value/contribution – The research confirms that it is important to introduce risk identification as a holistic process, focusing not only on defining potential risks, but also estimating which risk factors are the most important ones from the strategic point of view. Introducing churn risk KPIs and tracking them on a regular basis contributes to transparency and creativity of strategic and tactical management, enabling managers to identify issues and address them in a proactive manner.

Keywords: churn risk, marketing controlling, risk identification, project management, client satisfaction.
JEL Classification: G32, M37.