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Plamen Pytev, Elena Marinova
The Link Between Credit Default Swaps and Stock Markets in Central and Eastern Europe
Summary:
Our study aims at testing whether there is long-run relationship between the CDS and stock markets in seven countries of Eastern Europe. First, we define specifics of the seven CEE stock markets and CDS spreads. We have found that they show different performance characteristics – stock markets present very different performance while the volatility has been very close. Next, we try to estimate the presence of co-integration among the stock markets on the one side and CDS spread on the other. The results show that both stock market indices and CDS spread are not stationary at levels but are stationary at first difference and they are first-order integrated I(1) for all countries. Next, we apply Granger causality test for short-run relationship and our results show for Russia and Poland that the index return is Granger causing the change in CDS spread, the variance in the CDS explained by the index is 40% and 31% respectively. In the case of Hungary, Bulgaria and Romania, where the change in the CDS spread is Granger Causing change in stock market index, the variance in the index explained by the CDS spread is 36%, 11% and 27% respectively.
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Dragan Georgiev
Establishing a System of Income Multiplier Profiles in the Lodging Industry
Summary:
The determination of income multiplier profile (IMP) of an enterprise, activity or department in the budgeting process is a popular method in the field of hospitality to study the influence of different value measurable key factors on the financial result. Its traditional use is associated with determining the business orientation, analyzing the profitability of products and services in order to optimize the financial result, and implementation of accounting and control strategies.
This paper presents a modified approach for establishing a system of standardized profiles, based on conception of responsibility centers under USALI, as key factors are derived from the basic algebraic relationship "cost-volume-profit".
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Plamen Petkov
Econometric Estimation of Bulgarian Investment Function
Summary:
An investment function in economic terms is a concept or strategy that explains the relationships between shifts in the national income and changes in the investment patterns in the national economy. In this publication the methodology of vector error correction model (VECM) is applied to investigate long-run and short-run relationships between investments and some of their key determinants - real gross domestic product, inflation, discount interest rate and a composite index of financial development. Econometric analysis is based on annual data, which covered the period from 1991 to 2011. It is estimated there are three investment functions – of the total investment, private investment and foreign direct investment. Åach function is analyzed with and without structural shocks occurring in the study period.
