VOLUME 8, NUMBER 1
INTRODUCTION AND OVERVIEW OF THE INTERNATIONAL CONFERENCE MIBES 2006
George N. Blanas
This special issue of the Journal of International Business and Economy is devoted to a selection of papers, revised and edited for publication, from the 1st International Conference on “Management of International Business and Economic Systems (MIBES),” which was held by the Department of Business Administration of the Technological Educational Institute of Larissa, Greece, in November 3-4, 2006. In this introductory paper the author provides an overview of the conference, summarizes the most important presentations, and offers some reflections on the conference outcomes. The key objective of the 1st Conference on “MIBES” was to identify the evolvement of new innovative approaches to the management of international business and economic systems. Special emphasis was given to the development of the new innovative instruments for the improvement of financial management systems.
THE EVOLUTION AND THE PROSPECTS OF CONTEMPORARY FINANCIAL INSTRUMENTS IN GREECE: THE CASE OF SWAPS
Olympia Agorasti, George N. Blanas and Pavlos Golemis
This paper presents the results of a survey of derivatives and especially of swaps usage in the Greek market. Dividing the sample to Greek companies and Greek institutional investors, we find that institutional investors use derivatives much more than companies. In particular we find that 100% of institutional investors use derivatives when the corresponding percentage of companies is 34.75% and discover the most important reasons that companies do not use derivatives. Moreover, institutional investors use all the swap products that are referred to the questionnaire when companies use only interest rate and currency swaps.
A FUZZY GROWTH OPTIONS APPROACH UNDER COMPETITION THREAT
Georgios N. Angelou and Anastasio A. Economides
Information Communication Technology (ICT) projects may contain “wait and see” components, which give ICT managers the option to defer decisions until some uncertainty is resolved. In this paper, we treat these ICT opportunities as Real Options (RO) and assume that there is competition threat that can influence negatively or even worst eliminate their values. We consider exogenous competition modeling assuming that competitors are entering randomly into the market and cause a degradation of the available to the firm of interest overall market value. We introduce fuzzy logic and combine it with ROs under competition threat. The theory developed implicitly contains not only the deferral flexibility of projects but also the possibility of considering vague information, which needs to be taken into account when (long-time range) financial decisions are made. Our proposed model is applied to a real life broadband technology business activity associated with “Egnatia Odos S.A.” strategic decision to deploy optical fiber backbone network along the national motorway “Egnatia Odos.” The results of our model prove that FROs analysis may increase the overall value of the ICT business activity despite competition threat.
ECONOMIC SPREAD AND MARKET VALUE: THE CASE OF LISTED COMPANIES IN GREECE
Panayiotis G. Artikis
The present article aims to evaluate the relationship between economic spread and market value for all firms, except financials, listed in the Athens Stock Exchange over the period 2000~2004. Specifically, this relationship was examined both on a whole market and on an industry basis. The sample firms were classified into six industries, namely consumer cyclical, basic materials, consumer non-cyclical, industrial,
technology, and communications.
In doing so a regression analysis was performed having economic spread as the independent variable and the ratio of market value over the invested capital as the dependent variable. Economic spread is defined as the difference between the return on invested capital and the weighted average cost of capital and indicates the net return a firm achieves for the capital it uses in its operations. Market value of a firm is defined as the sum of the market value of equity plus the market value of debt.
The results for the whole market showed that there is a statistically significant positive relationship between economic spread and market value in 66.67% of the cases. On the industry basis the results showed a positive relationship between the two variables in all sectors except the technology one.
GLOBAL BUSINESS RESEARCH AND STRATEGIC PLANNING TOOLS
Basil J. Janavaras and Emanuel Gomes
The web-based tools discussed in this paper support students and business practitioners alike in their roles as managers and decision makers in a global setting. More specifically, the software will enable users to perform a situation analysis of a company, determine best markets for a company’s products/services and develop an international business plan online. Project-Based Learning (PBL) is a teaching and learning method widely used at universities and businesses around the world. The three software - the Global Market Potential System Online (), the Global Marketing Management System Online (GMMSO, ) and the Export Import Management System Online (EIMSO), ) - are web-based PBL tools designed to be used for international business projects. The purpose of this paper is to briefly explain PBL, show how the software work, the benefits provided to both students and instructors using the software and discuss both pedagogical issues and student reactions based on a survey questionnaire.
REAL OPTION METHODOLOGY FOR THE EVALUATION OF IT PROJECTS
Efthymios A. Papadopoulos and Georgios Dounias
Current project valuation framework under the Net Present Value (NPV) method has been proved to be incomplete, as it fails to accurately account for uncertainty. Traditional financial tools fail because they neglect to account for the value of flexibility. The standard NPV approach assumes that project risks remain constant over the life of the strategy. It, also, fails to factor in the full range of opportunities that a new and innovative strategy may create for a firm in the future. We show how one can use Real Option methodology in order to determine optimal financial path to fund new technology deployment within a risky environment. Moreover, in this paper we demonstrate, with the use of a simple numerical example, how the Real Options methodology can be implemented within an IT project deployment.
THE APPLICATION OF FUNDAMENTAL ANALYSIS AND TECHNICAL ANALYSIS IN THE ATHENS DERIVATIVES EXCHANGE (ADEX)
Nikolaos Pavlou, George N. Blanas and Pavlos Golemis
Derivatives Market in Greece is under development and investors have a clear lack of advising upon this market. Analysts may say that derivatives have low risk, however investing on them does not always return profits. That is why financial analysis is useful, to inform investors. In this paper we try to apply a financial analysis on derivatives market through two different approaches. The fundamental analysis (FA) investigates a firm’s performance through its financial statements and the technical analysis (TA) takes into consideration the past closing prices of the security. The FA will be set through five different kinds of financial ratios for the last five years and TA through five technical indicators for the last three years. Evaluating the results of each method, we try to find whether there is relation with their sector, index, size, establishment date and import date to ASE or not. Our findings show that in both methods there is no strong correlation between the performance and the five different factors, so stock performance is depending on preferences of the investors and not on the directive factors.
PRODUCTIVITY AND SPATIAL DIFFUSION OF TECHNOLOGY IN GREECE: AN EMPIRICAL ANALYSIS
Serafeim Polyzos, Dionyssis Minetos and Labros Sdrolias
A great number of studies concerning Greece and other countries have indicated that there are important differences in productivity of economic sectors amongst the different regions. This article focuses on the enterprises that employ more than 20 persons, analyses the observed differences in the productivity of the secondary sector and investigates the influence of technology on the configuration of enterprises’ productivity. The spatial scale of analyses is the one defined by the Greek prefectural administrative level. The basic determinant factors of productivity are concretely described and the relationships between technology and productivity and between technology and geographical distance are estimated. The article concludes by commenting on both the existing spatial differences in productivity and the diffusion of technology in the light of their influence on regional inequalities in Greece.
The Greek economy was growing at high rates during the post-war period and up until the middle of the 1970s, while afterwards real GDP growth rates fell significantly and remained on average very low during the 1980s. Using a generalised production function approach, this paper aims at assessing the importance of various factors in explaining this slowdown, in an attempt to isolate factors that could still be at play during the current cycle. More specifically, emphasis is placed on the share of the public sector, capital accumulation, education, the impact of international developments in productivity growth, and the ability of
the Greek economy to exploit technology transfer. Main findings include the negative relationship between the size of the public sector and growth and the fact that during that period Greece seemed unable to take advantage of accumulated knowledge and R&D capital in other parts of the world. Causality tests are performed in order to verify the robustness of these findings. Also, a potentially appropriate economic policy mix is evaluated accordingly.
GROWING AND DEVELOPING OLD ECONOMY FIRMS
Anne Smith and Bryan K. Temple
This paper paints a textual picture of two old economy firms in Scotland over a five-year period. It offers a longitudinal qualitative analysis into the processes and functions of the firms. The study draws on business development and knowledge transfer literature to provide research frameworks and underpin the analysis. The fundamental aim of the study was to understand how these businesses operate. The results give a narrow but essentially deep insight into important current issues affecting the development of such firms.
Small and medium-sized, “old economy” firms, mainly family-owned, represent the vast majority of business organizations in the UK and are particularly vulnerable to economic events, political decisions, policy change and natural disasters. Their ability to adapt and transform will hold the key to economic growth and competitiveness. This paper shows clearly the challenges facing the small or medium-sized “old economy” firms, which are restructuring for growth and development in the 21st Century.
CORPORATE SOCIAL RESPONSIBILITY AND SHAREHOLDER EFFECTS: THE GREEK PARADIGM
The study investigates the risk and return profile of a stock portfolio constructed of companies that consistently promote corporate social responsibility (CSR). The stock market behavior of these companies is analyzed and attention is paid on modeling dynamic volatility and assessing implications for shareholder value. It would be anticipated that corporate social responsible companies may exhibit a stable stock market behavior. However, the volatility model employed provides a statistical explanation of CSR stock
risk and return. The impact of volatility is shown to be persistent though varying across the CSR sample. Shareholder value may fluctuate considerably and CSR stocks may not necessarily constitute a defensive asset class.