Faculty of Economics
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Item type:Publication, Determinants of Capital Structure: Empirical Study of the Industrial Companies in North Macedonia(2024-12); Shkrekova, ElenaThis study explores the determinants of capital structure within industrial firms in North Macedonia, focusing on a decade-long panel of companies listed on the Macedonian Stock Exchange from 2012 to 2022. Using panel regression analysis, the research examines the impact of key factors—firm size, profitability, asset tangibility, growth, risk, and taxation—on the leverage decisions of these firms. The results reveal that firm size and asset tangibility are positively associated with leverage, indicating these companies’ reliance on debt, especially when supported by substantial physical assets. In contrast, profitability demonstrates a negative relationship with leverage, consistent with the Pecking Order Theory, suggesting that profitable firms in this emerging market prefer internal financing. Growth, measured through sales, shows a positive correlation with leverage, though the impact varies with growth metrics. Overall, this study highlights the unique capital structure dynamics in a transitioning economy and provides valuable insights for financial managers operating in similar markets. - Some of the metrics are blocked by yourconsent settings
Item type:Publication, Impact of Bank Concentration on Volatility – The Case of European Economies(Faculty of Economics-Skopje, Ss. Cyril and Methodius University in Skopje, 2023-12-15); The goal of this paper is to investigate the impact of concentration in the banking sector on the economic and financial stability. Having in mind that the European countries are predominantly bank-centered, we begin with the assumption that too much power concentrated in a small number of financial institutions could have a significant impact on the entire economy. Therefore, our aim is to examine the impact of concentration in the banking sector on the stability of both the financial system and the economy. For the purpose of the study, we have created a sample of 44 European countries, with data covering the period 2000-2021. The methodology involves two econometric techniques: logistic regression and the Generalized Method of Moments procedure to address the problem of possible endogeneity of the data. Using a set of independent variables representing the level of concentration and competition, as well as a set of controlling variables, the results show that the higher concentration of assets among the largest banks has a negative impact on economic stability, while the impact on financial stability is undetermined. The remaining variables show that the countries with higher growth rates and higher capital investments exhibit more stable growth, while the impact of inflation is generally negative. - Some of the metrics are blocked by yourconsent settings
Item type:Publication, Climate risks and vulnerability of the local economy of the City of Skopje(2023-06-01)Climate change is a global problem that challenges humanity. Global warming, which is expected to bring extreme weather events, exposes human health, ecological systems, and ultimately the economy to great risks. Although the economy affects climate change, climate change also affects the economy. The effects of climate change on the economy in the short term can be positive or negative, but in the long term there is a consensus that global GDP will on average experience a significant reduction depending on the intensity of global warming. In addition to the small direct impact through disruption of economic inputs, the indirect impact through the transmission mechanism of productivity and investments on GDP is complex. However, climate impacts are not expected to have an equal negative impact on all economies in the world, and the Republic of North Macedonia is in the group of counties less vulnerable to climate change. In this paper, we will apply the SECAP methodology for assessment of climate risks and vulnerability of the local economy of the City of Skopje. For this purpose, we will do an in-depth analysis of the local economy through the sectoral approach. The City of Skopje is an administrative city, and the sectors that are most vulnerable to climate change, such as agriculture, forestry, fishing and construction, are marginal. An increase in the intensity of the extreme weather is expected, especially the increase in temperatures in all seasons with increased precipitation and flash floods. Therefore, an increase in climatic risks is expected in the local economy in the City of Skopje in relation to the current vulnerability. Аlthough some sectors would be negatively affected by climatic change, the general assessment is that the economy of the City of Skopje will remain moderately vulnerable to future climate risks. It is because of the expectations for strong adaptability of local businesses and change of business models according to the new economic conditions. - Some of the metrics are blocked by yourconsent settings
Item type:Publication, Remittances, FDI and economic growth: the case of South-East European countries(Taylor & Francis, 2023-01); South-East European countries rely heavily on remittances and FDI as external sources of financing. Hence, an investigation of the behaviour of remittances and FDI during the business cycle and their impact on economic growth is of crucial importance. To achieve this objective, we first analyse the cyclical nature of remittances and FDI flows in Albania, Bosnia and Herzegovina, Croatia, Montenegro, the Republic of North Macedonia, and Serbia (SEE6) during their business cycles in the 2008q1-2021q2 period. Second, we investigate the causal link among these variables, and find out that although at the aggregate level remittances and FDI move synchronously and in the same direction as the business cycle, there are considerable variations across countries. Following Dumitrescu-Hurlin Panel Granger causality test, we find that for most SEE6 there is a bidirectional causal relationship between remittances and economic growth, i.e. economic growth is caused by remittances, and GDP growth also stimulates remittances. - Some of the metrics are blocked by yourconsent settings
Item type:Publication, Financial policy and companies' sustainable growth(2022-12-30)This paper investigates the intercompany-specific characteristics as a determinant of the sustainable growth rate. We researched a sample of companies listed on the Macedonian stock exchanges. We found that the average actual growth rate for the 2010-2019 period is only 0.38%, while the sustainable growth rate was 1.42%. This is because of the poor operating performance of the companies, moderate leverage, and average retention ratio of 82.5% for the whole sample. The actual growth rate in specific years is drastically higher than the sustainable growth rate, while in certain years it is negative. The sustainable growth rate is positively affected by the profit margin, retention ratio, asset turnover, financial leverage, and ROE, and it is negatively affected by the operating cash flow, company size, growth opportunities, and non-debt tax shield. - Some of the metrics are blocked by yourconsent settings
Item type:Publication, Analysis of determinants of corporate cash holding of listed manufacturing companies on the Macedonian stock exchange(St. Kliment Ohridski - Bitola, Faculty of Economics in Prilep, 2022-06-30); Simona RusevaIn this study, we identify the determinants of cash holding in Macedonian manufacturing companies. The analysis was conducted using accounting data from publicly available financial statements of the sample of Macedonian industrial companies for the 2005 to 2019 period. The research was conducted through the prism of the postulates of the three main theories in corporate finance, i.e., the trade-off theory, pecking order theory, and the free cash flow theory. To that end, we applied a panel regression analysis, while from the obtained results we assess which theoretical model best explains the cash management in Macedonian companies. We found that the cash to total assets ratio averaged 3.1%. The cash holding decreases with the decrease of the net working capital, financial leverage, cash flow variability, and cash conversion cycle. Cash holding increases with the increase of the company size, cash flow, debt maturity, and capital investments. We concluded that most of the results are in line with the pecking order theory, which indicates that Macedonian companies do not have predefined cash balances, and the cash holdings are a buffer between retained earnings and investments. The level of cash holding is not planned and is not optimized, but is determined during the work processes and depends on other business decisions. - Some of the metrics are blocked by yourconsent settings
Item type:Publication, Climate Finance: Global and National Perspectives in the Context of COVID-19 Pandemic Impact(Institute of Economics – Skopje, Ss. Cyril and Methodius University in Skopje, 2022-03); In this paper we investigated global and national public climate finance. We provide a novel methodology for estimating public climate finance in the government budgets with its application to the case of the City of Skopje. Climate finance globally reached USD 632 bn in 2020 with an annual increase of only 10%, compared to previous years, which grew by about 25%. The achieved level is far from the required USD 4.35 trillion per year to meet climate objectives by 2030. We found that global pandemic of COVID-19 negatively affected the growth of the global climate finance in 2020 and lowered the level of public climate finance in many developing countries. North Macedonia is a small developing country with clear commitment to combating climate change. The Enhanced Nationally Determined Contributions (ENDC) include 63 mitigation policies and measures to reduce GHGs emissions by 51% by 2030, which require EUR 25.03 billion climate investments. Using the methodology for Climate Budget Tagging (CBT), we estimated that the amount of public climate finances of the City of Skopje in 2020 reached USD 6.09 million, which represents as much as 9.07% of the overall budget expenditures for the year, and an increase of 75% from the previous year. - Some of the metrics are blocked by yourconsent settings
Item type:Publication, Impact of Company-Specific Determinants on Corporate Cash Holdings: Evidence from South-East European Countries(University of Pardubice, Faculty of Economics and Administration, 2022-11-01); This paper investigates the impact of intercompany determinants on corporate cash holdings in South East Europe. We researched a large sample of companies listed on the stock exchanges. We found that SEE companies’ cash holdings on average is 6.94% of the total assets, which is lower than in developed countries. Intercompany determinants have a significant impact on the company’s cash holdings. Our results suggest that cash holdings are positively affected by the size of the firms, cash flow, cash flow uncertainty, debt maturity, and growth opportunities. Cash holdings are negatively affected by the net working capital, financial leverage, and capital expenditures. SEE companies operate in underdeveloped financial markets with limited access to finances, and their cash holding decisions are mostly determined by the transaction motive. Our findings indicate that companies in SEE do not pursue a cash optimization policy. They largely follow the pecking order pattern and the cash holding of the firm is mostly determined by means of the relationship between the capital investments and internally generated funds. - Some of the metrics are blocked by yourconsent settings
Item type:Publication, Impact of working capital management on profitability of Macedonian industrial companies(“Victor Slăvescu” Centre for Financial and Monetary Research, 2022-07-15); Naumovska, MajaEfficient and effective working capital management is crucial given its impact on the company's profitability. The focus of the research in this paper is the impact of individual components of working capital on the profitability of industrial companies. The research was conducted on a sample of industrial companies listed on the Macedonian Stock Exchange using their accounting data for a period covering ten years 2010 - 2019 by applying a panel regression analysis. We found that corporate profitability increases with increasing account receivable period, account payables payment period, company size, sales growth, and volatility in net operating profit. Additionally, profitability increases with decreasing in the cash conversion cycle and financial leverage. Inventories conversion period and fixed financial assets do not show a statistically significant relationship with the company profitability. - Some of the metrics are blocked by yourconsent settings
Item type:Publication, Estimating public climate finance using objective-based cost component approach(Institute of Economics – Skopje, Ss. Cyril and Methodius University in Skopje, 2022-11-01);