Prague Economic Papers - In Press

The Nexus Between Financial Stability, Corruption, and Income Inequality: Evidence from Türkiye

Global Nodes, National Outcomes: The Domestic Financial Impact of International Financial Centers

Revisiting Economic Development and Inequality Dynamics in Transitional Economies

Why is the number of active pension contracts in the Czech Republic still declining?

Macroeconomic Determinants of Unemployment in V4 Countries: A Longitudinal Time Series Analysis

A necessity or an investment for the future? An empirical analysis of the socioeconomic determinants of household educational expenditures using the Heckman two-stage sample selection model

Gürkan Çalmaşur, İkram Yusuf Yarbaşı, Ali Kemal Çelik

Education is one of the fundamental drivers of human capital formation and long-term development. Especially in developing economies, household investments in education play a vital role in shaping future socioeconomic conditions. High-quality education not only enhances individuals’ knowledge and skills, but also significantly contributes to economic, social, and cultural advancement. Therefore, expenditures on education by both governments and households improve not only individual success, but also the overall welfare level of nations. Education expenditures are essential for raising well-equipped generations, fostering innovative thinking, and achieving a strong position in global competition. This study aims to identify the socioeconomic factors that influence household education expenditures in Turkey as an empirical example of an emerging economy. In this context, the determinants of education spending by households are analyzed using the Heckman two-stage sample selection model based on data from the 2023 Household Budget Survey conducted by the Turkish Statistical Institute (TurkStat). This study provides critical insights into how households in emerging economies navigate the trade-off between education as a basic need and a strategic investment, offering a comparative framework for middle-income countries. According to the analysis results, household total expenditures, age, educational attainment, marital status, and occupation of the household head; household type; housing ownership; number of rooms; ease of access to educational institutions; ownership of a second residence, internet, car, detached house, and land; as well as smoking habits, engagement in paid sports activities, coffeehouse habits, and private insurance ownership were found to influence education expenditures significantly.

Simplification opportunities for family personal income tax systems

Éva Szabóné Bonifert

The general aim of this study is to help to explore the complex relation between fairness, efficiency, and simplicity within personal income tax systems. It investigates the possibility of substitution of family-type taxation systems with a simpler, selected theoretical taxation system using a computer program developed for this purpose. By incorporating the elements of family-type taxation into the theoretical system, this type of taxation systems has also become analysable, similar to other income tax systems. The results of the analyses of the French, Portuguese, and German personal income tax systems show that substitution of complex family-type taxation systems by a simpler system with fewer taxation parameters can also be contemplated. Overall, it can be concluded that complex personal income tax systems might be reviewed in terms of commonly applied taxation elements, such as tax rates and general allowances. In addition to the above, the study uses an expanded list of countries to examine the impact of the various institutional and structural elements of personal income tax systems on the shape of the tax burden curve.

The Interplay Between Technological Innovation And Human Capital Development In Driving Industrial Productivity And Competitiveness In Türkiye

Zeki Çetin, Mehmet ŞAHİN

This study examines the dynamic relationships between industrial productivity, technological innovation, human capital, openness, R&D expenditures, and institutional structure in Turkey. Using annual data from 1990 to 2020, we applied the ARDL bounds test and analyzed changing relationship structures over time with the DCC-GARCH Model. Our key hypothesis is that industrial productivity significantly relates to these structural indicators. Our analyses, specifically tailored to the Turkish economy, have unearthed the pivotal role of variables influencing managerial and organizational capacity, such as technology, human capital, and openness to the outside world, in shaping productivity. The ARDL Model's validation of long-term relationships, coupled with the DCC-GARCH Model's revelation of their temporal variability, provides a nuanced understanding of these dynamics. In this context, policy recommendations to increase industrial productivity include enhancing the quality of education, promoting technology-based exports, improving the efficiency of R&D investments, and implementing institutional reforms that support production. The findings largely support the study's hypothesis and provide a data-based direction map for policymakers. The study contributes to the development of strategic orientations that are compatible with sustainable development goals by emphasizing the role of management and organizational systems in achieving economic efficiency.

Leaving Long-Term Unemployment: Evidence from a Post-Coal Industrial Region

Milan Šimek, Lukáš Jursa, Daniel Pakši, Jakub Vontroba, Denisa Krajčovičová, Jan Belardi

Using personal-level data from local labour offices, we investigate factors influencing exit from long-term unemployment in a Czech post-coal Moravian-Silesian region through logistic regression. Key determinants include personal traits such as age, gender, and education, as well as over-indebtedness, duration of unemployment, medical condition, and district of residence. Based on our model, we predict the probability of transitioning from long-term unemployment into employment for various combinations of factors and gender. For some variables, such as years of education and duration of unemployment, the relationship is linear. For age, it is nonlinear, with the highest probability of exit around age 40. Women also show a higher probability of leaving long-term unemployment, possibly due to male-dominated jobs being more affected by the heavy industry decline experienced by the region in recent decades.

Firm Characteristics Driving Digital Technology Adoption vs. Human Capital Formation in SMEs

Ján Hunady, Mária Stachová

A lack of adequate skills is a key challenge for small and medium-sized enterprises (SMEs). This paper examines three potential solutions to skill shortages, with a focus on the adoption of digital technology. It is based on microdata from more than 13,000 SMEs. The study employs logistic regression, classification trees, random forests, and propensity score matching to identify factors associated with the adoption of digital technologies, enhancing staff training and improving recruitment. The results suggest that while established firms and members of industry clusters are more likely to adopt digital technology, Firm size and location are primarily correlated with reskilling and recruitment strategies. Our findings provide several novel policy implications. It shows that targeted public support, such as consulting, training, and direct subsidies, significantly increases the likelihood of digital technology adoption, even after controlling for potential selection bias through propensity score matching.

Raising smart money and using it smartly for corporate social responsibility: Investor heterogeneity evidence

Qian Wang，Xiaojie Pei，Yanjing Wu，Hai Long

We examine the impact of the relationship between institutional investor heterogeneity and investment preference on corporate social responsibility (CSR) performance using Chinese manufacturing data for 2010–2020. Sustainability-pursuing investors prefer investing in CSR-focused firms for sustainability based on information transparency and their green investments contribute to CSR performance. This dynamic relationship is moderated by environmental governance and media coverage. However, speculative investors pursue better financial performance for short-term returns, and frequent shifts in their incoming–outgoing money interrupt firms’ CSR sustainability. Sustainability-pursuing investors and other stakeholders benefit from investment stability, whereas the agency principle posits that speculative investors benefit from information asymmetry with short-term returns. The findings suggest that manufacturing firms raise green money from green investors funding their sustainable development. The results have policy and practical value for green financing and investment in manufacturing-dominated emerging economies.