Prague Economic Papers 2026, 35(2):285-313
The information technology development has led to its application in numerous areas of business. Therefore, due to the perceived advantages, the use of different software solutions and applications is becoming more and more frequent. Artificial intelligence (AI) also finds its application in accounting. The aim of this paper is to consider and define the answer to the following question: Does the AI use affect accounting implications in hotels in North Macedonia (NM) and the Republic of Serbia (RS)? The research results point to the existence of significant differences between the use of AI software in accounting in NM and RS. A significant difference...
Prague Economic Papers 2026, 35(2):249-284 | DOI: 10.18267/j.pep.907
The goal of this article is to measure the objective dimension of quality of life in municipalities with extended jurisdiction in the Czech Republic. Quality of life is measured by four composite indicators. Composite indicators were calculated using two methods based on several socio-economic factors. The methods for calculating composite indicators are the weighted sum approach and the benefit-of-the-doubt method, which is based on linear programming. In the weighted sum method, the target population groups were distinguished by determining different weights for individual socio-economic factors. The article also analyzes the effect of living on...
Prague Economic Papers 2026, 35(2):221-248 | DOI: 10.18267/j.pep.912
Analyzing 223 Czech squeeze-out valuation reports from 2005-2024, this study examines discount rate construction as a governance mechanism influencing minority compensation. We document the persistent dominance of the CAPM model, a shift toward domestic risk-free anchors, and evolving practices in WACC iteration and parameter transparency. Central to this study is the introduction of a novel 12-parameter 'Transparency Index' used to statistically test the verifiability of valuation reports over time, while also analyzing the applied company-independent equity market risk premium. Our findings reveal a statistically significant rise in report transparency,...
Prague Economic Papers 2026, 35(2):196-220 | DOI: 10.18267/j.pep.909
This study examines the evolving role of Tether in cryptocurrency market volatility, particularly in the context of the Terra-LUNA collapse. Using a multivariate asymmetric BEKK-GARCH model, we analyze volatility transmission between Tether's trading volume and the return volatilities of Bitcoin and Ethereum. Unlike prior studies that rely on issuance based measures, we employ trading volume volatility as a proxy for real time stablecoin related liquidity dynamics. The results indicate that, in the pre-collapse period, Tether exhibited a stabilizing association with Bitcoin volatility, consistent with its role as a liquidity buffer. Following the Terra-LUNA...
Prague Economic Papers 2026, 35(2):166-195 | DOI: 10.18267/j.pep.910
In recent decades, the cross-border flow of waste has become increasingly active globally, with existing research primarily attributing this trend to the pollution haven hypothesis. This study re-examines the drivers of global waste trade and explores their implications for sustainability. Using panel data from 117 countries between 1996 and 2020, we find that both developed and developing economies import waste products as resources. However, the resource hunting motive declines and shifts toward higher-value waste when importers adopt recycling policies. When developed exporters implement such policies, importers increase trade value due to lower...
Prague Economic Papers 2026, 35(1):1-27 | DOI: 10.18267/j.pep.906
This paper investigates the drivers of foreign exchange implied volatility in Central and Eastern European (CEE) countries. Currencies in non-euro EU countries are particularly sensitive to changes in market sentiment. Risk aversion significantly impacts the implied volatility surface for FX options, making these options crucial for managing skew risk. By analysing option prices, this study identifies co-movements between spot rates, interest rates, and volatilities for specific option strategies. Empirical evidence reveals robust determinants of volatility levels, volatility smiles, and volatility term structures. Applying error correction models...
Prague Economic Papers 2026, 35(1):121-165 | DOI: 10.18267/j.pep.904
While prior research emphasizes the socio-economic benefits of financial inclusion, its implications for bank profitability remain underexplored. This paper employs seven traditional and four digital indicators to create a financial inclusion index through principal component analysis (PCA). To capture potential nonlinearities, quadratic specifications are incorporated within a two-step system generalized method of moments (GMM) framework and validated using the Lind and Mehlum (2010) U-shape test, while Granger causality tests examine directional effects over the 2015-2023 period. Results indicate that traditional financial inclusion positively influences...
Prague Economic Papers 2026, 35(1):97-120 | DOI: 10.18267/j.pep.905
This study examines the potential for cooperation between traditionally competitive small and medium-sized enterprises (SMEs) in the sector 86901 - Medical laboratory services in Slovakia as a strategy to enhance competitiveness in the face of large market players. By building coalitions, SMEs can overcome natural disadvantages, such as limited economies of scale, a lack of capital, or limited access to innovation. In this article, we will focus on the possibilities of applying the Banzhaf and Shapley - Shubik indices, as well as their reverse interpretation, to quantify the individual strength of a player within potential coalition groupings, with...
Prague Economic Papers 2026, 35(1):56-96 | DOI: 10.18267/j.pep.908
This paper investigates the nexus between medium- and high-technology exports and electricity consumption from 2016M1 to 2025M05 in Turkey. Nonlinear features in the data lead the use of a Smooth Transition Regression model that shows entrepreneurial expansion which intensifies electricity demand, while technology exports further increase electricity consumption in the nonlinear regime. Foreign direct investment is observed to reduce energy demand in the high entrepreneurship regime. Both Bootstrap Toda-Yamamoto and Fourier Cumulative Frequency causality tests indicate unidirectional causality from technology exports to electricity use. Moreover, Wavelet...
Prague Economic Papers 2026, 35(1):28-55 | DOI: 10.18267/j.pep.903
While theoretical perspectives often emphasize the role of high-quality institutions in attracting foreign investors, empirical findings remain rather mixed. This study advances existing research by exploring the interplay between quality of institutions and economic development in driving greenfield foreign direct investment (FDI) in European countries. The results do not suggest that better institutions alone directly help attract FDI in the selected European sample from 2003-2022. However, in more economically developed host countries, institutional quality plays a significant role, whether measured by real GDP per capita or GNI per capita. Further...
Prague Economic Papers 2025, 34(4):592-623 | DOI: 10.18267/j.pep.899
This paper presents the first systematic literature review of event study methodology applied to political events. Following PRISMA guidelines, 133 studies (1997-2024) were analysed to uncover methodological patterns. The findings show that nearly three-quarters of the papers rely on a single expected return model. The market model accounts for close to one-half of all identified model specifications, indicating its simplicity and practical applicability. Symmetric event windows, mainly shorter configurations like (-1, +1) are preferred; most of the studies test multiple lengths. Estimation periods vary (5-300 trading days), though many papers offer...
Prague Economic Papers 2025, 34(4):559-591 | DOI: 10.18267/j.pep.900
In existing empirical literature, the effect of remittances has most often been examined in relation to economic growth, poverty reduction, and employment in recipient countries. Unlike previous empirical studies, this paper focuses its analysis on the impact of remittances on unemployment in selected Central, Eastern, and Southeastern European (CESEE) countries from 1998 to 2021, using the New economics of labor migration framework. These countries, which underwent deep economic and political transitions during the 1990s, faced significant challenges associated with high unemployment, particularly among the working-age population who lost their jobs,...
Prague Economic Papers 2025, 34(4):495-558 | DOI: 10.18267/j.pep.898
Following the COVID-19 pandemic, Romania and other Central and Eastern European (CEE) countries faced some of the highest inflation rates in the European Union, creating a pressing need for accurate short-term forecasts to guide monetary policy. This study compares modern machine learning (ML) methods - Long Short-Term Memory (LSTM) neural networks, Random Forests (RF) and Support Vector Regression (SVR) - with traditional Autoregressive Distributed Lag (ARDL) models in forecasting Harmonised Index of Consumer Prices. Using quarterly data for Romania (2006Q1-2023Q4) and monthly data for nine CEE economies (2006M1-2025M3), we incorporate unemployment...
Prague Economic Papers 2025, 34(4):470-494 | DOI: 10.18267/j.pep.902
Investors often view financial distress, defined as a company’s inability to pay its debts on time, as a sign of declining creditworthiness. However, they also consider non-financial data, such as the environmental, social, and governance (ESG) activities of firms, when making decisions. This study investigates the impact of financial distress on ESG scores among European Union (EU) firms, using firm fixed effects (FE) and random effects (RE) models, along with Pooled Ordinary Least Squares (OLS), Common Correlated Effects Mean Group (CCEMG), and Augmented Mean Group (AMG) estimators. The panel data covers the years from 2013 to 2023. To examine...
Prague Economic Papers 2025, 34(4):442-469 | DOI: 10.18267/j.pep.901
The aim of this study is to empirically investigate how financial globalization affects tax competition, focusing on implicit and effective tax rates across 29 European countries over the period 2010-2021. Our linear dynamic panel findings suggest that while financial globalization increases implicit tax rates on labor and consumption, it exerts downward pressure on corporate tax rates. The non-linear analysis further reveals threshold effects, where the influence of financial globalization varies depending on its intensity. These results highlight the critical role of tax policy adjustments in response to globalization, emphasizing the need for international...
Prague Economic Papers 2025, 34(3):408-441 | DOI: 10.18267/j.pep.896
This article explores the determinants of bank credit granted to very small, small, and medium-sized enterprises (VSMEs) in Morocco over the period 2014-2024. The study focuses on the combined effects of monetary policy signals, prudential regulation, and government credit guarantees on this segment's access to finance. Using a quantitative approach, the analysis is based on a dataset of 799 lending decisions from two large commercial banks, combined with macroeconomic indicators. The econometric model uses linear regression to estimate the effects of the central bank's policy rate, bank lending rates, risk-weighted assets (RWA), government guarantee...
Prague Economic Papers 2025, 34(3):378-407 | DOI: 10.18267/j.pep.894
Measures of inequality typically rely on price indices formulated for a representative consumer, falsely assuming an identical consumption basket across households within the country. However, consumption patterns differ across households; hence, the changes in price levels might have different impacts on households at different points in the income distribution. To challenge this prevailing assumption and gain a more accurate comprehension of income inequality in Argentina from 2004 to 2018, I constructed income level-specific cost of living indices using the Argentinian Household Expenditure Survey. The results demonstrated that from 2004 to 2012,...
Prague Economic Papers 2025, 34(3):347-377 | DOI: 10.18267/j.pep.895
This study examines the impact of price consciousness and deal proneness on impulsive buying behavior and the Fear of Missing Out (FoMO) in the context of online clothing shopping, with a particular focus on post-purchase regret. Data were collected from 230 participants through an online survey and analyzed using structural equation modeling (SEM). The findings reveal that price consciousness has a negative impact on both FoMO and impulsive buying behavior, indicating that consumers with higher price sensitivity tend to make more deliberate purchasing decisions. On the other hand, deal proneness has a positive influence on FoMO, which in turn triggers...
Prague Economic Papers 2025, 34(3):304-346 | DOI: 10.18267/j.pep.897
This paper introduces a novel application of Growth-at-Risk (GaR) as an early warning system (EWS) for predicting recessions. By transforming GaR into a classification model, we assess its ability to signal economic downturns across 11 Central and Eastern European (CEE) economies from 2005 to 2024. We compare GaR’s performance with logistic regression across eight forecasting horizons. Our findings indicate that GaR slightly outperforms the logit model when financial conditions are used as the primary predictor. However, when additional factors such as agents’ expectations and financial flows are incorporated, the performance gap narrows....
Prague Economic Papers 2025, 34(3):278-303 | DOI: 10.18267/j.pep.893
This study investigates the nonlinear interplay between bank stability, financial inclusion, deposit insurance design, and banking concentration, utilizing unbalanced panel data from 122 countries between 2004 and 2021. By constructing novel indices-including a composite Moralhazard index to quantify deposit insurance-related risk incentives, a financial inclusion indicator, and a CONTAGION measure to capture the contagion effect of deposit insurance, we provide fresh empirical insights into the institutional synergies and trade-offs shaping banking system resilience. Our analysis reveals three key results: (1) Threshold effects exist...
Prague Economic Papers 2025, 34(2):165-186 | DOI: 10.18267/j.pep.888
This paper examines exchange rate pass-through (ERPT) to prices in Central and Eastern European (CEE) countries, focusing on the Czech Republic, Poland, Hungary, and Romania. We employ a Structural Vector Autoregression (SVAR) model to analyse the transmission of exchange rate shocks to imported, producer, and consumer prices. Results indicate significant heterogeneity in ERPT across countries and price stages. While all countries exhibit higher pass-through for import prices, variations emerge in producer and consumer price responses. Monetary policy credibility and trade openness are found to influence ERPT dynamics. The findings highlight the importance...
Prague Economic Papers 2025, 34(2):137-164 | DOI: 10.18267/j.pep.889
This study constructs two eight-asset green-energy portfolios, featuring stocks from the U.S. and Europe, to assess which portfolio delivers superior risk-adjusted performance. The analysis utilizes advanced performance metrics, the Stutzer and Omega ratios, with the traditional Sharpe ratio serving as a benchmark. Portfolios are evaluated across both pre-crisis and crisis periods. The results reveal differences in the structures of the Sharpe and Stutzer portfolios, underscoring the Stutzer ratio's ability to improve portfolio performance. Additionally, the Omega portfolio enhances the analysis by allowing the selection of varying thresholds, offering...
Prague Economic Papers 2025, 34(2):250-277 | DOI: 10.18267/j.pep.890
Reducing income inequality is one of the goals under the Sustainable Development Goals. This study examines the intricate relationship between financial development, policy uncertainty, inflation, and income inequality. Panel data for African countries covering the period 2000-2022 were used in the analysis. The study used the economic policy uncertainty (EPU) index to examine its effects on income distribution. Previous studies indicated the possibility of asymmetric effects of inflation and EPU on income inequality. Hence, a dynamic non-linear Panel ARDL was employed to examine the asymmetric nature of the relationship between these variables. The...
Prague Economic Papers 2025, 34(2):214-249 | DOI: 10.18267/j.pep.891
Numerous studies have explored the possible causes of global carbon emissions and climate change; however, the impact of export diversification and concentration on these emissions is a less examined topic in literature. This study investigates the effects of export diversification and concentration on carbon emissions in Türkiye from 1995 to 2018, utilizing the nonlinear ARDL method. The findings indicate that export diversification reduces carbon emissions after accounting for the effects of other control variables, such as renewable energy, levels of inequality, and government size. In this model, an increase in renewable energy, inequality, and...
Prague Economic Papers 2025, 34(2):187-213 | DOI: 10.18267/j.pep.892
This paper deals with the taxation of still wine in the Czech Republic. The aim of the paper is to quantify the fiscal impact of the imposition of a non-zero excise duty rate on still wine on excise and value added tax revenue. The paper uses an analytical approach to assess the impacts using data collected on consumption, production and price of wine and elasticity of demand under several alternative tax rates. The results show that taxation of still wine has significant potential to increase tax revenues for public budgets. Tax revenues would increase by an amount between 4.7 and 5.3 billion CZK if the tax rates on still and sparkling wine were aligned....
Prague Economic Papers 2025, 34(1):98-136 | DOI: 10.18267/j.pep.886
This study develops a multi-dimensional composite index to measure financial inclusion in Ethiopia, using a two-stage Principal Component Analysis based on ten traditional and five digital indicators from 2015 to 2023. The results reveal a significant increase in Ethiopia’s financial inclusion score, rising from an average of 10.89% in 2015 to 52.18% in 2023. Among the dimensions, traditional availability (0.2625) is the most influential, followed by traditional usage (0.2616), digital accessibility (0.2505), and digital availability (0.2254). Further analysis reveals that the Commercial Bank of Ethiopia alone contributes 48.99% for financial...
Prague Economic Papers 2025, 34(1):78-97 | DOI: 10.18267/j.pep.885
The study examines housing affordability in Germany from 2017 to 2023 in light of rising real estate prices and challenges in the housing market. It uses the Housing Affordability Index to identify trends and patterns and propose policy measures to tackle the problems. The results show regional differences, with large cities in particular facing rising prices. Overall, the housing affordability burden has worsened across the country, with the western federal states being particularly affected. Future research should focus on evaluating policy measures and analyzing future trends in order to develop appropriate strategies and make predictions for the future.
Prague Economic Papers 2025, 34(1):45-77 | DOI: 10.18267/j.pep.884
The infrastructure investment could strongly influence the economic growth in the Western Balkans countries and contribute to improved regional cooperation and reconciliation and to faster integration into the EU. However, it is essential that public investments in infrastructure are properly financed and managed. To measure the impact of infrastructure indicators on economic growth, panel regression analysis was used for the period 2000-2021, in six Western Balkan countries. The paper addresses the important question of how to intensify investments in infrastructure to achieve sustainable growth in the Western Balkans. The obtained results confirm...
Prague Economic Papers 2025, 34(1):26-44 | DOI: 10.18267/j.pep.887
This study estimates the impact of public debt on public investment in Central and Eastern European (CEE) economies. We implement Cross-sectionally Augmented Autoregressive Distributed Lag (CS-ARDL) model, which effectively handles cross-sectional dependence and slope heterogeneity, while dealing with short- and long-run coefficients simultaneously. The results indicate the existence of both short- and long-term crowding out effects of public debt on public investment in the CEE region. These findings have significant fiscal policy repercussions, particularly in context marked by constrained financial resources and substantial debt loads, as has been...
Prague Economic Papers 2025, 34(1):1-25 | DOI: 10.18267/j.pep.880
VAT is one of the most important sources of the public revenues in the EU Member States; therefore, it is crucial to determine the factors of VAT collection. So far, only a few researchers analyzed the influence of individual economic sectors on the indicators of VAT collection, namely Compliance and Policy gaps. Therefore, the authors used the autoregressive distributed lag (ARDL) and Error Correction (EC) models to study the relationship between eleven economic sectors, the VAT Compliance Gap and the VAT Policy Gap, which were selected as the dependent variables. The research focused on twenty-five EU member states, and the examined time period was...
