International Scientific Conference Economic Cooperation in South-Eastern Europe: Problems and Prospects Articles Risk Management of the Portfolio of Securities Using the Optimal Hedging Acad. Ivan Popchev, Nadya Velinova In the examinaon of the portfolio theory, the consideraon and analyzing of the risk assessment and measurement system is of substanal importance. There are many reasons that have incited sciensts to develop such risk measurement system. Two of the major elements of such system are related to risk determinaon and comparison. In this case when risk measurement is discussed, we have always to consider it related to the results which are obtained from the management of a securies portfolio. The hedging in the broadest sense is a strategy directed to the migaon of the undesired risk. Actually, it is a process of combinaon of two or more assets in one investment aiming at risk reducon. This strategy may include the buying of a share and, of course, the buying of a put opon on that share, or some short-term shares may be sold and aer that to be purchased call opons. There are many ways of hedging, but the only objecve of all of them is to acquire or ensure protecon of the profit without the investor losing from that. The basic hedging techniques are based on the availabili of correlaon between the parameters of different investments. The aim of this work is related to the provision of the main accents of a very important stage of the process of a securies portfolio hedging, namely, the process of the opmal hedging. The hedging efficiency is obligatorily assessed by means of comparison between the modificaon in the value or the cash flow of the hedging instrument (or a group of similar instruments), and the hedged financial posi- on (or a group of similar units). The process of op- mal hedging is used as a measurer of the quali of the opmal hedge rao depending on the amount with which the value of the variaon of a given portfolio has to be reduced. Two main parameters have material importance when using the opmal hedging strategy, namely the frequency of hedging and the degree of variaon. Some main models for opmal hedging are presented and analyzed in the first part of the arcle, namely: (1) by applying the funcon «uli»; (2) delta hedgingе; (3) use of duraon; (4) beta hedging. The second part presents how MATLAB can be used for applicaon of the opmal hedging for portfolio management. The third part is wholly in praccal aspect. It examines and compares some models for opmal hedging of securies portfolios, related to the process of risk management. Separate examples are given for the effi cient applying of these models. Key words: Opmal hedge, risk, derivaves, portfolio of securies, opon hedging. JEL: G11, G32, C61, O16. Application of the Means-End Chain Approach and the Laddering Methodology for Eliciting and Assessment of Positioning Ideas Assoc. Prof. Simeon Jelev, Ph.D. The successful posioning of a brand implies at least four interconnected things: (1) to iden- 154
fy the brand s disncve features, aributes or qualies in order to differenate it from its compeon; (2) to show these disncve characteriscs to consumers; (3) to persuade consumers into the significance of this disncon; (4) to prove that this brand overwhelms compeon in this respect. And of course, all of these things should become sustained and non-contradicng through me. One of the suitable approaches to solving each of these four tasks is researching on consumer s choice. This kind of research will first have to achieve the following: to penetrate through the surface of the inevitable inclinaon of consumers to jusfy a purchase or consumpon; and second, to pierce its way through this surface to the depth of more or less obscured, more or less realized actual reasons for this choice. Consumers choice is a favorable nourishing environment for conducng a research project aiming at solving these four tasks because it provides us with rich varie of accords and contradicons lurking into consumers behavior: desired possible, conscious unconscious, memory forgetfulness, common sense feelings, personal overindividual, now later and so on. This arcle fi rst describes how the Means-End Chain approach (MEC for short) and its corresponding methodology of Laddering Interviewing can be used to solve these four abovemenoned posioning tasks. The applicaons of MEC in posioning research have been outlined further in the arcle. The last part of the arcle idenfi es and discusses some limitaons and vulnerable areas in the approach and its methodology which will outline some direcons for fi nding beer soluons. Key words: Posioning, posional research, meanns-end chain approach, laddering methodology, laddering interviewing. JEL: M31, A14, C81. Determinants of Economic Growth Prof. George Petrakos, Paschalis Arvanitidis Over the last two to three decades a wide range of studies has invesgated the determinants of economic growth. Using differing conceptual and methodological approaches, these studies have placed emphasis on a number of explanatory parameters and offered various insights to the process of economic growth. The current paper draws on a quesonnaire survey addressed to various experts (academics, policy makers and business people), to idenfy the factors that either support or inhibit growth potenal and to assess their degree of significance. A number of points emerge. First, that alongside convenonal determinants, it is also the polical and instuonal aspects of an economy that play an important role in advancing growth dynamics. Second, determinants infl uence at a different degree each economy depending on the level of development achieved. As such, there are clear indicaons that policy priories should be different between developed and developing countries. Third, despite the previous point, there are some basic elements which are deemed important for economic growth independent of the level of development an area exhibits. Key words: Economic growth, economic dynamism, determinants, survey, experts views. Cooperation in South-Eastern Europe as a Means to Promote the European Prospects of the Region Assoc. Prof. Dinko Dinkov, Ph.D. U nder the tle above, I am sharing my thoughts with you on the opportunies to iniate new cooperaon in South-Eastern Europe and understand its new meaning in light of the vast transformaons that have taken place in the 155
internaonal system and the Balkans aer the end of the Cold War. Special aenon is paid on the streamlined policy of the countries from this part of the connent to achieve compabili with the dominant trends of building a Common European Area. The arcle covers the view that the local regional cooperaon is no more a substute for the European integraon; rather, the laer is essenal for its effecve progress. This idea is fundamental in the context of the aempts to break with the notorious image of the Balkans and promote their eventual europeanizaon.nonetheless, the region sll has the potenal to balkanize Europe, in spite of all the opmisc trends throughout it. It was here where the last military confl ict on the connent took place. Moreover, many other factors that make the region unstable are sll in place: weak states with unfinished polical and economic reforms; polical enes with unclear internaonal status; strong aspiraon for power without demonstraon of good management skills. All this is puing the European prospects of the local people and states to the test. The role of the European Union s policy and strategy for the region will be of utmost importance for it. With the development of the policy of stabilizaon and associaon of the countries from the Western Balkans, Brussels made it clear it understands that without the integraon of South- Eastern Europe, the vast European unificaon project would be incomplete. Nevertheless, the indecision which process deserves a higher priori stabilizaon or transformaon, has drawn much cricism. Thus, the establishment of the Regional Council for Cooperaon in South-Eastern Europe prompted the suggeson of a framework for the mechanisms promong regional coopera- on. The general view that has been expressed is that these mechanisms will have to ensure the common voice of the countries from the region, which on its turn would bear their shared interests and would help find raonal soluons to the problems in front of their European future. Key words: Regional cooperaon, stabilisaon and associaon agreements, Western Balkans. JEL: F01, F55. Study on Health Care Efficiency in Five Countries in South-East Europe Assoc. Prof. Evgenia Delcheva, Ph.D. The goal of the research is a comparave study on the indicators for resources, health effecveness (health results) and efficiency of the health care in five South East European countries (Bulgaria, Greece, Macedonia, Rumania and Turkey), which are not only territorial neighbors, but have common tradions and historical origins. Addional limitaon for the choice of these countries is the available informaon from the Data Base of WHO Health For All. The studying period is 2000 2004/2005. Through using the formula of the Global compeveness index, is calculated the rate of the resources and health effecveness, as their proporon - the efficiency coefficient. The conclusions show that the healthcare system in Greece works beer with a higher efficiency - 1,517 (2000) and 1,459 (2005), followed by Macedonia 1,329 (2000), 1,459 (2005) and Bulgaria 1,119(2000) and 1,201 (2005). Rumania has an efficiency close to 1, but Turkey is on the last place with health care inefficiency. The study holds out opportunies for future economic and scienfic cooperaon between South East Europe countries in the social and health area. Key words: Resources, health effecveness, efficiency, health care. JEL : I10. 156
The Retail Internationalization Assoc. Prof. Septemvrina Kostova, Ph.D. The retail internaonalizaon process is a long, risky, complex, expensive and non-linear one. Failure rates have been high for some of Europe s major firms. Moreover, and despite the current trend of standarzaon towards a single consumer, each country connues to require a specific approach. In a number of emerging economies, distribuon maturi has accelerated, whether Rumania, Slovenia, Bulgaria, Chroaa with the emergence of strong local retailers who understand how to copy overseas retailers know-how, correct mistakes, and develop hybrid formulae that are beer adapted to the local seing. Extant literature on retail adaptaon is fragmented, with contradictory evidence being provided by disparate studies set in different socio-economic contexts. Psychic distance has been idenfied as an important antecedent to format adaptaon. However, the exact nature of its intervenon is disputed. There is evidence suggesng that high psychic distance leads to standardizaon as well as adaptaon. The internaonal strategy consists of core competencies, compeve advantages in home country and in host country, strategic decisions: what, when, where, how, internaonal operaons: preentry entry-growth, reposioning, performance. Strong retail business formula in the home market is a combinaon of material and non-material elements owned by the retail firmand providing solu- ons that are both global and specific to the customer in terms of sale of goods and services. Characteriscs of the expanding internaonal retailers are: innovaons, adaptaon to the market, exploataon of economies of scale and scope, faster operaon of all process. Systemic retailers are defined as non-autonomous firms with a hierarchical/clan organizaonal culture and a centralized, formalized and specialized structure. Entrepreneurial retailers are defined as autonomous firms with an adhocracy/market centric organizaonal culture and a decentralized, non-formalized and non-specialized structure. The presented strategies are four: horizontal, perceptual, forced and migraonal. Systemic retailers are characterized by an innovaon led approach to agenda seing. Systemic retailers are characterized by an incremental approach to adaptaon. Entrepreneurial retailers are characterized by a problem led approach to agenda seing. Entrepreneurial retailers are characterized by an innovaon approach to adaptaon. Systemic retailers adopt a risk avoiding approach to adaptaon. Entrepreneurial retailers adopt a risk neutral approach to adaptaon. Key words: Internaonal retailing, psychic distance, standarzaon, adaptaon. JEL: F01, L81. Interaction, Perceptions and Policies in the Boundaries of European Union: The Case of the Northern Greek Cross Border Zone. Lefteris Topaloglou T he accession of ten new States in the EU following 1st May 2004 and the accession of Romania and Bulgaria in 2007 have brought to the fore a new economic geography in Europe shiing the EU s external borders eastward. In the broader Balkan area in parcular a new geography starts to shape, which sets new factors, balances, threats and challenges. Within this context, the borders and border regions are found to be in the center of academic research and policy making as well. This arcle aempts to study the pe and level of interacon, the percep- ons and policies occurring across the Northern Greek cross border zone. The border zone between Greece on the one hand and Albania, FYROM and Bulgaria on the other, is one of the most fragmented economic, social and polical spaces in Europe. Consequently, the actual region was considered to be a low opportuni area. It hosts small states having a low level of trade interacon and unl recently a mosaic of trade 157
policies and restricons to interacon towards each other. In addion, all countries have ethnic minories usually living in border regions that have triggered fric- on or conflict in the past and connue in some cases to be a source of suspicion and tension. The empirical analysis is based on a survey in the Northern Greek border zone that was conducted within the framework of the European research project EXLINEA. Key words: Boundaries, interacon, percepons, policies, cross border cooperaon. Evolution of European Union s position on the accession of the Western Balkans Tzvetelina Yantcheva The enlargement policy is one of the main instruments EU has in implemenng its external policy. Encouraging stabili, safe and prosperi in the Western Balkans is a major priori for the EU. Membership prospects are a powerful incenve for polical and economic reforms in the region. The EU s opinion regarding the Western Balkans in united Europe EU s posion on the place of the Western Balkans in united Europe evolves from close cooperaon to associaon and membership. However, the ulmate goal full membership depends on several condions. Main factors for this evoluon are considered: the crisis in the EU and the situaon in the Western Balkans. Key words: EU, Western Balkans, stabilizaon and associaon process, stabilizaon and associaon agreements, Thessaloniki Agenda. JEL: F15. Discussion On the Necessity of Studying Political Economy in Higher Education 1 Prof. Penyu Mihailov, Ph.D. The arcle examines one of the most controversial issues of contemporary economic thought in its theorecal and methodological aspects: the reasons of removing polical economy from the curriculum of higher educaon and unfavorable consequences for students edifica- on. The author rejects the argument that ideologizaon is the reason for the removal of this discipline. Economics is no less subject to ideologizaon, which is inherent to economic theory, and not a phenomenon imported from outside. The study provides arguments for the uni of and difference between Polical Economy and Economics. Teaching of both disciplines is necessary. The schemes and clichés of economics are a focus of crical analysis as well as its detachment from real problems of social life, which results in a crisis of economic science. As far as content is concerned, the author rejects the claims of neoclassical theory of being the universal expression of economic theory. Any theory is a child of a certain historical necessi, each one of those theories bearing the stamp of historical limitaon. This is also true for neoclassical theory, which is a parcular case of economic theory and cannot claim to be universally valid, therefore. The arcle includes an analysis of the queson whether neoclassical theory is scienfically impeccable. Key words: Polical economy, economics, dogmasm, ideology, utmost quanes, imposement, controlling test. Publications in Economic Alternatives Journal, Issues 1-6/2007 Contents and Article Summaries Guide for Authors 1 The arcle is based on contribuons by the author at a conference on Polical economy: past, present and future, organized by the Department of General Economic Theory at the Economic Universi of Varna (9-10.05.2007.) 158