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This paper is the first paper that systematically observes and describes all publicly available data on insider trading on the Zagreb Stock Exchange during the period of June 2010 - June 2021. To accomplish this objective both parametric and non-parametric event-study tests are conducted using the data collected from 827 notifications published on the Zagreb Stock Exchange website. After filtering the notifications for overlapping events, there were 48 insiders’ purchase events and 50 insiders’ sales events. The results indicate that insiders can earn abnormal returns on share purchases based on their insider knowledge and that the information on insider purchases can bring additional information to outside investors. However, in the case of notifications of share sales by insiders, Cumulative Average Abnormal Returns (CAARs) after the event are not statistically significant and are just slightly positive, thus bringing no abnormal returns for insiders and not conveying information to the public. This suggests that the market may perceive sales having a lower informational content, as motivation for sales may be other needs, such as liquidity.

This chapter considers finance in the world of artificial intelligence and digitalization with a special focus on the role and physical forms of money throughout history, modes of executing financial transactions, development of banking and investment industry, and its overall importance for financial management. Innovative and alternative business solutions in the financial industry result from the development of modern technologies, information and communication networks, smart devices, and various applications. Digital money and cryptocurrencies are extremely interesting current phenomena producing a broad range of speculations and mystery about their role in the future. Electronic payments bring many benefits and opportunities for corporate finance, capital markets, and investment and banking activities. Digitalization of business operations and use of artificial intelligence applications increases competitiveness and efficiency of all controlling processes and improves corporate risk management and at the same time decreases information asymmetry in the market.

This paper investigates the linkages among equity market returns before and after the 2007- 08 crisis using exchange traded funds (ETFs) in Germany, France, Italy, UK and the USA. Daily data used from January 2005- September 2007 and July 2009- July 2010 and apply to a Multivariate Autoregressive Moving Average model (MARMA). The data are diveded into two separate periods: before the 2007-08 financial crisis and after the crisis. The results show the existence of significant co-movement of returns in all selected periods although some important differences before and after the financial crisis are noted such as marked increases in the integration of the markets and hence diminishing diversification opportunities for investors over time. Implications for the critical importance of understanding the transmission process between markets for risk management and economic policy are indicated.

This paper investigates the linkages among equity markets of four European countries (Germany, France, Italy, UK) and the USA in terms of market returns and transmission of volatilities. We use daily exchange traded funds (ETF) data from January 2002 to March 2016 and utilize both a Multivariate Autoregressive Moving Average model (MARMA) and a Generalized Autoregressive Conditional Heteroskedasticity model (GARCH). We divided the data into three separate periods: before the 2007-08 financial crisis, during the crisis and after the crisis. The results show the existence of significant co-movement of returns in all three selected periods although some important differences before and after the financial crisis are noted. Findings also include marked increases in integration of the markets and thus diminishing diversification opportunities for investors. Volatilities appear to react strongly to market movements and their shocks fade away slowly in all five countries during the crisis period. There is also strong evidence of volatility spillovers particularly during and after the crisis periods.

This paper investigates co-movements of equity returns, volatility persistence and spillovers in selected Central and Southeast European countries, the countries of former Yugoslavia: Croatia, Bosnia and Herzegovina, Macedonia, Montenegro, Serbia and Slovenia during the period of 2011-2017. The Multivariate Auto Regressive Moving Average (MARMA) and the Generalized Autoregressive Conditional Heteroskedasticity (GARCH) models are utilized to daily returns of the stock indices. The results of the analysis provide the evidence of signifi cant co-movements of returns and volatility spillovers among selected markets. The fi ndings indicate that in Slovenian, Macedonian and Serbian markets volatility reacts intensely to market movements, whereby volatilities persist very long in Bosnia and Herzegovina, and in Montenegro. From the viewpoint of volatility transmission the fi ndings also indicate enough elements for closer and intense collaboration between selected markets., Rad istražuje kretanje prinosa, postojanost volatilnosti i njeno prelijevanje u zemljama srednje i jugoistočne Europe, zemljama bivše Jugoslavije: Hrvatskoj, Bosni i Hercegovini, Makedoniji, Crnoj Gori, Srbiji i Sloveniji u periodu od 2011. do 2017. MARMA i GARCH modeli su primijenjeni na dnevne prinose dioničkih indeksa. Rezultati analize pokazali su da postoji značajno zajedničko kretanje prinosa i prelijevanje volatilnosti između odabranih tržišta. Nalazi ukazuju da na slovenskom, makedonskom i tržištu Srbije volatilnost intenzivnije reagira na tržišna kretanja te da je na tržištima Bosne i Hercegovine i Crne Gore volatilnost najdulje prisutna. Sa stajališta prijenosa volatilnosti, rezultati ukazuju da postoji dovoljno elemenata za intenzivniju suradnju između odabranih tržišta.

This paper investigates the linkages among equity returns (based on exchange traded funds, ETF) and transmission of volatilities in the following countries: Germany, Austria, Poland, Russia and Turkey. Multivariate Autoregressive Moving Averages (MARMA) and the Generalized Autoregressive Conditional Heteroskedasticity (GARCH) methodologies are utilized. The findings include the existence of significant co-movement of returns among countries in the sample. Also, Turkish and Russian markets were found to be more volatile than Austria, Germany and Poland. However, volatilities in Russia and Turkey do not persist very long. Finally, there is strong evidence of volatility spillovers. All of the countries in the sample, with the exception of Turkey, experience volatility spillovers from other markets. The presence of spillovers among return series and persistence of volatilities are useful to investors interested in diversifying their portfolios and to traders/fund managers who are interested in maximizing returns.

The primary goal of this paper is to analyze the banking sector in transition countries in Central and Eastern Europe, and identify bank’s potential as an investment in the globalized environment. The primary hypothesis is that banking sector is one of the most attractive investment areas in transition countries. In the comparison with financial systems of G7 and other growth countries, the financial industry in transition countries shows significant potential for future growth and development. Operating as universal bank with acquired position in financial supervisory bodies banks can easy control and slows down growth and development of nonbanking financial institutions. They are not overly involved in risky operations of securitization and were not so much exposed to the recent crisis. Analysis of the banking sector in transition countries has been made on available sources of secondary data and comparable quantities. Comparable quantities are analyzed with descriptive statistics, starting from the general characteristics of the region and individual countries, through macroeconomic indicator analysis to analysis of assorted indicators of banking sector which have dominant influence on prospective cash flows and risk, i.e key components of bank’s value as an investment.

Preliminary Assessment of the Planning Approach and Planning Technologies in Croatian Companies

Capital Budgeting Practices: A Survey of Croatian FirmsThis paper reports the results of a mail survey of capital budgeting practices among Croatian firms and compares the results with those from similar studies in the USA, UK, Sweden, and other European countries. It is based on a questionnaire sent to 200 firms selected from 400 of the best Croatian firms (special edition of Privredni vjesnik) and to 34 banks from a ranking of Croatian banks (special edition of Privredni vjesnik). The response rate was 25,21%. The goal of the empirical survey was to determine the present application of quantitative capital budgeting methods, cost of capital and cash flow estimation, risk analysis and application of a real options approach in capital budgeting practices in Croatian firms. This is the first empirical survey of Croatian capital budgeting practices that has been undertaken.

Ponašanje cijena dionica u veoma kratkom vremenu osnovica je vrednovanja uvjetovanih tražbina, posebno onih koje se javljaju kao formalizirane opcije, ali i u parametrima koji defi niraju dugoročno ponašanje u dionicama skrivenih opcija. Promjenama cijena dionica mijenja se rizičnost uvjetovanih tražbina, pa za vrednovanje većine njih nije moguće primijeniti koncept ekonomske vrijednosti. Jedna je od mogućnosti vrednovanja opcija oslanjanje na stohastičko ponašanje cijena dionica ili neke druge vezane imovine, pa je važno odrediti stohastički proces koji opisuje to ponašanje. Stohastički proces u kontinuiranom vremenu, poznat pod nazivom geometrijsko Brownovo gibanje, odnosno Wienerov proces sastavni je dio mnogih modela vrednovanja opcija. Najpoznatiji model vrednovanja opcija jest Black–Scholes model, a polazi od pretpostavke da cijene dionica slijede geometrijsko Brownovo gibanje. Bez obzira na kritike i postojanje brojnih alternativnih modela vrednovanja opcija, B/S model najkorišteniji je model i zajedno s različitim prilagodbama može poslužiti za vrednovanje različitih opcija i poslovnih procesa koji sadrže određene opcijske elemente., The behaviour of stock prices in a very short period of time is the base for valuing contingent claims, especially those that appear as formalized options, but also in the parameters that define long-term behaviour in stock’s hidden options. Changes in stock prices alter the risk of contingent claims, and because of that, for valuing the most of them it is not possible to apply the economic value concept. One of the possibilities for pricing the options is to rely upon the stochastic behaviour of stock prices or other underlying asset. It is important to determine the stochastic process that describes this behaviour. The continuous time stochastic process is known as geometric Brownian motion or Wiener process and it is a building block for all kinds of models for options pricing. The best-known model for option pricing is the Black-Scholes model and it assumes that stock prices follow geometric Brownian motion. Despite critics and the existence of alternative models for option pricing, the Black-Scholes model is widely used and with appropriate adjustments it can be used for pricing of different options and business processes with embedded options.