Contents of Volume 3, Number 1

June 2007

Fuzzy Near-Optimal Algorithm for the Determination of Investment Options

J.J. Flores, J. Avila, F. González, B. Flores, A.M. Gil Lafuente

Abstract: When cash becomes available in a company, there are several strategies that allow us to benefit from it. The problem is how much to invest, for how long, and using which of the investment options in order to get the maximum profit out of it. A common problem in business administration is that we do not want to keep the money idle in the checking account, neither to over-invest. When the cash function becomes negative an analogous scheme is used as we want to pay as little interests as possible. In this paper we are reporting the experiments and implementation of several heuristics that can be used with the greedy algorithm and how well they behave. Next, we develop a hybrid algorithm that takes the best of the greedy algorithm and performs a very limited search. We find in this work that the greedy algorithm we propose, in general is not able to optimize the profit for a given function; nevertheless the algorithm we use can find profits that are very close to the optimum and in some cases it gets the optimum. The proposed algorithm use a heuristic search based on a greedy scheme and greedy selection criteria to find profits close to the optimum. Finally, we propose a fuzzy representation, which includes uncertainty in several points of the algorithm. Although this algorithm is suboptimal, it is very efficient in terms of time, and its results are very close to optimal..

Financial Statement Analysis: A Bootstrapping Approach in Data Envelopment Analysis

I.E. Tsolas

Abstract: This paper contrasts data envelopment analysis (DEA) and traditional ratio analysis (i.e. performance measurement by means of profitability ratios) as alternative approaches for assessing the performance of firms. Data on a sample of firms operating in the electricity, oil and gas industry in Greece are used for the comparison. We test the null hypothesis that there is no relationship between input-output DEA model scores following a bootstrapping approach and traditional accounting ratios of profitability as firm performance measures. The application of an alternative DEA ratio model using bias-corrected technical efficiency and return on equity (ROE) as component performance indicators provide similar results with these of input-output DEA model, in terms of ranking of firms. Therefore, performance measurement by means of ratio analysis and DEA can be used and it is probably recommended to use them as complements to each other for the evaluation of performance of firms.

Financial Development and Economic Growth in a Transition Economy: Evidence for Poland

D. Kenourgios, A. Samitas

Abstract: This paper examines the long-run relationship between finance and economic growth for a transition economy, such as Poland using quarterly data from 1994:Q1 until 2004:Q4. It presents the interaction between the financial market and economic growth, and an aggregate production function is then estimated using cointegration analysis. Given that the literature on the transition specific finance-growth relationship has recently started to emerge, this study with a focus on a transition economy contribute to the existing limited research. The findings suggest that, in the long run, credits to the private sector have been one of the main forces in Polish economic growth. Furthermore, we find that economic development is not driven by endogenously determined variables among which is financial development.

The Determinants of Capital Structure for Greek Manufacturing Companies in the Eve and Aftermath of Euro

I. Asimakopoulos, F. Voulgaris, Th. Papadogonas

Abstract: This paper examines the determinants of capital structure for a large panel of 2269 Greek manufacturing companies for the period 1996-2003, therefore, covering the years before and after Greece’s EMU entry. The analysis of this study, which is the first, to the best of our knowledge, using Greek data in such a large scale, was enriched by a sectoral analysis. The results indicate that, while all variables used were found to be significantly related to leverage, the evidence from individual sectors resulted to contrasting results. Also, the effect of EMU accession and Euro adoption was positively related to leverage, especially for the export-oriented companies.