142 10 3494 https://omeka.ibu.edu.ba/files/original/d5ed895be4c5fc4800254fcf22c1ce77.pdf b1a7eb731c2701055e85cd56e21ccb85 PDF Text Text 3rd International Symposium on Sustainable Development, May 31 - June 01 2012, Sarajevo Özdevecioğlu, M. ve Aktas, A., 2007. Kariyer Bağlılığı, Mesleki Bağlılık ve Örgütsel Bağlılığın Yaşam Tatmini Üzerindeki Etkisi: İş-Aile Çatışmasının Rolü. Erciyes Üniversitesi İktisadi ve İdari Bilimler Fakültesi Dergisi, Sayı: 28, Ocak-Haziran, ss.1-20. Pindyck, R. S., ve Rubınfeld, D., 1991. Econometric Models and Economic Forecasts. Mc Graw-Hill, Inc, New York. Rode, J., 2004. Job Satisfaction and Life Satisfaction Revisited: A Longitudinal Test of an Integrated Model. Human Relations, Volume 57(9), ss. 1205-1230. ICT Infrastructure for Sustainable Society: A Story of BH Telecom Dzihad Zlatar,Meliha Handzic International Burch University, Sarajevo, 71000, Sarajevo, Bosnia and Herzegovina. E-mails:dzidzmir@gmail.com, mhandzic@ibu.edu.ba Abstract World-class ICT infrastructure is the key to rapid economic and social development ofa country. Past studies show that the growth of ICT, particularly telecommunicationservices has a direct link with the economic growth of the country. However,the access to ICT infrastructure, services and applications and thus the level ofdevelopment varies among the countries. The focus of this study is on the currentsituation in Bosnia and Herzegovina (BiH). The main objective of the study is toexplore the penetration of telecommunication in B&H and the role of BH Telecom inthis process. Keywords:ICT, infrastructure, sustainable society, case study 1. INTRODUCTION The war that has ravaged Bosnia (1992-1995) did not just take its toll in casualties and material damage but has left the communications infrastructure crippled as well. While the other countries in the region introduced beginnings of information technologies, Bosnia had just started an arduous task of rebuilding its communications network. That task fell to the 198 �3rd International Symposium on Sustainable Development, May 31 - June 01 2012, Sarajevo shoulders of the state held PTT Company (Post, Telephone, Telegraph) more accurately to its offspring company - BH Telecom. It is not against logic that ICT development and spread infrastructure has a beneficial effect of economic and social development. If we just take the basic economic principles of effectiveness and efficiency we can assume that a functional ICT can help reduce costs and redundancy and point out faults and bottlenecks which the system needs to address. To understand what kind of impact the ICT provided by BH Telecom had we would have to have an extensive study of IT environments conducted in the private sector so that we can have a comparable ratio of increase in development compared to services provided. Sadly that kind of study has never been done which makes this hard to compare and contrast this relation in retrospect. However, previous projects, studies and activities had been conducted to promote usage of ICT technologies in the government, educational and private sectors. These activities were funded both by foreign agencies as well as local decrees and can provide the necessary comparison data for the case. 2. BH TELECOM 2.1.History The firsts steps of the renewal and reconstruction of the new information and telecommunication system were taken by the mother company already in the war period. After the breakthrough of the telephony barrier in September 1993, the management board in the former Public Enterprise PTT B&H devised the interest in new technologies in the field of communications,and in doing so prepared the company for the inevitable market race in the aftermath of the war. Its courage and visionary orientation was proven in 1996 by investing significant financial assets into the GSM technology enabling the population a access to the world by new digital PSTN access points as well as mobile telephony and Internet. At the beginning of 2001 the company Public Enterprise PTT B&H was divided and into BH Postal Services and its offspring BH Telecom. 2.2 Services BH Telecom had a long standing streak as the biggest provider of the telecommunication services in Bosnia – Herzegovina in the field of PSTN, mobile and data network. In the area of the mobile telephony it introduced the GPRS/ WAP, MMS and SMS info and fun services on the VAS platform as well as EDGE technologies. At the end of 2006 BH Telecom had over 1.000.000 users with market participation of over 50% and annual increase 199 �3rd International Symposium on Sustainable Development, May 31 - June 01 2012, Sarajevo of the number of users for approximately 150.000 accompanied by continuous improvement and work on coverage of the territory and signal quality in the entire B&H. In the field of PSTN numerous activities were conducted on application of the broadband network on the basis of the ADSL technology ensuring that BH Telecom has a very reliable and safe network accompanied by digitalization of total installed capacities of over 95%. In order to even more improve its predispositions and promote the economc sector BH Telecom implemented new technologies in the domain also, such as IVR, SMS and VMS. In recent years BH Telecom continually increased its broadbands speeds, removed the long standing limit on downloadable traffic, introduced VoIP, IPTV with video on demand and PayPerView options and continues to spread its network by reaching remote users via wireless technology. 2.3.Government support and internal operations The business model of BHT allowed for special contracts to be offered to private, government and educational sectors. While the private sector offers were most concerned with stability and security, educational sectors are cost conscious options for users who require wide range of users with no specific requirements. The government sector is a cross between the two incorporating both a large scale of smaller, constant transactions with big emphasis on security and reliability. Being a state held company as well (the government is a majority share-holder) BHT had regarding its own problems regarding its internal organization and operation redundancy. All available technologies (landline, internet, GSM service) started further improving in their own direction with no coherent relationship between the users. Therefore it was normal for one user to regular receive 3 or more bills monthly all coming from the same company all due to be paid in different times. In 2009 in cooperation with local software companies a new information system has been devised to unify the subscriber tree and provide a single platform from where all customer operations can be conducted. By doing so instead of juggling between several different applications and multiple entries on different databases everything can be done from one place with added monitoring and customer history. This not only allowed faster and more reliable service but also helped decrease the costs to the company. Regarding the topic of the paper this could be a proving case for itself but for the purpose of exploring the impact on society we will focus on government institutions as a measure of improvement to society. 200 �3rd International Symposium on Sustainable Development, May 31 - June 01 2012, Sarajevo 3.EFFECTS OF ICT DEVELOPMENT IN B&H The development of informational society in BIH was abruptly stopped by the fall of Yugoslavia and the following war. The drawback in development was even more dramatic because it happened it the time of explosive global expansion of ICT development and practical usage. It is important to note that in 2002 it was estimated that there were over 300.000 PC in households, over 5000 web sites and 100.000 internet users. However most of thesestatistics is centered on urban population and the “digital divide” between urban and rural population is one of the greatest obstacles in enabling ICT infrastructure. 3.1. Government According to the results of the study conducted by UNDP in cooperation with the Council of Ministers n 2009 government institutions have made significant progress towards incorporating and overall acceptance of ICT in their work. The results showed that 95.74% of government employees use computers in their daily work. This study does not allow us to see the quality of hardware nor the sophistication of usage but does show the results of penetration of ICT in administrative usage. 201 �3rd International Symposium on Sustainable Development, May 31 - June 01 2012, Sarajevo Another important statistic that has improved over recent year is the presence of local area networks within government institutions. This is an essential prerequisite for electronic information exchange in the daily work of government employees. Finally, the study examined the quality of the internet connection provided to the institutions which showed a dramatic increase in percentage of broadband connections as opposed to previously dominant Dial-up and ISDN connectivity. 202 �3rd International Symposium on Sustainable Development, May 31 - June 01 2012, Sarajevo The survey, done in 2009 would probably encounter even more dramatic results since, in the case of BH Telecom the overall shift to broadband connectivity will result to entirely terminating its offering of Dial-up and ISDN service due to the lack of subscribers (and the need of) by the end of the current year. The largest improvements in the government sector had been seen in its judiciary system both in terms of the infrastructure and project development. The judiciary system had made the biggest leap to automatization of its services and support and as the process matures the citizens will see the increasing benefits of ICT enabled administration. Some of the project conducted in the process of improving the judicial system is LAND ADMINISTRATION PROJECT (GTZ) - project on the Implementation of laws related to land registers in Bosnia and Herzegovina. LEGISLATION DATABASE PROJECT (UNDP and EU) - This webpage allows users to search, browse and access all laws in Bosnia and Herzegovina. JUSTICE SECTOR DEVELOPMENT PROJECT (USAID) - The JSDP was designed to strengthen capacities within the justice sector in order to maintain and strengthen the rule of law. The primary goal is the provision of institutional support in order to strengthen the independence of the justice sector 203 �3rd International Symposium on Sustainable Development, May 31 - June 01 2012, Sarajevo 3.2. Education One of the main indicators of ICT usage within educational institutions is the ratio of pupils/studentsper computer. In comparison with the collected data from the 2005 eReadiness Report we can observe an increase in pupils/students per computer ratio: Though the increase is promising (especially considering the data dates to 2005) it is far away from adequate. Another problem is that the rate of acquisition of ICT technologies varies amongst different educational institution. While some have embraced information technologies and help/improvement that it brings other reluctantly implement new methods due to either financial reasons or unwillingness to learn new technologies. 3.3. Private sector The reliability on ICT technologies is present in all branches of economy but the impact on society is best measured observing the development of IT market itself. According to the International Data Corporation (IDC) the IT market in Bosnia and Herzegovina stagnated at $167 million in 2010. When measured in local currency, the market expanded 5.0% from the previous year. According to a recent report from market research company IDC, per capita IT spending in Bosnia and Herzegovina reached $36 in 2010, or 4.3% of the EU average. Between 2011 and 2015, IDC expects the Bosnia and Herzegovina IT market to expand at a compound annual growth rate (CAGR) of 11.8% to reach $291.49 million in 2015.Like in many developing counries benefits from ICT technologies in Bosnia are predominantly that of it’s mobile operators and service providers. Survey done in 2003 conducted by UNDP showed that 8,6 % of countries GDP is shared between ICT service providers. To effectively 204 �3rd International Symposium on Sustainable Development, May 31 - June 01 2012, Sarajevo use the resources provided this trend has to be reversed: The service providers must be second to the market which benefits from the service and creates value. Although in recent years the IT market has significantly expanded, most of the companies are foreign subsidiaries who use the local work force for “cheap labor” because of the difference of standards in the regional industies. The same standards apply for platforms, standards and equipment needed therefore it is hard to be competitive in foreign markets. This can be attributed as the largest reason for stagnation in the industry because even if ICT technology is present and suffice the needs of IT developement the lack of financial investment and high prices due to economies of scale hinder their development. 3.4 Role of BH Telecom in ICT industry In terms of the three sustainable society branches spoken of BH Telecom was involved in all aspects. In the goverment sector as the state owned operator it provided majority of the infrastructure (at least in the Federation entity). Most if not all goverment institutions are connected with broadband internet and connected via local area networks. In the educational sector there is a wide gap left by the discontinuation of the academic research newtork which has never been filled. BHT has on numerous occasions collaborated with educational institutions and promoted programs in the educational sector but the task of establishing an unified network falls upon the legislation of the goverment. If and when the goverment decides that the need for such a network cannot be ignored BHT has the resources to create it. Concerning the private sector BHT is a long time partner with two of the worlds leading plaform solutions – Oracle and Microsoft and in that way enabled all its customer to use and develop their own solutions based on that platform. Regarding other branches of the industry BHT offered specialized business packages suited for the needs of companies either operating on the internet or using its benefits. This feature did expirience a decline due to the appearance of smaller ISPs which are focused on delivering more customized and suitable offerings but some of which still use BHT infrastructure.In this sector services of BHT provided operational requirement for e-banking, virtual private networks or even such services as Mparking.It is also important to note the distribution of IPTV, although BHt is not the fist operator to offer the service, the service it does offer is not just centered in the urban areas but all over the country enabling suburban and rural areas the quality of IPTV service which can compare to world standars. 4.CONCLUSION The facts presented in this paper that there is indeed an increase in development of ICT in all aspects of the society, although it is less than desirable. It would be unfair and incorrect to attribute all of it to the services provided by BH Telecom but it cannot be denied that BH 205 �3rd International Symposium on Sustainable Development, May 31 - June 01 2012, Sarajevo Telecom was in all recent years and still is the largest provider of ICT services all across the country. Furthermore where other ISP providers are mostly profit oriented the role of BHT as the state operator is to provide service everywhere regardless of the profits involved. Development of ICT undeniably affects the society as a whole in a beneficial manner but B&H has reached a point where future development is not hampered by the lack of its infrastructure but rather a lack of financial investment in further improvements. Though the lack of resources is high compared to world standards or even countries in the region it is the usage of these resources that creates the demand. Until our society does not promote and invest in incorporating ICT in our daily routine the stagnation is inevitable and furthers the gap between B&H and the countries of the developing world. If that demand does happen and is adequately supported by the ruling structures, BH Telecom has the necessary resources and skill to answer that call. “For a country to put ICT to effective use it must be ‘e-Ready’ in terms of infrastructure, the accessibilityof ICT to the population at large and the effect of the legal and regulatory framework on ICT use”. Source: bridges.org, http://www.bridges.org/e_readiness_assessment REFERENCES Last accessed on 4 29, 2012, from United Nations Development program E-Readiness report 2009 : http://www.undp.ba/upload/News/e-Readiness%202009.pdf Last accessed on 4 26, 2012, from BH Telecom Web Portal, History of BH Telecom : http://www.bhtelecom.ba/1210.html Last accessed on 4 26, 2012, from United Nations Development program, Strategy for IS Development in BH, IS and sustainable development : http://www.undp.ba/upload/publications/Strategy%20for%20IS%20Development%20in%20 BH.pdf Last accessed on 4 28, 2012, from LAND ADMINISTRATION PROJECT (GTZ), http://www.zkk.ba Last accessed on 4 28, 2012, from LEGISLATION DATABASE PROJECT (UNDP and EU), http://www.legislativa.ba/ Last accessed on 4 28, 2012, from JUSTICE SECTOR DEVELOPMENT PROJECT (USAID), http://www.usaidjsdp.ba Last accessed on 4 27, 2012, from Internation Data Corporation (IDC), IT Market in Bosnia and Herzegovina http://www.idc-cema.com/?showproduct=41456 Last accessed on 4 27, 2012, from bridges.org http://www.bridges.org/e_readiness_assessment 206 E-Readiness assessment, � Dublin Core The Dublin Core metadata element set is common to all Omeka records, including items, files, and collections. For more information see, http://dublincore.org/documents/dces/. Extent The size or duration of the resource. 1169 Title A name given to the resource ICT Infrastructure for Sustainable Society: A Story of BH Telecom Author Author Dzihad , Zlatar Abstract A summary of the resource. World-class ICT infrastructure is the key to rapid economic and social development ofa country. Past studies show that the growth of ICT, particularly telecommunicationservices has a direct link with the economic growth of the country. However,the access to ICT infrastructure, services and applications and thus the level ofdevelopment varies among the countries. The focus of this study is on the currentsituation in Bosnia and Herzegovina (BiH). The main objective of the study is toexplore the penetration of telecommunication in B&H and the role of BH Telecom inthis process. Keywords:ICT, infrastructure, sustainable society, case study Date A point or period of time associated with an event in the lifecycle of the resource 2012-05-31 Keywords Keywords. Conference or Workshop Item PeerReviewed H Social Sciences (General) https://omeka.ibu.edu.ba/files/original/c0d1ed274ba86dbda3262a5d7b98339f.pdf f20c0cb8b5c937a9af895ef6100af5b0 PDF Text Text 3rd International Symposium on Sustainable Development, May 31 - June 01 2012, Sarajevo Weinberg, L. Eubank, W. L. (2006), The Roots of Terrorism, What is Terrorism, Reno, Nevada, Chelsea House Publishers. Wilson, R. A. (2005), “Human Rights in the ‘War on Terror’”, Human Rights in the ‘War on Terror’, New York, NY, Cambridge University Press Business Diplomacy Management As A Key Role In The Sustainable Development And Stakeholder Management In The Multinational Corporations: Daimlerchrysler Case Dinç, Mehmet,Kaygisiz, Ümmühan Suleyman Demirel University Vocational School of Isparta Isparta Turkey E-mails: mehmetdinc@sdu.edu.tr, ummuhankaygisiz@sdu.edu.tr Abstract In the last two decades a dramatic shifts within the business community have been occurred. Globalization has offered business opportunities to companies around the world and has led to the development of a multitude of standards that govern business behavior. It is no longer sufficient to know the business and legal conditions of a multinational companies’ headquarters country and some of the countries where it operates foreign subsidiaries. Multilateral and intergovernmental organizations are increasingly defining industry standards that become mandatory for multinational companies. Non-Governmental Organisations (NGOs), operate at multiple levels ranging from national civil society issues like environmental protection to observation and investigation of possible human rights violations of multinational companies or foreign states. They often operate at national, regional and transnational levels focusing on economic, social and political issues. In addition, growing internationalization has became increasingly complex, civil society organizations have exerted increasing pressure on MNCs, especially the concept of sustainable development has expanded to include the simultaneous consideration of economic growth, environmental protection and social equity. Thus, in response to these kind of shifts, many have made a commitment to apply the principles of sustainable development to their activities. To meet and to handle these commitments, MNCs have required a multitude of policies and new business competencies. One important factor contributing to the sustained success of MNCs’ operations in foreign markets in the competent use of business diplomacy. Business Diplomacy Management (BDM) refers to the ability of MNCs to effectively interact with non-business stakeholders wherever the MNCs have business interests, be they in the form of local production, distribution channels or sales offices. 63 �3rd International Symposium on Sustainable Development, May 31 - June 01 2012, Sarajevo This paper aims to describe a framework for business diplomacy competencies of MNCs based on their sustainable development goals. One in- depth case study about business diplomacy is examined. With DaimlerChrysler (DC) case, it was aimed to conceive how the importance of business diplomacy for multinational corporations, what the successful business diplomacy tasks and behaviors for their sustainable development. As a consequence it was assessed the implications on these companies and their managers. Keywords: Sustainable Development, Multinational Corporations, Business Diplomacy Management, Stakeholder Management, Case Analysis, DaimlerChrysler. 1.INTRODUCTION It is hard to manage an organization in todays turbulent world. Practically everyday, we learn of a new tecnology, social dilemma or environmental problem. Business worry about the proliferations and the effects of globalization. Governments struggle to maintain services while andressing the needs of an increasingly diverse and growing population amid an antitax culture. Unless you want to be buffeted by each change, you need a framework for making sense of what is happening in the world so that you can foresee changes and take action before they happen. (Hitchcock and Willard, 2006:3) In other words, society is pressuring business for a broader and longer-term engagement than maximizing near term profitability, with these pressures occuring in both developed and emerging markets. As a result, managers of multinational companies (MNCs) and their subsidiaries are realizing a need for increased corparate responsibility. Firms are being subjected to two tests: do their actions enhance long-term profitability and do they servet he public good-broadly defined to include the political, social, legal and physical environments. MNCs operate in a complex environment charaxterized by countries at various and varying development levels. This environment poses challenges of making appropriate responses to both current and future stakeholder expectations (Chen et al., 2009:317) and to requirements of sustainable development. Especially over the past two decade the concept of sustainable development has expanded to include the simultaneous consideration of economic growth, environmental protection and social equity in business planning and decision-making. Many multinational corparations based in the United States and Europe engage in managing external pressures (Amann et al., 2007:33) corporate citizienship programs (Rondinielli and Berry, 2000:70) and corporate social responsibility (Dyllick and Hockerts, 2002:130) to promote sustainable development. Sustaining operations in these areas reqires that MNCs recognize changing role expectations and adapt accordingly. To meet and to handle these increased commitments and responsibilities, MNCs have required a multitude of policies and new business competencies. One important factor contributing to the sustained successof MNCs operation in foreign markets lie in the competent use of business diplomacy. 64 �3rd International Symposium on Sustainable Development, May 31 - June 01 2012, Sarajevo In this study, firstly we will present a brief explaining regarding multinational corparations, sustainable development, stakeholder management and business diplomacy concepts and their relationships with multinational corporations; secondly we will describe these topics/concepts in more detail, through illustrative case study on DaimlerChrysler and lastly we will conclude with implications for researchers and practitioners. 1.1.Multinational Corporations Although the modern multinational corporation (MNC) has its roots in the East and West Indies traders of the mercantilist era, the term “multinational corporation” first appeared in 1960 when Lilienthal used it to refer to such corporations …. which have their home in one country but which operate and live under the laws of other countries as well’. Two major features are associated with MNCs; first, their activities involve more than one nation; and second, they are responsible for most foreign direct investment ( Abdul-Gafaru, 2009: 52). The period 1970-2012 saw an enormous growth of activity by multinational corporations. While only 7000 MNCs existed in 1970 (Abdul-Gafaru, 2009:53); there were roughly 40,000 MNCs in the world by 1990 (Rangel, 2007:7); there were as many as 63,000 parent firms with around 690,000 foreign affiliates by the year 2000 (UNCDAT, 2000:37). A popular way of understanding how much impact and influence such corporations have is to rank countries by Gross Domestic Product along with corporations using gross sales. In such a ranking, in 1999, General Motors, (gross sales of $176.6 billion), Walmart (gross sales of $166.8 billion) Exxon Mobil (gross sales of $163.9 billion), Ford Motor (gross sales of $162.6 billion) and DaimlerChrysler (gross sales of $160 billion) ranked 38-42 on the list, above such countries as Hong Kong (number 43 at $158.2 billion), Portugal (number 44 at $151.4 billion) and Greece (number 45 at $149.2 billion) (Rangel, 2007:8). Historically, MNCs have fulfilled multiple roles in the markets where they operate. These roles have been associated with positive outcomes, including technology transfer, job creation, increased wage standards, improved infrastructure, reduced corruption, and the provision of investment capital. However, they have also been subject to criticism (whether correct or not), such as whether investment occurs to access pollution havens or to benefit from less regulation (Chen et al., 2009:318-319). 1.2.Sustainable Development The basic idea behind the concept of sustainable development (SD) has been around for centuries. It appeared in German forestry in the 17th century not only as idea but even as legal constrait to logging; the rule was to cut trees at a rate which enabled forests to renew themselves over time, i.e. to utilize timber in a responsible and sustainable way (Steurer et al., 2005:264). The major discussing initiating sustainable development is found in the report of the World Commission on Environment and Development (WCED). The Commission’s 1987 report, often referred to as the Brundtland Commission Report, defined “sustainable 65 �3rd International Symposium on Sustainable Development, May 31 - June 01 2012, Sarajevo development” as development that “meets the needs of the present without compromising the ability of future generations to meet their own needs (WCED,1987:8). In its broadest sense, this normative abstraction has been widely accepted and endorsed by thousands of governmental, corporate, and other organizations worldwide (Gladwin, Kennely and Krause, 1995:876). Since the time of the Commission report, scores of alternative definitions of sustainable development, sustainable economies and sustainable societies have been proposed. Table 1, presents an abbreviated gallery of some of the more detailed and leading conceptions in recent years. ●To maximize simultaneously the biological system goals (genetic diversity, resilience, biological productivity), economic system goals (satisfaction of basic needs, enhancement of equity, increasing useful goods and services), and social system goals (cultural diversity, institutional sustainability, social justice, participation) (Barbier, 1987: 103). ●A Sustainable society is one that can persist over generations, one that is far-seeing enough, flexible enough, and wise enough not to undermine either its physical or its social systems of support (Meadows, Meadows and Randers, 1992:209). ●Living well within the limits of nature (Hitchkock and Willard, 2006:8). ●Sustainable development refers to social, economic, and environmental development that meets the needs of current society without compromising or limiting future development and growth (Cantor, 2011:5). Table 1: Represantative Conceptions of Sustainable Development. Today, sustainable development is a well-known societal guiding model that asks for the integration of economic, social and environmental issues in all societal spheres and levels in the short- and long-term (Steurer et al., 2005:264). Businesses have long referred to this as the ‘triple bottom line’. Instead of trading these realms off against one another (jobs or the environment; economic growth or environmental health; development or habitat), sustainability aims to optimize all three (Hitchcock and Willard, 2006:8). These three realms are intimately interwined. Without a healthy economy, unemployment is high, leading to a host of social problems; and without a healthy economy, governments don’t have the revenues to handle these increased social ills. Without a healthy environment, we deplete the resources upon which our economy depends and contribute to human illness (Hitchcock and Willard, 2006:9). 1.3.Multinational Corporations and Sustainable Development The role of multinational corporations (MNCs) in sustainable development has probably been one of the most controversial debates among scholars. The environment has been at the 66 �3rd International Symposium on Sustainable Development, May 31 - June 01 2012, Sarajevo centre of the contoversy. On the one hand, environmentalists are generally pessimistic about the contributions of MNCs to the protection of the natural environment, particularly in host developing countries. In sharp contrast to the above assessment, neoliberal economists contend that MNCs are perhaps the most significant catalysts for sustainable development because they typically possess newer and cleaner technology, and have beter management practices that can be transferred to the their subsidiaries in the developing world. Thus, rather than “pollution halos” in developing countries through the export of modern technologies (Abdul-Gafaru, 2009: 50-51). 1.4.Stakeholders Management Various scholars have contributed to the development of stakeholder theory over the last decades (Freeman, 1984: 21). The term “stakeholder” first formally appeared with reference to business in a 1963 internal memorandum at the Stanford Research Institute. Researcers at the Institute postulated that instead of an exclusive focus on shareholders, corporations were also responsible for a wider range of entities or interest groups ‘without whose support the corporation would cease to exist (Freeman, 1998:602). Freeman popularized the ‘stakeholder’ concept in a groundbreaking book in 1984; Strategic Management: A Stakeholder Approach, and consolidated a strategic approach to stakeholder management. Freeman (1984) defined a stakeholder more broadly as “Any group or individual who can affect by the achievement of the firm’s objectives” (p.25). Since then, an energetic academic debate has arisen around stakeholder theory. This theory focused on managerial decision-making and based on several complementary premises that include following (Jones et al., 1999:207): Corporations have relationships with many constituent groups that affect and are affected by its decisions. Those relationships affect corporate processes and outcomes. The intrest of all (legitimate) stakeholders have intrinsic value and no set of interests is assumed to dominate the others. 1.5.Multinational Corporations and Stakeholder Management Stakeholder theory without differentiating between market development levels, empasizes difficulties MNCs have adapting to expectations of different stakeholder groups. However, the potential for inconsistencies and conflicts between stakeholder expectations regarding MNCs may be stronger within lesser economic development levels, where stakeholder groups may compete for prioritization in local economic development –creating difficulties for managers assessing their local roles (Chen, Newburry and Park, 2009:319). 67 �3rd International Symposium on Sustainable Development, May 31 - June 01 2012, Sarajevo Today multinational corporations face a wide range of different demands from their stakeholders. Steger examined the business case for incorporating social and environmental issues into business strtegies and operation. Based on personal interviews with 300 managers (plus 100 external stakeholders) and 1100 analysed self-completion questionnaires in nine industries (oil and gas, food and beverage, pharmaceutical, etc.) he concluded that issues’ significance to companies did not result from a few make it break it issues but from their sheer number and variety. He managed to cluster 350 responses into 225 distinct categories of social, environmental and economic challenges (Steger, 2004:5). In addition in an other study, Clement (2005) identifies five important lessons from the stakeholder model for today’s leaders of MNCs. These five lessons may be summarized as follows (p. 256): Corporations are facing increasing pressures to respond to their stakeholders. Corporations have a legal basisi for responding to a wide range of stakeholders. Corporations are being led by executives no longer guided by the principles of their professions. Corporations respond to powerful stakeholders with legitimate, urgent claims. Corporations can improve the bottom line by responding to stakeholder concerns. 1.6.Business Diplomacy Management Nowadays, civil society organisations have exerted increasing pressure on MNCs, especially in the social and ecological spheres. The now accepted Corporate Social Responsibility charter and the UN-initiated Global Compact are just two of the most prominent examples of how companies are trying to manage mounting environmental pressures from non-business stakeholders (Saner and Yiu, 2005:301). Demands from local communities on a global company’s corporate conduct can significantly limit the freedom of a MNC’s behavior and actions. Incompetently managed external constituencies and pressure groups could quickly result in millions of dollars of costs, lost business opportunities and market share (e.g., consumer boycotting), and reputational capital (Saner and Yiu, 2005:301). Thus managing a multitude of business and nonbusiness stakeholders at the international level requires diplomatic skills-calls business diplomacy management- to safeguard a MNC’s reputational capital and to seize business opportunities embedded in nonbusiness environments (Saner et al., 2000:83). In this context, business diplomacy pertains to the management of interfaces between the global company and its multiple non-business counterparts (such as NGOs, government, political parties, media and other represantatives of civil societies) and external constituencies (Saner and Yiu, 2005:303). The goals of business diplomacy management; influencing economic and social actors to create and seize new new business opportunuties, working with rule-making international bodies whose decisions affect international business, forestalling potential conflicts with stakeholders and minimazing political risks, using multiple international forums and media 68 �3rd International Symposium on Sustainable Development, May 31 - June 01 2012, Sarajevo channels to safeguard corporate image and reputation (Saner and Yiu, 2005: 303; Saner et al., 2000:85). Business diplomacy management has got four dimensions. In other word, business diplomacy managers need to be competent at international, national, community and firm levels. At the firm level, they help define business strategy and policies in relation to stakeholder expectations, conduct bilateral and multilateral negotiations, coordinate international public relations campaigns, and collect and analyze pertinent information emanating from host countries and international communities. Internationally, competent business diplomats lobby with finesse, are gracious hosts, and know how the comply with protocol according to local customs and practices. They are able to develop local connections and relationships and conflictual interfaces. When dealing with stakeholder groups, business diplomats are called in to mediate potential or on-going conflicts of an economic, social, environmental, or political nature. More importantly, business diplomats scan the environment and identify potential conflict areas with the stakeholders before implementing a project (Saner et al., 2000:85-86). A corporation’s ability to obtain a license to operate by matching the expectations of numerous stakeholders has become one of the most important assets for corporations, especially in a world post Enron and other corporate scandals that promised to ruin the trust in corporations. The legitimacy of the contemporary corporation as an institution within society its social charter, or license to operate depends on its ability to meet the expectations of an increasingly numerous and diverse array of constituents(Saner et al., 2000:83; Post et al., 2002:9). Some of the domains of these competencies could express as follows; knowledge of international relations and diplomacy, multicultural sensitivity, political skills as mastering political negotiations, oration and handling of media and mastering analytic tools (Saner and Yiu, 2003: 28). Business diplomacy management (BDM) is part of a corporate response to the external environment when dealing with the international business environment involving vanous stakeholders seeking a non-zero sum solution to underlying conflicts. The tasks of BDM thus contain environmental scanning, stakeholder management and issue management pertaining ton on-business counterparts (Saner and Yiu, 2005: 309). 1.7.Case Study: DaimlerChrysler One important factor contributing to sustainable development success of MNCs operations in foreign markets is the competent use of business diplomacy. Business diplomacy management (BDM) refers to the ability of MNCs to effectively interact with non-business stakeholders wherever the MNCs have business interests, be they in the form of local production, distribution of open and participatory societies around the world. (Saner and Yiu, 2005:298) As mentioned before, while the need for business diplomacy is evident, it is less clear how MNCs actually conduct business diplomacy around the world and how they develop this core competence. It is also unclear how this function is actually structured within MNC. To 69 �3rd International Symposium on Sustainable Development, May 31 - June 01 2012, Sarajevo answer some of these questions and to see the tasks of BDM better, we preferred the method of case study by means of Alman- American MNC as known DaimlerChrysler. Business diplomacy management (BDM) is part of a corporate response to the external environment when dealing with the international business environment involving vanaus stakeholders seeking a non-zero sum solution to underlying conflicts. The tasks of BDM thus include/contain environmental scanning, stakeholder management and issue management pertaining to non- business counterparts. (Saner and Yiu, 2005:309) Case study of DaimlerChrysler presents to any of MNC set appropriate policies and develop organizational competence in this emerging three tasks domain. Figure 1: The tasks of Business Diplomacy Management Towards to Non-Business Counterparts. ( Saner ve Yiu, 2005) On 6 May 1998, Daimler- Benz of Germany signed a merger agreement with Chrysler Corporation of the United States. The merger marked the beginning of the ambitious goal of merging two styles of auto-making two approaches to business and the proud but distinct cultures of two nations. Thus Daimler‘sengineering skill and tecnological advances could be complemented by Chrysler’s skills for innovation, speed in product development and bold marketing style. After signed the merger agreement German car maker Daimler-Benz AG and Amerkan’s third largest automobile company, Chrysler Corporation transformed to be one of the wold’s biggest automakers. While Chrysler has the reputation of being a “lean” car manufacturer producing “cuttingedge” vehicles, Daimler Benz was the symbol of Germans conservative, high class quality craftsmanship (Johann, 2006:4). For this study one multinational company was selected with an outstanding track record in managing their broader business environment in accordance with its sustainability over the last five years: DaimlerChrysler. 70 �3rd International Symposium on Sustainable Development, May 31 - June 01 2012, Sarajevo With DaimlerChrysler (DM) case, the focus is on the processes needed to comprehensively manage the business environment and anything that may affect the brand. The efficient design of global processes and their back-up with a tailored IT infrastructure, is as important as its “fit” with the organizational structure and its alignment with corporate strategy (Steger, 2003:23) DaimlerChrysler: Responsiveness And Determination Via Business Diplomacy Management Practices At the company’s 2001 General Assembly, at the top of the agenda there was clearly disappointment with the share price. But, as on similiar occasions, pressure groups used the platform to voice their concern: DaimlerChrysler’s “Dodge” supports bullfights in Mexico; there are no female managers in top positions; DaimlerChrysler subsidiaries are stil producing landmines etc. Since November 1998, after the merger euphoria faded and now exacerbanted by heavy losses in the Chrysler Group and Freightliner, DaimlerChrysler came under criticism by financial analyts due to an underperforming share price. But otherwise you have to go back many years to find DaimlerChrysler in negative headlines; being the first to implement a new but controversial law for sick payment brought massive protests from the metal-workers union, worker council and ordinary employees. In 1991 the new Mercedes S-Class was the focus of a broad coalition of critics as being an irresponsible product, neglecting environmental concerns and resource conservation and increasing traffic jams due to its sheer size. Greenpeace staged a major demonstration at the door of Frankfurt Automotive Fair, piling up all the barrels of oil that an S-Class car would consume during its life cycle. After the unsuccessful but ambitious strategy to transform the car company into a technology concern, Daimler-Benz, like the S-Class, were considered the dinosaurs of German Industry. Chrysler was faced with another situtition with regard to its business environment, different from that of the high profile Daimler Benz subsidiary. Being the smallest of the “Big 3” in Detroit, Chrysler tended more to follow theindustry mainstream and was less visible and risk exposed than were the more global General Motors and Ford. 1.7.1. Issue Management & Environmental Scanning As a sub task domain of BDM, issues management tends to be one of the most important techniques to work for the mentioned corporate and social values symbiosis and to map the relevant stakeholders’ expectations. In words of Heath (1997), “Issues communicators discuss values to establish the standarts of acceptable corporate responsibility, the foundations of corporate policy and operations” (p.217) Global issue management at DaimlerChrysler has an important distinction (Figure.2). Here, the system is based on the assumption that there is a pattern in the dynamic of issues and that you can detect it early. You then have to respond differently, depending on how the 71 �3rd International Symposium on Sustainable Development, May 31 - June 01 2012, Sarajevo escalation has worked out. Therefore, extensive scanning of leading media companies in Europe and the US, based on a set of criteria, is an ongoing activity: In addition, relevant chat rooms are visited – the themes raised there often serve as an early warning system too. From product-related (for example a recall), corporate themes (for example, financial reports) to general, political, social or environmental trends relevant to Daimler Chrysler (Steger, 2003:259-260) Figure 2: Global ıssue management at DaimlerChrysler. (Steger, 2003:260) On these issue, a large number of communications professionals and other observers provide their input weekly, and the end of the week the CEO and the management board receive a “key issue briefing” of not more than three pages. The amount of processed information should not be underestimated: 20.000 quotes on Daimler Chrysler per month is not extraordinary. Sophisticated IT equipment in the “war room” makes this possible. Financial analysts increasingly dominate the reports in business news papers with their quotes, where as environmental and social issue are driven by NGO activities (Steger, 2003:260-261) To be able to match internal and external expertise and to understand, evaluate and privatize the input from the external world, you need in-house competence that can process the information, make sense of it and put it into a framework that allows management conclusions for strategy, products and organization (Amann et al., 2007: 34). At Daimler Chrysler, an interdisciplinary internal research group “society and Technology” is fulfilling this role. Based in Berlin, Palo Alto and Kyoto, the research group focuses on the future- oriented identification of societal “needs”, using scenario us to understand upcoming “battle-necks” and to complement market research with a better understanding of context 72 �3rd International Symposium on Sustainable Development, May 31 - June 01 2012, Sarajevo factors (for examples, ageing) trends (for example, multicultural societies), individuality and environmental values ( for example, leisure time). With its approximately 25 multi- disciplinary teams, however, it is not only shaping new technologic in the Daimler Chrysler group. An important product is the annual “Delta Report”, which documents research into the socio- economic environment as a basis for decision- making in all business units. In addition, the group supports the innovation process and internal organizational learning with “laboratories of the future”, where decision- makers from all disciplines learn to understand the complexity of the business environment, conflicting views and expectations and test the available contributions in different scenarios. (Steger, 2003:261). To monitor information is one thing, to act on it is another. When one issue is identified (for example, the Kerkonian legal attack against the manager in late 2000), a master plan is developed. In the case of issue that are expected to be around for a longer period of time (for example, slave labour compensation payments for slave labour in Nazi camps), on IT-based platform is the focal point of all activities (Steger, 2003:262) 1.7.2. Stakeholder Management Dialogue with stakeholders is regarded as a top priority for corporate Sustainabılity Management (CSM) In automotive companies and especially in Daimler Chrysler some stakeholders has got mone impartance: NGOJ are usually open to dialogue to achıeve their aim of improving the social and environmental responsibility. Financial markets are always open to dialogue on sustainability. They treat sustainable development as a niche investment market. And goverment, other regulatory authorities are only marpinally interested in the concept of sustainable development. Their focus is mainly on product related lepislation. (Brunner, 2004:93) But apart from these stekeholders, the workforce and investment communities are currently of special importance for DC. Whereas the US media jumped enthusiastically at the chance of “Coerman-bashing” – when economic problems hit Chrysler – The European media like to ridicule the quality of Chrysler cars. To prevent a deep division “them” and “us”, internal communicetion has become even more important noted Ulrike Becker, Director for Internal Communicetions. She has built a system of commonication channels, aimed at specitic target groups and time-frames. Heving established a process to do this, top management can bypass middle- men and outside advisors, creating space for face-to-face meetings with institutional investon, major shareholders and rating agencies (Steger, 2003:264) A special unit copes with non-brand – specific corporante themes and sponsoring. They maintain good relations with environmental groups or NGOS and conduct regular dialogue. Sponsoring has a philanthropic dimension, which builds mainly on the Chrysler tradition of community involvement and promoting opportunities for minorities and disadvantaged people. Senior executives serve therefore as sponsor of internal interest groups (for example, 73 �3rd International Symposium on Sustainable Development, May 31 - June 01 2012, Sarajevo Afro – Americans) and purchasing rules ease access for small-and-medium-sized businesses, especially when these are owned by minorities (Steger, 2003:265). In addition, the DC Corporation recently concluded an agreement with labor representatives to promote the employment of women and remove barriers to remove barriers to their career development. Continuing along these lines, in 2000 the DC Fund sponsored, for an amount of Us32 million, a wide variety of education, community development and cultural groups across the world-from the society of Women Engineers in Michigan , Nelson Mandela’s Children’s Charity fund to the Charities Aid Foundation in the U.K (Steger, 2003:266) Beyond the philanthropic dimension, corporate-sponsoring is also related to leveraging DC’s core competence for the solution of ecological, social and scientific problems, The branch of corporate sponsoring has therefore set up projects that relate to the key corporate goals and help to establish the image of a “troubleshooter”: for example, satellites from the aerospace division collect data for an environmental project, researchers in sophisticated transportation simulations models receive support from Daimler Chrysler engineers, as do road safety education programmers ( Steger, 2003:266) 2.CONCLUSION In order to succeed a business and ensure sustainable economic viability of their investments, MNCs must draw on competencies which will allow them to manage multiple stakeholders at home and abroad. Faced with these challenges, these companies need to acquire greater diplomatic capacities and competencies in handling both the internal stakeholders and the external non-business stakeholders. We have elaborated on one case study that illustrated the need for business diplomacy systematically. MNCs are challenged to manage their business environment systematically and professionally so that a formal and informal licence to operate is sustained. This can be achieved by: ● Detecting and understanding emerging issues, via early warning systems. ●The key to success when dealing with a broad range of stakeholders lays in managing a double tension: a) to have a set of clear messages on issues and on your corporate values, but to be responsive to the questions with which you are confronted, b) to decentralize all stakeholder activities as far as posible, but make sure that all who are communicating externally use the same song book. ● Extensive scanning of leading media companies in Europe and the USA based on a set of criteria is ongoing activity. ●With sophisticated IT equipment in the “war room”, to know and to process information regarding media report before. ●The group names “Society and Technology” focuses on the future-oriented identification of societal needs, thus to be able to match internal and external expertise. 74 �3rd International Symposium on Sustainable Development, May 31 - June 01 2012, Sarajevo ● By the way of “The Global News Bureau” to integrate the different communication units that either focus on a brand, a subsidiary or corporate issues. ● A special unit copes with non-brand-specific corporate themes and sponsoring. They maintain good relations with environmental groups or NGOs, and conduct regular dialogue. REFERENCES Abdul-Gafaru, A. (2009). “Are Multinational Corporations Compatible with Sustainable Development? The Experience of Developing Countries”. in John R. McIntyre, S. Ivanaj and V.Ivanaj (eds.). Multinational Enterprises and the Challenge of Sustainable Development, Edward Elgar Publishing Limited, UK. Amann, W.; Khan, S.; Salzmann, O.; Steger, U. and Ionescu-Somers, A. (2007). “Managing External Pressures Through Corporate Diplomacy”. Journal of General Management, Vol. 33, No. I. PP.33-49. Barbier, E. (1987). “The Concept of Sustainable Economic Development”. Environmental Conservation, 14(2), pp. 101-110. Brunner, Marc (2004). “ The automotive Industry” in The Business of Sustainability: Building Industry Cases for Corparate Sustainability, Ulrich Steger (ed.) Palgrave Macmillan, New York, 2004. Chen, D.; Newburry, W. and Park, S.H. (2009). “Improving Sustainability: An International Evolutionary Framework”. Journal of International Management, 15, pp.317-327. Clement, R.W. (2005). “The Lessons from Stakeholder Theory for U.S. Business Leaders”. Business Horizons, 48, pp. 255-264. Contor, M. (2011). “Development for the Past, Present and Future: Defining and Measuring Sustainable Management”. Senior Honors Projects. Paper 221. Dyllick, T. and Hockerts, K. (2002). “Beyond the Business Case for Corporate Sustainability”. Business Strategy and the Environment, Vol. 11, No. 2, pp. 130-141. Freeman, R.E. (1984). “Strategic Management: A Stakeholder Approach”. Marshfield, MA: Pittman Publishing. Freeman, R.E. (1998). “Stakeholder Theory”. İn P. Verhane and R.E. Freeman (eds.), The Blackwell Encyclopedic Dictionary of Business Ethics. Malden, MA/ Oxford: Blackwell Publishers. Gladwin, T.N.; Kennely, J.J. and Krause, T.S. (1995). “Shifting Paradigms for Sustainable Development: Implications for Mnagement Theory and Research”. Academy of Mnagement Review, 20, pp. 874-907. Heath, R. (1997). Strategic Issues Management: Organizations and Public Policy Challenges. In R. Heath (Ed.) Handbook of Public Relations (pp.1-37) London: Sage 75 �3rd International Symposium on Sustainable Development, May 31 - June 01 2012, Sarajevo Hitchcock, D. and Willard, M. (2006). The Business Guide to Sustainability: Practical Strateggies and Tools for Organizations. Earthscan, Axis Performance Advisors, Inc. UK and USA. Jones, T.M. and Wicks, A.C. (1999). “Convergent Stakeholder Theory”. Academy of Management Review, 24(2), pp. 206-221. Johann, R. (2006). Cross- Cultural Management: The Case of the DaimlerChrysler Merger. Seminar Paper, 1. Auflage. Meadows, D.H.; Meadows D.L. and Randers, T. (19929. Beyond the Limits: Confronting Global Collapse-Envisioning a Sustainable Future, Post Mills, VT: Chelsea Green. Post, J.; Sachs, S. and Preston, L. (2002). Redefining the Corporation: Stakeholder Management and Organizational Wealth. Stanford, CA: Stanford University Pres. Rangel, V.B. (2007). Multinational Corporations and Corporate Social Responsibility: How History, Non Governmental Organizations and International Groups are Changing Business. Unpublished M.A. Thesis, University of Southern California, May, 2007. Rondinielli, D. and Berry, M.A. (2000) “Environmental Citizienship in Multinational Corporations: Social Responsibility and Sustainable Development”. European Management Journal, Vol. 18, No. 1, pp. 70-84. Saner, R. and Yiu, L. (2003). International Economic Diplomacy: Mutations in Post-Modern Times”. Discussion Papers No.84, January, Geneva. Saner, R. and Yiu, L. (2005). “Swiss Executives as Business Diplomats in the New Europe: Evidence from Swiss Pharmacetical and Agro-Industrial Global Companies”. Organizational Dynamics, Vol. 34, No. 3 pp. 298-312. Saner, R.; Yiu, L. and Sondergaard, M. (2000). “Business Diplomacy Management: A Core Competency for Global Companies”. Academy of Mnagement Executive, Vol. 14, No. 1, pp. 80-92. Steger, U. (2003). Corporate Diplomacy: The Strategy for a Volatile, Fragmented Business Environment. Wiley & Sons, Ltd., England. Steger, U. (ed.), (2004). The Business of Sustainability – Building Industry cases for Corporate Sustainability. London: Palgrave MacMillan. Steurer, R.; Langer, M.E.; Konrad, A. And Martinuzzi, A. (2005). “Corporations, Stakeholders and Sustainable Development I: A Theoretical Exploration of Business – Society Relations”. Journal of Business Ethics, 61, pp. 263-281. UNCTAD (2000), World Investment Report 2000: Cross-Border Mergers and Acquisition and Development, New York and Geneva: UN. WCED:1987, Our Common Future. Oxford University Pres, Oxford. 76 � Dublin Core The Dublin Core metadata element set is common to all Omeka records, including items, files, and collections. For more information see, http://dublincore.org/documents/dces/. Extent The size or duration of the resource. 1099 Title A name given to the resource Business Diplomacy Management As A Key Role In The Sustainable Development And Stakeholder Management In The Multinational Corporations: Daimlerchrysler Case Author Author Dinç, Mehmet Abstract A summary of the resource. In the last two decades a dramatic shifts within the business community have been occurred. Globalization has offered business opportunities to companies around the world and has led to the development of a multitude of standards that govern business behavior. It is no longer sufficient to know the business and legal conditions of a multinational companies’ headquarters country and some of the countries where it operates foreign subsidiaries. Multilateral and intergovernmental organizations are increasingly defining industry standards that become mandatory for multinational companies. Non-Governmental Organisations (NGOs), operate at multiple levels ranging from national civil society issues like environmental protection to observation and investigation of possible human rights violations of multinational companies or foreign states. They often operate at national, regional and transnational levels focusing on economic, social and political issues. In addition, growing internationalization has became increasingly complex, civil society organizations have exerted increasing pressure on MNCs, especially the concept of sustainable development has expanded to include the simultaneous consideration of economic growth, environmental protection and social equity. Thus, in response to these kind of shifts, many have made a commitment to apply the principles of sustainable development to their activities. To meet and to handle these commitments, MNCs have required a multitude of policies and new business competencies. One important factor contributing to the sustained success of MNCs’ operations in foreign markets in the competent use of business diplomacy. Business Diplomacy Management (BDM) refers to the ability of MNCs to effectively interact with non-business stakeholders wherever the MNCs have business interests, be they in the form of local production, distribution channels or sales offices. Date A point or period of time associated with an event in the lifecycle of the resource 2012-05-31 Keywords Keywords. Conference or Workshop Item PeerReviewed H Social Sciences (General) https://omeka.ibu.edu.ba/files/original/0d4cc6a2a50828271758a592e7b91ca1.pdf 52b24d163c339bde5013d54eb908a049 PDF Text Text 3rd International Symposium on Sustainable Development, May 31 - June 01 2012, Sarajevo system. Online Journal of Distance Learning Administration, volume 7, number 3. URL, http://www.westga.edu/~distance/ojdla/fall73/kosak73.html Maguire, L.L., (2002). Literature review-Faculty participation in online distance education: Barriers and motivators. Online Journal of Distance Learning Administration, volume 8, number 1, 2002. URL, http://www.westga.edu/~distance/ojdla/spring81/maguire81.html Yang, Y., (2010). Roles of administrators in ensuring the quality of online programs. Knowledge Management & E–Learning, volume 2, number 4, 2010. URL, http://kmeljournal.org/ojs/index.php/online-publication/article/viewArticle/80 Zhen, Garthwait,Y. A. & Pratt, P., (2008). Factors affecting faculty members’ decision to teach or not to teach online in higher education. Online Journal of Distance Learning Administration, Volume 11, number 3. URL, http://www.westga.edu/~distance/ojdla/fall113/zhen113.html Republic of Turkey Ministry of National Education (MEB). URL, http://www.meb.gov.tr/english/indexeng.htm The council of Higher Education (YOK). URL, http://www.yok.gov.tr/en/content/view/527/222/ Garrison, D. R., & Vaughan, N. D., (2008). Blended learning in higher education: framework, principles, and guidelines. San Francisco, CA: Wiley & Sons, Inc. [Holden, J. T. & Westfall, P., (2010). An Instructional Media Selection for Distance Learning-Implications for Blended Learning. United States Distance Learning Association. Wang, W., & Wang, C., (2009). An empirical study of instructor adoption of web-based learning systems. Computers & Education, Vol. 53, No.3, pp. 761-774. H2O persistence framework for column oriented distributed (NoSQL) databases Dino Kečo, Dženana Đonko University of Sarajevo, Faculty of Electrical Engineering Zmaja od Bosne bb, 71000 Sarajevo, Bosnia and Herzegovina E - mails: dino.keco@gmail.com, ddonko@etf.unsa.ba Abstract Cloud architectures are most commonly used in cases when large scale data processing is required. Building applications for cloud architectures requires a lot of engineering experience, especially in cases of data persistence. Persistence in cloud architectures is solved using NoSQL database models. In this paper we are working with column oriented NoSQL database model. Main research goal of this paper is building of new persistence framework 22 �3rd International Symposium on Sustainable Development, May 31 - June 01 2012, Sarajevo for column oriented NoSQL databases. H2O (HBase to Object) framework is created to resolve problem of mapping objects into rows in column oriented database and to provide effective mechanisms for data retrieval. Main focus of this framework is to support persistence of domain models presented by standard UML language. Current implementation supports storing content into HBase NoSQL database. Core engine of H2O framework is built on top of XPath standard. All mappings between domain model attributes and columns in row are represented using XPaths. These paths are used to transform object into row and vice versa. H2O framework contains component for integration with Hadoop map reduce processing library to simplify writing of Hadoop map reduce parallel programs. We took two hardware platforms of same price. First platform have HBase 0.90.1 and H2O installed and other have installed Oracle 11g and Hibernate framework. We are comparing performance of these two platforms from aspects of retrieval and persistence of objects. Result of our comparison is that NoSQL model is better from aspects of retrieval by primary key but shows lower performances in save operations. Keywords: NoSQL, persistence, distributed, HBase, Hadoop, mapping, framework, UML, map-reduce 1.INTRODUCTION Problem of mapping and persistence of objects in relational database model was open question for about 15 years [1]. This problem is resolved by ORM frameworks like Hibernate. Mapping and persistence of objects into NoSQL database model is even harder to solve because difference between models is much larger. Our work is focused on developing framework which will resolve these two problems. H2O framework is object/row mapping tool that provides user friendly interface to persistence application layer. This interface is developed using DAO (data access object) design pattern. Because NoSQL database model is easy to integrate with map reduce programs, in this paper we present H2O modules which are used for integration with Hadoop map reduce library [5]. Mainly these modules are used to simplify process of creating map reduce jobs. This paper makes the following research contributions: We present model of new persistence framework. We present implementation of H2O framework with support for HBase database. We present modules for integration with Hadoop map reduce library. Section 2 provide more detailed explanation of mapping and persistence problem. In section 3 we present model of H2O framework. Section 4 provides implementation details with focus on main components. We present model and implementation of components used for integration with map reduce library in section 5 and we conclude in section 6. 23 �3rd International Symposium on Sustainable Development, May 31 - June 01 2012, Sarajevo 2. PROBLEM FORMULATION All business applications have domain model which is presented by graph of classes. In most cases these classes are presented using UML modeling language. Main persistence problem is mapping of graph of objects into format suitable for storing. In this case we are mapping graph of objects into key value database storage. ORM problems like granularity, subtypes, identity, data navigation, relation to association, etc. [1] are even harder to solve because data models are much more different. Concepts like inheritance, encapsulation and polymorphism doesn't exist in key value storages and because of that it is necessary to find appropriate replacement for those concepts. What H2O is trying to resolve is illustrated on Fig 1. and model of one solution, based on xpath standard [6], is presented in next section of this paper. Fig 1. Conceptual illustration of mapping problem for key value distributed storages On the left side of Fig 1. we have graph of domain objects, while on the right side we have key value database storage. H2O needs to find best possible way to map data presented like graph of objects into row of key values storage and to keep data consistent in any possible case. 3. FRAMEWORK MODEL In this section we present model of H2O framework and it basic components which are presented on Fig 2. 24 �3rd International Symposium on Sustainable Development, May 31 - June 01 2012, Sarajevo Fig 2. H2O basic components Entry point component for user of H2O is Session, which provides basic methods (get, create, update and delete) to work with database. Main component of H2O framework is MappingEngine which performs conversion of graph of objects into key value row and vice versa. IndexingEngine is component which provides support for indexing. PersistenceEngine is component which is used for interaction with specific database implementation. In this case we are using HBase persistence engine. IndexingEngine and PersistenceEngine should be implemented by user for specific database and index implementations. MappingEngine, most important and most complicated, component is based on customized xpath standard which is capable to describe additional information about each path in graph of objects. This customization is needed to describe data types (class) of nodes in graph of objects. Problem of subtypes, which is main problem in ORM, is resolved in H2O by creating different mappings for each of subtypes available. Although ORM persistence frameworks have multiple strategies for persistence of subtypes [1] all of them are compatible with each other. Because of that fact in H2O we are supporting just one mapping strategy for subtypes. If there is a need for cycles in domain model that can't be resolved using xpath because xpath is structure driven, which causes infinite loops in mappings. Because of this new component is introduced, SerializationEngine, which uses one of standard serialization frameworks for data serialization. Introduction of serialization enables H2O to handle cycles because serialization frameworks are data driven [7]. Any user of H2O framework can easily implement his own strategy of data serialization by extending interface of SerializationEngine. 4. IMPLEMENTATION In this section, we are presenting API which provide H2O framework for data persistence and data retrieval. As part of this section we present basic comparison of persistence 25 �3rd International Symposium on Sustainable Development, May 31 - June 01 2012, Sarajevo performances between H2O/HBase and Hibernate/Oracle databases. For each comparison set we have used same hardware platforms. We have used PowerEdge M805 Dell Blade servers with two Quad Core Xeon processors and 128 GB of RAM memory. For Hibernate/Oracle test we have used two M805 servers connected to Oracle cluster, and for H2O/HBase we have used VM Ware virtualization and created 8 hosts for setting up HBase cluster. Each node had 2 cores and 32 GB of RAM memory. Oracle RAC version 11g is used for setting up Oracle database while HBase 0.90.1 version is used for HBase cluster. Even if there is a big difference between relational and key/value database models, API on DAO layer is same for any database if DAO design pattern is used in application architecture. H2O framework is built for applications which will use DAO design pattern in their architecture. Main advantage of this is that all business application can be modeled using standard modeling languages like UML and persist that model into any type of database. On Fig 3. we present DAO API which is provided by H2O framework for any kind of database implementation. Fig 3. API provided by H2O framework As shown in Fig 3. H2O provides basic CRUD (Create, Read, Update, Delete) operations. We have performed three tests to compare Oracle database and Hibernate as persistence framework and HBase and H2O on the other side. We have performed following tests: Data retrieval by primary key: In this experiment we monitor speed to read one record (record size 2KB) from database by primary key. We performed these tests with different number of records persisted in databases. Results of this tests are presented on Fig 4. As shown on Fig 4. Relational database doesn't scale well when # of records is greater than 64 M. Data persistence with increasing number of objects in graph: In this experiment we monitor speed to persist one record but with variable record size (nodes in graph). Results on Fig 5. shows that HBase/H2O is much slower than relational database, which is caused by MappingEngine. MappingEngine component doesn't have multi-threaded processing and that 26 �3rd International Symposium on Sustainable Development, May 31 - June 01 2012, Sarajevo is main reason for slowness. Definitely there is open space for optimization of this component. Data persistence with static number of objects in graph: In this test we are inserting records in database with variable number of records inside database. Results on Fig 6. shows that insert in database is static regarding number of records persisted in database. Fig 4. Data retrieval by primary key Fig 5. Data persistence with increasing number of nodes in domain graph Fig 6. Data persistence with static number of nodes in domain graph 27 �3rd International Symposium on Sustainable Development, May 31 - June 01 2012, Sarajevo 5. MAP REDUCE INTEGRATION Inspired by the map and reduce primitives present in functional languages, Google proposed the Map Reduce [3] abstraction that enables users to easily develop large-scale distributed applications. Mechanisms of fault tolerance is handled inside of map reduce library by reexecuting failed tasks. In this model, the computation inputs a set of key/value pairs and produces a set of output key/value pairs. The user of the map reduce library expresses computation as two functions: Map and Reduce. Map written by user, takes an input pair and produces a set of intermediate key/value pairs. The map reduce framework then groups together all intermediate values associated with same intermediate values key and passes them to reduce function. The Reduce function, also written by user, accepts intermediate key I and set of values for that key. It merges together these values to form a possibly smaller set of values. H2O framework goes one step more in abstraction over map reduce framework. Custom adapters inside H2O framework enables that value inside key/value pair be a graph of objects. This provides user more flexible and more user friendly interface to work with. This enables faster development of map reduce applications where complexity of persistence and mappings is hidden inside of H2O framework. Because, H2O framework is build to work with Hadoop implementation of map reduce library, adapters for integration, known as H2OInputFormat and H2OOutputFormat are named by Hadoop naming standard. 6. CONCLUSION AND FUTURE WORK H2O is created to solve problem of mapping between graph of domain objects and row in key/value storage. As presented in this paper there is a lot of open space for improvements in MappingEngine component. Also support for other implementations of key/value storages like Cassandra should be implemented. Main reason why H2O is created is to speed up development process by using standard UML modeling techniques and to solve all problems related to persistence. This will enable users to focus on business logic instead of technical details. Integration with Hadoop map reduce library provides easy way to write parallel applications and not even to worry about data persistence. For future we plan to create an open source project from H2O to involve more people into this and to gather new ideas. REFERENCES Christian Bauer and Gavin King (2006.) - Java Persistence with Hibernate Second Edition of Hibernate in Action, Manning, Ming-Yee Iu and Willy Zwaenepeol - HadoopToSQL a MapReduce Query Optimizer, EuroSys (2010), Jeffrey Dean and Sanjay Ghemawat - MapReduce: Simplifed Data Processing on Large Clusters, OSDI (2004), 28 �3rd International Symposium on Sustainable Development, May 31 - June 01 2012, Sarajevo HBase web page - hbase.apache.org, Hadoop web page - hadoop.apache.org, Jxpath web page - commons.apache.org/jxpath, JacksonJSON web page - jackson.codehaus.org The investigation of optimum welding parameters in connecting high alloyed X53CrMnNiN219 and X45CrSi93 steels by friction welding Mehmet Uzkut1, Bekirsadik Ünlü, Selimsarper Yilmaz2, Mustafa Akdağ3 1Celal Bayar University, Vocational High School, Department of Machinery, 45400, Turgutlu,Manisa, Turkey 2Celal Bayar University, Vocational High School, Department of Machinery, 45020, Manisa, Turkey 3Gediz University,Faculty of Engineering, Department of Mechanical Engineering, Menemen, Izmir, Turkey E-mails: mehmet.uzkut@bayar.edu.tr, bekir.unlu@bayar.edu.tr, selim.yilmaz@bayar.edu.tr, mustafa.akdag@gediz.edu.tr Abstract In this study, different welding parameters are applied to two different steels with high alloys and mechanical and metallographical investigations were performed. Thus, the optimum welding parameters were investigated for these materials and working conditions. 12.30 diameter steel bars made up of 1.4871 (X53CrMnNiN219) & 1.4718 (X45CrSi93) steel were used as experimental material. The material loss increased with increase in friction and rotating pressure. The highest hardness and fracture energy were obtained in B5 group. Keywords: Friction Welding, Welding Parameters, Microstructure. 1. INTRODUCTION Joining has increasingly been used in the material technology because materials having different mechanical properties need to be efficiently joined to increase material’s performance. The most suitable method of joiningtwo different alloyed steel is welding(Anık, 1983). After welding process, the properties of welding zone naturally becomedifferent from the properties of alloyed steels andthis difference maycause someproblems.The use melting welding methods, among many kinds of welding methods, has also increased these 29 � Dublin Core The Dublin Core metadata element set is common to all Omeka records, including items, files, and collections. For more information see, http://dublincore.org/documents/dces/. Extent The size or duration of the resource. 1145 Title A name given to the resource H2O persistence framework for column oriented distributed (NoSQL) databases Author Author Dino, Kečo Abstract A summary of the resource. Cloud architectures are most commonly used in cases when large scale data processing is required. Building applications for cloud architectures requires a lot of engineering experience, especially in cases of data persistence. Persistence in cloud architectures is solved using NoSQL database models. In this paper we are working with column oriented NoSQL database model. Main research goal of this paper is building of new persistence framework for column oriented NoSQL databases. H2O (HBase to Object) framework is created to resolve problem of mapping objects into rows in column oriented database and to provide effective mechanisms for data retrieval. Main focus of this framework is to support persistence of domain models presented by standard UML language. Current implementation supports storing content into HBase NoSQL database. Core engine of H2O framework is built on top of XPath standard. All mappings between domain model attributes and columns in row are represented using XPaths. These paths are used to transform object into row and vice versa. H2O framework contains component for integration with Hadoop map reduce processing library to simplify writing of Hadoop map reduce parallel programs. We took two hardware platforms of same price. First platform have HBase 0.90.1 and H2O installed and other have installed Oracle 11g and Hibernate framework. We are comparing performance of these two platforms from aspects of retrieval and persistence of objects. Result of our comparison is that NoSQL model is better from aspects of retrieval by primary key but shows lower performances in save operations. Keywords: NoSQL, persistence, distributed, HBase, Hadoop, mapping, framework, UML, map-reduce Date A point or period of time associated with an event in the lifecycle of the resource 2012-05-31 Keywords Keywords. Conference or Workshop Item PeerReviewed H Social Sciences (General) https://omeka.ibu.edu.ba/files/original/5427448bffd717be7974c7876afa1899.pdf 1b0a75efcd6f3efe63f1a535ce7a7971 PDF Text Text 3rd International Symposium on Sustainable Development, May 31 - June 01 2012, Sarajevo The IPARD Programme in the context of European Union Rural development funds Dilek Memişoğlu1,Ayşe Durgun2, Sibel Yegül2 1Faculty of Economics and Administrative Sciences, Department of Public Administration Süleyman Demirel University, Turkey 2Faculty of Economics and Administrative Sciences, Department of Economics Süleyman Demirel University, Turkey E –mails: dilekmemisoglu@sdu.edu.tr,aysedurgun@sdu.edu.tr,sibelyegül@yahoo.com Abstract One of the pre-accession funds which provided by the European Union is IPARD (Instrument for Pre-Accession Assistance-IPA). With this fund, it is aimed that include in some of the priorities for the adaptation of the agricultural sector and rural areas and contribute to the solution of problems. Thus, it is aimed people in rural areas attain sustainable business and living conditions their own region. In this context, it is given priority such as market efficiency, improving of quality and health standards, and creation of new employment opportunities in rural and rural areas in the supported activities. At this study primarily, it will be focused on the importance of rural development. Later, it will be given information about funds in order to promote rural development by the European Union. It will be especially focused on IPARD funds and the implementation of IPARD in Turkey will be discussed. Keywords: European Union, Rural Development, IPARD Programme, Turkey. 1. INTRODUCTION 275 �3rd International Symposium on Sustainable Development, May 31 - June 01 2012, Sarajevo Looking at the geography of Turkey in general, the width of rural areas attracts attention. Therefore, it is possible to say that rural areas with a particular population have the potential of economic and human resources which will contribute to the strengthening of the country development. From this point, consider the potential and eliminate the deficiencies, make new investments and services in rural areas, are important for sustainable development. In fact, rural development today is considered not only in the terms of agricultural sector but also in the context of regional development. European Union also supports rural development through various funds in the region countries. These supports aimed the sustainable development of rural areas in their region by taking into consideration country needs, priorities and the local conditions in a manner consistent with urban areas. 2. Rural Development in Development Process The content of the term “development”, frequently used for underdeveloped countries, can not only be defined as the increase in per capita income but it also has to involve the development in all spheres of the economy as well as the reformation and modernization of the economic and socio-cultural structure of the society. Assuming a vital significance for the underdeveloped countries to be able to catch up with the developed ones, the term “development” is a process which may come out both in stable and unstable terms. Within this process, the key elements of the development can be listed as the increase in per capita income as well as the grow of the share of the industry and service sectors in national income and export through modification of the frequency and amount of the production factors. (Han and Kaya; 2008:2). The term “development”, having gained a significant importance particularly following the Second World War and often cited in the literature, has been discussed in various studies under several other headings like economic development, rural development, sustainable development, etc. Among those complementary themes, rural development shall be discussed in our study. The rural area is plainly defined as the areas of land that are not urbanized. In broader terms, it is the area of land where social and economic activities are largely dependent on the use of the natural resources; the economic, social and cultural development processes move slowly; the traditional values hold direct influence in daily life; face-to-face interaction preserves its priority, the impact of the technological advancements on daily routines and production takes longer to appear; the infrastructure services are insufficient and the population density is lower than the urban areas. (DPT, 2000:2) Rural areas remain behind the urban areas in terms of social or economic opportunities. The structural, social and cultural reforms executed to ameliorate the living conditions of such areas can be defined as the rural development. (Uzunpınar, 2008:11). In short, every activity conducted in order to promote the rural life may mean rural development. However; for the 276 �3rd International Symposium on Sustainable Development, May 31 - June 01 2012, Sarajevo rural development activities to accomplish, in the first instance a sense of such need to maintain a certain standard of living is to be raised among those who dwell in the rural areas and earn their keep from farming or similar other rural area occupations; and then the economic, social and cultural development of those communities are to be promoted in a democratic manner by ensuring them with moral and material support. (Çandar, 2009:82) Within this framework, the essence of the rural development is regarded as a political policy that intends to ensure an optimum balance among social, cultural and economic differences between the rural and urban; to improve the rural population on-site as well as to settle the immigration and recruitment issues on-site. (Gülçubuk, 2002:1). When viewed from this aspect, we may esteem that the rural development policies in Turkey hold the similar objectives. That is to say, the relevant objective is mentioned in national rural development statement as follows: “to make use of local and potential resources, to improve and to sustain the working and living conditions of the rural areas on-site in harmony with the urban areas in reliance on the protection of the natural and cultural assets.” (DPT, 2006:10). 3. Rural Development Policies in Turkey Countries differ in their levels of development due to their geopolitical positions as well as their proximity to or distance from the natural resources. Beside these basic variables, there are plenty other factors having impact on the development of the countries. The underdeveloped countries involve people who mostly engage in farming and dwell in rural areas and whose economic activities, living standards, education levels as well as health services fall behind compared to those in developed countries. In this respect, the development of the rural areas holds a vital significance for the developing countries. That a considerable amount of population dwell in the rural areas worldwide concerns not only underdeveloped countries but also developed countries since the problems that the people in rural areas encounter, the gap in level of income between the urban and rural, the unfair distribution of income, sustainable use of the natural resources as well as the protection of the environment are regarded as international issues. Abovementioned case lays stress on the strategic significance of rural development for both developed and underdeveloped countries. Consequently, alternative policies regarding the rural development have been brought up recently. Turkey has been adopting a set of scheduled development principles so as to conduct an effective and rational socio-economic development through its progress plans since 1963. The rural development policies were first brought up by Five Year Plans which sought for the solutions to the problems of the rural areas. Within the 1st Five Year Progress Plan (19631967), the development of the society was perceived as rural development and “model village” projects were put into practice. Within the 2nd Five Year Progress Plan (1968-1972), the issues of urbanization, modernization in agriculture and industrialization were discussed. The 3rd Five Year Progress Plan (1973-1977) marked the “Central Village” and “Agricultural 277 �3rd International Symposium on Sustainable Development, May 31 - June 01 2012, Sarajevo City” projects. Within the 4th Five Year Progress Plan (1979-1983), land reform was added to the agenda while the main objective was set as the industrialization. “Leader Farmer” and “GAP” projects were put into effect in the 5th Five Year Progress Plan. The final period of the 6th plan and the initial period of the 7th plan marked the Customs Union Agreement. Within the 8th Five Year Progress Plan, Rural Development Special Commission Report discussing the modern village and agriculture approach as well as the increase in the income and recruitment was issued. The 9th Progress Plan, issued for a period of seven years (20072013) considering The European Union Accession Period, marked The Action Plan for Rural Development in accordance with The National Rural Development Strategy. The plan encapsulates not only the agricultural and regional policies regarding rural development but also the education, health, social security, trade and industry, recruitment, population, culture, urbanization, energy, tourism as well as environment. (Işık and Baysal, 2011:166). As said above, various policies or projects regarding the rural development have been conducted in the scheduled period. However, these have failed to produce effective outcomes. The rural development has gained more importance and considerably more efforts have been put together with The European Union Accession Period. 4. Rural Development Policies of the European Union for the Candidate Countries and Turkey 4.1. Rural Development Policies of the European Union and the Rural Development Funds Agriculture and rural development is still one of the most complex, sensitive and critical issues in the enlargement conditions of European Union. Because agriculture has a significant size (share of the Gross Domestic Product (GDP), high number of the population active in agriculture) and has structural deficiencies (subsistence and semi-subsistence farming). In the enlargement process the European Commission plays a key role and it is closely associated in the accession process including negotiations. Commission experts in the field of agriculture and rural development provide assistance and guidance to candidate and potential candidate countries preparing for the Common Agricultural Policy and Rural Development (European Commission, 2012a). In the 1950s the European Union (EU) Common Agricultural Policy (CAP) came up with the candidate countries in the implementation of rural development policies. CAP includes all of the policies pursued for the development of agriculture in order to bring the same level between members of different structure and regulation of agricultural markets of member countries in the agricultural sector. Initially, this application contains only the agricultural policies over time, other issues concerning rural areas (tourism, handicrafts, etc.) expanded to cover. Through the Common Agricultural Policy various programs have been developed to be brought into line particularly promote rural development and agricultural policies of candidate countries with the EU. In accordance with the CAP, various programs have been 278 �3rd International Symposium on Sustainable Development, May 31 - June 01 2012, Sarajevo developed to be bring into line agricultural policies of candidate countries with the EU and to support the rural development of candidate countries. Special Accession Programme for Agriculture and Rural Development (SAPARD) is one the programme that covers the years 2000–2006 and seeks to promote rural development in candidate countries. Instrument for Pre-Accession Assistance for Rural Development (IPARD) programme is the other one that covers 2007–2013 and still being implemented (Işık and Baysal, 2011: 167). Special Accession Programme For Agriculture And Rural Development (SAPARD) is one of the special European Union (EU) programmes started in June 1998. It is aimed to manage problems in agriculture and rural development for enhancing competitiveness in reference to the EU market and implementation of EU regulations in candidate countries. SAPARD programme can be implemented until the candidate countries join to the EU (Perić, Odobaša, and Konjić, 2009: 774). The SAPARD programme aims at (Perić, Odobaša, and Konjić, 2009: 775): - Harmonization with EU legislature in agriculture - Preparation in common agricultural policy (CAP) - Investing in agricultural land - Improvement of soil quality - Afforestation of agricultural areas - Supporting the manufacturers of wood products, - Improving the quality of arable land and parcelling - Land-ownership records - Professional education and training - Agricultural and fishery products processing and marketing building up. It is mentioned that the users of the programme are the producers, not the state. “The agriculture market and structural aid authority has been structured to performing the SAPARD programme of the Agency. It is the Agency that fulfills the function of SAPARD implementation starting from instruments preparation and inviting applications, project awarding, funding and field control9. SAPARD funding is targeted and grant-in-aid” (Perić, Odobaša, and Konjić, 2009: 774). 4.2. Instrument for Pre-Accession Assistance (IPA) The European Union's rural development policy in the new period 2007–2013, consists of three axes. These are competitive, land management and rural development axes. Competition axis aims to support human resources (especially young farmers) and to increase physical capacity, agricultural products and production capacity. The axis of land 279 �3rd International Symposium on Sustainable Development, May 31 - June 01 2012, Sarajevo management purposes to ensure sustainable use of agricultural land and forest areas. And the rural development axis pursues goals such as improving the quality of life and economic diversity and rising and training is the acquisition of skills. (EC, 2008: 17). The EU introduces new conditions for financing agriculture and rural development both for the member states and candidate countries by the new budget period 2007-2013. According to this, a new programme called as Instrument for Pre-Accession Assistance (IPA), will replace the Polognie et Hungrie Assistance Pour la Restructuration Economique (PHARE), Instrument for Structural Policies for Pre-Accession (ISPA), Special Accession Programme For Agriculture And Rural Development (SPARD), Community Assistance for Reconstruction Development and Stabilisation (CARDS) programmes and the Turkey preaccession instrument (Perić, Odobaša, and Konjić, 2009: 776). IPA replaces all the preaccession instruments and unifies them into a single framework. It also supports all the candidate and potential candidate countries with a clear and easy pre-accession aim on all categories. IPA has five components and it provides targeted and effective assistance for each country according to its needs and evolution by these components (European Commission, 2010). The Instrument for Pre-Accession Assistance (IPA) is the financial instrument for the European Union (EU) pre-accession process for the period 2007-2013. The IPA is intended as a flexible instrument. So it provides assistance to beneficiary countries according to their progress and their needs through the Commission’s evaluations and strategy papers. The beneficiary countries are divided into two categories, depending on their status. One of them is candidate countries and these are under accession process. And the other one is potential candidate countries and these are under the stabilization and association process. Candidate countries are the Former Yugoslav Republic of Macedonia, Croatia and Turkey (Annex I to the Regulation). Potential candidate countries are defined as Albania, Bosnia and Herzegovina, Iceland, Montenegro, and Serbia including Kosovo (Annex II to the Regulation) (European Commission, 2012b). The IPA’s main aim is to support institution-building and the rule of law, human rights, including the fundamental freedoms, minority rights, gender equality and non-discrimination, both administrative and economic reforms, economic and social development, reconciliation and reconstruction, and regional and cross-border cooperation. To achieve targeted, effective and coherent action, the IPA is made up of five components (European Commission, 2012b). Each component has priorities defined according to the needs of the beneficiary countries (European Commission, 2012c): 1. Transition Assistance and Institution Building: It provides financing for institutionbuilding and associated investments. It supports measures to drive stabilization and the transition to a democratic society and market economy. This component is open to all candidates and potential candidates. 280 �3rd International Symposium on Sustainable Development, May 31 - June 01 2012, Sarajevo 2. Cross-Border Cooperation: It supports cross-border cooperation between candidates and potential candidates and with EU Member States. It may also fund participation in transnational cooperation programmes (under the Structural Funds) and Sea Basin programmes (under the European Neighbourhood and Partnership Instrument or ENPI). This component is open to all candidates and potential candidates. 3. Regional Development: It finances investments and associated technical assistance in areas such as transport, environment and economic cohesion. It is open to candidate countries only. 4. Human Resources Development: It aims to strengthen human capital through education and training and to help combat exclusion. It is open to candidate countries only. 5. Rural Development: It contributes to sustainable rural development. It provides assistance for the restructuring of agriculture and its adaptation to EU standards in the areas of environmental protection, public health, animal and plant health, animal welfare and occupational safety. It is open to candidate countries only. In this process candidate countries and potential candidates are separated from each other. Because candidate countries are prepared for full implementation of the Community acquis at the time of accession. On the other hand potential candidate countries shall benefit from support to progressively align themselves to the Community acquis. Beside this, potential candidates may utilize last three components under the framework of the first component. It can be said that the difference is especially in the implementation way of these measures. Because beneficiary countries must manage the Community funds in a decentralized way preparing for the implementation of the structural and agricultural funds in the context of the three components (European Commission, 2012b). It is not possible to talk about a competition environment for countries while using funds. The envelope has been allocated to beneficiaries according to the needs of each country. One of the main objectives of IPA is to strengthen the administrative capacity of all beneficiary countries. Hence beneficiaries will be able to receive support to increase the administrative capacity and establish the correct management structures necessary to take responsibility of the management of assistance under the transition assistance and institution building component. For candidate countries, this will then allow measures relating to regional, human resources and regional development to be undertaken through the relevant components (which are designed to prepare for structural funds and hence require such management structures). For potential candidates, such development will be essential preparation for candidate status (European Commission, 2010). IPA should ensure a higher level of coherence and co-ordination of EU Assistance and better preparation for Structural, Cohesion and Rural development Funds through progressive emulation of EU funds rules. The financial envelope allocated for the period 2007–2013 is 10.2 billion Euros (at 2004 prices) (Davis, 2007: 7). Potential beneficiaries of the IPA are the local self-government units, farmings and other natural or legal persons depending on priority measures (Perić, Odobaša, and Konjić, 2009: 776). 281 �3rd International Symposium on Sustainable Development, May 31 - June 01 2012, Sarajevo It is possible to say that IPA has different management and implementation conditions. The IPA is based on strategic multi-annual planning. It is formed in agreement with the broad political guidelines set out in the Commission's enlargement package, which now contains a Multi-annual Indicative Financial Framework (MIFF). The MIFF constitutes the reference framework of the multi-annual indicative planning documents which are composing the strategic planning. Multi-annual indicative planning documents are created for each beneficiary country and contain the main intervention areas envisaged for that country. Annual or multi-annual programmes depend on the component and are based on the indicative planning documents and adopted by the Commission. The annual or multi-annual programmes are implemented by centralized, decentralized or shared management methods (European Commission, 2012b). Assistance through IPA can take the following forms (European Commission, 2012c): • Investment, procurement, contracts or subsidies • Administrative cooperation, involving experts sent from Member States (e.g. twinning) • Action by the EU in the interest of the beneficiary country • Measures to support the implementation process and programme management • Budget support (granted exceptionally and subject to supervision) 4.3. Instrument for Pre-Accession Assistance for Rural Development (IPARD) IPARD differs from the other components of the IPA. According to this, IPARD has devolved the control of financial resources completely to the candidate countries. Thus, the points such as monitoring of national accreditation process and the accredited organization, transferring of the fund management to IPARD agency, which has been accredited by the Commission and controlling of the IPARD agency after application (ex-post) are stand out. (European Commission, 2007). As mentioned before, IPARD programme exposes an easier and simple structure than SAPARD. For example, SAPARD includes 15 measures, but IPARD contains 9 measures in 3 axes (Turhan and Akdağ, 2006). These axes include the following measures (Davis, J., 2007: 7-8): Priority Axis 1-Improving market efficiency and implementing Community standards • Investments in farms to restructure and upgrade to the EU standards; • Supporting setting up of Producer groups • Investments in processing and marketing of agriculture and fishery products to restructure and upgrade to the EU standards Priority Axis 2-Preparatory actions for implantation of the agri-environmental measures and Leader • Preparation to implement actions designed to improve the environment and the country side 282 �3rd International Symposium on Sustainable Development, May 31 - June 01 2012, Sarajevo • Preparation of local private-public partnerships to implement local development strategies Priority Axis 3-Development of rural economy • Improving and developing rural infrastructure; • Development and diversification of rural economic activities; • Improvement of training • Technical assistance The main purpose of the IPARD is to contribute to the implementation of the acquis related to the EU Common Agricultural Policy and to determine some priorities and to contribute to the solution of problems in the candidate countries. Accordingly it is aimed to give priority to market efficiency, quality and improving health standards and the creation of new employment opportunities in rural areas (Bakırcı, 2009: 59). IPARD entrusts the financial control of all funds to the candidate country and brings an improved decentralized implementation system. In this respect, it is possible to say that a different application and scheduling mechanism is exhibited by IPARD and IPARD differs from the other components of IPA. Accordingly, the candidate country primarily needs to prepare a Rural Development Plan that must be approved by the Commission. In addition, a Rural Development Agency must be built and must be accredited in the candidate countries for implementation (Yıldız and Akdağ, 2006: 35). 4.3.1. IPARD Programme of Turkey IPA made up of five components and as a candidate country Turkey can beneficiary from all the components of IPA and also IPARD. IPARD is the fifth component of the IPA and includes rural development supports. Following initiation of negotiations, Turkey has started to work to fulfill the prerequisites. In this respect, the Ministry of Agriculture and Rural Affairs Department of Strategy Development has prepared the IPARD Programme by negotiating with relevant departments of the European Commission. Prepared IPARD Programme has accepted by the European Commission Rural Development Committee by discussing (Ministry of Food, Agriculture and Livestock, 2008). IPARD plan focused on issues such as, the country's overall socio-economic characteristics and current status, a detailed analysis of the agricultural sector, the economic activities in rural areas, human resources and regional differences, the country's agricultural policies, implemented before the development plans, goals and strategies and national support. However the part that shows what areas, which sectors and to whom the EU funds will be transferred under which conditions is the most important part of the programme and called as measures or technical jobs. The selected measures for the first level of programme includes following (Support Institution of Agriculture and Rural Development, 2010: 167): 283 �3rd International Symposium on Sustainable Development, May 31 - June 01 2012, Sarajevo • Investments for restructuring of agricultural businesses and the delivery to the Community standards • Investments for to restructure processing and marketing of agricultural and fishery products and the delivery to the Community standards • Investments for diversification and the development of rural economic activities In this context, the amount of funds allocated to Turkey under the rural development component of the IPA has determined total 660.9 million Euros between the years of 20072012 (European Commission, 2011). The IPARD programme for Turkey is in line with the Multi-annual Indicative Planning Document (MIPD) between the years of 2007 - 2009 as well as the enlargement package and other strategic documents on the pre-accession process of Turkey. The main policy objectives are to contribute to the modernization of the agricultural sector (including processing) through targeted investments while at the same time encouraging the improvement of EU acquis related food safety, veterinary, phytosanitary, environmental or other standards as specified in the Enlargement Package and to contribute to the sustainable development of rural areas (Europa, 2007). There are 3 overall aims of IPARD programme in the country. First one is, modernization of the agricultural production and processing sectors through increasing efficiency and competitiveness and implementation of Community standards. Second one is capacitybuilding and preparatory actions for the implementation of agri-environmental measures and the LEADER method. And the last one is, development and diversification of the rural economy, increase of quality of life and attractiveness of the rural areas, counteracting rural out-migration (Europa, 2007). On the other hand there 3 axes of IPARD programme in Turkey. Axis 1 aims to improve market efficiency and to implement Community standards and it has 154.954.667 million Euros (73%) public aid for the periods 2007 – 2009. Under Axis 1, three measures will be implemented as the following (Europa, 2007): • Investment in agricultural holdings to restructure and to upgrade to Community standards (40% of the public aid), • Investment in processing and marketing of agricultural and fishery products to restructure and upgrade to Community standards (28% of the public aid), • Support for the setting up of producer groups (5% of the public aid). Axis 2 purposes to prepare actions for the implementation of agri-environmental measures and Links between Actions for the Development of Rural Economy (LEADER). The Programme includes an outline of preparatory actions planned for the implementation of agrienvironmental measures such as erosion control, water resource conservation, biodiversity as well as for the LEADER method (acquisition of skills, implementation of local development 284 �3rd International Symposium on Sustainable Development, May 31 - June 01 2012, Sarajevo strategies, running costs for approved Local Action Groups as well as co-operation projects between those groups). The measures will be developed in detail and submitted to the Rural Development Committee for adoption after a capacity-building process including institutionbuilding and training during the period 2010 – 2013 (Europa, 2007). Ultimately Axis 3 intends to provide development of the rural economy and contains 53.066.667 million Euros (25%) public aid during the period 2007-2009. Under Axis 3 the diversification and development of rural economic activities will be implemented. The main priorities of Axis 3 are to contribute to the development of the rural economy, diversify onfarm and off-farm activities, to support the formation of micro enterprises in order to create new jobs as well as to maintain the existing jobs in rural areas. And the supports through Axis 3 will be provided to (Europa, 2007): • Diversification and development of on-farm activities (bee keeping and honey production, medicinal and aromatic plants, ornamental plants production), • Local product and micro enterprise development, • Rural tourism, • Aquaculture. IPARD implementation which will be implemented through the IPARD programme consists of two phases. The first stage encompasses the years 2007-2009 and the second stage covers the years 2010-2013. Various measures are envisaged in the two stages and four sectors have been defined as priority for IPARD intervention as the following (Ministry of Agriculture and Rural Affairs, 2008: 177): • Milk and milk products processing sector, • Meat and meat products processing sector including poultry • Fish processing sector • Fruits & Vegetable processing sector “The priorities for IPARD intervention in the processing sector are the assistance to the implementation of EU Acquis - notably related to quality, hygiene and food safety and veterinary controls, animal welfare, environmental impact and occupational safety – by the processing industry, as well as the improvement of the efficiency of the processes” (Ministry of Agriculture and Rural Affairs, 2008: 177). Support Institution of Agriculture and Rural Development is established as an IPARD agency in accordance with the IPARD program in order to fulfill the program requirements on 4 May 2007. Because the national accreditation process completed positively Support Institution of Agriculture and Rural Development Central and Provincial Coordinatorships have been accredited by the National Authorizing Officer on 21 July 2010 (Tarımsal ve Kırsal Kalkınmayı Destekleme Kurumu, 2010: 18). Up to now in the context of IPARD programme 285 �3rd International Symposium on Sustainable Development, May 31 - June 01 2012, Sarajevo five times the call announcements have been made to support businesses willing to invest by Support Institution of Agriculture and Rural Development. 5. CONCLUSION In recent years, the EU emerges as one of the actors that support rural development. The EU, thanks to funds provided for the candidate countries supports rural development in these countries on one hand and aims to harmonize agricultural policies of these countries with the EU on the other hand. The IPA is the financial instrument for the EU pre-accession process for the period 2007-2013. IPA made up of five components and IPARD is the fifth component of the IPA and includes rural development supports. IPARD programme covers 2007–2013 and still being implemented. As a candidate country Turkey can beneficiary from all the components of IPA and also IPARD. The Development Bank of Turkey recorded a total country population of 73.722.000 in 2012. The rural area population makes up 29% of the total population (21.382.000). The total number of recruitment in agriculture, industry and service sectors is 22.594.000 while 5.683.000 people engage in agricultural sector making up 39% of the total recruitment. The figures above mark the significance of the rural development policies for Turkey. Additionally, the rural development assumes a strategic significance to ensure the regional development and repair the instabilities among the geographical regions in Turkey. Through the EU rural development policies and funds and also IPARD programme as a candidate country, Turkey was a new era in rural development policies. In this new era, agricultural and rural producers are supported with funds and increasing the efficiency and the diversity of the product is aimed. Furthermore different methods for achieving rural development are envisaged. Accordingly, diversification of non-farming income-generating activities such as tourism and handicrafts has targeted in agricultural and rural areas, where seasonal unemployment is more than the other places. thereby creating new jobs, increase income and upgrade living standards of people living in rural area and prevent migration is intended. REFERENCES Bakırcı, M. (2009). AVRUPA Birliği Üyelik Öncesi Destek Fonu’nun (IPA*) Kırsal Kalkınma Bileşeni (IPARD**), Türkiye’nin Durumu ve Muhtemel Etkileri. Eastern Geographical Review, 14 (21), 53–78. Çandar, A. (2009). Yirminci Yüzyılın İkinci Yarısından Günümüze Kırsal Kalkınma Alanındaki Temel Yaklaşımlar ve Değişimler. Ahmet Saltık Kırsal Kalkınma Paneli, SÜRKAL - Sürdürülebilir Kırsal ve Kentsel Kalkınma Derneği, Ankara.81-92. 286 �3rd International Symposium on Sustainable Development, May 31 - June 01 2012, Sarajevo Davis, J. (2007) Agriculture and Rural Development Challenges in SEE and Turkey with the View to EU Integration Process. Devlet Planlama Teşkilatı. (2006). Ulusal Kırsal Kalkınma Stratejisi, Ankara. Devlet Planlama Teşkilatı. (2000). Sekizinci Beş Yıllık Kalkınma Planı, Kırsal Kalkınma Özel İhtisas Komisyonu Raporu, Ankara. Europa, (2007). IPA Rural Development (IPARD) Programme for Turkey. [Online] Available: http://europa.eu/rapid/pressReleasesAction.do?reference=MEMO/07/609&format=HTML&a ged=0&language=EN&guiLanguage=en (April 12, 2012) European Commission, (2012a). Enlargement of the European Union. [Online] Available: http://ec.europa.eu/agriculture/enlargement/index_en.htm (April 12, 2012) (European Commission, 2012b). Instrument for Pre-Accession Assistance (IPA). [Online] Available: http://europa.eu/legislation_summaries/agriculture/enlargement/e50020_en.htm 2012) (April 12, European Commission, (2012c). Instrument for pre-accession assistance (IPA). [Online] Available: http://ec.europa.eu/enlargement/how-does-it-work/financial-assistance/instrument-preaccession_en.htm (April 12, 2012) European Commission, (2011). Turkey - Financial Assistance. [Online] Available: http://ec.europa.eu/enlargement/candidate-countries/turkey/financial-assistance/index_en.htm (April 12, 2012) European Commission, (2010). Instrument for pre accession assistance "IPA" - Questions and Answers. [Online] Available: http://ec.europa.eu/enlargement/questions_and_answers/assistance_ipa_en.htm 2012) (April 12, Europen Commission, (2008). Fact Sheet EU Rural Development Policy 2007–2013. Luxembourg: Office for Official Publications of the European Communities. Europen Commission, (2007). Commission Regulation (EC) No 718/2007 of 12 June 2007 Implementing Council Regulation (EC) No 1085/2006 Establishing an Instrument for PreAccession Assistance (IPA). [Online] Available: http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2007:170:0001:0066:EN:PDF (April 12, 2012) Gülçubuk, B. (2002). Kırsal Kalkınma Politikaları. [Online] Available: 287 �3rd International Symposium on Sustainable Development, May 31 - June 01 2012, Sarajevo www.kirsalcevre.org.tr/_html/tur/yayinlarimiz/dyayinlar/kirsal_kalkinma_politikalari_bulent g.pdf. (April 10, 2012) Han, E.& Kaya A. A. (2008). Kalkınma Ekonomisi Teori ve Politika. 6. Baskı, Nobel Yayınları, Ankara. Işık, N. & Baysal, D. (2011). Avrupa Birliği’ne Uyum Sürecinde Türkiye’de Kırsal Kalkınma Politikaları: Genel Bir Değerlendirme. C.Ü. İktisadi ve İdari Bilimler Dergisi, 12(1), 165– 186. Kalkınma Bakanlığı. 2012. Ekonomik ve Sosyal Göstergeler. [Online] Available http://www.dpt.gov.tr/PortalDesign/PortalControls/WebIcerikGosterim.aspx?Enc=83D5A6F F03C7B4FC5A73E5CFAD2D9676. ( April 05,2012) Ministry of Agriculture and Rural Affairs, (2008). Instrument for Pre-Accession Assistance Rural Development (IPARD) Programme (200-2013). [Online] Available: http://www.tkdk.gov.tr/files/IPARD_Ingilizce.doc (April 12, 2012) Ministry of Food, Agriculture and Livestock, (2008). Türkiye’ nin IPARD Programı Avrupa Komisyonu Kırsal Kalkınma Komitesi’ nce Kabul Edildi. [Online] Available: http://www.tarim.gov.tr/Files/KirsalKalkinma/IPARD_Programi_1.htm (April 12, 2012) Perić, R., Odobaša, R., & Konjić, E. (2009). Financial Measures and Instruments for Adjustment of Agriculture for EU Accession. Interdisciplinary Management Research V, 771-780. Support Institution of Agriculture and Rural Development, (2010). Tarım ve Köyişleri Bakanlığı, IPARD Programı (2007–2013). [Online] Available: www.tkdk.gov.tr/files/IPARD_Program_son1.doc (January 10, 2012) Tarımsal ve Kırsal Kalkınmayı Destekleme Kurumu, (2010). Akreditasyon ve Yetki Devri Süreci Son Durum IPARD İzleme Komitesi 4. Resmi Toplantısı. [Online] Available: http://www.tarim.gov.tr/Files/duyurular/%C4%B1pard_izleme_komitesi/4.pdf 2012) (April 12, Turhan, M.S. & Akdağ, K. (2006). AB Üyeliği Yolunda Kırsal Kalkınma Planı ve Bu Plan Kapsamında Alınacak Tedbirler. Türktarım Dergisi, 167, 16–19. Uzunpınar, A. (2008). Katılım Öncesi AB Kırsal Kalkınma Politikası ve Türkiye’de Uygulanacak IPARD Programı Kapsamında Proje Hazırlama, Değerlendirme ve Seçim Süreci. [Online] Available http://diabk.tarim.gov.tr/Adnan_UZUNPINAR_AB_Uzmanl%C4%B1k_Tezi_200. (March 25, 2012) 288 �3rd International Symposium on Sustainable Development, May 31 - June 01 2012, Sarajevo Yıldız, F. F. & Akdağ, K. (2006). Avrupa Birliği Yapısal Fonları Kapsamında Bölgesel Kalkınma ile Kırsal Kalkınma Fonlarının Karşılaştırılması. Tarım ve Köyişleri Bakanlığı Türktarım Dergisi, 167, 29–37. Organization of Petroleum Exporting Countries (OPEC) and Role of Saudi Arabia Nađa Dreca International University of Sarajevo,Faculty of Business and Administration 71000, Sarajevo, Bosnia and Herzegovina E-mails: nadja.dreca@students.ius.edu.ba, nadja_n88@hotmail.com Abstract The aim of this research is to explain the OPEC position and the role of Saudi Arabia within OPEC. Saudi Arabia as the largest producer and country with largest oil reserves of oil attract many attention and many studies try to explain which role Saudi Arabia plays within OPEC, is it the role of dominant producer and which strategy Saudi Arabia used during its membership in order to keep its position and its market share. Saudi Arabia role is to keep the balance of production within OPEC. Saudi Arabia was explained as swing producer, and in order to protect itself and its interest because of cheating of other members of OPEC, it was forced to adopt the strategy tit-for-tat. There is big question of it is good to have dominant producer, or all of them to be equal. Keywords: OPEC, Saudi Arabia, Cartel, Oil prices, dominant producer 1. INTRODUCTION Organization of Petroleum Exporting Countries (OPEC) is the international organization composed of the twelve member states. These countries mainly depend on the revenues from oil export. They work together in the coordination of the overall oil price in the world market. OPEC is by market structure Cartel, which represents intergovernmental organization. As it is stated in OPEC`s Statute it is an international organization with aim to influence and maintain the price of oil through the control of production levels and to generate revenue, which goes towards meeting the development needs of its members. By 289 � Dublin Core The Dublin Core metadata element set is common to all Omeka records, including items, files, and collections. For more information see, http://dublincore.org/documents/dces/. Extent The size or duration of the resource. 1176 Title A name given to the resource The IPARD Programme in the context of European Union Rural development funds Author Author Dilek , Memişoğlu Abstract A summary of the resource. One of the pre-accession funds which provided by the European Union is IPARD (Instrument for Pre-Accession Assistance-IPA). With this fund, it is aimed that include in some of the priorities for the adaptation of the agricultural sector and rural areas and contribute to the solution of problems. Thus, it is aimed people in rural areas attain sustainable business and living conditions their own region. In this context, it is given priority such as market efficiency, improving of quality and health standards, and creation of new employment opportunities in rural and rural areas in the supported activities. At this study primarily, it will be focused on the importance of rural development. Later, it will be given information about funds in order to promote rural development by the European Union. It will be especially focused on IPARD funds and the implementation of IPARD in Turkey will be discussed. Keywords: European Union, Rural Development, IPARD Programme, Turkey. Date A point or period of time associated with an event in the lifecycle of the resource 2012-05-31 Keywords Keywords. Conference or Workshop Item PeerReviewed H Social Sciences (General) https://omeka.ibu.edu.ba/files/original/e479f1b5c68fca5ef618b00e00a9b498.pdf c9edbbbe388ff4749c360abe7a3f730d PDF Text Text 3rd International Symposium on Sustainable Development, May 31 - June 01 2012, Sarajevo Uzun S., İlbaş A.İ., İpek A., Beyzi E.Uranbey, S. and Arslan, N. (2012). In Vitro Propagation of Endemic Iris galactica Immature Zygotic. XI. International Symposium on Flower Bulbs and Herbaceous Perennials. Abstract Book. P: 109. ANTALYA. Yıldırım Z., Öztürk G. and Esen, M. (2010). Propagation of Tuberose (Polianthes tuberosa L.) in In Vitro Conditions. III. National Ornamental Plants Congress.p:98-102. İZMİR Zencirkıran M.and Mengüç A. (2002).The Effects of Twin Scale and Chipping Techniques on Bulblet Production in Galanthus elwesii Hook. II. National Ornamental Plants Congress.p: 24-28.ANTALYA. Zeybekoğlu E. and Özzambak E, 2012. XI. International Symposium on Flower Bulbs and Herbaceous Perennials. Abstract Book. P: 225. ANTALYA. Sustainable Collection of Laurel (Laurus nobilis L.) Leaves in Antalya Province Deniz Hazar1 Ibrahim Baktir2 Ozgul KaraguzeL3 Levent Ht4 1*Akdeniz University, Kumluca Vocational School 2 Akdeniz University, Faculty of Agriculture, Department of Horticulture 3Bati Akdeniz Agricultural Research Institute 4Antalya Forest Department E-mail: dhazar@akdeniz.edu.tr Abstract Laurel (Laurus nobilis L.) is an evergreen shrub which belongs to the Lauraceae family. It grows naturally along the entire coastal line of Turkey up to altitude of 1200 m. Laurel has been regarded as an important medicinal and aromatic plant for years in the Mediterranean Basin. Meantime, it is also often used as an ornamental plant in parks and gardens because it is very much suitable to pruning and to give the desired forms. Turkey provides about 97% of the world’s laurel leaf need. It is one of the top five plants collected from nature and exported from Turkey. However, there are some serious problems about the production system of laurel. Laurel production is done in conventional methods by local people. These areas are under threat due to overgrazing and uncontrolled collection. Ultimately, laurel growing areas have been exploited. In recent years, the researches related to sustainable use of laurel have increased. In this study it was investigated the researches conducted to sustainable use of laurel in Sırtkoy, Manavgat district and some other districts of Antalya. The aim of these studies was to develop an inventory method and to prepare management plans to be used by forest service and regional people. The cut shoots and leaves of laurel should be controlled and they should not be cut from the same locations every year. The rotation must be strictly applied in every 3 or 4 years intervals. Leaf collections should be done by experienced people in right period of the years and the leaves should be dried in a proper way. Keywords: Laurel, leaf, sustainability 104 �3rd International Symposium on Sustainable Development, May 31 - June 01 2012, Sarajevo 1.INTRODUCTION Medicinal and aromatic plants are used for many purposes. There is a growing demand for them at the global level. They are mostly collected from nature. Therefore, conservation and sustainable use of these species are necessary to meet the needs of present and future generations. Laurel is an important medicinal and aromatic plant in Turkey. Laurel areas are under threat due to some serious problems such as uncontrolled collection and overgrazing. In this study, it was investigated the researches have been conducted so far (e.c. SırtkoyManavgat district) to conservation and sustainability of laurel areas. Laurel (Laurus nobilis L.) is a member of the Lauracea family which contains 45 genera and about 1000 species. It is also known, as sweet bay, bay laurel, Grecian laurel, true bay and bay. In Turkish, it is named as Akdeniz defnesi or only defne. The homeland of the Laurel is Anatolia and Balkans. But it was taken to the shores of the Mediterranean in ancient times. Today it is one of the characteristic plants of the Mediterranean. Laurel grows wild and is cultivated in many warm regions of the world particularly in the Mediterranean countries (Turkey, Greece, France, Spain, Portugal, Algeria and Morocco). It grows naturally along the entire coastal line of Turkey up to altitude of 1200 m (Davis, 1982; Başer and Ekim, 2003). It has a wide distribution in Turkish flora: Balıkesir, Bursa, İstanbul, Zonguldak, Kastamonu, Sinop, Trabzon, Rize, İzmir, Muğla, Antalya, Mersin and Maraş (Davis, 1982) (Figure 1). It isn’t selective in terms of soil request and prefers stream beds (Göker and Acar, 1983; Özel, 2008). Its distribution area is related to water (in soil or in weather) every time (Özel, 2008) Laurel is an evergreen large shrub or small tree growing up to 15 m in height (Davis, 1982). The leaves are elliptic and shiny dark green about 5-10 cm long, rather thick, aromatic and leathery. It has shiny gray bark. The laurel is dioecious plant with male and female flowers on separate plants. Clusters of small yellow or greenish white flowers are produced in spring on the female plants. The fruits are small (about 1-2 cm long), egg-shaped, green single-seeded berries that ripen to shiny, purplish black in the fall (Gökmen 1973; Seçmen et al., 1992). Figure 1. Distribution of Laurel in Turkey (Davis, 1982) Laurel has been symbolised of victory, strength and protection since ancient times. After the victory or success, a crown of laurel leaves was worn by the emperors, generals, heroes and 105 �3rd International Symposium on Sustainable Development, May 31 - June 01 2012, Sarajevo athletes in ancient Rome and Greek. Also it has been used for many purposes for ancient times (Jirovetz et al., 1997). The tree is grown primarily for its leaves. Fresh or dried, they are used as a culinary herb and also for leaf essential oil. Dried leaves are used as flavour and spice, especially in canned meat and fish, storage of olive, packaging raisins and dried figs. Laurel leaf essential oil has got widely usage in the flavouring, cosmetic and perfume industries. The oil extracted from berries is utilized in the food, drink, pharmaceutical, chemical and cosmetic industries. The leaves are also used in traditional medicine and to rheumatism, joint pains, epilepsy, parkinsonism, schizophrenia, stress, stomach ulcers, to stimulate the appetite and as a sedative and antiseptic. The oil extracted from the berries is used as a cure for irritated skin, earache, asthma and urinary ailments. Furthermore, it was widely cultivated and used mainly in Europe and the USA as an ornamental plant in parks and gardens because of suitable to pruning and to give the desired forms. (Barla et al., 2007). Turkey has an important potential for production and exports of the laurel. About 90% of world’s laurel production is done in Turkey. It is one of the top five plants collected from nature and exported from Turkey. Laurel leaf production is arranged according to laws and principles and the annual production programs of the General Directorate of Forestry. Laurel leaf production is done between July October due to vegetative growth has stopped. Since the best quality leaves are on 2-3 year-old shoots, leaf production is the collection of these leaves. This process is not in the form collection of single leaves, is obtained by cutting the 2-3 year old leafy shoots (Bozkurt et al., 1982; OGM, 1987).Leafy shoots are made bunch and are dried in the shade. So, the green color of leaves is protected. After the leaves dried, they are collected from shoots. Yellowed leaves and contaminated foreign substances are eliminated. Then the dried leaves are separated into quality classes and packed. The drying process is made very primitive conditions. Ultimately, percent of the unqualified leaf is increased. 106 �3rd International Symposium on Sustainable Development, May 31 - June 01 2012, Sarajevo Figure 2. A graph showing the production quantities until 2006 and the estimated demand quantities after 2006 in the laurel areas As seen from the Figure 2, the demand quantities are increasing every year. However, there is no increase in the laurel areas. On the contrary, it decreases with each passing day. Accordingly, the amount of production also decreases. The reasons for this are as follows: 1. The dense, irregular and uncontrolled leaf collecting is made. 2. These areas are under threat due to overgrazing. 3. There is not an applicable inventory method and management plan accepted and implemented by forest service and small farmers. 4. Laurel production is done in conventional methods by local people. 5. Laurel production is mostly done from its native areas. The newly established plantations are very limited. 6. The clonally propagation techniques aren’t used for sampling production. Therefore, the standard product can not be obtained from the new plantations. 7. Diseases and pests of laurel are damaged its leaves. This situation causes a loss in product. 8. The lack of information Some researches have been conducted to ensure the sustainability of production and exports of laurel leaves in the laurel production areas of Antalya and other provinces. 2.Researches on Laurel in Antalya: 1. Sırtkoy-Manavgat: This is the main study in laurel. Sırtkoy-Manavgat district were chosen to study the criteria of sustainable use of laurel. The aim of this study was to develop an inventory method and prepare a management plan to be used by forest service and farmers. In 107 �3rd International Symposium on Sustainable Development, May 31 - June 01 2012, Sarajevo the first step, the inventories of the areas were carried out and the areas were assigned into homogenous classes. In the second step, fresh laurel leaf yield was measured on 30 sampling plots. In the third step, an index named “crown index” was developed to estimate actual leaf stocking in sample plots taken for inventory. The index is determined by multiplying of crown diameter and crown height and gives the values represent the amount of leaf production for a tree. Correlation of this index values with measured values was significant (r=0.79; P<0.0001). This index was used successfully for inventory of study area. The index was also suggested to planers to use for inventory studies. The digital maps produced by the use of GIS (Geographic Information System). The leaf harvesting rotation plans were developed on digital maps. GPS (Global Positioning Systems) was also used to locate all the fieldwork plots. As a result, a management plan was prepared for practitioners and forest service (Baş et al., 2005). 2. Yardop project: After the huge forest fire (16 000 ha) in Tasagil-Serik in 2008, Yardop project was developed in order to establish fire-resistant forests by forest service. This project aims to establish with leafy forest trees 50-150 m wide area between forest and farmland. For this purpose selected plants are laurel, carob, acacia, olives, almonds and cypress. Especially laurel is preferred because it is fire resistant and provides income. 3.The Other Researches on Laurel in Turkey: 1. The aim of this study was to determine the most suitable leaf harvesting method and cutting period which were yield good quality and quantity leaves of laurel and its economy. Experimental design was completely randomized parcel design with three different leaf harvesting methods (clear cutting, pollarding, combination) and three different shoot cutting periods (every year, once in two years, once in three years) on total 108 plots. First treatment was clear cutting method (coppice system). Second treatment was pollarding method. Within this method, one shoot which good growing and 1.0-1.5 m height at each plot was selected and were cut over its shoots on 1/3 ratio. The third treatment is combination method. It was combination of first and second methods. Shoot cutting periods were every year cutting, at two years interval cutting and at three years interval cutting. Commercially important dry leaf yield/plot (g/plot), the best quality dry leaf yield/ dry leaf yield ratio (%), the best quality dry leaf yield/plot (g/plot) and dry base essential oil contents (%) were given. According to results of this research; combined leaf harvesting method and two years interval cutting period were suggested for laurel areas (Polat et al., 2009). 2. The aim of this study was to determine the most suitable vegetative propagation method of laurel. For this, the cuttings were taken in 11 different time periods and treated with 5 different dose of IBA, were planted in 4 different medium. The best results were obtained from cuttings taking on 30 July and applied with 5000 ppm IBA. The mix of peat and perlite was determined as the best media (Parlak, 2008). 4.CONCLUSION In this study, to ensure the sustainability of laurel areas have been revealed primarily the problems. Some researches done in these areas are examined and some proposals are presented. One of the oldest and the most comprehensive studies were done in SırtkoyManavgat district and it was followed by several other studies. Considering the results of 108 �3rd International Symposium on Sustainable Development, May 31 - June 01 2012, Sarajevo these studies, the following recommendations can be presented to the sustainability of the laurel areas: The cut shoots and leaves of laurel should be controlled and they should not be cut from the same locations every year. The rotation must be strictly applied in every 3 or 4 years intervals. Leaf collections should be done by experienced people in right period of the years and the leaves should be dried in a proper way. To prevent destruction in natural laurel areas and to promote management of culture fields should be primarily carried out education, information and organization activities. For this purpose, the state, producers and private sector must be provided coordination and unity of purpose. REFERENCES Barla, A., Topcu. G., Oksuz, S., Tumen, G.and Kingston, D. (2007). Identification of cytotoxic sesquiterpenes from Laurus nobilis L. Food Chem, 104: 1478-1484. Baş, M.N., Güler, S. ve Erkan, N. (2005). Defne (Laurus nobilis L.) Alanlarında Yaprak Üretim Miktarlarının Belirlenmesi (Manavgat-Sırtköy Örneği). Çevre ve Orman Bakanlığı Batı Akdeniz Ormancılık Araştırma Müdürlüğü. Teknik Bülten Serisi. No:24, Antalya Baser, K.H.C. and Ekim, T. (2003). Medicinal Plants in the Western Black Sea Countries: Turkey, Eurasia Environment Conference, Istanbul, 21-23 October 2003, Türkiye Çevre Vakfi Yayini, Istanbul. Bozkurt, Y., Yaltırık, F. ve Özdönmez, M. (1982). Türkiye’de Orman Yan Ürünleri, İstanbul Üniversitesi Orman Fakültesi Yayınları, İÜ Yayın no:2845, O.F. Yayın no:302, İstanbul, s:13-15 Davis P.H. (1982). Flora of Turkey, Vol. 7, Edinburgh University Press, Edinburgh. Göker,Y. ve Acar, İ. (1983). Orman Yan Ürünlerinden Akdeniz Defnesi (Laurus nobilis L.). İ. Ü. Orman Fakültesi Dergisi. Cilt: 33. Seri: B. Sayı: 1. İstanbul. Gökmen, H. (1973). Kapalı Tohumlular 1. Cilt. Şark Matbaası. 576 s. Ankara. Jirovetz, L., Buchbauer, G.and Ngassoum, M. (1997). GC/MS-analysis of essential oils from Cameroon plants used as spices in local foodstuff. Recent Research and Development In Agricultural and Food Chemistry, 1: 241-255. OGM (1987). Ülkemizdeki Bazı Önemli Orman Tali Ürünlerinin Teşhis ve Tanıtım Kılavuzu, Orman Genel Müdürlüğü, Yayın No:659, Seri No:18, Ankara, sayfa:25. Özel N., Akkaş, M.N., Öner, H.H., Akbin, G., Altun N. ve Albayrak Akbin, N. (2008). Batı Anadolu’da Defne (Laurus nobilis L.)Yayılış Alanlarının Yetişme Ortamı Özelliklerinin Belirlenmesi. Ege Ormancılık Araştırma Müdürlüğü. Teknik Bülten Serisi. No:39, İzmir. Parlak, S. (2008). Defne (Laurus nobilis L.)’nin Çelikle Üretilmesi. Ege Ormancılık Araştırma Müdürlüğü. Teknik Bülten Serisi. No:42, İzmir. Polat, S., Gülbaba, A.G., Tüfekçi, S. ve Özkurt, A. (2009). Defne (Laurus nobilis L.) Alanlarında En Uygun Yaprak İşletme Şekli ve Maliyetlerinin Belirlenmesi (Tarsus Örneği). Doğu Akdeniz Ormancılık Araştırma Enstitüsü. Teknik Bülten Serisi. No: 34, Tarsus. Seçmen, Ö., Gemici, Y., Görk, G., Bekat, L. and Leblebici E. (1992.) Tohumlu Bitkiler Sistematiği (Ders Kitabı). Ege Üniversitesi Fen Fakültesi Kitaplar Serisi No:116. Ege Ünv. Basımevi. Bornova-İzmir. 109 � Dublin Core The Dublin Core metadata element set is common to all Omeka records, including items, files, and collections. For more information see, http://dublincore.org/documents/dces/. Extent The size or duration of the resource. 1234 Title A name given to the resource Sustainable Collection of Laurel (Laurus nobilis L.) Leaves in Antalya Province Author Author Deniz, Hazar Abstract A summary of the resource. Laurel (Laurus nobilis L.) is an evergreen shrub which belongs to the Lauraceae family. It grows naturally along the entire coastal line of Turkey up to altitude of 1200 m. Laurel has been regarded as an important medicinal and aromatic plant for years in the Mediterranean Basin. Meantime, it is also often used as an ornamental plant in parks and gardens because it is very much suitable to pruning and to give the desired forms. Turkey provides about 97% of the world’s laurel leaf need. It is one of the top five plants collected from nature and exported from Turkey. However, there are some serious problems about the production system of laurel. Laurel production is done in conventional methods by local people. These areas are under threat due to overgrazing and uncontrolled collection. Ultimately, laurel growing areas have been exploited. In recent years, the researches related to sustainable use of laurel have increased. In this study it was investigated the researches conducted to sustainable use of laurel in Sırtkoy, Manavgat district and some other districts of Antalya. The aim of these studies was to develop an inventory method and to prepare management plans to be used by forest service and regional people. The cut shoots and leaves of laurel should be controlled and they should not be cut from the same locations every year. The rotation must be strictly applied in every 3 or 4 years intervals. Leaf collections should be done by experienced people in right period of the years and the leaves should be dried in a proper way. Keywords: Laurel, leaf, sustainability Date A point or period of time associated with an event in the lifecycle of the resource 2012-05-31 Keywords Keywords. Conference or Workshop Item PeerReviewed S Agriculture (General) https://omeka.ibu.edu.ba/files/original/fbd7b239d55ee3e4a7cb4e1f2b356d1c.pdf f0f4d8ffef45663c1b04aaa614f86aaf PDF Text Text 3rd International Symposium on Sustainable Development, May 31 - June 01 2012, Sarajevo Durkaya, M., S., Ceylan, “Tax Revenues and Economic Growth”, Maliye Dergisi, N.150, p.79-89. Ekici, M.Sena (2009), “The Determinants of Tax Revenue & Its Economical-Social Side”, Electronic Journal of Social Sciences, V.8, ISSN : 1304-0278, p.200-223 Göçer, İ., M., Mercan, et all (2010), “Ekonomik Büyüme İle Vergi Gelirleri Arasındaki İlişki: Sınır Testi Yaklaşımı”, Dumlupınar Üniversitesi Sosyal Bilimler Dergisi. Güriş, S, E.Çağlayan and B.Güriş (2011), Eviews İle Temel Ekonometri, Der Yayınları, İstanbul, ISBN: 9789753533706 Lee, Y., R.Gordon (2005), “Tax Structure and Economic Growth”, Journal of Public Economics, 89, p.1027-1043. Mucuk, M. and V., Alptekin (2008), “The Relationship Tax and Economic Growth in Turkey: VAR Analysis (1975-2006)”, Maliye Dergisi, N.155, p.159-174 Paksoy, S. and S, Bakan (2010), “Tax Policies Which are Applied in Turkey & Effects of Them on Economic Growth: (After 1980)”, Journal of Social Sciences, V.9, ISSN : 13040278, p.150-170 Pehlivan, O.(2012), Vergi Hukuku, Genel İlkeler ve Türk Vergi Sistemi, Murathan Yayınevi, Trabzon, ISBN: 9786055451219 Temiz, D.(2008), “The Relationship Between Tax Revenues and Economic Growth in Turkey : The Period of 1960-2006”, 2.National Economy Congress, İzmir, Özsoy C.(2009), "Türkiye'de Eğitim ve İktisadi Büyüme Arasındaki İlişkinin VAR Modeli İle Analizi", The Journal of Knowledge Economy & Knowledge Management, Vol:IV, , 71-83. Turan, T.(2008), “Maliye Politikası Araçlarının Ekonomik Büyüme Üzerindeki Etkileri: Bir Literatür İncelemesi”, Sayıştay Dergisi, S.69, p. 17-36 Yanpar, Atila (2007), Master Degree Thesis, Gelişmekte Olan Ülkelerde Büyüme Yönelimli Vergi Politikası, Yılmaz, Ö., V.Kaya(2007), “İhracat, İthalat ve Reel Döviz Kuru İlişkisi: Türkiye İçin Bir VAR Modeli”, İktisat İşletme ve Finans Dergisi, p.250, 69-84. The Effect of Exchange Rate Volatility on Import Demand: Evidence from Turkey Demirgil Hakan1, Keskin Hidayet1, Karaöz Murat2,Şentürk, Canan1 1Süleyman Demirel University, Isparta, Turkey 2Akdeniz University, Antalya, Turkey, Abstract Since 2001 financial crisis, Turkey has adopted fluctuating exchange rate regime in order to make the economy stronger against external shocks. This has lead to a high volatility of Turkish lira against to foreign currencies. Therefore, it became essential for policy makers to evaluate the potential effects of exchange rate volatility on international trade. The purpose of this study is to provide new evidence on the effects of exchange rate volatility on the import 40 �3rd International Symposium on Sustainable Development, May 31 - June 01 2012, Sarajevo demand of Turkey along with income and price elasticities. Our data cover the period 2010:01 to 2010:05. We, initially, employed a GARCH model to evaluate exchange rate volatility one of the independent variables that estimate real import. The study also includes conventional determinants such as relative price level of imports and real GDP. Afterwards, our paper investigates long-run and short-run relationship between real imports and its determinants by using ARDL error correction model. The empirical results indicate that real exchange rate volatility of local currency has significant and reverse effect on import demand. Keywords: Exchange rate volatility, Import demand, GARCH model, ARDL error correction model, Turkey. 1. INTRODUCTION The high degree of volatility and uncertainty of exchange rate movements since the beginning of the generalized floating in 1973 have led policy makers and researchers to investigate the nature and extent of the impact of such movements on the volume of trade. Most studies investigate empirically the effects of exchange rate volatility on the export flow. However, there are only a few studies which investigate the impact of exchange rate volatility on import demand. Gotur (1985) found mixed evidence regarding the effect of exchange rate volatility on import demand using aggregate data for the US, Germany, France, Japan and UK. The main conclusion of this analyze is that the Akhtar-Hilton methodology fails "to establish a systematically significant link between measured exchange rate variability and the volume of international trade". Anderton and Skudelny (2001) estimated euro area import demand function for the period 1989:01 to 1999:02. They found a significant negative effect of extraeuro area bilateral exchange rate volatility on euro area imports. Aydın et al. (2004) examines the export supply and import demand for the Turkish economy using both single equation and vector auto regression frameworks. The analysis shows the real exchange rate as a significant determinant of imports and the trade deficit, but not of exports. Baum et al. (2004) estimates the impact of exchange rate volatility on real international trade flows utilizing a 13 country dataset of monthly bilateral real exports for 1980-1998. They find that the effect of exchange rate volatility on trade flows is nonlinear, depending on its interaction with the importing country’s volatility of economic activity, and that it varies considerably over the set of country pairs considered. Arize (1998) tried to apply the co-integration technique to the import demand model using quarterly data over 1973:02 through 1993:04 and estimated the short- and long-run influence of exchange-rate volatility on the import flows of the United States. The major finding is that there is a significant long- as well as short-run negative effect of exchange-rate volatility on the volume of imports. Arize and Shwiff (1998) provided new evidence on the long-run relationship between import flows and exchange-rate volatility in G-7 countries, during the quarterly period 1973:02 to 1995:01. They found that exchange rate volatility has a significant negative effect on the volume of imports of G-7, countries whereas for Canada, it is positive and significant. Hwang and Lee (2005) examine the impact of exchange rate volatility on trade flows in the UK, over the period 1990-2000. Volatility is modelled by GARCH-M method. This study identifies the existence of a positive relationship between exchange rate volatility and imports in the U.K. in the 1998. Gül and Ekinci (2006) investigate the interactions between the real exchange rates and export and import applying bivariate Granger causality test in Turkey. The 41 �3rd International Symposium on Sustainable Development, May 31 - June 01 2012, Sarajevo results indicate that there is a cointegrating relationship between the real exchange rates and export and import. Erden and Sağlam (2009) investigate the impact of exchange rate volatility on import demand in Turkey. The results indicate that while volatility and import demand on investment goods are co-integrated and are negatively related, there is no co-integrating relationship between exchange rate volatility and import demand on consumptions goods. Sarı (2010) provides the exchange rate volatility by using MSARCH which is a new econometric method; the results indicate that the import and exchange rate volatility are inversely related. Alam and Ahmed (2010) estimated the import demand function for Pakistan covering quarterly period 1982:01 to 2008:02 by employing ARDL approach. The result from ARDL analysis, support the hypothesis that in Pakistan there exist a long run relationship among, import demand, real economic growth, relative price of imports, real effective exchange rate and volatility of real effective exchange rate. 2. Data and Methodology For the following analysis, we gathered data on real import demand (RIMP) which is constructed as nominal import level deflated by the unit value index of import level, relative price (RELPR) which is the ratio of import price index of Turkey to consumer price index for Turkey (CPI), real GDP (GDP) seasonally adjusted using by CENSUS X12 method and exchange rate volatility (VOL). A continuous monthly sample from 2000:01 to 2010:05 is used in this study. RIMP, RELPR, GDP and CPI variables collect from Turkish Statistical Institute. Exchange rate volatility means that risk level faced by importers due to unpredictable fluctuations and thus it is an unobservable variable. We, therefore, used the conditional variance measure derived from GARCH model by Bollerslev (1986): where c is constant term, are the coefficients and is the error term normally distributed with mean zero and variance . ARCH model developed by Engle (1982) presume that the variance can be obtained from the following AR process: where is the conditional variance of exchange rate, are the coefficients and indicates the squared residuals from the mean equation. However, the GARCH (p,q) process is a widening version of ARCH in which is a function of the lagged values of itself as well as of . The conditional variance of exchange rate is estimated by: 42 �3rd International Symposium on Sustainable Development, May 31 - June 01 2012, Sarajevo The most familiar drawback of testing for nonstationary in the process of time series is the very low power of unit root tests. Thus, a method which has received considerable attention over the past years is the autoregressive distributed lag (ARDL) bounds testing approach to cointegration developed by Pesaran and Shin (1999) and Pesaran et al. (2001) is usually used. The advantages of this method are to compare with other cointegration procedure. Firstly, a major advantage of this approach is that order of integration for each variable is not required for testing on the existence of a long-run relationship between them. More precisely, it is not relevant whether the variables are I(0) or I(1). Moreover, the long and short run coefficients can be estimated simultaneously and a dynamic error correction model (ECM) can be derived from ARDL through simple linear transformation. Applying the method, the error correction version of the ARDL model is given by: where the c is the constant tem, are the long run multipliers, are the short run coefficients and is the white noise error term. To test the long run relationship, an F-test on the null hypothesis of no cointegration in the long run relationship is defined by , against the alternative hypothesis of is conducted. The calculated F statistic is compared with the critical values provided by Pesaran et.al (1999). If the calculated F statistic lies above the upper bound, the null hypothesis of no cointegration is rejected. In other case, the null hypothesis can be accepted if F statistic below the lower bound. If the existence of a cointegration relationship is identified, then following cointegration model is projected: The selection of the orders of lags in ARDL model is very important which is guided by Akaike Information Criterion (AIC). Furthermore, the properties of the residuals are checked to ensure the absence of serial correlation. Finally, the dynamic short-run coefficients for the error correction representation are estimated according to; 43 �3rd International Symposium on Sustainable Development, May 31 - June 01 2012, Sarajevo where ECMt-1 is the error correction term resulting from estimated long run equilibrium relationship; and is the coefficient represent the speed of adjustment to long run equilibrium i.e. the percental monthly correction of a deviation from the long run equilibrium the month before. 3. Empirical Results The Augmented Dickey Fuller (ADF) and Philips-Perron (PP) tests results are shown in Table 1. This tests shows that RIMP, RELPR, GDP are to be integrated of order one, I(1), except for measures exchange rate volatility (VOL). VOL is to be integrated of order zero, I(0). Evidently, composition of I(0) and I(1) variables provides a good reason for using the bounds test approach (ARDL model). Table 1. ADF and PP tests of the series Variable ADF test with intercept Philips-Perron test with intercept Level First Difference Level First Difference RIMP -0.861 -2.906** -1.912 -18.695* RELPR -1.665 -5.889* -1.383 -9.185* GDP -1.366 -8.245* -1.462 -7.136* VOL -7.441* -15.659* -7.484* -67.973* Critical values are: -3.483 (for 1% level), -2.887 (for 5% level), -2.581 (for 10% level). *,** and *** indicates significant at 1%, 5% and %10 level respectively. In the first stage of the ARDL procedure, the order of lags on the first differenced variables for eq. (4) is usually obtained by means of Akaike Information Criterion (AIC). Given that we are using monthly observations, we experimented up to 8 lags on the first-difference of each variable and decided to choose 2 lags length. 44 �3rd International Symposium on Sustainable Development, May 31 - June 01 2012, Sarajevo Table 2. Lag Lengths for Bounds Test Lag Length AIC Breusch-Godfrey (Prob.) 8 6,9658 0.142 7 6,9673 0.571 6 6,9036 0.734 5 6,9024 0.108 4 6.8588 0.104 3 6.7958 0.413 2 6.7951 0.507 1 6.7976 0.401 LM Test In Table 3, the results of the bounds co-integration test demonstrate that the null hypothesis of against its alternative is easily rejected at the 5% significance level. The computed F-statistic of 4.738 is greater than the lower critical bound value of 3.49; thus indicating the existence of a steady-state long-run relationship among RIMP, RELPR, GDP and VOL. Table 3. Bounds Test for Cointegration Analysis K 3 Bounds F test Critical Values Lower Bound Upper Bound %90 level 2.97 4.00 %95 level 3.49 4.58 %99 level 4.56 5.83 4.738 Diagnostics R2=0.440 F-Statistics=5.398 (0.000) Breush-Godfrey (0.451) Ramsey (0.577) LM=1.59 Jarque-Bera=10.307 (0.005) D-W Stat=1.938 White Test= (0.928) 7.872 RESET=0.312 Given the existence of a long-run relationship, in the next step we used the ARDL cointegration method to estimate the parameters of ARDL (1,0,1,1) model. GDP and VOL 45 �3rd International Symposium on Sustainable Development, May 31 - June 01 2012, Sarajevo variables display the expected signs for the regressors and they are highly statistically significant. The results of long run test suggest that the demand for imports in Turkey has not been affected by an increase in the relative price level of import. Because, Turkey mostly imports goods that are essential for continuing economic activity like petroleum products and raw materials. Table 4. ARDL (1,0,1,1) Model and Long Run Coefficients Variable Coefficient t-stat Constant -33.426 -3.758* RIMPt-1 0.331 3.763* RELPR 0.139 0.825 GDP 2.48E-06 0.507 GDPt-1 8.73E-06 1.843* VOL -0.069 -1.996** VOLt-1 0.034 1.002 Constant -50.002 -3.815* RELPR 0.208 -0.989 GDP 1.676E-05 3.763* VOL -0.051 -3.994* F-Statistics=157.948 (0.000) D-W Stat=2.043 Coefficients for Long Run Diagnostics R2=0.892 Breush-Godfrey (0.636) Ramsey (0.278) LM=0.97 Jarque-Bera=13.375 (0.001) White Test=3.279 (0.785) RESET=1.184 *, **and *** denote significance at the1%, 5% and 10% level, respectively. Error Correction Model (ECM) is employed to check the short run relationship among RIMP, RELPR, GDP and VOL. The t-statistics of ECM is statistically significant which shows that there is short run relationship among variables and results are incorporated in Table 5. The coefficients of error correction term represent the speed of adjustment of this variable back to its long- run value following a shock. 81% of any deviation from the long-run equilibrium is corrected every month. 46 �3rd International Symposium on Sustainable Development, May 31 - June 01 2012, Sarajevo Table 5. Error Correction Representation of ARDL Model Variable Coefficient t-stat Constant -0.171 -0.254 ECMt-1 -0.816 -5.039* RIMPt-1 0.119 0.913 RELPR 0.321 0.688 RELPRt-1 0.376 0.806 GDP 3.73E-06 0.775 GDPt-1 3.61E-06 0.769 GDPt-2 8.93E-06 1.918*** VOL -0.077 -2.687* F-Statistics=7.984 (0.000) D-W Stat=2.061 Diagnostics R2=0.365 Breush-Godfrey (0.182) Ramsey (0.190) LM=1.79 Jarque-Bera=7.388 (0.024) White Test=1.182 (0.316) RESET=1.168 *, **and *** denote significance at the1%, 5% and 10% level, respectively. In order to check for parameter constancy, we employ the CUSUM stability test to the estimated ARDL model. Graph 1. Stability tests for Short Run ARDL (ECM) Model 30 40 2 3 1 2 20 0 30 10 1 -1 0 -2 -1 -3 -2 0 20 -10 -4 01 02 03 04 05 06 07 08 09 10 -3 01 02 03 Recursive C(1) Estimates ± 2 S.E. 10 50 0 04 05 06 07 08 09 10 01 02 03 Recursive C(2) Estimates ± 2 S.E. 0 04 05 06 07 08 09 10 08 09 10 08 09 10 Recursive C(3) Estimates ± 2 S.E. 200 .00006 100 .00004 0 .00002 -50 -100 -10 -100 .00000 -200 -.00002 -300 -.00004 -150 -200 -20 -250 01 02 03 04 05 06 07 08 09 10 01 02 03 Recursive C(4) Estimates ± 2 S.E. -30 .00004 .00002 -40 04 05 06 07 08 09 10 01 02 03 Recursive C(5) Estimates ± 2 S.E. 04 05 06 07 Recursive C(6) Estimates ± 2 S.E. .00004 .6 .00002 .4 .00000 .2 .00000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 -.00002 -.00002 -.00004 CUSUM 5% Significance -.00006 02 03 04 05 06 07 Recursive C(7) Estimates ± 2 S.E. (a) CUSUM Plot for the estimated ARDL Model .0 -.00004 01 08 09 10 -.2 01 02 03 04 05 06 07 Recursive C(8) Estimates ± 2 S.E. 08 09 10 01 02 03 04 05 06 07 Recursive C(9) Estimates ± 2 S.E. (b) Recursive Coefficient Test for stability of ECM 47 �3rd International Symposium on Sustainable Development, May 31 - June 01 2012, Sarajevo The CUSUM plot for the model is shown in Graph 1 (a). As can be seen, the plot is within the 5% critical bounds. Furthermore, we conduct the Recursive Coefficient Test to confirm the stability of parameters see Graph 1 (b). As the coefficients do not display significant variation as more data is added to the estimating equation, it is a strong indication of stability. For the model, the stability tests show an overall constancy of the cointegration space. 4. CONCLUSION In this paper, we have analyzed real import demand for Turkey using available monthly time series data from 2000:01 to 2010:05. It could be concluded from this study that there is a long run relation among import demand, relative prices, real GDP and real exchange rate volatility. CUSUM and Recursive Coefficient Tests also indicate that there exists a stable import demand function. By employing an error correction framework, we also obtain estimates for the speeds of adjustment to long run equilibrium and short run elasticities for the import demand of Turkey. Therefore, it found that import demand of Turkey is positively affected by real GDP indicating that it is growth driven. Further, the results show that relative price level has no significant effect on import demand, which is quite obvious for growth driven economy. Results of the study also disclose that real exchange rate volatility of local currency has significant and reverse effect on import demand. The import demand of Turkey is sensitive and elastic (long run elasticity is -0.051 meanwhile short run elasticity is -0.077) to real depreciation and its volatility. The short-run dynamics assessed by estimation of the error correction models indicate an average adjustment coefficient of -0.82. For sustainable foreign trade policy (mediately sustainable economic growth), Central Bank of the Republic of Turkey should conduct more stable exchange rate policy. REFERENCES Alam, S. and Ahmed, Q.M. (2010) Exchange Rate Volatility and Pakistan’s Import Demand: An Application of Autoregressive Distributed Lag Model International Research, Journal of Finance and Economics, 48, 7-22. Anderton, R. and Skudelny, F. (2001) Exchange Rate Volatility And Euro Area Imports, European Central Bank Working Paper, 64. Arize, A. C. (1998) The effects of Exchange Rate Volatility on U. S. Imports: An Empirical Investigation, International Economic Journal, 12(3), 31-40. Arize, A.C. and Shwiff, S.S. (1998) Does Exchange-Rate Volatility Affect Import Flows In G-7 Countries? Evidence From Cointegration Models, Applied Economics, 30, 1269-76. Aydın, M.F., Çıplak, U. and Yücel, E.M. (2004) Export Supply and Import Demand Models for the Turkish Economy, Research Development Working Paper No: 04/09, The Central Bank of the Republic of Turkey. Baum C.F., Caglayan M. and Ozkan N. (2004), Nonlinear Effects of Exchange Rate Volatility on the Volume of Bilateral Exports, Journal of Applied Econometrics, 19, 1-23. Bollerslev, T. (1986), Generalized Autoregressive Conditional Heteroskedasticity, Journal of Econometrics, 31, 307-27. 48 �3rd International Symposium on Sustainable Development, May 31 - June 01 2012, Sarajevo Engle, R.F. (1982) Autoregressive Conditional Heteroscedasticity with Estimates of the Cariance of UK Inflation, Econometrica, 50, 987-1008. Erden, L. and Sağlam, G. (2009) Türkiye’de Döviz Kuru Oynakliğinin Sektörel Ithalata Etkileri: Bir Ardl Ithalat Modeli Analizi, H.Ü. İktisadi ve İdari Bilimler Fakültesi Dergisi, 27(2), 19-44. Gül E. and Ekinci A. (2006) Türkiye’de Reel Döviz Kuru İle İhracat ve İthalat Arasındaki Nedensellik İlişkisi: 1990 – 2006, Dumlupınar Üniversitesi Sosyal Bilimler Dergisi, 16, 165190. Hwang H. and Lee, J. (2005) Exchange Rate Volatility and Trade Flows of the U.K. in 1990s, International Area Review, 8(1), 173-182. Pesaran, M.H. and Shin Y. (1999) An Autoregressive Distributed-Lag Modelling Approach to Cointegration Analysis, in: Strom, S.(Ed.), Econometrics and Economic Theory in the 20th Century, Camridge University Press, Cambridge. Pesaran, M.H., Shin, Y. and Smith, R.J. (2001) Bounds Testing Approaches to the Analysis of Level Relationships, Journal of Applied Econometrics, 16(3), 289-326. Sarı A. (2010) Döviz Kuru Oynakliğinin Ithalata Etkileri: Türkiye Örneği, İstanbul Üniversitesi Iktisat Fakültesi Ekonometri ve İstatistik Dergisi, 11, 31–44. Cox Regression Models with Time-Varying Covariates Applied to Survival Success of Young Firms (*) Aygül Anavatan, Murat Karaöz Akdeniz University, İİBF, Department of Econometrics 07058, Kampus, Antalya, Turkey E-mails: aygulanavatan@akdeniz.edu.tr, mkaraoz@akdeniz.edu.tr Abstract Cox proportional hazards model assumes that independent variables remain constant throughout the observation period. Model can give biased results in cases which this assumption is violated. One of the methods used modelling the hazard ratio in the cases that the proportional hazard assumption is not met is to add a time-dependent variable showing the interaction between the predictor variable as parametric function of time. In this study, we investigate the factors that affect the survival time of the firms and the time dependence of these factors using Cox regression considering time depedent independent variables. (*) This paper is an extension to the findings of the scientific research project “The Factors Affecting Survival and Growth Performance of Newly Established Enterprises in Business Incubators: A Survey on the KOSGEB Business Development Centers (İŞGEM)”, 109K139, which has been funded with grant from TÜBİTAK. We also acknowledge the administrative support to the project from KOSGEB. 49 � Dublin Core The Dublin Core metadata element set is common to all Omeka records, including items, files, and collections. For more information see, http://dublincore.org/documents/dces/. Extent The size or duration of the resource. 1312 Title A name given to the resource The Effect of Exchange Rate Volatility on Import Demand: Evidence from Turkey Author Author Demirgil , Hakan Abstract A summary of the resource. Since 2001 financial crisis, Turkey has adopted fluctuating exchange rate regime in order to make the economy stronger against external shocks. This has lead to a high volatility of Turkish lira against to foreign currencies. Therefore, it became essential for policy makers to evaluate the potential effects of exchange rate volatility on international trade. The purpose of this study is to provide new evidence on the effects of exchange rate volatility on the import demand of Turkey along with income and price elasticities. Our data cover the period 2010:01 to 2010:05. We, initially, employed a GARCH model to evaluate exchange rate volatility one of the independent variables that estimate real import. The study also includes conventional determinants such as relative price level of imports and real GDP. Afterwards, our paper investigates long-run and short-run relationship between real imports and its determinants by using ARDL error correction model. The empirical results indicate that real exchange rate volatility of local currency has significant and reverse effect on import demand. Keywords: Exchange rate volatility, Import demand, GARCH model, ARDL error correction model, Turkey. Date A point or period of time associated with an event in the lifecycle of the resource 2012-05-31 Keywords Keywords. Conference or Workshop Item PeerReviewed H Social Sciences (General),HB Economic Theory,HG Finance,HJ Public Finance https://omeka.ibu.edu.ba/files/original/0bd045852c0ea58a11d8ef6604e4836f.pdf e9cbba86c9570baecd86837205856bd0 PDF Text Text 3rd International Symposium on Sustainable Development, May 31 - June 01 2012, Sarajevo Yusof, S.A. (2010). Globalization and the Malaysian labor market: an empirical investigation. Journal of Economic Cooperation and Development, 31 (1), 17-40. Factors Affecting The New Vehicle Registration In The Eu Countries Cumhur Erdem1, Şaban Nazlioğlu2 1Department of Economics ,Gaziosmanpaşa University, Tokat-Turkey 2Department of Econometrics, PamukkaleUniversity, Denizli-Turkey E-mails: Cumhur_erdem@yahoo.com,snazlioglu@pau.edu.tr Abstract Theobjective of this study is to determine whether economic factors (namelyprice, consumer preferences, consumer income, interest rate, fuel prices, industrial production, and trade)have any explanatory power on new vehicle registry in the EU member countries. To meet this objective, a panel cointegration analysis was applied to the panel of thirteen EU countries for the time period spanning from January 1999 to August 2010. This study concludes that while the vehicle sales in the EU are determined by the macroeconomic factors instead of the factors in the demand theory, the consumer preferences are impetuses for passenger car sales in the EU countries. Keywords: newvehicle sales, demand theory, macro economic variables, EU countries, panel cointegration, 1. INTRODUCTION Automotiveindustry has become very dynamic and competitive sectors on a global scale in recent years. Since the industry is considered as a crucial contributor to economic growth, it has been observed that most of the developed countries (such as. the USA, Germany, France, UK, Italy, Spain and South Korea) and many of the less developed ones (such as China, India, Malaysia, Thailand) have policies for becoming major players on world market by improving their own industry. Therefore, prediction of new vehicle registry is of great interest for policy makers, legislators, transport and urban planners, and traffic engineers in nations whose economies highly depend on the vehicle industry because the prediction of future vehicle registry has a vital importance in terms of forecasting national accounts as well as future energy and infrastructure requirements (Abu-Eisheh and Mannering, 2002). Predicting the new vehicle registration and having information about the determinants of the vehicle demand has also crucial importance for the strategic planning of vehicle manufacturers. The industryplays a vital role in the economies of European Union (EU) member countries, the world’s largest vehicle producer and playground for a highly competitive and innovative 468 �3rd International Symposium on Sustainable Development, May 31 - June 01 2012, Sarajevo industry, in terms of manufacturing, employment, exports, Rersearch&Develpment and government revenue (European Automobile Manufacturers’ Association (hereafter ACEA), 2011). As of 2009,Germany is the largest vehicle producer (5.2 million units) in the EU followed by Spain, France, United Kingdom (UK), Italy, Czech Republic, and Poland (ACEA, 2011). Vehicle production and demand in most of the countries (including the EU) show upward and downward trends from time to time depending on the changes in economic conditions. Wad (2009) stated that “the effect of the global crisis came immediately with the stop for consumer credit and rapidly declining consumer confidence hitting in particular durable and expensive purchases like automobiles”. Even though 14.1 million new cars were registered in the EUby 2009, the automotive industry experienced the biggest decline in EU car sales since 1993. New passenger car registrations decreased by 9.5% compared to the pre-crisis levels of 2007 (1.6% compared to 2008) and commercial vehicle registrations declined by 32.4% compared to 2008(ACEA, 2011). Due to the significance of the vehicle industry on the economies of EU member countries, from both policy makers and manufacturers’ perspectives, there is a need to establish a policy framework that grows the automotive industry. In this context, it is important to determine the factors affecting the new vehicle registry in EU member countries. However, the empirical attempts on the determinants of the vehicle sales in the EU countries are very scarce and this gap in the literature provides room for examining the factors affecting the new vehicle sales in the EU countries. This paper thereby aims at addressing to which extent the economic factors have impact on the number of new vehicle registry in EU countries. To meet this objective, a panel data analysis was applied to the panel consisting of thirteen EU countries for the period January 1999-August 2010. 2. Literature review There are a limited number of studies in the literature related to the determinants of vehicle demand. In an early study, Abu-Eisheh and Mannering (2002) analyzed the determinants of automobile import in West Bank and their estimation and simulation results showed that population/employment, economic growth, oil prices, exchange rates, and governmental policies have relative importance on the importation of automobiles. They concluded that much of the growth in automobile ownership is determined by economic growth. Lord and Sahito (2010) analyzed whether yen-for-dollar exchange rate and gasoline prices have impact on the demand for Japanese cars in the US and found that demand for Japanese imports is positively correlated with the gasoline prices. They also found a positive relationship between the yen-for-dollar exchange rate and imports after 1988. Alper and Mumcu (2007) estimated the demand for new automobiles in Turkey and found that the origin of automobile’s country and quality have impacts on the demand for automobile in Turkey and found that the demand for new automobiles is price inelastic in the short run. Mannering (1988) conducted a study to determine how consumers in the USA value interest rates in their new car choice decisions. His findings shows that consumers tend to overvalue interest rates relative to their true worth, proving the success of interest rate incentive programs. 469 �3rd International Symposium on Sustainable Development, May 31 - June 01 2012, Sarajevo McManus (2007) hypothesized that there is a link between gasoline price and selling price of automobiles in the USA and to reveal the existence of this link, he regressed the aggregate automobile prices on the number of independent variables including the interest rates. He found that interest rates has negative impact on the price of automobiles and concluded that since interest rate has negative impact on the automobile sales, automobile manufacturers overcomes this effect by reducing the selling price of automobiles. Dotseyand Reid (1992)tested the effectiveness of interest rates, proxied for the monetary policy,, and oil prices in economic activity for the USA and concluded that both tight monetary policy and oil price increases are statistically related to the declines in economic activity. Beck (2003) investigated the difference in consumers' responses to changes in the price of automobiles and changes in the level of the interest rate for automobile loans in USA and found that consumers respond to price changes rather than interest rate changes when purchasing a new automobile. His estimation results showed that there is a statistically significant and negative relationship between auto-demand and both interest rate and price variables. As expected, they found a positive and statistically significant positive relationship between auto-demand and disposable income. 3. Empirical Model and Data To examine the determinant of new vehicle registrations in the EU, the demand model which is augmented with the macro-economic aggregates is described as follows: ln NVit   0  1 ln Pit   2 ln CCI it   3 yit   4 iit   5 ln FPit   6 ln IPI it   7 ln XM it   it (1) where i stands for the EU country, t refers to time period, NV is new vehicle sales, P is price of vehicles, CCI is consumer confidence indicator (consumer preferences), y is consumer’s disposable income,i is interest rate,FP is fuel prices (diesel prices for the commercial vehicles, gasoline prices for the passenger cars), IPI is industrial production, and XM is total trade. For new vehicles, four particular segments are considered in the estimations. The number of new registry for passenger cars (PC), light commercial vehicles (LCV) up to 3.5t - (excluding minibuses up to 3.5t), commercial vehicles (CV) over 3.5t - (excluding buses&coaches over 3.5t), heavy commercial vehicles (HCV) over 16t - (excluding buses&coaches over 16t) were used for the dependent variables. The independent variable price is one of the variables that represents the price of vehicles. In equation (1), the sign of the coefficient on the price is expected to be negative due to the demand theory which postulates that the quantity demanded is a negative function of the price. One of the important contributions of this study to the empirical literature is to determine the sensitivity of the new vehicles sales to the consumer confidence indicator. Consumer confidence indicators were formulated in the late 1940's by George Katona at the University of Michigan as a way to include empirical measures of consumer expectations into the models of spending and saving behavior. The demand model described above includes a measure of the consumer confidence indicator to accounts for changes in consumers’ preferences due to the current economic condition, recessions or expansions, which effect consumers' decision to buy a car. Concerning the theory of demand, this variable can be used as proxy to measure the consumers’ preferences (Beck, 2003). With regard to the expected sign of the consumer confidence indicator, 470 �3rd International Symposium on Sustainable Development, May 31 - June 01 2012, Sarajevo the views are not unambiguous about to what extent the consumer confidence affects the demand of a good. On the one hand, a positive relationship is expected between new vehicle registration and consumer confidence indicators due to fact that optimistic consumer confidence may encourage consumers to make large expenses and to increase the tendency for borrowing. On the other hand, pessimism may cause consumers to decrease their expenditures and to make more strategic financial decisions. The consumer income is one of the traditional determinant of a good consumed. The demand theory assumes that an increase in demand for a good is positively associated with an increase in consumer income. In this study, the growth rate of per capita income is used as a proxy for the consumer income. Another independent variable representing the price of automobiles is interest rate that is included into the model to determine whether macroeconomic instability has any explanatory power on the new vehicle registry in the EU member countries. As a durable good, it is expected that the demand for vehicles is affected by the real interest rates. Accordingly, a negative relationship between interest rate and vehicle sales is expected due to fact that higher interest rates mean higher costs of borrowing for loans. The fuel prices may be one of the important factors in explaining the fluctuations in new vehicle sales. High oil prices are expected to be negative effect on the consumer demand for the vehicles. According to Lee and Ni (2002), both the demand and supply of oil-sensitive industries are affected after an oil price shock. They also emphasized that the vehicle industry is negatively affected by oil price shocks and that the long run effects of oil price shocks will results in a weakening demand for full-size cars or opting for alternative means of transportation. It was hypothesized that worldwide economic conditions are expected to have impact on demand for commercial vehicles. For the commercial vehicles, industrial production index and trade volume were added to the models as independent variables to determine the effectiveness of economic activities on vehicle demand. It is expected that there is a positive relationship between demand for commercial vehicles and both industrial production and trade volume. It is expected that the demand for the vehicles is expected to rise as the cargo transportation increases with the growing economic activity in the sectors such as the construction, agriculture, chemical, mining and service. This study covers the monthly data spanning from January 1999 to August 2010 for 13 EU countries (Austria, Belgium, Denmark, Finland, France, Germany, Greece, Italy, Netherlands, Portugal, Spain, Sweden, and United Kingdom). The starting date of time period and the crosssectional dimension of the panel are restricted to availability of the variables in concern for the EU countries. The monthly data for the new registration of vehicles, short-term interest rates, harmonized index of consumer prices were obtained from EUROSTAT databank. To reflect relative movements in the average aggregate price level for new vehicles, motorcars inflation is measured by harmonized index of consumer prices (2005=100). We observe seasonal cycles in the passenger cars and therefore the seasonally adjusted observations for this variable were used in the analysis. The monthly observations for the consumer confidence indicators, industrial production index, trade volume in goods were obtained from OECD databank. Trade volume (export+import) was indexed by taking January 2005=100 as the base time. Since monthly data for the growth rate of per capita income is not available for the countries in hand, the quarterly 471 �3rd International Symposium on Sustainable Development, May 31 - June 01 2012, Sarajevo data for the growth rate of per capita income retrieved from OECD database and was transformed to monthly observations by means of cubic spline interpolation method (PROC EXPAND procedure in SAS). The fuel prices are measured as including taxes and duties and were obtained from European Commission Oil Bulletin. 4. Methods and Findings In order to search for the long-run relations among the new vehicle sales and their determinants in equation (1), this study utilizes panel cointegration methods. The justification behind the use of panel cointegration analysis is due to the fact that panel data methods are more powerful than times series analysis since the panel data gets additional information from the cross-sectional dimension in addition to the time series dimension. In the first step of our empirical analysis, unit root properties of the series are investigated via four panel unit root tests developed by Breitung (2000), Levin et al. (2000), Im et al. (2003), and Hadri (2000). The panel unit root analysis indicates that while the variables of interest have unit root in their level forms, they are stationary in the fist-difference form76. The unit root analysis therefore implies that the variables may be cointegrated in the long-run, which provide a room to continue the empirical analysis with the examination of the cointegration properties of the variables. To analyze the existence of the long-run equilibrium relationship among the variables in question, several panel cointegration tests are developed in McKoskey and Kao (1998), Kao (1999), Pedroni (1999). The test of McKoskey and Kao (1998) and of Kao (1999) strictly assumes a homogenous panel cointegration vector for the panel. Pedroni (1999) relaxes this assumption by allowing heterogeneous cointegration vectors among cross-sectional units of the panel. To test for the null of no-cointegration in the panel, Pedroni (1999) developed the seven cointegration statistics which are asymptotically distributed as standard normal77. First, four statistics are based on the within-dimension approach which pools the autoregressive coefficient across different members for the unit root tests on the estimated residuals. The next three statistics are based on the between-dimension approach which averages the individually estimated coefficients for each member in the panel. The results from the panel cointegration tests are reported in Table 1. The findings strongly support that the new sales of commercial vehicles, light commercial vehicles, and heavy commercial vehicles in the EU are cointegrated with the prices, the consumer confidence index, the interest rate, the real income growth, the diesel prices, the industrial production, and the trade 76See Pedroni (1999) for further details and mathematical representation of the statistics. 77Single-family homes are unattached houses and townhouses, including individually owned and operated housing units as well as single-family townhouse condominiums. Currently, some 66 percent of all U.S. housing consists of single or one-family homes (Listokin, D. and Burchell, R.W., Housing (shelter), Microsoft® Student 2009 [DVD], Redmond, WA: Microsoft Corporation, 2008). 472 �3rd International Symposium on Sustainable Development, May 31 - June 01 2012, Sarajevo volume. Similarly, the passenger car sales tend to be move together in line with the changes in the prices, the consumer confidence index, interest rate, the consumer income, and the gasoline prices. The existence of the cointegration relations is also implies that the short-run deviations from the steady-state equilibrium in the estimated demand models for the vehicles are corrected over time. Accordingly, the policy makers in the EU countries may not quickly react to the shortterm shocks to the new vehicle sales. Table 1: Results for panel cointegration tests Statistic Commercial vehicles (CV) Light commercial vehicles (LCV) Heavy commercial vehicles (HCV) Passenger Cars (PC) 6.02 -29.37 -30.71 -28.24 6.42 -21.94 -24.80 -22.14 5.92 -28.30 -29.52 -27.69 12.92 -27.37 -29.19 -22.99 -30.48 -35.20 -32.05 -23.79 -29.68 -26.88 -29.28 -33.64 -31.29 -28.63 -31.81 -27.01 Within-dimension Panel v-stat Panel rho-stat Panel pp-stat Panel adf-stat Between-dimension Group rho-stat Group pp-stat Group adf-stat The critical value at 1 percent level of significance is 1.96 for panel v-stat and -1.96 for other statistics. All the statistics are statistically significant at 1 percent level of significance. The existence of the cointegration among the variables arises the question of to what extent the explanatory variables influence the new vehicle sales in the long-run. To estimate the long-run cointegration parameters, panel ordinary least squares (OLS), panel dynamic OLS (DOLS) and panel fully modified OLS (FMOLS) have been extensively utilized. Since these estimators are asymptotically equivalent, the choice among the methods depends upon their performance in finite samples (Banerjee, 1999). Monte Carlo experiments carried out by Kao and Chiang (2000) show that panel DOLS outperforms both panel OLS and FMOLS estimators. The recent Monte Carlo study of Wagner and Hluoskova (2009) indicate that the panel DOLS estimator outperforms both single- and system-equation panel cointegration methods. We therefore estimate the panel cointegration parameters by the group-mean panel DOLS estimator developed by Pedroni (2001). The panel DOLS estimator of Pedroni (2001) is flexible in examining crosscountry heterogeneity in the panel as well as in providing the mean value of the panel cointegrationcoefficient. Estimation of the cointegration parameters from the group-mean panel DOLS approach is computationally simple that the following regression model is estimated with the OLS for each member of the panel. yit   i   i xit  K ii  k   K ii ik xit k  it (2) wherey denotes the dependent variable, x is the matrix of the explanatory variables (lnP, lnCCI, i, y, lnFP, lnIPI, lnXM), ∆ is the first–difference operator, -K and K are leads and lags to be 473 �3rd International Symposium on Sustainable Development, May 31 - June 01 2012, Sarajevo N ˆ *  N 1   i  i 1 determined. The panel cointegration parameter is constructed as where i is the cointegration parameter obtained from the individual OLS estimation of equation (2). Finally, the N associated t-ratio for the panel cointegration parameter is derived as t ˆ *  N 1 / 2  t ˆ i 1 . The results for the panel cointegration estimations are reported in Table 2. Findings indicate that although some of the cointegration parameters appear to be insignificant, they have the expected signs. More specifically, while the commercial and heavy vehicles are negatively affected from interest rates, they are positively associated with a rise in the industrial production and in the total trade. For the light commercial vehicles, consumer confidence, income, and trade are found to be significantly positive. When we turn the passenger cars, it is found that while the passenger car sales are positively determined by the consumer confidence and the income,it is negatively determined by the interest rates. Table 2: Results for panel cointegration estimation Commercial vehicles lnP lnCCI I Y lnFP lnIPI lnXM -1.74 (1.47) 0.44 (0.73) -0.04 (3.04) *** 0.06 (0.95) -0.06 (0.74) 0.34 (2.38) *** 0.83 (3.40) *** Light commercial vehicles -0.26 (1.49) 1.16 (2.15) ** -0.01 (0.98) 0.05 (2.31) ** -0.43 (3.35) 0.90 (1.36) 0.30 (2.80) *** Heavy commercial Vehicles -1.23 (0.41) 0.10 (0.46) -0.05 (3.36) *** 0.03 (0.11) -0.19 (1.24) 0.46 (3.40) *** 1.20 (4.28) *** Passenger Cars -0.06 (1.28) 0.75 (1.66) * -0.01 (2.18) ** 0.02 (1.97) ** 0.05 (0.08) Figures in parentheses are the absolute t-statistics. ***, **, * indicates the significance at 1, 5, and 10 percent level of statistical significance. 5. Conclusions and Policy Implications In this study, we determine to what extent the economic variables affect the new vehicle sales in the selected EU countries over the period January 1999-August 2010 by means of panel cointegration analysis. The empirical results for the vehicles show that the vehicle sales are strongly associated with higher industrial production and trade. For the passenger cars, we find out that the passenger car sales are basically determined by the consumer preferences. The panel cointegration analysis provides important implications about the vehicle sales in the EU. First of all, the macro economic variables such as interest rate, industrial production, and trade appear to be more pronounced factors in the fluctuations of the vehicle sales. 474 �3rd International Symposium on Sustainable Development, May 31 - June 01 2012, Sarajevo REFERENCES Abu-Eisheh, S.A. and Mannering,F.L. (2002) Forecasting automobile demand for economies in transition: a dynamic simultaneous-equation system approach.Transportation Planning and Technology, 25(4), 311-331. ACEA (European Automobile Manufacturers’ Association)(2011)The automobile industry in Europe an industry with strength and breadth.http://www.acea.be/index.php/collection/industry_and_economy_industry_report, (Accessed:02/01/2011) Alper, C.E. and Mumcu,A. (2007) Interaction between price, quality and country of origin when estimating automobile demand: the case of Turkey.Applied Economics, 39, 1789–1796. Banerjee, A. (1999) Panel data unit roots and cointegration: an overview. Oxford Bulletin of Economics and Statistics, 61, 607-629. Beck,E.C. (2003)Are consumers more interested reductions?Issues in Political Economy, 12,1-9. in financing incentives or price Breitung, J. (2000)The local power of some unit root tests for panel data. in B. H. Baltagi, ed., Nonstationary Panels, Panel Cointegration and Dynamic Panels, Advances in Econometrics, 15, 161-177. Dotsey, M. andReid,M.(1992) Oil shocks, monetary policy, and economic activity. Economic Review, 78, 14–27. Hadri, K. (2000)Testing for stationarity in heterogeneous panel data. Econometrics Journal, 3, 148–161. Im, K. S., Pesaran, M. H.and Shin, Y. (2003)Testing for unit roots in heterogeneous panels. Journal of Econometrics, 115, 53–74. Kao, C. (1999)Spurious regression and residual-based tests for cointegration in panel data. Journal of Econometrics, 90, 1-44. 475 �3rd International Symposium on Sustainable Development, May 31 - June 01 2012, Sarajevo Kao, C. and Chiang, M.H. (2000)On the estimation and inference of a cointegrated regression in panel data. In B.H. Baltagi, ed., Advances in Econometrics.Nonstationary Panels, Panel Cointegration and Dynamic Panels, 15, 179–222. Lee, K. andShawn,N.(2002)On the dynamic effects of oil price shocks: a study using industry level data. Journal of Monetary Economics, 49, 823-852. Levin, A., Lin, C., and Chu, C.J. (2002)Unit root tests in panel data: asymptotic and finite-sample properties. Journal of Econometrics, 108, 1-24. Lord, R.A. and Saito,Y. (2010) Effect of exchange rates and gasoline prices on us imports of japanese automobiles, The International Trade Journal, 24(2), 182-208. Mannering, F. (1988) Analysis of the impact of interest rates on automobile demand. Transportation Research Record, 1116, 10-14. McCoskey, S., and Kao, C. (1998)A residual-based test of the null of cointegration in panel data.Econometric Reviews, 17, 57-84. McManus, W. (2007) The link between gasoline prices and vehicle sales.Business Economics, 42, 53-60. Pedroni, P. (1999)Critical values for cointegration tests in heterogeneous panels with multiple regressors. Oxford Bulletin of Economics and Statistics, 61(Special Issue), 653–670. Pedroni, P. (2001) Purchasing power parity tests in cointegrated panels.Review of Economics and Statistics, 83, 727-931. Wad, P. (2009) Impact of the global economic and financial crisis over the automotive industry in developing countries, United Nations Industrial Development Organization, Research and Statistics Branch, Working Paper, No:16/2009. Wagner, M., Hlouskova, J. (2009) The performance of panel cointegration methods: results from a large scale simulation study, Econometric Reviews, 29(2), 182-223. 476 � Dublin Core The Dublin Core metadata element set is common to all Omeka records, including items, files, and collections. For more information see, http://dublincore.org/documents/dces/. Extent The size or duration of the resource. 1355 Title A name given to the resource Factors Affecting The New Vehicle Registration In The Eu Countries Author Author Cumhur, Erdem Abstract A summary of the resource. Theobjective of this study is to determine whether economic factors (namelyprice, consumer preferences, consumer income, interest rate, fuel prices, industrial production, and trade)have any explanatory power on new vehicle registry in the EU member countries. To meet this objective, a panel cointegration analysis was applied to the panel of thirteen EU countries for the time period spanning from January 1999 to August 2010. This study concludes that while the vehicle sales in the EU are determined by the macroeconomic factors instead of the factors in the demand theory, the consumer preferences are impetuses for passenger car sales in the EU countries. Keywords: newvehicle sales, demand theory, macro economic variables, EU countries, panel cointegration, Date A point or period of time associated with an event in the lifecycle of the resource 2012-05-31 Keywords Keywords. Conference or Workshop Item PeerReviewed H Social Sciences (General),HB Economic Theory,HG Finance,HJ Public Finance https://omeka.ibu.edu.ba/files/original/d4fa5499d73948ebdcc6c749efd970b9.pdf 136d624246a8f7c18aa1d946e080ce45 PDF Text Text 3rd International Symposium on Sustainable Development, May 31 - June 01 2012, Sarajevo Significance Of Fairs For Marketing Activities Cengiz Funda, Gürkanlar, Esin Akdeniz University Alanya Faculty of Business E-mails: cengizfunda@akdeniz.edu.tr, esingurkanlar@akdeniz.edu.tr Subject: This study aims to set forth the significance of fairs in marketing activities through determining the relevant attitudes of participant companies. Abstract This study aims to set forth the significance of fairs in marketing activities through determining the relevant attitudes of participant companies. To this end, a questionnaire comprising of 22 questions was devised to collect data for the research. The questionnaire was used during the “2011 Antalya Anfaş Hotel Equipment” fair organized in “Antalya Expo Center”. The questionnaires were given to and filled in by the company staff working in the booths allocated to the participant companies. Among 150 questionnaires completed 116 were deemed eligible to be used in this research. Analysis made in the light of the data collected as a result of the research revealed that fairs have a significant role for the marketing activities of participant companies. It has been determined that fairs offer significant advantages to companies especially in the promotion of existing products and conducting of market analysis for the new products. Keywords: Fair, Marketing, Marketing Tool, Promotion Mix 1.INTRODUCTION Competition is increasing as a result of globalization and technological developments and consequently marketing activities have become more important than product quality and features, which in turn has increased the function of and the need for marketing. Therefore, the significance of fairs are increasing for marketing managers since such events can fully respond to the current needs, enable the use of many interpenetrating marketing instruments such as advertisements, promotion, public relations and direct marketing and ensure that a single message is delivered to the consumer. This research aims at dwelling upon the significance of fairs through determining the role they play for company marketing activities, and benefits they offer to the companies that use fairs as effective marketing instruments. 2.General Overview of the Term Fair The word fair is originally derived from the Latin word “fariae”, which means festival or fest (Koldaş 2006). In general terms fairs are publicity activities scheduled to take place regularly, usually at the same venue, where tradable goods or services, technological developments, information and innovation are promoted aiming at finding new markets and sales opportunities, 35 �3rd International Symposium on Sustainable Development, May 31 - June 01 2012, Sarajevo technical cooperation, establishment and development of potential commercial networks. Fairs are among the most significant marketing communication instruments through which companies offer their goods and services to visitors, and potential buyers and sellers meet and have individual contacts with each other (Okay 2000). Fair organization business is growing and expanding globally. Almost 9000 fairs are organized every year in around 120 countries (Sülün 2004). The largest and most modern fair venues are located in Europe. Germany is the leading country in Europe and in the world, where high-quality fair organizations take place. Almost 400450 fairs are organized every year in Germany. In this respect Germany is followed by France, Italy and the United Kingdom in Europe (Sülün 2004). 3.Link between Fairs and Marketing Diversified product and application options have extremely complicated the process of selection for the buyer, and have made it essential to have a single platform for comparing all options. In national and international competition close customer relations have become the most important instrument in success strategy (TOBB 2012). Fairs are the marketing instruments which appeal to five senses of the individual and provide unique features since they are three dimensional unlike other sales development activities. Furthermore, fairs are effective sales development instruments which allow all promotion activities to be collectively used at once such as individual sales activities actively used via individual contacts with customers, public relations activities actively used via news coverage in the press, advertisement activities actively used before, during and after the fair organization via advertisements about the fair (Koldaş 2006). Fairs serve for two main purposes; the first one is that fairs function as a marketing instruments for its participants. Participants in fairs introduce their products to the customers and try to conclude trade agreements. The second purpose of fairs is that they contribute to the development of professional networks and sales while keeping a pulse on commercial and organizational markets under the warm atmosphere created by the fair (Çakıcı 2004). Almost no marketing instrument but fairs have the capability of providing individual contact with the customer in addition to the introduction of the firm and its products (Göksel and Sohodol 2005). Studies conducted in this field reveal that customers which could not be reached by sales staff under normal circumstances can be easily reached by fairs, each visitor spends an average of 22 minutes in every booth, and 85% of them take their final decisions right there, and in terms of costs fairs are less expensive than individual sales visits (Philip, 1994). According to a research made on firms participating in fairs, the main reasons why participant firms (n:201) opt for fairs can be listed as follows: 89% sell products and 81% raise awareness on the product. The third reason is to have contacts with existing customers (52%). Other reasons might be listed as; fulfill the sales quota (37%), penetrate into the market (34%), change perceptions (27%) and staff training (9%), respectively (Çakıcı 2004). These data clearly underline that fairs are places where new networks can be built. According to a research made, commercial fairs are the second most effective instrument after individual sales, which has the strongest influence on decision making process of the industrial consumers. (Herbg et al. 1997). 36 �3rd International Symposium on Sustainable Development, May 31 - June 01 2012, Sarajevo 4.The research This study aims to set forth the significance of fairs in marketing activities through determining the relevant attitudes of participant companies. By doing this, it is considered that the study will contribute to the literature and the companies. A field research was conducted in the “2011 Antalya Anfaş Hotel Equipment” fair organized in “Antalya Expo Center. The first limitation on the study is that it was conducted in an international fair organized only in the city of Antalya. Due to limitations of time and cost, research sampling had to be restricted. A survey was devised and used as an instrument of data collection. The survey consisted of two different questionnaires which involved closed ended questions. The first section of the questionnaire consisting of 18 statements which uses the interval scale (1-absolutely disagree…5-absolutely agree),aims at measuring the significance of fairs for marketing activities. To determine the reliability of this scale Cronbach Alpha coefficient was used. Reliability of the scale was calculated as α= …... The second section of the questionnaire aims at finding answers to how much budget participants allocate to fairs, how many times they participated in fairs and in fairs abroad, and general significance of fairs for the company and role of participants in the company. The research subject group consists of 156 companies participating in the fair. Among these 156 companies, 150 participated in the research. Surveys were administered by researchers on individuals in charge of companies’ fair booths and personal interviews were used as a supplementary instrument. Among 150 filled-in questionnaires 116 were deemed eligible to be used for the research, and the remaining 34 were excluded due to several reasons. Data collected through the survey were transferred to the SPSS 14.0 package software and statistical analyses were made. 4.1.Findings Findings obtained as a result of the research were classified under the following groups. Information concerning the research participants and companies Sectors that participated in the fair were mainly the food sector with 24,1%, textile sector with 22,4% and security sector with 19%. These sectors are followed by the electric-electronic with 13,8%, construction with 8,6%, chemical sector with 6%, press and media with 4,3% and furniture sector with 1,7%. As regards the positions held by participants who filled in the surveys, it has been observed that majority of the participants (50,9%) worked in the department of marketing and sales. Other positions included the following: general director with 16,4%, company owner with 13,8%, founder with 9% and other with 18,1%. It was found among the companies selected for the research that rate of participation in fairs abroad was rather low (14,7%), and majority of the companies (85,3%) did not participate in fairs abroad. As regards the company budget allocated for fairs, it has been collected that 71,6% of the companies allocated 1 to 20% of their budget to fair activities while 13,8% allocated “21 to 40%” of their budget, 11,2% allocated “41 to 60%”, 3,4% allocated “61 to 80%” of their budget to the fair activities. Annual rate of participation in fairs indicated that 77,6% of the companies participated in “1 to 2 fairs”, 12,1% participated in “3 to 4 fairs”, 6% participated in “5 to 6 fairs”, 1,7% participated in “7 to 8 fairs”, and 2,6% participated in “9 to 10 fairs”. Majority of the companies (75%) indicated that participation in fairs was significant for the company while 15% stated that it was highly significant. Among others only 1,7% stated that participation in fairs was insignificant, and 7,8% stated that it was “neither significant nor insignificant”. 37 �3rd International Symposium on Sustainable Development, May 31 - June 01 2012, Sarajevo 4.2.Fair Perception Factor Analysis This phase of the research applies factor analysis to 18 statements concerning fair perception to determine the internal clustering of variables. As a result of the analysis KMO value has been found to be 0.792. If p value is (0.000), it is significant to conduct such an analysis. As a result of the factor analysis four aspects have been determined as customer interaction, product publicity, market analysis and information transfer, and total variance explanation of these four factors have been found to be 74,4%. Reliability tests have been applied to the data collected, and Cronbach Alfa value has been found as 0,835. Corelation, t-test and Anova tests have been used in the analysis. Table1. Analysis of Corelation among Variants Budget Share allocated to fairs 1 Amount of fairs participated per year Significance attributed to Fairs Budget Share allocated to fairs Amount of ,375(**) 1 fairs participated per year Significance ,318(**) ,287(**) 1 attributed to Fairs Interaction ,025 -,038 ,519(**) Publicity ,144 ,067 ,396(**) Analysis ,052 ,073 ,448(**) Info ,362(**) ,243(**) ,347(**) Exchange ** Correlation is significant at the 0.01 level (2-tailed). Interaction Publicity Analysis 1 ,595(**) ,576(**) ,305(**) 1 ,543(**) ,524(**) 1 ,297(**) Info Exchange 1 As a result of the correlation analysis among factor ratings, a positive relation has been observed among the budget share allocated to fairs, amount of fairs participated per year, significance attributed to fairs and the belief that information transfer takes place in fairs. 1 unit increase in the budget share allocated to fairs increases the amount of fairs participated per year by 37%, and 1 unit increase in significance attributed to fairs increases budget share allocated to fairs by 31% and the amount of fairs participated per year by 28%. 1 unit increase in the belief that information transfer takes place in fairs increases budget share allocated to fairs by 36% and the amount of fairs participated per year by 24%. There is a positive correlation among the significance attributed to the fairs and belief that fairs ensure interaction with customers (51%) and information transfer (34%) and belief that fairs provide opportunities for product publicity (39%) and market analysis (44%). There is also a positive correlation among the belief that fairs ensure interaction with customers and enable product publicity (59%), the belief that fairs provide opportunities for market analysis (57%) and information transfer (30%). 38 �3rd International Symposium on Sustainable Development, May 31 - June 01 2012, Sarajevo t-Test results of Factor Ratings concerning Participation in Fairs Abroad Results of the t-test administered to determine whether participation by companies in fairs abroad influence the factors significantly, indicate that according to 0,95 significance level, no significant difference exists between beliefs on “Customer Interaction”, “Product Publicity and Market Analysis”. However, there are significant differences concerning the belief that fairs ensure “Information Transfer”. Accordingly, those who participated in fairs abroad (14.6%) (A.O=3,70, S.S.= ,7806) considered fairs much more useful in terms of information transfer than those who did not participate in fairs abroad (85.4%) (A.O=3,30, S.S= ,7356). Anova Test results of Factor Ratings concerning Allocated Budget Share Results of Anova analysis administered to determine whether the annual budget share allocated for fairs influence the factors significantly, indicate that according to 0,95 significance level, no significant difference exists between beliefs on “Customer Interaction and Market Analysis”. However, there is a significant difference concerning beliefs regarding “Product Publicity and Information Transfer”. Accordingly, those who allocate 61 to 80 % of their budget annually (3,4%) (A.O=4,541, S.S= ,458) consider fairs much more useful in terms of product publicity than those who allocate 1 to 20% of their budget on an annual basis (71,5%) (A.O=4,072, S.S= ,278). Similarly, those who allocate 61 to 80 % of their budget (A.O=4,25, S.S= ,500) consider fairs much more useful in terms of information transfer than those who allocate 1 to 20% of their budget on an annual basis (A.O=3,1767, S.S= ,6774). 5.CONCLUSION Fairs are platforms where companies can implement the strongest marketing activities concerning their products and services. It is no doubt that establishment of new business networks, rapid feedback on products and services received through individual talks, strengthening of the institutional and visual image of companies contribute to increasing sustainable competitiveness of companies. To this end, the study aimed at determining the significance of fairs on marketing activities as well as discovering the participant companies’ attitudes towards the fairs. The study concluded that participants deem fair events significant and consider them as effective instruments for marketing activities. However, despite what has been stated above, the study also revealed that participation in fairs abroad and budget allocated to fairs need to be improved. Increasing both the quantity and the quality of relevant studies in this field is deemed necessary for underlining the significance of fair events in terms of marketing activities. Researchers of the study plan to expand the scope of this study in order to cover larger participant groups in several fairs in the future. REFERENCES Çakıcı A.C. (2004) Toplantı Yönetimi – Kongre, Konferans, Seminer ve Fuar Organizasyonu, Detay Yayıncılık, Ankara. Göksel A. B. and Sohodol Ç. (2005) Stratejik Fuar Yönetimi, Mediacat, İstanbul. Herb P., O’haraf G. B., Palumba A. (1997) Difference Between Trade Show Exhibitors and Non-exhibitors, Journal of Business & Industrial Marketing, 12(6), 368. 39 � Dublin Core The Dublin Core metadata element set is common to all Omeka records, including items, files, and collections. For more information see, http://dublincore.org/documents/dces/. Extent The size or duration of the resource. 1361 Title A name given to the resource Significance Of Fairs For Marketing Activities Author Author Cengiz, Funda Abstract A summary of the resource. This study aims to set forth the significance of fairs in marketing activities through determining the relevant attitudes of participant companies. To this end, a questionnaire comprising of 22 questions was devised to collect data for the research. The questionnaire was used during the “2011 Antalya Anfaş Hotel Equipment” fair organized in “Antalya Expo Center”. The questionnaires were given to and filled in by the company staff working in the booths allocated to the participant companies. Among 150 questionnaires completed 116 were deemed eligible to be used in this research. Analysis made in the light of the data collected as a result of the research revealed that fairs have a significant role for the marketing activities of participant companies. It has been determined that fairs offer significant advantages to companies especially in the promotion of existing products and conducting of market analysis for the new products. Keywords: Fair, Marketing, Marketing Tool, Promotion Mix Date A point or period of time associated with an event in the lifecycle of the resource 2012-05-31 Keywords Keywords. Conference or Workshop Item PeerReviewed H Social Sciences (General) https://omeka.ibu.edu.ba/files/original/f6ebb48c6787ede774c64947418bcee8.pdf dda8b8e5646bcaf3f5133b900c0dfda7 PDF Text Text 3rd International Symposium on Sustainable Development, May 31 - June 01 2012, Sarajevo Lean Way Of Valuing Inventory Cengiz, Emre Akdeniz University ALTSO Vocational School emrecengiz@akdeniz.edu.tr Research Title: Subject: This study illustrates the actual cost calculations for inventory valuation for lean companies. The study will explain “the number of days method and unit quantity method” and highlight their differences between the traditional inventory valuation methods. Abstract American manufacturers which are choosing are lean principles as their basic business model, increasingly looking to lean thinking to improve productivity, reduce costs, enhance flexibility, create better value for their customers, and raise profits, cash flow, and stock price. The basic principles of lean thinking are based some solid factors namely profits are earned by selling products; value streams deliver customer satisfaction; nonfinancial operational data helps line workers manage business processes; real-time data is needed to enable process improvement; idle time is okay if there are no customer orders to fill at the moment; the goal of world-class organizations is to improve actual performance at a faster rate than competitors; front-line employees are an asset that should be cross-trained and highly skilled. Moreover, the cardinal rule of lean management is eliminating all unnecessary steps that create waste. In this context, lean accounting seeks to reduce steps in transaction processing, eliminate standard costs in favor of actual costs, and discontinue cost allocations. The traditional mass production companies which are typically advocators of standard costing see inventory as the largest current asset on traditional manufacturer s balance sheet and naturally, a traditional manufacturer use their inventory asset for collateral for bank lines of credit. Thus, lot of cash is tied up in the inventory. The traditional manufacturer inventory valuation is not based on an actual cost system. For instance, a company with inventory turns of 3.00 has four months of inventory on hand, which means it must use the actual production cost system for the last four months to value inventory. This absolutely obviates to maintain an actual cost system. On the other hand, lean companies aim to eliminate work in process and finished goods inventory with high inventory turns. A shrinking inventory value on a balance sheet based on real time cost information which in turn becomes a smaller percentage of total current assets is a typically way of doing for lean companies. This study illustrates the actual cost calculations for inventory valuation. The study will explain “the number of days method and unit quantity method” and highlight their differences between the traditional inventory valuation methods. Keywords: Lean Accounting, Inventory Valuation, Number of Days Method, Unit Quantity Method 258 �3rd International Symposium on Sustainable Development, May 31 - June 01 2012, Sarajevo 1.LEAN PRODUCTION Since the early 1980s, the market conditions faced with intensive global competition have led to many leading manufacturing companies to adopt new production approaches. Especially in the most prominent of these approaches is the concept of lean production. Lean manufacturing is a sophisticated approach that consists of quality systems, work teams, cellular manufacturing, and supply management and so on. It integrates many management applications. The core motivation behind the concept of lean production is working in synergy with these applications in a continuous manner through progressive and high quality systems according to customer demand but no or little waste at the end (Shah and Ward 2003, Kennedy and Widener 2008). Product / service features generate income but if only if the customer value to them. If the added features do not add value in respect of the customer perspective, this will only create waste. This kind of waste is especially a pure waste which the management should be striving to prevent in order to gain a successful market share. The primary issue in developing product / service differentiation is using different customer preferences that add value not a bunch of waste (McNair 2007). Fuji Cho (Toyota Manager) defines waste as follows: “anything other than the minimum amount of equipment, material, parts, space, and worker’s time which are absolutely essential to add value to the product” (Huntzinger 2007). According to Ohno'ya Taiichi "Toyota production system of the company lies on the basis of absolute waste prevention" (Grasso 2005). Prevention of waste provides significant improvements to the operation cost, productivity, quality and timely delivery of products improvements (Woehrle and AbouShady, 2010). Lean approach is not a striving effort for a zero waste and creating a perfect result. This approach is a never-ending journey of continuous improvement that seeks to create better and less wasteful results than previously known methods (Shah and Ward 2003). In other words, the lean production aims to decrease waste by increasing customer value (Carnes and Hedin 2005). Then, it would be possible for the stakeholders to share these earnings that lean creates (Grasso 2005). Lean manufacturing aims to reduce labor force in the company, stock, defective products, the factory occupied area, cycle time, scrap and rework costs and, at the same time leads to increase productivity, quality and output. Such a restructuring, which would save time and factory space, would provide product quality monitoring and improvement. Stock at all levels may have a negative factor and thus, should be controlled (Carnes and Hedin 2005). 1.1.The Factors of Lean Production If world-wide surveys conducted at the factory levels are considered, following applications under the framework of lean production are observed (Jusko 1999):    259 Equipment set-up time efficiency Facilitating the production of small batches of equipment and work stations arranged in cellular production. A cell, which is in close proximity with another cell, thus, provides a quick feedback between the operators and includes all activities that are usually necessary for the production of a component or sub-components. Manufacturing cells often consist of cross-trained employees to perform multiple tasks. �3rd International Symposium on Sustainable Development, May 31 - June 01 2012, Sarajevo   Just-in-time production / continuous production flow techniques are deployed to reduce batch sizes, reduce setup time, decrease severely the work-in process inventory levels, improve work / time ratio and reduce manufacturing cycle time. Just-in time generally use “pull” signals to initiate production facilities for actual orders instead of “push systems” at production plantings or work orders that are usually based on estimated levels Supplier deliveries in just-in time production systems, where more frequent deliveries in small lots of parts and materials are in consideration, should be scheduled to meet customer needs. Just-in time delivery made by suppliers usually reduces the inventory level of producers and thereby this both reduces the need for material requirement in the warehouse and inventory holding costs. 2.LEAN ACCOUNTING Management accounting is an accounting discipline designated to provide managers the information for decision making that will optimize the organization in order to achieve its strategic, economic and profit objectives set by corporate management. If the strategy is correct for the market, this will ultimately increase the corporate value of the organization as a result of will result the increased value of the work, increased wages for workers and an increase in dividends to shareholders (White 2009). In a study conducted by Advanced Manufacturing Consortium International (CAM-I) among 145 chief financial managers in the United States, it is expressed that:   %80 of the managers still use traditional cost allocation systems and Only %23 of them declared that they are satisfied with their current decision support system (Sharman 2003). These results should not be too surprising because the accounting community limited management accounting only with its contribution to the external financial reporting (White 2009). In addition, studies show that senior managers in the United States are lack of issues such as cost and resource management (Sharman 2003). Lean Accounting movement was born as a solution to a period of intense disappointment. Lean American manufacturers, who are under pressure of this intense competition and want to overcome this great frustration, work continuously to ensure that the customer is willing to pay for the value created by permanently eliminating the waste (Grasso 2005). Lean processes need information for value stream activities including purchasing, ordering and month-end closings. These processes value streams management need quick information to continuously determine waste, deploy employees for cost reduction activities in their divisions and analyze the results of improvement activities. Traditional accounting systems do not provide information about necessary measures and thus, they are late for creating value in a lean environment (Carnes and Hedin 2005). In this concept, Lean Accounting has the following purposes (Maskell and Kennedy 2007).   260 Motivating lean transformation all throughout the organization and providing accurate, timely and easily understandable information for decision-making process leading to increasing customer value, growth, profitability and cash flow Using lean techniques to remove waste from accounting processes while maintaining financial control �3rd International Symposium on Sustainable Development, May 31 - June 01 2012, Sarajevo   Being fully complied with Generally Accepted Accounting Principles (GAAP), and with the requirements of external reporting and internal reporting arrangements, Investing in people, providing appropriate and relevant information to motivate and empower the organization at every stage of development to support the lean culture. The main difference between traditional accounting and lean accounting is the fact that lean organizations are arranged according to value streams rather than the organization's functions. Value stream organizations simply need to re-organize their accounting knowledge in a simplistic manner (Haskin 2010). Lean organizations classify costs according to value streams rather than departments. The costs that may occur in value streams include design, engineering, sales and marketing, delivery costs as well as costs associated with customer relations, material purchasing and collection of receivables (Kroll 2004). From a management accounting point of view; any resources’ total cost with the product material cost as well as the sum of the costs of outsourced services, are included to value stream cost object (Van Der Merwe and Thomson 2007). In a lean environment, the processes are based on a customer oriented “pull” environment, where the production begins when the customer gives orders, rather than a “push” environment based on predictions. The products produced based on contemporary estimates will be produced in accordance with the budget and will be stored until delivered by the customer. Often, the problems may arise because of the high inventory levels and even the risk of stock being outdated. Traditional methods that assign fixed production costs, support high levels of production estimates to lower unit cost by assigning costs to greater number of units (Haskin 2010). Traditional accounting strives to assign cost to precise and fixed cost centers. On the other hand, lean accounting aims to accurately measure these costs rather than perfect assignment of them (Kroll 2004). Unlike traditional full cost accounting that assigns all overhead to product costs and supports excessive production, value stream organizations use simple and summarized direct costing that involves little cost assignment. As a result, lean accounting clearly contrasts with the traditional methods that claim it is efficient for overhead to be absorbed by mass production (Haskin 2010). It is a clear fact that conventional methods reflect an era dominated by the idea of economies of scale which has products with less variety. The information generated by the conventional methods may lead to wrong decisions (Drickhamer 2004). This information is prepared weekly and it is easy to understand. Decisions are given by assessing their effects on value stream costs and profitability as a whole not assessing their effects on individual product. Thus, decisions may be made more effectively because the information is more accurate and understandable. Also, with this perspective, real information can be provided rather than information which is less accurate and sometimes based on complex accounting formulas (Maskell and Kennedy 2007). 3.LEAN INVENTORY VALUATION Traditional manufacturers developed the standard cost systems which generate the standard unit costs for each product. In the balance sheet, the amount of inventory is the sum of multiplications of actual amount of each product with standard unit of that product. This process needs the periodic comparison of actual costs with the standards to update the standards to reach actual values. Using actual costs for inventory valuation is a requirement for GAAP. Using standard costs for inventory valuation needs the sustainability of a sophisticated system in order to observe and generate all necessary standard rates. Standard costing system assesses inventory at the level of individual product. This means that every inventory valuation needs detailed information about how an individual product’s standard 261 �3rd International Symposium on Sustainable Development, May 31 - June 01 2012, Sarajevo cost is valued. The information about material invoices, work orders, work centers, overhead rates, direct labor rates, and direct / indirect assignments should be obtained, updated and be available for inventory valuation. On the other hand, lean companies have different perspectives for inventory valuation (Maskell and Kato 2007). Lean companies can value their inventory in a very simple way because the most important feature of a lean company is its low level of inventory. When Inventory is low, many simple methods for inventory valuation may be considered. Physical inventory counting is quick and easy because inventory level is low and can be managed visually (Maskell and Kennedy 2007). The managers of lean companies know the inventory level that will enable continuous flow of all work cells in a value stream. All excess inventory is a waste and must be disposed. As a result, inventory at the end of the period was produced for that period, and thus, matching the actual production cost of inventory with its amount has become quite simple. Lean companies make actual cost calculations at inventory valuation in two ways. These two methods are described following (Maskell and Kato 2007). a) Valuing Inventory Using the Unit Quantity Method The average cost per unit method resembles traditional inventory valuation method in which the amount of each inventory component on hand is multiplied by actual material and conversion cost. The only difference is that the actual amount on hand is the sum of all units in the factory product range. Calculation is based on all inventory levels not on each individual item. The main assumption of this method is that the inventory is a mix of products that are sold and produced which is also a common assumption for lean pull systems. Figure1 exhibits the calculation of an inventory valuation based on average cost per unit method (Maskell and Kato 2007). Total Units Total Material cost Average Material Cost Per Unit Total Conversion Cost Average Conversion Cost Per Unit 19.450 $758.568,33 $39,00 $40,06 Quantity Material Value 13.730 2.288 3.432 $535.483 $89.234 $133.851 $779.155,56 Conversion Value $0 $91.656 $137.484 19.450 $758.568,33 $229.139,83 Raw Material Work in process Finished Goods Total Inventory Value Total Value $535.483 $180.890 $271.335 $987.708,17 Figure 1: Valuing Inventory Using the Unity Quantity Method b) Valuing Inventory Using the Number of Days Method In the days of inventory method (Figure 2), daily material costs and conversion cost rates are used for inventory valuation. Daily rate information comes directly from value stream costing information and these daily rates are multiplied by the days on hand of each inventory component (Maskell and Kato 2007). Days in the Month 262 Total Material Cost Material Cost per Day Total Conversion Cost Conversion Cost per Day �3rd International Symposium on Sustainable Development, May 31 - June 01 2012, Sarajevo 20 $758.568,33 $37.928,33 $779.155,56 12 2 3 Material Value $455.140 $75.857 $113.785 Conversion Value $0 $77.916 $116.873 17 $644.781,67 $194.788,89 Days Raw Material Work in process Finished Goods Total Inventory Value $38.957,78 Total Value $455.140 $153.772 $230.658 $839.570,56 Figure 2: Valuing Inventory Using the Number of Days Method 4.CONCLUSION Conventional methods reflect an era dominated by the idea of economies of scale which has products with less variety. The information generated by the conventional methods such as standard costing may lead to wrong decisions. In addition, the maintenance and use of a standard costing system requires a sophisticated and costly process which absolutely contrasts with the principles of a lean organization. Lean organizations use value stream costing that is simple and based real time information for their purpose of cost control, internal decision making and external financial reporting. The lean inventory valuation methods for these purposes (the number of days method and unit quantity method) as illustrated in this study are compliant with GAAP. Regarding these methods, there is no need to know the cost of any specific product and maintain a sophisticated standard cost system. The simplification of inventory valuation process means eliminating non-value added activities and creating available capacity for finance people to focus on lean improvement projects. REFERENCES Carnes, K.and Hedin, S. (2005) Accounting for Lean Manufacturing: Another Missed Opportunity?, Management Accounting Quarterly, 7(1), 28-35. Drickhamer, D. (2004) Lean Accounting: Novel Number Crunching, Industry Week, 253(12), 49-52. Grasso, L. (2005) Are ABC and RCA Accounting Systems Compatible with Lean Management?, Management Accounting Quarterly, 7(1), 12-27. Haskin, D. (2010) Teaching Special Decisions in a Lean Accounting Environment, American Journal of Business Education, 3(6), 91-96. Huntzinger, J. (2007) “Limited Production Principles: Right Sizing for Effective Lean Operations and Cost Management” in E. D. Stenzel (eds.) Lean Accounting: Best Practices for Sustainable Integration, Hoboken, New Jersey: John Wiley & Sons, Inc. Jusko, J. (1999) A Look at Lean, Industry Week, 248(22), 88-91. Kennedy, F. A. and Widener, S. K. (2008) A Control Framework: Insights from Evidence on Lean Accounting, Management Accounting Research, 19, 301-323. Kroll, K. M. (2004) The Lowdown on Lean Accounting, Journal of Accountancy, 198(1), 6976. 263 �3rd International Symposium on Sustainable Development, May 31 - June 01 2012, Sarajevo Maskell, B. and Kato, N. (2007) “Value Stream Costing: The Lean Solution to Standard Costing Complexity and Waste” in E. D. Stenzel (eds.) Lean Accounting: Best Practices for Sustainable Integration, Hoboken, New Jersey: John Wiley & Sons, Inc. Maskell, B. H. and Kennedy, F. A. (2007) Why Do We Need Lean Accounting and How Does It Work?, Journal of Corporate Accounting & Finance (Wiley), 18(3),59-73. McNair, C.J. (2007) On Target: Customer-Driven Lean Management. in E. D. Stenzel (eds.) Lean Accounting: Best Practices for Sustainable Integration, Hoboken, New Jersey: John Wiley & Sons, Inc. Shah, R. and Ward, P.T. (2003) Lean Manufacturing: Context, Practice Bundles, and Performance, Journal of Operations Management, 21, 129-149. Sharman, P.A. (2003) The Case for Management Accounting, Strategic Finance, 85(4), 43-47. Van Der Merwe, A. and Thomson, J. (2007) The Lowdown on Lean Accounting. Strategic Finance, 88(8), 26-33. White, L. (2009) Resource Consumption Accounting: Manager-Focused Management Accounting, The Journal of Corporate Accounting & Finance, 20(4), 63-77. Woehrle, L. S. and Abou-Shady, L. (2010) Using Dynamic Value Stream Mapping and Lean Accounting Box Scores to Support Lean Implementation, American Journal of Business Education, 3(8), 67-75. The Factors Which Caused The Decline In The Amount Of The Newly One Family Houses Sold In Us Ali Cüneyt Çetin1,Jing Li-Kole2 1Department of Accounting and Finance,Suleyman Demirel University Faculty of Economics and Administrative Sciences, Isparta, Turkey 2State University of New York at Oswego, New York, USA E-mails: cuneytcetin@sdu.edu.tr,likole@oswego.edu Abstract The new privately owned one-family house sold (C25) is recognized as great indicator for economy. The monthly data in February 2011 was 250,000 houses sold. Compared to five years ago, 1,061,000 in 2006 were decreased by 76%. What are the causes to the dramatic decline of number of C25? The purpose of this paper is to analyze factors that determine the decline of number of C25 in US. Therefore, in this study, dependent variable is the new privately owned one-family house sold. Independent variables include 30 years mortgage rate, real personal income, unemployment rate, population, and house price index. The results indicate when the interest rate increases 1%, the number of new privately owned one-family houses sold decreases by 20 thousand. When the unemployment rate increases 1%, the 264 � Dublin Core The Dublin Core metadata element set is common to all Omeka records, including items, files, and collections. For more information see, http://dublincore.org/documents/dces/. Extent The size or duration of the resource. 1302 Title A name given to the resource Lean Way Of Valuing Inventory Author Author Cengiz, Emre Abstract A summary of the resource. American manufacturers which are choosing are lean principles as their basic business model, increasingly looking to lean thinking to improve productivity, reduce costs, enhance flexibility, create better value for their customers, and raise profits, cash flow, and stock price. The basic principles of lean thinking are based some solid factors namely profits are earned by selling products; value streams deliver customer satisfaction; nonfinancial operational data helps line workers manage business processes; real-time data is needed to enable process improvement; idle time is okay if there are no customer orders to fill at the moment; the goal of world-class organizations is to improve actual performance at a faster rate than competitors; front-line employees are an asset that should be cross-trained and highly skilled. Moreover, the cardinal rule of lean management is eliminating all unnecessary steps that create waste. In this context, lean accounting seeks to reduce steps in transaction processing, eliminate standard costs in favor of actual costs, and discontinue cost allocations. The traditional mass production companies which are typically advocators of standard costing see inventory as the largest current asset on traditional manufacturer s balance sheet and naturally, a traditional manufacturer use their inventory asset for collateral for bank lines of credit. Thus, lot of cash is tied up in the inventory. The traditional manufacturer inventory valuation is not based on an actual cost system. For instance, a company with inventory turns of 3.00 has four months of inventory on hand, which means it must use the actual production cost system for the last four months to value inventory. This absolutely obviates to maintain an actual cost system. On the other hand, lean companies aim to eliminate work in process and finished goods inventory with high inventory turns. A shrinking inventory value on a balance sheet based on real time cost information which in turn becomes a smaller percentage of total current assets is a typically way of doing for lean companies. This study illustrates the actual cost calculations for inventory valuation. The study will explain “the number of days method and unit quantity method” and highlight their differences between the traditional inventory valuation methods. Keywords: Lean Accounting, Inventory Valuation, Number of Days Method, Unit Quantity Method Date A point or period of time associated with an event in the lifecycle of the resource 2012-05-31 Keywords Keywords. Conference or Workshop Item PeerReviewed H Social Sciences (General),HB Economic Theory,HG Finance,HJ Public Finance https://omeka.ibu.edu.ba/files/original/53c3fb9a889ac776282a13d28f45e107.pdf 57b46472dffd31af016008e742598c70 PDF Text Text 3rd International Symposium on Sustainable Development, May 31 - June 01 2012, Sarajevo Islamic Finance as a Means of Shaping the Future of Sustainable Finance Can Mehmet International University of Sarajevo Hrasnička Cesta 15, 71210 Ilidža/Sarajevo,Bosnia and Herzegovina mcan@ius.edu.ba Abstract The recent financial crises have proven that the major social impact of the activities of the most major commercial and investment banks is through improper management of transaction, portfolio and reputational risks. Although they and their key stakeholders agree that financiers bear significant responsibility for the environmental and social impacts of the operations they finance, they do not go beyond the recognition of environmental and social responsibilities driven to a large degree by outside pressures of environmental organizations such as Friends of the Earth (FoE) and the Rainforest Action Network (RAN). They challenged the industry with high-profile campaigns that highlighted cases in which commercial banks were “bankrolling disasters”. In 2002, a global coalition of nongovernmental organizations (NGOs) including FoE, RAN, WWF-UK and the Berne Declaration came together to promote sustainable finance in the commercial sector. This informal network subsequently evolved into BankTrack, whose vision for a sustainable finance sector was expressed in the Collevecchio Declaration of January 2003. In this paper we will put forward the main agent in improper management of transaction, portfolio and reputational risks of commercial banks, the interest rate. No economic system can sustain its health and vigor or contribute positively to the achievement of its socioeconomic goals without the support of sane and equitable money and banking system. The money and banking system should hence be reformed to eschew the excesses and imbalances which promote inequalities, conspicuous consumption, and unhealthy monetary expansion to the ultimate detriment of all. Keywords: Sustainable finance, Islamic finance, financial crises, interest free finance 1.INTRODUCTION The rapid growth of Islamic finance and its ethical foundations make it an increasingly serious alternative to conventional finance. Both New York and London have launched indices affiliated to their main Dow Jones and FTSE indices, to provide a benchmark for equity prices for investments in Islamic financial institutions. The UK Government has also played a major role in trying to make the City of London the global centre of Islamic finance by extending support wherever possible, including the abolition of double stamp duty on Islamic mortgages, and the recently announced plans to test the feasibility of issuing Shari’ahcompliant sukuk bonds. The 2007 Budget introduced new measures for sukuk bonds to be issued, held and traded on the UK financial market (Tayyebi, 2008). 1 �3rd International Symposium on Sustainable Development, May 31 - June 01 2012, Sarajevo Islamic finance claims to be compliant with the principles of Islamic law (Shari’ah). In terms of finance, indeed Shari’ah explains in detail the ethical concepts of money and capital, the relationship between risk and profit and the social responsibilities of financial institutions. The most well-known aspect of an Islamic financial system is the prohibition of paying or receiving interest on capital. Essentially, any positive, fixed, predetermined rate tied to the maturity and the amount of principal, which is guaranteed irrespective of the performance of the investment, is considered riba and is so prohibited. Contractual risk is also forbidden. In general, this prohibits the selling of goods or services that the seller is not in a position to deliver or the making of a contract which is conditional on an unknown event. Although the prohibition of interest can indeed is viewed as the nucleus of Islamic doctrine relating to finance, there are a number of other supporting principles which provide guidance for an Islamic financial system (Tayyebi, 2008): • Advocating risk sharing • Promotion of entrepreneurship • Discouraging speculative behavior • Preservation of property rights. Given the restrictions outlined above, modern-day scholars have developed principle modes of financing which can be applied to contemporary financial scenarios while adhering to Islamic principles. Some common financial instruments currently being utilized in Islamic finance in various forms are as follows. Murabaha: this is effectively cost-plus financing, as used for trade and asset finance, allowing deferred payment by customers. Istisna’a: aimed at long-term construction projects For asset finance Ijara: this is a quasi-debt instrument, essentially equivalent to leasing. Equity-like instruments Musharakah: this is akin to a joint venture arrangement, through an equity participation contract. Mudarabah: this is essentially an investment fund where one party provides the entire capital, and the other party provides the management. Profit sharing is agreed up-front, although the loss is borne by the provider of the funds alone. 2 �3rd International Symposium on Sustainable Development, May 31 - June 01 2012, Sarajevo Fixed income investment Sukuk: this is an investment certificate (bond) that represents a proportionate interest in a well-defined pool of assets that yield income and capital returns. Differences of opinion from Shari’ah scholars on whether certain practices or products are Shari’ah compliant continue. A common set of standards and closer links between regulators and standard setters such as AAOIFI, the IFSB and the FSA are crucial. The nuances of Islamic jurisprudence and its assimilation with conventional banking require a great deal of expertise. Investment in training and formal qualifications will be vital to attract and maintain the right level of professionals to allow the industry to develop. As would be expected with a relatively recent phenomenon, there remain legitimate concerns over the mechanics and regulation of Islamic finance. Although, a Congressional Research Service report on Islamic finance in July 2008 notes: ‘Some also view the integration of ethics and values into finance as a positive development, with many investors reportedly considering SCF (Shari’ah compliant finance) to be more reliable than conventional financing, given the recent global credit crisis and fears of economic recession’, many religious Muslims still are not confident about the Shari’ah compliance of Islamic finance. The most serious questions around the Shari’ah compliancy of Islamic finance are related to the income smoothing. Islamic banks are more inclined to set up an allowance for loan loss provision (LLPs) to absorb any future losses (Taktak, et.al. 2010; Ahmed et. al. 1999; Anandarajan et. al. 2003, 2005; Hasan et.al 2004; Ismail et. al. 2002, 2005; Zoubi 2007). To avoid bank runs, Islamic financial institutions are also encouraged by Islamic Financial Services Board (IFSB), and their Shari’ah Boards to use profit equalization (PERs) and investment risk reserves (IRRs) (Sundararajan 2007) to keep stable returns to reward investment account holders (IFSB 2010). They also use devices like deposit insurance (DIs). Income smoothing devices cause an almost constant return rate seemingly bench marked to the London Interbank Offered Rate, LIBOR. In this research, possible outcomes of the removal of one the most important devices of the income smoothing, profit equalization reserves (PERs) is discussed. 2.Income Smoothing by Profit Equalization Reserves (PERs) PER is a mechanism act to mitigate the fluctuation of Rates of Return arising from the flux of income, provisioning and total deposits (Child, 2009). 3 �3rd International Symposium on Sustainable Development, May 31 - June 01 2012, Sarajevo The creation of PER is to ensure that Islamic Banking Institutions (IBIs) Rates of Return remained competitive and stable. During times of low returns to depositors and investors, IBIs can choose to utilize the PER to improve and stabilize the Rate of Return to its depositors and investors. The main purpose is to protect depositors and investors interest as far as possible. Currently, PER can be allocated up to a maximum 15% of the total gross income every month. The formula for how much PER can be allocated is as follows: PER (maximum monthly provision) = (15% x gross income) + net trading income + other income + irregular income such as recovery of non-performing financing (NPF) and write back of provisions. In Malaysia, as per BNM Guidelines, IBIs are only allowed to maintain a maximum accumulated PER of 30% of Islamic Banking Shareholders’ Fund. The IBIs may write back the PER into the total gross income, at their discretion, in the event that the prevailing rates have become less competitive. PER is recognized as a liability in the Balance Sheet and as an expense in the Income Statement. 3.Misconception by IBIs on PER Although IBIs are given the right to allocate some of its income into PER, it is not right for IBIs to treat PER as another source of income as most bankers assume. PER is a way on how an IBI can manage or control its Rates of Returns. By right, any income generated from the utilization of funds i.e. depositors funds, must be returned back in full to customers accordingly. But this may be a partly solution since the depositors due to change by the time, a profit realized by one’s investment will be paid to an irrelevant investor. The best is the abolishment of all income smoothing devices. What Happens if Profit Equalization Reserves (PERs) are Removed? Islamic banks afraid of the bank run, if they reflect the real profits and losses of investments in their periodic profit and loss share dividend distribution reports. It is not possible to have an excess to the exact data of the profit and loss reports of Islamic financial institutions just like others. Since their long term profit dividends are around LIBOR, we may create hypothetical scenarios about the history of the return rates of a certain Islamic Bank, which distributes normally with a mean of LIBOR and with several variances. Let as assume that LIBOR is around 3% in the 120 months of the period of our study: 4 �3rd International Symposium on Sustainable Development, May 31 - June 01 2012, Sarajevo 3.4 3.2 3.0 2.8 10 20 30 40 50 60 (a) 5 4 3 2 0 10 20 30 40 50 40 50 60 (b) 6 4 2 10 20 30 60 (c) 5 �3rd International Symposium on Sustainable Development, May 31 - June 01 2012, Sarajevo 10 5 10 20 30 40 50 60 5 (d) Figure 1. Return rates of investors in four scenarios with expected value around LIBOR, and with several STDVs; a) 0.1, b) 1.0, c) 2.0, and d) 3.0 Although expected monetary values (EMVs) are almost the same, around LIBOR of these nightmare scenarios for Islamic Bank managers, they are different in the risk they undertake. 3.1 Risk Profile of Investors To predict the investor response to these scenarios, EMVs are not sufficient, and we must run a field work with the questions derived from the underlying probability distributions of these scenarios which also take the risk averseness of the investors (Khan et. al. 2001; Sundararajan 2005, 2007). Which business you invest? Table 1. Investments in the below gave 30 times at most r1%, 70 times r2% return in their 100 months history. Investment r1% r2% Choice 1 2.95 3.05 2 2.50 3.50 3 2.00 4.00 4 1.50 4.50 6 �3rd International Symposium on Sustainable Development, May 31 - June 01 2012, Sarajevo None The distribution of choices between alternatives gives the risk profile of potential investors in the society of the Islamic Bank which it operates in. If this research reveals that many investors are still eager to invest under higher risks of Investment 3, and 4, the Bank managers should not hesitate to abolish profit equalization reserves (PERs). 3.2 Utility of Profit Shares for Muslim Investors Because of the prospective utility understanding of human beings, and interest rate averseness of Muslim investors, we may expect a utility profile for Muslim investors as follows. Islamic Bank managers must run a field work with the questions relevant for eliciting potential investors in the country if not globally. Figure 2. Utility profile of a Muslim investor. To this hypothetic investor, the highest possible return rate 7% has the utility 1. The lowest acceptable return rate -2% (2% loss) has the utility 0, and the midpoint of 0.5 utility is given to 1.5% return rate. 3.3 Decision Trees for Muslim Investors For the Muslim investors, do not have any incentive in deviating from investing at an “interest rate free” business, to an “interest rate paying” one. A Risky Islamic Bank’s Profit Loss Sharing accounts return rate history reveals that the next time bucket may give annual 4.5% profit share with probability 0.7, and annual 1.5% profit share with probability 0.3, while a traditional commercial bank gives the LIBOR of 3%. The expected monetary value (EMV) of Profit Loss Sharing Account is 3.6%, while invest g the capital in a traditional commercial bank gives LIBOR for sure. Although Islamic Banks EMV is higher, EMV is not so effective on the decisions since it does not take the risk factor into account. If the risk factor is counted, any risk adverse investor without Islamic values may be indifferent between the two options. Risk profiles of decision makers are represented in their utility profiles. We can demonstrate it better on a decision tree: 7 �3rd International Symposium on Sustainable Development, May 31 - June 01 2012, Sarajevo Figure 3. Decision tree for a Muslim investor. Considering the utility profile of the hypothetic Muslim investor in Figure 2, the utility of profit share rate of 4.5% has the utility 0.825, while the utility of profit share rate of 1.5% has the utility 0. 5. Therefore the expected utility of Islamic Bank’s Profit Loss Sharing account is 0.73, while the utility of a traditional commercial bank investment is zero. The other most important factor related to the bank runs is the prospective utility perception of investors. 3.4 Prospective Utility Perception of Investors Prospective utility is widely used by investors. They tolerate temporal loses, if there is a potential higher profit possibility. To understand how prospective utility understanding works, we may use exponential smoothing (Brandimarte, 2011). Let us consider the above four rate of return data, as time series. Along the time, investors use these data to formulate their prospective expectations for the next time bucket. The graphs in Figure 2 reveals that temporal losses do not discourage investors, taking the past data into consideration, they are ready to give time to the Islamic Bank managers to compensate these losses. 8 �3rd International Symposium on Sustainable Development, May 31 - June 01 2012, Sarajevo 3.3 3.2 3.1 3.0 2.9 2.8 0 10 20 30 40 50 60 (a) 5 4 3 2 0 10 20 30 40 50 (b) 9 60 �3rd International Symposium on Sustainable Development, May 31 - June 01 2012, Sarajevo 6 4 2 10 20 30 40 50 60 (c) 10 5 10 20 30 40 50 60 5 (d) Figure 4. Prospective utilities of investors (squares) in the view of realizations of the variable return rates in Figure 1. 4.CONCLUSION When they smooth their accounts, Islamic bank Managers and their Sharia Boards think that, if they reflect the real profits and losses of investments in their periodic profit and loss share dividend distribution reports, they will confront with the bank run. In this article it has been shown through hypothetic scenarios that, Bank managers should not hesitate to abolish profit equalization reserves (PERs) and other account smoothing devices to save the image of Islamic Banking as an interest rate free alternative to the traditional banking. Of course prior confirmations of these hypothetic scenarios are necessary through serious field researches. 10 �3rd International Symposium on Sustainable Development, May 31 - June 01 2012, Sarajevo REFERENCES Ahmed, A.S., Takeda, C., Thomas, S. (1999), Bank loan loss provisions: a reexamination of capital management, earnings management and signaling effects, Journal of Accounting and Economics, Vol. 28 No.1, pp.1-25. Anandarajan, A., Hasan, I., Loranzo-Vivas, A. (2003), The role of loan loss provisions in earnings management, capital management, and signaling: the Spanish experience, Advances in International Accounting, Vol. 16 pp.43-63. Anandarajan, A., Hasan, I., Lozano-Vivas, A. (2005), "Loan loss provision decisions: an empirical analysis of the Spanish depository institutions", Journal of International Accounting, Auditing and Taxation, Vol. 14 No.1, pp.55-77. Brandimarte, P. (2011) Quantitative Methods: An Introduction for Business Management, John Wiley & Sons, Inc., Hoboken, New Jersey, pp. 546-550. Child S., 2009, Profit Equalization Reserve (Per), http://myviewpoint2u.blogspot.com/2009/07/profit-equalization-reserve-per.html Goodwin P., and G. Wright, (2004) Decision Analysis For Management Judgment, John Wiley & Sons Ltd, The Atrium, Southern Gate, Chichester, West Sussex PO19 8SQ, England., pp. 95-123. Hasan, I., Wall, L. (2004), "Determinants of the loan loss allowance: some cross-country comparison", The Financial Review, Vol. 39 No.1, pp.129-52. Islamic Financial Services Board (IFSB) (2010), "Guidance note on the practice of smoothing the profits payout to investment account holders", Exposure Draft. Ismail, A.G., Be Lay, A.T. (2002), "Bank loans portfolio composition and the disclosure of loan loss provision: an empirical evidence of Malaysian banks", Asian Review of Accounting, Vol. 10 No.1, pp.147-62. Ismail, A.G., Shaharudin, R.S., Samudhram, A.R. (2005), Do Malaysian banks manage earnings through loan loss provisions? Journal of Financial Reporting and Accounting, Vol. 3 No.1, pp.41-7. Khan, T., Ahmed, H. (2001), Risk Management an analysis of Issues in Islamic Development Bank, Islamic Development Bank, Jeddah, Occasional Paper No. 9. 11 �3rd International Symposium on Sustainable Development, May 31 - June 01 2012, Sarajevo Sundararajan, V. (2005), Risk measurement and disclosure in Islamic finance and the implications of profit sharing investment accounts, paper prepared at the Sixth International Conference on Islamic Economics, Banking, and Finance, Jakarta, Indonesia, 22-24. Sundararajan, V. (2007), Risk characteristics of Islamic product: implications for risk measurements and supervision, in Archer, S., Karim, R.A.A. (Eds), Islamic Finance: The Regulatory Challenge, Wiley, Singapore, pp.40-68. Sundararajan, V. (2008), Issues in managing profit equalization reserves and investment risk reserves in Islamic banks, Journal of Islamic Economics, Banking and Finance, Vol. 4 No.1, pp.1-12. Taktak, N. B., S. B. S. Zouari, and A. K. Boudriga, (2010) Do Islamic banks use loan loss provisions to smooth their results?, Journal of Islamic Accounting and Business Research, Volume: 1, Number: 2, pp: 114-127. Tayyebi, A., (2008), Islamic Finance: ethical alternative to conventional finance? The Association of Chartered Certified Accountants. http://www.yasni.co.uk/ext.php?url=http%3A%2F%2Fwww2.accaglobal.com%2Fpdfs%2Fisl amic_finance_paper.pdf&name=Aziz+Tayyebi&cat=document&showads=1 Zoubi, T.A., Al-Khazali, O. (2007), "Empirical testing of the loss provisions of banks in the GCC region", Managerial Finance, Vol. 33 No.7, pp.500-11. 12 � Dublin Core The Dublin Core metadata element set is common to all Omeka records, including items, files, and collections. For more information see, http://dublincore.org/documents/dces/. Extent The size or duration of the resource. 1276 Title A name given to the resource Islamic Finance as a Means of Shaping the Future of Sustainable Finance Author Author Can , Mehmet Abstract A summary of the resource. The recent financial crises have proven that the major social impact of the activities of the most major commercial and investment banks is through improper management of transaction, portfolio and reputational risks. Although they and their key stakeholders agree that financiers bear significant responsibility for the environmental and social impacts of the operations they finance, they do not go beyond the recognition of environmental and social responsibilities driven to a large degree by outside pressures of environmental organizations such as Friends of the Earth (FoE) and the Rainforest Action Network (RAN). They challenged the industry with high-profile campaigns that highlighted cases in which commercial banks were “bankrolling disasters”. In 2002, a global coalition of nongovernmental organizations (NGOs) including FoE, RAN, WWF-UK and the Berne Declaration came together to promote sustainable finance in the commercial sector. This informal network subsequently evolved into BankTrack, whose vision for a sustainable finance sector was expressed in the Collevecchio Declaration of January 2003. In this paper we will put forward the main agent in improper management of transaction, portfolio and reputational risks of commercial banks, the interest rate. No economic system can sustain its health and vigor or contribute positively to the achievement of its socioeconomic goals without the support of sane and equitable money and banking system. The money and banking system should hence be reformed to eschew the excesses and imbalances which promote inequalities, conspicuous consumption, and unhealthy monetary expansion to the ultimate detriment of all. Keywords: Sustainable finance, Islamic finance, financial crises, interest free finance Date A point or period of time associated with an event in the lifecycle of the resource 2012-05-31 Keywords Keywords. Conference or Workshop Item PeerReviewed H Social Sciences (General),HB Economic Theory,HG Finance,HJ Public Finance