32 10 3494 https://omeka.ibu.edu.ba/files/original/9d0bfa0cd64fc7ebaf5c527533dfcd57.pdf df3c325aabeb19b7e0984db9567841a6 PDF Text Text Journal of Foreign Language Teaching and Applied Linguistics Argumentation Strategies inNegative Academic Book Reviews Irena Vassileva New Bulgarian University, Bulgaria Submitted: 03.03.2014. Accepted: 03.11.2014. Abstract Although nobody would deny that academic criticism is an inherent feature of academic communication, most of the existing studies assume that due to the nature of the development of science, collaborative rhetoric is intrinsic to academic discourse and criticism is the exception rather than the rule. In order to check this hypothesis, the present pilot study investigates a sample corpus of 10 book reviews in the field of English applied linguistics that are definitely negative in character. Scientific book reviews not only belong to the basic academic genres, but also possess a functionally determined highly evaluative character, thus being potential carriers of academic criticism. They have, unfortunately, received relatively little attention as yet. The study aims to uncover the argumentation strategies used by review writers in terms of classical Aristotelian argumentation theory.Within this theory the notion of topic plays a crucial role. There are two basic types of topoi: those based on everyday-logic generic premises and those with conventionalised conclusions, whose subgroups are used as a methodological instrument of the analysis. The analysis leads to conclusions concerning the surface expression of the argumentation strategies used by writers, the degree to which criticism is based on objective logic and on subjective personal evaluation, the preference for certain topoi, as well as some general concerns in relation to confrontation in the academia. Keywords: academic discourse rhetoric, negative book reviews, English, confrontation in science, argumentation Aim and data of the study The pilot study is based on a sample corpus of 10 book reviews in English applied linguistics that have a definitely negative character.This means that the ‘final verdicts’ of the reviews are in accordwith the above motto.The investigation aims to elucidate the argumentation strategies used by review writers in terms of the classical 119 �Argumentation Strategies inNegative Academic Book Reviews Aristotelian theory combined with the modern argumentation theory.The analysis leads to conclusions concerning the realisation of the argumentation strategies used by writers, the degree to which criticism is based on logic (objective) and on personal evaluation (subjective), the preference for and/or avoidance of certain topoi. The scientific book review Wills (1997:136) defines the academic book review in the following way: “A person, as a rule an expert, expresses her/his opinion on a scientific work with view to bringing about a (tacit) feedback between herself/himself and the respective author and to familiarizing a more or less expert leadership with the achievements and failures of the work under review. The reviewer produces, on the basis of his subjective text assessment, a metatext directly related to a primary text.” What follows from this definition are the two basic features of the review, namely: (1)The discourse of the review is not independent and self-sufficient, but is closely related ideationally to preceding texts and/or practices, thus forming a wide and complicated network of intertextual links. (“Ideational function” after Halliday 1985) (2) The two basic communicative functions of the review are the informative and the evaluative. (“Interpersonal function”, ibid.) Methodology McElholm (2002:67-68) maintains that: “Argumentation takes place when there is disagreement (or lack of agreement) as to a certain state of affairs, or as to what should be done, or as to whether something is good or bad; a speaker or writer intends to bring about consensus on the subject, i.e. transform disagreement into agreement, by persuading his or her audience of the correctness of the point of view put forward by him or her by advancing an argument which appeals to certain commonly held beliefs or opinions, i.e. beliefs or opinions shared by his or her audience.” Eggs (1994:16ff. and 1996:183) classifies argumentation into three types depending on the author’s objectives. Thus, there are three ways to react to a controversial problem of the type: 120 �Journal of Foreign Language Teaching and Applied Linguistics Problem: T or not T? For T to assert Against T Argumentation to deny epistemic to advise in favour to appreciate of to advise against to find bad deontic ethical/aesthetic On the other hand, within the classical Aristotelian argumentation theory the notion of topic plays a crucial role. There are two basic types of topoi: those based on everyday-logic generic premises and those with conventionalised conclusions, where each of these groups contains the following subgroups: I. Topoi based on everyday-logic generic premises: 1. Topoi from the consequence 2. Topoi from the comparison 3. Topoi from the contrast 4. Topoi from the division (classification) 5. Topoi from the example II. Topoi with conventionalised conclusions 1. Topos from the authority 2. Topos from the analogy 3. Topos from the person. The topoi enumerated above will serve as a second analytical methodological instrument for the investigation of argumentation in book reviews. Results Content- and form-based premises The expression of criticism maytake various forms and may be based on different premises – theoretical assumptions, methodological failures, relevance of data, etc. I have divided the premises into content-oriented and form-oriented, where the first type refers to criticism of the content per se, while the latter refers to the graphic representation, spelling mistakes and the structure in general. Graph 1 shows the distribution of the two types and their sub-types within the present corpus in percent. 121 �Argumentation Strategies inNegative Academic Book Reviews As Graph 1. below shows, the most frequent premise for criticism is theoretical deficiency or failure, which accounts for almost half of the cases (48%). Next comes criticism of methodology / analysis (22%), followed by pointing to discrepancies between the aim(s) of the respective study / course book and their realization, erroneous and/or imprecise use of terminology and ‘personal attack’ which I shall dwell upon later in more detail. 122 �Journal of Foreign Language Teaching and Applied Linguistics Graph 1. Content- and form-based premises Hyland’s (2004) investigation of book reviews in various disciplines showed a tendency to praise general features and criticise specific ones: “[…] while over 80 per cent of the positive commentary on content addressed general aspects of the book, critical observations tended to be more specific, with 60 per cent referring to particular content issues.” This, however, does not seem to be the case in the present investigation. Reviewers tend to attach more importance to theoretical and analytical aspects of publications. Topoi in English book reviews Graph 2. demonstrates that 22% of the topoi consist of topos from the person,which, together with topos from the authority (4.5%), makes more than ¼ of the topoi. That is, unlike other academic genres where argumentation is primarily based on topoi based on everyday-logic generic premises (see e.g. Vassileva 2006 for spoken academic communication), within the genre of the academic book review the topoi with conventionalized conclusions account for a relatively high percentage of argumentation. Thus, it seems that the review is one of the few academic genres that are highly personalized. 123 �Argumentation Strategies inNegative Academic Book Reviews Graph 2. Topoi in English book reviews The topos from the person is very often realized in the form of a personal attack and may have a snide and sneering, contemptuous tone: Ex. (1) But in my view, the outcome was merely a bizarre charade of camouflaged communication where the lion’s share of the analyst’s work was kept out of sight by invoking the “native speaker’s intuition” and “introspection” (cf. Beaugrande 1998b). In this example, there is a shift from condemning the content of the book under review to denouncing the author as incompetent and arrogant, thus flouting “need to facilitate a continued sense of solidarity with their readers” (Hyland 2004:48). The topos from the authority prevails in criticism of theoretical and terminological issues, usually pointing either to failures or to deficiencies: Ex. (2) But then Saussure never said it was, and nor did anybody else as far as I know. So this departure from tradition is not a radical theoretical innovation at all but a rudimentary mistake, […]. Topoi based on everyday-logic generic premises: The topoi from the contrast account for 38% of the cases: Ex. (3) If this were just an occasional lapse or aberration, it would not matter much. But this disregard of inconvenient textual features seems to be endemic in the critical approach. Most of the topoi from the contrast are used in criticism of theory and methodology / analysis. In addition, such criticism is often expressed by involving both the reader and the review author in the process of argumentation: 124 �Journal of Foreign Language Teaching and Applied Linguistics Ex. (4) Meanwhile, bleary-eyed readers might ask with mounting frustration: if all these would-be “discourse analysts” have got it wrong, when is [X] going to present his own method that sets matters right? This does not expressly occur, as far as I can see, until pages […]. Next in frequency (with 15.5%) comes the topos from the example, which is not surprising for the genre since reviews often draw directly on the original text for argumentation: Ex. (5) However, some of the previous weaknesses continue to exist in this edition, which is rather disappointing. For instance, the writing is still not very reader-friendly and, in fact, is somewhat inaccessible. The ‘definition’ topos accounts for 8% and relates primarily to terminology; it is often expressed in the form of questions: Ex. (6) So there are seven main headings, but how the second group relate to the first is not explained. Nor is the relationship between headings (aspects?, dimensions?, functions?) within the groups. What, one wonders, […], is the difference between cohesion and text structure? The cause and effect topoi account for 5% of the cases. They refer either to negative consequences of problematic theoretical assumptions or of errors in the analysis: Ex. (7) It would be difficult for an EST teacher to try and use the book […] as there does not seem to be any attempt at teaching techniques […]. The topos based on means and goal (7%) expresses criticism concerning discrepancies between author’s aim and its realization. The latter may concern the overall aim of the publication or certain ‘local’ aims: Ex. (8) However, due to the brevity of the chapter there is very little by way of examples, and it is really only a reminder to the reader to use some visuals during the talk. Conclusions From the viewpoint of argumentation theory and Eggs’ (1994) classification, one could draw the following conclusions:  Epistemic argumentation dominates review articles.This is only logical, since academic discourse in general reproduces the natural striving of research for the truth and for explanations of phenomena.  Deontic argumentation is relatively more frequent compared to other academic genres such as the research article (see Vassileva 2000, 2006) due to the evaluative character of the genre;  The same holds for ethical argumentation, which presupposes the categorization of a claim on the scale of ‘good – bad’. 125 �Argumentation Strategies inNegative Academic Book Reviews  Although this kind of personalized evaluation clashes in principle with the universal assumption of the objectivity of science, the wide use of topoi from the person in reviews points once again to their highly subjective character. The correlation between the topoi based on logical generic premises and those based on conventionalized conclusions is approximately 2:1 in the present corpus.Linguistics is a ‘Geisteswissenschaft’ (‘spiritual science’ if translated 1:1 from German) that does not and cannot always operate with strictly measurable, tangible and therefore verifiable matter, so it has to rely on logic for securing successful argumentation. The latter is obviously true for English with its high percentage of ‘argumentation pure’ through topoi from the contrast. Moreover, English-speaking reviewers are rather derisive and idiosyncratic. Particularly prominent is the relatively frequent use of ‘personal attacks’, realized in “scornful, contemptuous, and sarcastic tones” (Tannen 2002:1664) – a fact that contradicts Galtung’s (1985) observation that the English-speaking academic discourse community is more tolerant than, e.g., the German-speaking one. This new development is most probably due to the function of English as the globallingua franca of research, the language that is the medium of the ever-growing global competition in academia. In the humanities it is easy to play down the discourse of other scholars. Especially in cases where there is a preliminary conception that there could not possibly be any common ground to be found, where the review writer sees him/herself as a worrier, as a gatekeeper whose mission is to fight for the only cause, his/her own cause, the discussion of a book may turn into a battlefield and remain a battlefield, only to take other forms, sometimes through other media of academic communication. Thus, one could, to my mind at least, hardly speak today of the academic discourse community as one consisting of like-minded peers. Like-mindedness consists in ‘moving within the same semiotic space’, so to say, in partial sharing of terminology and background knowledge, in observing certain politeness rules. It stops, however, there, where basic interests of various kinds clash, since the competition for power and prestige in science becomes ever more intensive with the increase of its importance in modern society. Tannen (2002:1653) maintains in this connection that: “oppositional moves traditionally assumed to be constructive can have hitherto unexamined destructive consequences” and, further, that “there is much wrong with the metaphorical assignment of research to warring camps. It obscures the aspects of disparate work that overlap and can learn from each other. It obscures the complexity of research” (ibid., 1661). 126 �Journal of Foreign Language Teaching and Applied Linguistics Our present conventions of climbing the academic ladder and making a name in the community through opposition and refutation of the work of our predecessors could be extremely counterproductive in the achievement of our primary goal, namely the maintenance of the purity of science and its principal aim – to explore the enormous complexity of our world. References Aristotle (1954).Rhetoric. (W.R.Roberts, Trans.) New York: Random House. Clyne, M. (1991). The Sociocultural Dimension: The Dilemma of the Germanspeaking Scholar. In Schröder, H. (Ed.),Subject-oriented Texts(pp. 49 – 67). Berlin: de Gruyter. Clyne, M. (1993).Pragmatik, Textstruktur kulturelleWerte.EineinterkulturellePerspektive. In Schröder, Fachtextpragmatik(pp. 3 – 18).Tübingen: Gunter NarrVerlag. H. und (Ed.), Eggs, E. (1994).Grammaire du discoursargumentatif. Paris: Kime. Eggs, E. (1996).Formen des Argumentierens in Zeitungskommentaren – Manipulation durchmehrsträngig-assoziativesArgumentieren ? In HessLüttich, E. W. B., Holly. W. &Püschel, U. (Eds.),TextstrukturenimMedienwandel(pp. 179 – 209). Frankfurt/Main: Peter Lang. Galtung, J. (1985).Struktur, Kultur und intellektuellerStil.Einvergleichender Essay übersachsonische, teutonische, gallische und nipponischeWissenschaft.In Wierlacher, A. (Ed.),Das Fremde und das Eigene(pp. 151 – 193).München: Judicum-Verlag. Halliday, M. (1985).Introduction to Functional Grammar. London: Edward Arnold. Hyland, K. (2004).Disciplinary Discourses. Social Interactions in Academic Writing.Michigan: The University of Michigan Press. McElholm, D. (2002).Text and Argumentation in English for Science and Technology. Frankfurt/Main: Peter Lang. Tannen, D. (2002).Agonism in academic discourse.Journal of Pragmatics 34, 1651 – 1669. 127 �Argumentation Strategies inNegative Academic Book Reviews Vassileva, I. (2000). Who is the author? (A contrastive analysis of authorial presence in English, German, French, Russian and Bulgarian academic discourse).Sankt Augustin: AsgardVerlag. Vassileva, I. (2006).Author-Audience Interaction. A Cross-Cultural Perspective. Sankt Augustin: AsgardVerlag. Wills, W. (1997). Hedges in Expert-Language Reviews. In Markkanen, R., Schröder, H. (Eds.),Hedging and Discourse: Approaches to the Analysis of a Pragmatic Phenomenon in Academic Texts(pp. 134 – 147). Berlin/New York. 128 � 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. 2812 Title A name given to the resource Argumentation Strategies in Negative Academic Book Reviews Author Author Vassileva, Irena Abstract A summary of the resource. Although nobody would deny that academic criticism is an inherent feature of academic communication, most of the existing studies assume that due to the nature of the development of science, collaborative rhetoric is intrinsic to academic discourse and criticism is the exception rather than the rule. In order to check this hypothesis, the present pilot study investigates a sample corpus of 10 book reviews in the field of English applied linguistics that are definitely negative in character. Scientific book reviews not only belong to the basic academic genres, but also possess a functionally determined highly evaluative character, thus being potential carriers of academic criticism. They have, unfortunately, received relatively little attention as yet. The study aims to uncover the argumentation strategies used by review writers in terms of classical Aristotelian argumentation theory.Within this theory the notion of topic plays a crucial role. There are two basic types of topoi: those based on everyday-logic generic premises and those with conventionalised conclusions, whose subgroups are used as a methodological instrument of the analysis. The analysis leads to conclusions concerning the surface expression of the argumentation strategies used by writers, the degree to which criticism is based on objective logic and on subjective personal evaluation, the preference for certain topoi, as well as some general concerns in relation to confrontation in the academia. Keywords: academic discourse rhetoric, negative book reviews, English, confrontation in science, argumentation Date A point or period of time associated with an event in the lifecycle of the resource 2015-03-03 Keywords Keywords. Article PeerReviewed LT Textbooks,P Philology. Linguistics,PR English literature https://omeka.ibu.edu.ba/files/original/3b5de31232f114135afa8957baec08cb.pdf c919dee0de89961e756eda880be982dd 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. 2775 Title A name given to the resource Investigating Croatian Inflation through the Cointegration with Structural Break Approach Author Author Malešević Perović, Lena Abstract A summary of the resource. Abstract: This paper analyses the inflationary process in Croatia during the period 1992-2011, using a cointegration with structural break approach. Our results indicate that there is a long-run relationship between inflation, exchange rate, unit labour costs and money growth. Currency depreciation and unit labour costs are found to influence inflation positively, and money supply negatively. We argue that the latter occurs because exchange rate targeting policy in Croatia results in a situation where endogenous money moves in the direction opposite to the exchange rate, so as to keep the exchange rate fixed. We, furthermore provide some evidence that money supply need not mean risks to inflation in the presence of declining money velocity. Publisher An entity responsible for making the resource available International Burch University Date A point or period of time associated with an event in the lifecycle of the resource 2015-02-10 Keywords Keywords. Article PeerReviewed HB Economic Theory https://omeka.ibu.edu.ba/files/original/ef2e2437e02392a5c6c0bf9a35579aa1.pdf b6f9fe84279cdbac0b3a653dbf958706 PDF Text Text Journal of Economic and Social Studies Price Related Constructs’ Effects on Daily Deal Buying Behavior in Turkey i Hilal Asil Fatih University Istanbul,Turkey hilalasil@fatih.edu.tr Hilal Özen Istanbul University Istanbul, Turkey hilaloz@istanbul.edu.tr Abstract: Daily deal sites have become so popular in Turkey just as they have in many other countries. Heavy discounted offers for products or services attract most of the people to these new marketplaces. Glancing over the offers before starting to work became a habit for some of the people. However, some others do not have any interest to daily deals. So, it can be said that behavioral differences are unavoidable among customers. There are different forces that initiate the buying process. In this study, factors that affect buying behaviors of people from daily deal sites are investigated. The effect of buying behavior on satisfaction is also examined. Price related constructs (price consciousness, price mavenism, sale proneness and coupon proneness) and impulse buying tendencies of customers are taken as predictors of buying behavior from daily deal sites. Results suggest that price mavenism and coupon proneness are positively related with buying behaviors from online daily deal sites. On the other hand satisfaction come about to be a positive result of buying behavior. Even though the focus of this study is specific to a limited group, it is envisaged that the results will provide insights for both academics and e-tailers. Volume 5 Number 1 Spring 2015 Keywords: Daily Deal Sites; Online Shopping; Turkey; Structural Equation Modeling. JEL Classification: M31, M10 Article History Submitted: 10 February 2014 Resubmitted: 30 May 2014 Accepted: 12 August 2014 http://dx.doi.org/10.14706/JE OCSS11514 201 �Hilal Asil, Hilal Özen Introduction The rapid change in information and communication technologies today made consumers begin to spend much more time on the Internet. Hence, the number of the consumers’ online shopping activities is increasing day by day. According to the Interbank Card Center (BKM) data, e-commerce in Turkey has grown 14% in 2013 compared to the same period in 2012 (BKM, 2013). On the other side, this Internet revolution has also forced organizations to adapt their marketing, sales, and distribution and promotion efforts to the online environment. For retailers, these platforms represent a new marketing channel to promote their products and services and to attract new customers (Krasnova et al., 2013). In parallel with the developments in e-commerce, daily deal sites have become the latest Internet enthusiasm, providing discounted offers to customers for various items. Moreover, they have contributed to the transformation of online shopping. This new concept is growing as a subset of online shopping, which has been also named as “private shopping” or “exclusive shopping”. It is really like a closed loop at which only members can take the advantage of deep discounts and high-end brands (Baybars and Ustundagli, 2011). Membership is free, but in some cases to become a member to one of the deal sites, a person needs to be invited by another member. Daily deal sites have some advantages, as well as some disadvantages, both for the service providers and the customer. While the service providers get new customers and increase their popularity, in the meantime they can give some damage to their relations with their old customers. On the other side, customers get massive discounts by this way and get to know more places. But, they are sometimes discriminated and mistreated in some places to which they go using the discount coupons (Dang, 2013). Regardless of the problems that both side face, there are also a number of daily deal websites where users have to sign up to be able to buy products at high discounts in Turkey. In 2008 private shopping began to grow in Turkey. Markafoni was the first website which applied the daily deal model in this country. Trendyol and Limango were the followers in the Turkish online market. After those three firms, the number and variety of daily deal sites had increased continuously (Ekonomist, 2011). Unnado, Vipdukkan, Morhipo, Daybuyday, Markareyon and Perabulvarı were the most known private shopping sites after the first ones. In the beginning, the daily deal sites in Turkey were only accepting consumers that they had invited via an 202 Journal of Economic and Social Studies �Price Related Constructs’ Effects on Daily Deal Buying Behavior in Turkey invitation letter. But, after 2009 most of them had changed their operations and opened their system to all Turkish Internet users (Eticaretmag, 2013a). Despite the rapid development of the private shopping industry, research in this area appears to be insufficient. Thus, this paper represents an attempt to find out factors affecting consumers’ shopping behaviors and their satisfaction from daily deal sites. Literature review The usage of coupons and the promotions in purchasing products, are widely studied by academics in the literature, but limited research exists about daily deal sites which is also a new form of price promotion (Kimes and Dholakia, 2011). Several concepts from the promotions literature are relevant to the study of daily deals. Among these, consumers’ price consciousness, price mavenism, sale proneness, coupon proneness which are price related constructs and impulse buying tendency are examined in the context of this study. Price Consciousness Price consciousness is "the degree to which the consumer focuses exclusively on paying low prices" (Lichtenstein et al., 1993, p. 235). Brown et al. (2003) describe price conscious consumers as people who are more concerned with purchasing products and services at the lowest price or trying to get the best possible value for the money they spend. The Internet itself is a very convenient channel for price conscious consumers; as it diminishes the search costs by providing rapid and easy access to information about products and services (Girard et al., 2003). Daily deal sites also provide low price opportunities to customers. Price conscious consumers have a tendency to find cheaper items and reduce their search costs. So, they may be more willing to shop from daily deal sites. Therefore, in this study it is expected that price consciousness has a positive effect on buying behaviors of online consumers. H1: Price consciousness is positively associated with buying behavior from online daily deal sites. Price Mavenism Some of the consumers may have a desire to be perceived as a "price maven" in their social environment (Lichtenstein et al., 1993). By the definition provided by Yu Volume 5 Number 1 Spring 2015 203 �Hilal Asil, Hilal Özen (2008, p. 67), price mavenism is explained as “the degree to which an individual is a source for price information for many kinds of products and places to shop for the lowest prices”. Price mavenism concept could be accepted as the narrow interpretation of the market mavenism concept (Moore et al., 2003) because, where market mavens are known as market experts, price mavens are only focused on price information in a market. Price mavens are mostly concerned with low price information in the market so that s/he could share this with others. So, in a similar vein with price consciousness, price maven consumers could be more willing to shop from daily deal sites that are mostly popular with low prices. It is expected in this study that price mavenism will have a positive effect on buying behaviors of online consumers. H2: Price mavenism is positively associated with buying behavior from online daily deal sites. Impulse Buying Tendency According to consumer decision process, consumers pass through numerous stages when they decide to purchase a service or product. After recognizing the need, they begin to search for information, evaluate alternatives and at the end decide to purchase. But, impulse buyers are feeling an urge to buy immediately, so they either pass this stages without thinking or they find themselves at the purchase stage without searching for information and looking for alternatives. On the other hand, this way of behavior is more common in the online environment. Consumers are acting more impulsively while making online purchasing (Verhagen and Dolen, 2011). From this point of view, one can assume that, when consumers see an offer in a daily deal site they could buy the item without thinking. In a study held by Sharma and Khattri (2013) they found that most of the online daily deals are taking place on impulse. The limited time period for a product in a daily deal site could make consumers more impulsive buyers (Liu et al., 2013). So, the shopping made from daily deal sites may be strongly related to impulse buying tendencies of consumers. This study is also expecting a high relationship between those two constructs. H3: Impulse buying tendency is positively associated with buying behavior from online daily deal sites. 204 Journal of Economic and Social Studies �Price Related Constructs’ Effects on Daily Deal Buying Behavior in Turkey Sale Proneness Being on sale could be sometimes the foremost important reason for a consumer in order to decide to buy a product. Yu (2008, p. 67) defined sale proneness as “an increased propensity to respond to a purchase offer when the price is presented in a discounted form”. Lichtenstein, Ridgway and Netemeyer (1993) stated in their study that people perceive sale prices more valuable than an equivalent price that is not presented in sale form. The buying intentions of consumers and being sale prone was found to be positively correlated in the literature (Alford and Biswas, 2002). In this study, it is also expected that sale proneness will have a positive effect on buying behaviors of online consumers. H4: Sale proneness is positively associated with buying behavior from online daily deal sites. Coupon Proneness Coupons are important promotional tools in some product categories (Swaminathan and Bawa, 2005). They are also being used in daily deal sites in order to attract consumers. When they are offered a discount coupon after entering the website, they become prone to use this coupon. So, consumers who respond to coupon offers are called as “coupon prone” consumers (Lichtenstein et al., 1990). Coupon proneness is a very similar concept with sale proneness and suggests that the perception of the price cue may also be related to the form in which it is presented (Lichtenstein et al., 1993, p. 235). Coupon proneness is consistent with the negative role of price which means that higher prices result in lower purchases (Alford and Biswas, 2002). Lichtenstein et al. (1990) define coupon proneness as “increased propensity to respond to a purchase offer because the coupon form of the offer positively affects purchase evaluations”. This study claims that coupon proneness will also have a positive effect on buying behavior. H5: Coupon proneness is positively associated with buying behavior from online daily deal sites. Satisfaction The satisfaction concept has an important position in marketing practice (Ho and Wu, 1999). Satisfaction from a retailer refers to consumers’ overall evaluation of the organization, based on their experiences with the organization (Park and Kim, 2003, Volume 5 Number 1 Spring 2015 205 �Hilal Asil, Hilal Özen p.18). When the consumers are dissatisfied after a purchase behavior, they generally do not want to try the same experience again from the same retailer or e-tailer. So, it can be said that satisfaction is a key component for designing an online retail store (Liu et al., 2008). In order to make customers repeat the purchase behavior e-tailers should try to satisfy them. So, it is expected in this study that buying behavior will have a positive effect on satisfaction. H6: Buying behavior is positively associated with satisfaction from online daily deal sites. Figure 1 shows all of the hypothesized relationships. Figure 1: Research Model Price Consciousness Price Mavenism Impulse Buying Tendency Buying Behavior from Daily Deal Sites Satisfaction from Daily Deal Sites Sale Proneness Coupon Proneness Research Methodology Research Objectives This study attempts to analyze the effects of price related constructs (price consciousness, price mavenism, sale proneness and coupon proneness) and impulse buying tendencies of online consumers on their buying behaviors from daily deal 206 Journal of Economic and Social Studies �Price Related Constructs’ Effects on Daily Deal Buying Behavior in Turkey sites in Turkey. Besides, the effect of buying behavior on satisfaction is also investigated. Sample In order to test the research model, an online survey was conducted. The survey was conducted from April 30 to May, 14, 2013. Respondents of the survey were online consumers in Turkey who have bought a service or a product from an online daily deal site in Turkey within the last three months. An e-mail was sent to the people who were thought to shop from online daily deal sites in order to announce the survey. They were also asked to forward the e-mail to whom they think that were also using daily deal sites for shopping. In the e-mail, a link to the address was provided with instructions to start the questionnaire. At the end, the online questionnaire was administered to a set of 245 respondents. Respondents were the existing customers of the Turkish online deal sites. The demographic characteristics of the survey sample are summarized in Table 1. The sample comprised of 138 (56.3%) women and 107 men (43.7%). The respondents’ ages ranged from 18 to over 58 years. Most of the respondents were between the age group of 26-33 (38.4%) and it was followed by the age group of 3441 (25.3%). High School and lower grade respondents comprised only the 11.4%, university and over grade respondents comprised the 88.6% of the sample. Table 1: Demographic Characteristics of the Sample Age 18-25 n 60 % 24.5 26-33 34-41 42-49 50- 57 58+ Total 94 62 17 9 3 245 38.4 25.3 6.9 3.7 1.2 100.0 Education Have not completed High School High School University MS/Doctorate Total n 1 % 0.4 Gender Female n 138 % 56.3 27 138 79 245 11.0 56.3 32.2 100.0 Male Total 107 245 43.7 100.0 The respondents were also asked to indicate which of the daily deal sites they used more in the last three months. Markafoni had by far the largest share of 24.5%, which was the most preferred site in this study. This outcome was a surprise since Markafoni is the pioneer of this industry in Turkey (Özmen, 2011). Trendyol (20.0%) was the second mostly preferred daily deal site. Volume 5 Number 1 Spring 2015 207 �Hilal Asil, Hilal Özen Measures The price related constructs, which are price consciousnesses, price mavenism, sale proneness and coupon proneness, were measured using multiple items, five-point, Likert scales ranging from strongly disagree (1) to strongly agree (5). Similarly impulse buying tendency and satisfaction from online daily deal sites were measured by multiple items. Buying behavior from online daily deal sites were measured by asking the number of purchases made from an online daily deal site in the last three months. For all of the constructs initial scale items were adapted from previously validated measures. The items were adapted from the scales initially developed by Lichtenstein et al. (1993), Dholakia and Kimes (2011), Lichtenstein et al. (1990), and Liu et al. (2008). Price consciousness was measured by three items; price mavenism and sale proneness were each measured by five items, which were all derived from Lichtenstein et al. (1993). Coupon proneness was measured by four items and was adapted from Dholakia and Kimes (2011) and Lichtenstein et al. (1990). Impulse buying tendency was measured by five items and was adapted from Dholakia and Kimes (2011). Lastly, satisfaction from daily deal sites has four items and which was derived from the study of Liu et al. (2008). Results After collecting the data, validities and reliabilities of the scales were analyzed. The validity of the obtained data was tested using confirmatory factor analysis (CFA). CFA is known as a more strict interpretation of dimensionality of the scales (Gerbing and Anderson, 1988). In the initial test, the measurement model needed some revisions. So, the model was consequently refined by eliminating one item that has the largest error variance (Broekhuizen, 2006). After eliminating this item, the test of the final measurement model showed a good fit between the data and the proposed measurement model. One of the goodness of fit index measures is the relative/normed chi-square (χ2/df). Although there exists still some conflict regarding the acceptable ratio for this statistic, the cutoff point was taken as 3 (Hair et al., 2006). The ratio of the chi square value relative to degrees of freedom for the measurement model was calculated to be 1.663. Besides, comparative fit index (CFI), the goodness of fit index (GFI), the normed fit index (NFI), adjusted goodness of fit index (AGFI), Tucker Lewis Index (TLI) and the root mean square error of approximation (RMSEA) were also taken in order to test the goodness of fit 208 Journal of Economic and Social Studies �Price Related Constructs’ Effects on Daily Deal Buying Behavior in Turkey of the measurement model. For CFI, NFI and GFI the recommended threshold for good fit is 0.90, and this was nearly met for most of the fit indexes (Hair et al., 2006; Kline, 2011; Raykov and Marcoulides, 2006). Also, RMSEA, in which a value less than 0.08 is considered a good fit, was also met (Browne and Cudeck, 1993). The results of CFA for the dataset are given in Table 2. Table 2: Goodness of Fit Statistics for the Measurement Model 1.66 0.879 0.951 0.887 AGFI 0.844 < 3.00 > 0.90 > 0.90 > 0.90 > 0.90 X2/sd Goodness of Fit Measures Recommended Levels GFI CFI NFI TLI 0,941 RMSEA > 0.90 < 0.08 0.052 In addition to the goodness of fit measures, reliabilities of the constructs were also considered. In order to test the reliabilities of the measures, cronbach’s alpha coefficient was used. According to Hair et al. (2006), Cronbach’s alpha values should be above 0.70 in order to establish scale reliability. Cronbach’s alpha scores assessing internal consistency of all research constructs were above 0.70, indicating good reliabilities of measures. Structural Model After testing the validity and reliabilities of the items, the causal relationships between them were tested. This study used structural equation modeling in order to test the hypothesized relationships between the constructs. At first, the fit between the data of this study and the proposed model was analyzed. To assess the model fit, χ2/df statistic, goodness of fit index (GFI), comparative fit index (CFI), normed fit index (NFI) and the root mean square error of approximation (RMSEA) were used. All of the goodness of fit measures was between the recommended levels, so the model had a good fit. Table 3: Model Fit for the Structural Model Goodness of Fit Measures Recommended Levels X2/sd GFI CFI NFI 0.883 0.956 0.891 AGFI 0.851 TLI 0.948 RMSEA 1.58 < 3.00 > 0.90 > 0.90 > 0.90 > 0.90 > 0.90 < 0.08 0.049 Looking at the results for the model, three of the hypotheses were supported. The positive effect of price mavenism (H2) and coupon proneness on buying behavior (H5), and again the positive effect of buying behavior on satisfaction (H6) were all Volume 5 Number 1 Spring 2015 209 �Hilal Asil, Hilal Özen supported. However, there was no support for H1, H3 and H4. Table 4 summarizes the standardized path coefficients and t-values. Table 4: Parameter Estimates for the Structural Model Price ConsciousnessBuying Behavior Price MavenismBuying Behavior Impulse Buying TendencyBuying Behavior Sale PronenessBuying Behavior Coupon PronenessBuying Behavior Buying BehaviorSatisfaction Parameter Estimates t-values 0.036 0.465 0.170 2.335* 0.060 0.817 -0.129 -1.260 0.229 0.260 2.515* 3.996* Hypothesis Not Supported Supported Not Supported Not Supported Supported Supported *p<0.05 As the results indicate, being a price maven and a coupon prone customer was found to be important for deciding to buy from online daily deal sites. Also, if a consumer bought from daily deal sites, this behavior was correlated with his/her satisfaction from those sites. But, price consciousness, sale proneness and impulse buying tendency were the constructs that were not related with buying behaviors from the online daily deal sites in Turkey. Conclusion Internet became a popular way for shopping throughout the world. Turkey, in this sense, is still a developing country with its 21.8% online shopping rate (TUIK, 2012). This rate could be interpreted as only one of the five internet consumers uses it for shopping purposes currently. Besides, a new way of online shopping called “private shopping” brought some changes to online shopping. In this new way of shopping “daily deal sites” which are offering many kinds of discounted products to their members, have contributed to the transformation of online shopping experience in Turkey as well (Pelenk et al., 2011). In this paper, the factors that predict a consumer’s online buying behavior from daily deal sites were attempted to be investigated. Those constructs were price consciousness, price mavenism, impulse buying tendency, sale proneness and coupon proneness. Besides the main objective, the effect of buying behavior on satisfaction 210 Journal of Economic and Social Studies �Price Related Constructs’ Effects on Daily Deal Buying Behavior in Turkey from online daily deal sites was also investigated. Primary data was collected from an online survey of national Internet users. Results of the study showed that some of the price related factors have significant effects on buying behavior from daily deal sites, while some do not have any effect. The hypothesis which claimed that there is a positive correlation between price mavenism and buying behavior was found to be significant. The shopper’s price maven trait is a positive predictor of their daily deal site usage, suggesting that a key motivator for daily deal purchase is being a good source of price information and making suggestions about price issues to friends. Respondents who see themselves as price maven are more prone to buying from daily deal sites. Those type of people mostly follow the discounts. On the other hand, daily deal sites claim to have the best prices. So, it could be said that the objectives of the consumers overlap with the purposes of the daily deal sites. Coupons have been in use throughout the world for many years to get discounts while buying something. Especially in the US, businesses took notice of the coupons and made millions of consumers use coupons (Horne, 2013). However, this habit is not widespread among Turkish retailers. Nevertheless, in Turkey, with the great success of daily deal sites, most of the people began to use this channel. So, the popularity of discount coupons is on rise. In this study, coupon proneness is found to be a positive predictor of buying behavior. This increases the possibility that consumers use daily deal sites because of the promotions made for the services and products. Similar with this study, Dholakia and Kimes (2011) tried to examine the effects of the six psychological factors of daily deal site use in their study. They found market mavenism and coupon proneness as positive predictors of online daily deal site usage. Finally, buying behavior has a positive effect on satisfaction from online daily deal sites. This means that when the number of purchases made from daily deal sites increases, the level of satisfaction increases. On the other hand, price consciousness, sale proneness and impulse buying tendency were not found to be predictors of buying behavior from daily deal sites. This suggests that daily deals do not appear to be attractive for price conscious and sale prone consumers to greater degrees. Interestingly, respondents who have tendency for buying impulse are not willing to buy from daily deal sites. Volume 5 Number 1 Spring 2015 211 �Hilal Asil, Hilal Özen Implications Why do consumers choose to buy from daily deal sites? Is this because they are impulsive buyers or do they love to hunt for bargains? Does coupon matter for them? Do mostly price conscious buyers choose this way of shopping? The results of the present study give answers to these questions for Turkish online consumers. There are some interesting findings of this study. At first glance, one can think that the logic behind daily deal sites is the low prices that they offer. This means that, online consumers use this way of shopping, because they think they are paying less compared to other online stores and even physical stores. But, price consciousness and sale proneness were not found to be related with buying behavior from daily deal sites. This could be interpreted as people who are searching for low prices are not always willing to buy from daily deal sites. Turkey is not in introductory stage for this way of shopping. The Turkish daily deal market could be claimed to be in the maturity stage, since in the first years, the market grew so fast and after 2014 this growth began to decline (Eticaretmag, 2013b; Atakan et. al., 2013). The big players mostly survive in the market, but even so there are still numerous daily deal sites and consumers are purchasing from those types of sites. They do not see daily deal sites as outlet stores offering low prices, which was the viewpoint at the beginning, because in some of the daily deal sites (especially in the leading sites such as markafoni.com) some luxury and high-priced brands are being sold. Prices of those products are same with these brands’ official web stores. In this case, consumers may choose buying from the daily deal site due to ease of access to luxury brands with limited distribution rather than price advantages. Besides, the inventory levels of the suppliers that are providing the products to daily deal sites began to drop off (Yavuz, 2012). This could be also a reason behind the moderate price levels. At the beginning the inventory level was high and the number of daily deal sites was low. So, they were utilizing from the situation and were offering lower prices to online customers. But later, this advantage disappeared. On the other hand, the most advantageous feature of online stores is their 7/24 accessibility. Consumers have the chance to buy what they want at the time their need emerges. This feature may increase the number of sudden purchases made from the internet which is directly related to impulse buying tendency. A recently conducted study by Liu et al. (2013) in China emphasized the importance of impulsiveness in online group shopping and recommended online retailers to pay attention to impulse purchases. Also, a study held by Martinez and Kim (2012) in 212 Journal of Economic and Social Studies �Price Related Constructs’ Effects on Daily Deal Buying Behavior in Turkey the US found a positive significant relationship between impulse buying behavior and intention to purchase from a private sales site. But, in our study which is conducted in Turkey, the story is not the same. Consumers having tendency for impulsive buying are not eager to buy from online daily deal sites. The e-tailers of daily deal sites should be aware of their customers, because they are not buying products/services without thinking. Therefore putting effort for attracting impulsive buyers does not seem a good idea for daily deal site retailers. Giving a limited time offer for the consumers in order to make them buy things quickly will not work. For this reason, they could extend the time period they offered to consumers for discounts. Being price maven and using coupons are the supporting criteria for using daily deal sites. Consumers who are consulted for price information are more eager to buy from daily deal sites. The reason behind this may because they want to give the impression to others that they follow daily offers. The perception of other people could be important for them. So, getting price information as early as possible is an important criterion for those type of consumers. Daily deal sites e-mail their subscribers every day. The e-tailers of daily deal sites may increase the frequencies of those alerts to consumers who are using their sites more often. Because the possibility of being a price maven for the people using daily deal sites more often could be high. According to the results of this study, using coupons encourages online consumers to shop from daily deal sites more frequently. Consumers who are prone to use coupons also use daily deal sites more often as compared to others. Coupon usage is normally not so widespread in Turkey for physical stores, but in online shopping, especially for daily deal sites’ coupons became popular. People are getting used to coupons. Some of them are sent by e-mail to consumers, some of them are active for one hour when they enter to the website. These coupons motivate online consumers for buying more products/services. E-tailers should consider this effect. In addition, the research findings of this study do provide some insights for Turkish e-retailers of daily deal sites in designing managerial implications on how to improve their performance in order to increase the level of customer satisfaction. They should consider the effects of those two constructs. Because, they have an effect on buying behaviors of online consumers and buying behavior is directly related to customer satisfaction. Volume 5 Number 1 Spring 2015 213 �Hilal Asil, Hilal Özen Limitations and Future Research Even though the research findings provide some new insights to researchers, as of prior studies this study has also some limitations. Firstly, even this study has a diverse sample that covers a wide range of demographic characteristics; the method for this is convenience sampling. The data were obtained from online consumers by emailing and asking them to submit to the questionnaire. So, the study could not present the entire Turkish online consumers. More diversified samples would provide more valuable results. Second, this study investigated the effects of price related factors and impulse buying tendency on buying behavior from daily deal sites. Some other constructs may have also any effect on buying behavior. In the future, those factors could be included and the effects may be retested. References Alford, B. L., & Biswas, A. (2002). 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Labyrinth Publications. Brown, M., Pope, N., & Voges, K. (2003). Buying or browsing? An exploration of shopping orientations and online purchase intention. European Journal of Marketing, 214 Journal of Economic and Social Studies �Price Related Constructs’ Effects on Daily Deal Buying Behavior in Turkey 37(11/12), 1666-1684. Browne, M. W., & Cudeck, R. (1993). Alternative ways of assessing model fit. In Bollen, K. A., & Long, J. S., (Eds.), Testing structural equation models (pp. 136-162). Newbury Park, CA: Sage Ltd. Dang, L. (2013). E-Commerce strategies of group buying websites, Case study: Groupon Inc. Unpublished thesis in International Business, Lahti University of Applied Sciences, Finland. Dholakia, U. M., & Kimes, S. E. (2011). Daily deal fatigue or unabated enthusiasm? A study of consumer perceptions of daily deal promotions. SSRN eLibrary. Retrieved from http://ssrn.com/abstract=1925865 Eticaretmag, (2013a). 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Volume 5 Number 1 Spring 2015 217 �Hilal Asil, Hilal Özen Yavuz, Ö. (2012). Özel Alışveriş Siteleri Satacak Mal Bulamıyor Mu?. Ekonomist, 39. i This paper is an improved version of the study named “Factors Influencing Buying Behavior on Daily Deal Sites in Turkey” which was partly presented in ICESoS 2013 Conference. 218 Journal of Economic and Social Studies � 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. 2736 Title A name given to the resource Price Related Constructs’ Effects on Daily Deal Buying Behavior in Turkey Author Author ASIL, Hilal OZEN, Hilal Abstract A summary of the resource. Abstract: Daily deal sites have become so popular in Turkey just as they have in many other countries. Heavy discounted offers for products or services attract most of the people to these new marketplaces. Glancing over the offers before starting to work became a habit for some of the people. However, some others do not have any interest to daily deals. So, it can be said that behavioral differences are unavoidable among customers. There are different forces that initiate the buying process. In this study, factors that affect buying behaviors of people from daily deal sites are investigated. The effect of buying behavior on satisfaction is also examined. Price related constructs (price consciousness, price mavenism, sale proneness and coupon proneness) and impulse buying tendencies of customers are taken as predictors of buying behavior from daily deal sites. Results suggest that price mavenism and coupon proneness are positively related with buying behaviors from online daily deal sites. On the other hand satisfaction come about to be a positive result of buying behavior. Even though the focus of this study is specific to a limited group, it is envisaged that the results will provide insights for both academics and e-tailers. Keywords: Daily Deal Sites, Online Shopping, Turkey, Structural Equation Modeling. JEL Classifications: M31, M10 Publisher An entity responsible for making the resource available International Burch University Date A point or period of time associated with an event in the lifecycle of the resource 2015-01-15 Keywords Keywords. Article PeerReviewed HG Finance https://omeka.ibu.edu.ba/files/original/a0f564534d80e6e93f838754d6109031.pdf 41633c3a43b11248ca6bbd08281340a2 PDF Text Text Journal of Economic and Social Studies Possibilities of Development of Private Health Insurance in Bosnia and Herzegovina Safet Kozarević University of Tuzla Tuzla, Bosnia and Herzegovina safet.kozarevic@untz.ba Senija Nuhanović University of Tuzla Tuzla, Bosnia and Herzegovina senija.nuhanovic@untz.ba Irnela Hrnjić University of Tuzla Tuzla, Bosnia and Herzegovina Abstract: Increased rise in costs of healthcare in the last five decades has rapidly increased interest in the functioning of healthcare systems within every country. The reasons for growth in healthcare costs are related to demographic changes, technology advancement, increased number of educated persons, emergence of new diseases, etc. Financing the risk of poor health is mainly organized through programs of social and private health insurance. Regarding the management of the risks of poor health in Bosnia and Herzegovina (BiH), the social health insurance system is the basic solution for the population. However, in BiH, as in other countries in the world, the system of social insurance has become unfeasible and it is necessary to search for new solutions, that is, to reform the system. The research subject in this paper is private/voluntary health insurance offered by insurance companies, which can be an efficient addition to social insurance in BiH. It has become present on the market of private insurance in BiH only recently, so its share in the total premium of private insurance is still minor. Therefore, a primary research was conducted on the possibilities for its development as well as on the need and acceptance by the users of healthcare services. Besides, there was a need for examining the performance of the existing system of social health insurance, based on the principles of Bismarck’s model of financing, and recognizing its disadvantages. By identifying and eliminating obstacles for development of voluntary health insurance, it is possible to improve performance of the existing system of health insurance in BiH. Volume 5 Number 1 Spring 2015 Keywords: Private/Voluntary Health Insurance; Social Health Insurance JEL Classification: G22, I13 Article History Submitted: 23 May 2014 Resubmitted: 29 June 2014 Accepted: 3 July 2014 http://dx.doi.org/10.14706/J ECOSS11512 87 �Safet Kozarević, Senija Nuhanović, Irnela Hrnjić Introduction Health is the basic human right and one of the most important assumptions for economic development and life quality of a country’s population. There is huge responsibility of individuals and communities regarding the prevention of disease occurrence and good health keeping and improving. Healthcare system is a complex entity whose functioning largely influences the level of population’s health, which indirectly affects the economic system as well. Very often the level of country’s development is represented as the level of health of an individual and the entire population. That is the reason why states are the bearers of the activities related to healthcare system management. Every state has a specific healthcare system that can have some similarities when compared to other states. For many years, the awareness on the importance of health and health insurance has been growing stronger. Many make efforts to find the appropriate model that would satisfy the highest possible needs for healthcare services, along with low costs and higher quality of services. From the country’s point of view, Bismarck’s or Beveridge’s model of healthcare system usually dominates, but there are other options that are combined or mutually corresponding. Bosnia and Herzegovina (BiH) is characterized by the inherited Bismarck’s model of social health insurance whose effectiveness has been long questioned, while the country’s needs for healthcare increased significantly as the consequence of the war. Only in recent years, there has been more attention paid to the issues of the functioning of country’s health system, quality of services provided and alternatives to social health insurance. Some reforms of primary healthcare have already been implemented (Atun et al. 2007), but the reform of current model of financing is necessary, and it should provide a framework for introducing other forms of health insurance, such as voluntary health insurance provided by private insurance companies. However, the present offer of voluntary health insurance is still at a very low level. The reason for this is the lack of legal regulations and low interest by the state for entering partnership in health insurance with insurance companies. The aim of this paper is to establish the possibility for developing voluntary health insurance within the existing reform of the healthcare system in BiH. Due to that, based on the results of the secondary research, the most significant disadvantages were presented in terms of effectiveness of the existing system of social health 88 Journal of Economic and Social Studies �Possibilities of Development of Private Health Insurance in Bosnia and Herzegovina insurance. After that, based on the results of the primary research, the interest in the package of voluntary health insurance was registered by private healthcare institutions, citizens and insurance companies. The primary research was also to confirm the disadvantages of the existing system of social health insurance. Healthcare System in BiH Matter of health insurance needs to be observed in broad context of healthcare system, which is organized in a specific way in BiH. Healthcare in BiH is regulated on level of entities and Brčko District, and it esults in a very complex organizational solution, especially considering that on level of BiH Federation, besides entity ministry, there are also ten cantonal ministries of health. It is clear that this significantly increases costs of transactions and makes coordination in decision making more difficult (Kozarević, 2010). Healthcare in BiH is regulated with laws on healthcare adopted on level of entities. These laws have defined the concept of healthcare, which basically comes down to set of measures focused on systemic management of risks of poor health of the citizens. In purpose of that, competencies of specific institutions were established in this system, whose purpose is to enable high inclusion of population with right on healthcare, according to principles of: universality, cost-effectiveness, fairness, freedom of choice and autonomy. Health insurance within the social insurance in BiH is regulated with provisions of laws on health insurance on level of entities as well as corresponding regulations on Brčko District and cantonal levels. A special place in healthcare system belongs to health insurance institutes (funds) and public health institutes which were established on level of entities as well as Brčko District and level of cantons. Cantonal health insurance funds are formed for activities performed on level of cantons in BiH Federation. BiH Federation health insurance fund collects the assets of federal solidarity which are used to form Solidarity Fund of BiH Federation. Its purpose is to equalize conditions of compulsory health insurance in all cantons, to organize certain programs of healthcare in interest of BiH Federation and to enable providing of priority and most complex forms of healthcare from certain special fields. The assets of federal solidarity are provided from contributions for compulsory health insurance. Crucial difference in Republic of Srpska is in higher level of centralization through unified health insurance fund. Volume 5 Number 1 Spring 2015 89 �Safet Kozarević, Senija Nuhanović, Irnela Hrnjić Public health institutes also play significant role, and they are performing publichealth activities focused on planning and implementation of measures for: supervision over infectious and noninfectious diseases, providing of health safety of food, water, air and products for general use, monitoring of the environment, promotion of health, prevention of diseases and implementation of regular healthstatistical researches. Besides that, public health institutes are also in charge for providing of information on leading health issues and priorities, as well as for proposals for their solving. Literature Review The issues of health insurance have been everlastingly urgent and they provide material for constant research. By founding the World Health Organization (WHO) on April 07, 1948, the United Nations particularly emphasized their work in the field of healthcare. Under the auspices of the WHO, numerous conferences were held, whose aim was to define the suggestions for improving population’s health. One of the most important conferences for creating healthcare systems of the modern times was the one held in Alma Ata in 1978. Then the declaration “Health for All by the Year 2000” was brought that established the policies related to health protection on the global level. Public discussions led in many countries related to healthcare are mainly concentrated on the amount of health allocations or the issues related to increased costs and the need for the control of spending the resources in the healthcare system. Zrinščak (1999) compares the countries by various indicators such as: health allocations, healthcare system model, most frequent causes of death, etc. Although many healthcare indicators are getting improved, the inequality of the countries in terms of access to healthcare and social inclusion is increasing. Zrinščak mentions the following possible ways of cost control: (1) Measures related to patients – copayment, modalities of paying sick leave compensations and introducing waiting days, discounts in cases when insurance premiums during one year are not used, and limitations in selecting doctors and hospitals, (2) Health funds – reducing administrative costs, competition between private and mandatory funds, (3) Measures related to hospitals and doctors – encouraging competition among doctors and various models of payment for medical services, and (4) Measures aimed at control of pharmaceutical costs expressed through various models: “permitted” and “prohibited” drug lists, state regulation of prices, determination of the highest price, budget financing, etc. 90 Journal of Economic and Social Studies �Possibilities of Development of Private Health Insurance in Bosnia and Herzegovina In the last few years there has been a particular emphasis on the reform of the health insurance in the USA. Booz & Co (2012) established in its research that nowadays employers move towards the model of contributions deposited on savings accounts. Thus, employees may use the funds to choose the insurance package as they wish, instead of the earlier model of benefits in which company created the insurance program for all. Vaughan E. & T. (2000) believe that, regardless of the fact whether the financing system is private or public, it is influenced by adverse selection. They emphasize that private insurers’ premiums grow due to increased costs of medical services caused by population aging, improved medical technology, capacity overload and preventive medicine. Additional criticism to the US healthcare system is related to unequal access to medical care, unequal quality of medical services, significant misuse, inefficiency and frauds (Wiening and Rejda, 2007). While describing the reform of the health protection initiated by President Obama, Schansberg (2011) emphasizes that the state’s solutions to health protection are not efficient and that the advocates of healthcare free market should provide convincing evidence in favor of a real reform and conduct it where possible. He believes that abolishment or at least reduction of subsidies to health insurance based on employment would be the first step towards the free market of healthcare, and that employers would try to present several options to their employees. The effect of economies of scale is also possible if the groups of employers are categorized in only several insurance types. According to the analysis made by Deloitte (2012), as a direct result of the Affordable Care Act (ACA) it was estimated that some 32 million Americans by the year 2014 will have been insured. As of 2014, most of these individuals are to possess a minimum level of health insurance, whether by state-sponsored plans, plans sponsored by employers or plans provided on the market of individual insurance policies. In order to improve the access and respect patient’s rights, the ACA introduced new commercial standards such as: abolishment of medical underwriting, elimination of age limit, prohibition of exclusion based on previous illnesses, and cancellation of cost share (participation) for preventive services. Health plans would also have to provide the guarantee and renewing option as well as the coverage for essential medical privileges. The ACA introduces new distribution channels that would make the access to health insurance markets easier. National health insurance stock markets have been established aimed at providing information to potential clients and the facts on the range of health plans. Stock markets are designed for those who are not included in Medicaid, Medicare or employer sponsored plans. Volume 5 Number 1 Spring 2015 91 �Safet Kozarević, Senija Nuhanović, Irnela Hrnjić The study conducted by the European Observatory on Health Systems and Policies (2006), which discussed the private health insurance in Great Britain, showed that the number of new users is static, if not decreasing, that the market numbers for these types of insurance for corporations falls, and that insurance companies are to turn to smaller firms and individual policies. Vidojević (2011) describes the health system of Great Britain and the National Health Service (NHS) that is the basis of the entire system. The result of the economic crisis in 2008 is the plan for introduction of radical reforms, probably the most drastic ones in the last four years. In July 2010, the White Book Equity and excellence: Liberating the NHS was presented, which defines a new way of the NHS functioning. Patients will actively participate in making important decisions related to their health, in all stages of treatment. The feasibility of this change shall involve larger accessibility of medical documentation and the possibility for a patient to have an insight into it at any moment and, if he wants, to share it to a third party. Provided that all the planned measures are taken, in the following 4 years the savings should be achieved amounting to almost £20 billion that could be invested into the improvement of health service quality. In terms of financing healthcare in the European Union (EU) member states, Totić (2012) emphasizes that the national bodies of every EU member states join the collected contributions into the health funds for that purpose. Such fact leads to reluctance of certain groups to collective payment of subsidized costs of healthcare for other people, especially in poorer EU member states. This consequently increases reluctance to regular payment of taxes and/or contributions. Private health insurance is suggested as an alternative. Janković (2011) states that private (voluntary) health insurance is usually specified for the part of the population exempt from mandatory health insurance based on their high income (the Netherlands), the part of the population that may, based on their high income, choose whether to stay in mandatory or opt for voluntary health insurance (Germany) or for the part of the population, the so called self-employed (Austria and Belgium). The level of coverage is in the range of 0.2% in Austria up to 24.7% in the Netherlands. The search for a satisfactory system of financing healthcare is also present in Russia. Šolak (2007) believes that Russia needs a complete reorganization of the system of mandatory social health insurance. Fifteen-year long reforms did not lead to the goals that were set. One can notice the disruption of the proclaimed principles of social justice regarding the access of medical assistance, while the level of quality and culture in terms of health service is not appropriate to the modern needs. 92 Journal of Economic and Social Studies �Possibilities of Development of Private Health Insurance in Bosnia and Herzegovina Being a country in transition, on its way to healthcare reform, BiH suffers numerous problems due to its constitutional arrangement (two entities – BiH Federation which consists of cantons and Republic of Srpska – and Brčko District) and the fact that healthcare is regulated at the entity levels (Cain et al., 2002). The system in BiH Federation was decentralized too early, since every canton is responsible for its administration and the financing of healthcare. The system in Republic of Srpska (RS) is centralized and it has one body – the Ministry of Health that monitors the healthcare system. Due to the lack of appropriate legal mechanisms, coordination between the entities is rather poor, while in BiH Federation the cantons do not mutually cooperate at an appropriate level. Untimely decentralization brought a dramatic change of the system from the aspect of administrative structure and management, while the institutions continued their work without changes and kept the same functions as before the 1992-1995 war. The reason is that they were not able to develop the necessary skills and capacities that would stand such strong and complex processes of decentralization. That is why many functions in the cantons and entities are duplicated. The detected problems are also related to almost complete lack of planning function in healthcare, implementation of the passed laws, as well as a complex organizational structure. The implementation of health reform starts with a paradox including an innovative approach against the political resistance to changes as well as enthusiasm against obstacles. BiH cannot respond to all demands for healthcare and the situation is substantially worse than in 1992. A significant number of life-important medical treatments does not exist. There is a certain interest in the system reform, but nothing would move forward until the entities start cooperating and creating unified strategies for the entire country (CARDS Program 2005). For the purpose of health statistic records, the Public Health Institute of BiH Federation (2012) specified a set of conclusions on the total health condition of the population. The healthcare reform in BiH Federation is oriented to strengthening primary health protections, with the emphasis on promotion of health and prevention of illnesses. However, there are still discrepancies present in the population’s access to the teams of primary health protection in the cantons of BiH Federation. In accordance to the adopted Strategy for development of primary health protection, the process of implementation of family medicine in BiH Federation continued gradually. Even though there is a significant number of educated doctors and nurses and improved infrastructure, implementation of family medicine is still not satisfactory. A particularly evident problem is constant turnover of already Volume 5 Number 1 Spring 2015 93 �Safet Kozarević, Senija Nuhanović, Irnela Hrnjić insufficient staff, medical doctors in particular. Implementation is more difficult mostly due to a slow restructure of departments within outpatient clinics, in accordance to the Strategy for development of primary health protection, nonstimulating mechanisms of payment, lack of managerial skills and insufficiently coordinated legislative. Methodology The existing systems of health insurance, not only in BiH but also in other countries in the region and world, show numerous disadvantages. The legal framework in BiH defined voluntary private health insurance as the option that citizens can use by their own choice. The assessment of performances of the existing model of health insurance in BiH is based on the secondary source indicators, announced by Eurostat (2012), the World Bank (2012), Central Bank of BiH (2012), Federal Ministry of Health (2013), Public Health Institute of BiH Federation (2012), Public Health Institute of RS (2011) and Agency for Statistics BiH (2012). Special attention was given to the following indicators: level of health protection costs, in particular expenditure on drugs from personal resources of the population; state’s allocations for healthcare; rates of natural population growth; leading causes of death; organizational structure of the health system; social and economic environment; availability and structure of healthcare personnel; characteristics of primary protection; amount of contribution for health insurance; populations’ coverage by health insurance; population’s structure by work status; development of the private sector of health protection and legal regulations, as well as population’s familiarity with these regulations. In order to reach research purposes, the development of voluntary health insurance in BiH is defined as the independent variable, while the improving the effectiveness and efficiency of the existing health insurance system in BiH is the dependent variable. The starting premise in the paper is that by identifying and removing obstacles for development of voluntary health insurance, it is possible to improve effectiveness of the existing system of health insurance in BiH. Therefore, the paper attempts to confirm that there is room for its development through the reform of healthcare system, extension of the existing model of social insurance and also that there is interest by insurance companies in a more serious approach to the offer of health insurance package. For the purpose of confirming the formulated hypothesis, the empirical research was conducted by survey of three groups of subjects: private 94 Journal of Economic and Social Studies �Possibilities of Development of Private Health Insurance in Bosnia and Herzegovina healthcare institutions, citizens, that is, the users of healthcare services, and insurance companies. The questionnaire for private health institutions consisted of 12 questions, in which the respondent had offered answers. In some questions there was option of entering a new, own response that was not listed in the questionnaire. Private health institutions located in Tuzla Canton are listed on the web site www.bhzdravlje.ba, where they are classified according to the activity and the level of care they provide to their customers. Of the total number of these institutions, the survey answered 51 institutions located in Lukavac, Gračanica, Gradačac, Srebrenik, Tuzla and Živinice. The second survey was focused on citizens and the questionnaire similarly consisted of 12 questions with multiple choice answers. A total number of 183 healthcare service users filled the questionnaire. One part of the survey was conducted online by the Internet news portal - www.lukavac-x.ba (115 respondents from different age groups). The last e-mail survey was focused to private insurance companies. The questionnaire, consisted of 10 questions with multiple choice answers, was send by email to all insurance companies registered in BiH. Since two insurance companies have branches in both entities, total number of active insurance companies in BiH is 22, and eight of them responded to the e-mail survey. Results and Discussions Disadvantages of the Existing System of Social Health Insurance in BiH Based on the analysis of secondary source indicators, a general rate is that the existing system of health insurance in BiH has many disadvantages. There are many fields in the healthcare sector that require changes and improvements. The following part of the paper mentions the most significant results obtained on the basis of the secondary source analysis. The rates of social insurance contributions are too high, even when compared to the OECD and new EU member states. The rate of social contributions in BiH Federation is 41.5% on gross salary, while in RS that amount is 33%. Over 50% of those covered by health insurance (retired persons, unemployed, invalids, war veterans) are exempt from paying contributions and their health insurance is Volume 5 Number 1 Spring 2015 95 �Safet Kozarević, Senija Nuhanović, Irnela Hrnjić financed by the transfers from other non-budgetary funds and public revenue. Besides, the insured/retired number ratio grows in favor of the retired persons and is around 1.1:1, which is definitely not a desirable trend. It is well known that this ratio needs to be 4:1 in order for the social insurance system to function properly. The total healthcare expenditures in BiH are around 10.3% of the GDP, which is a level much higher than in most EU countries. Almost 60% of the total healthcare expenditures are paid from public resources while more than 40% are financed by households from their own resources. Unfavorable trends in the economy, war events, economic blockade, huge growth of unemployment, increased influence of grey economy, increased costs of healthcare, change in the structure of insured categories, etc., affected the increase in personal participation of citizens in the provision of health protection, economic situation in healthcare, and financial business activities of health insurance funds. Natural rates of population growth change more rapidly in comparison to the EU countries. Also, due to higher mortality rates compared to birth rates, natural population growth (-0.8%) has a negative value and it leads to natural depopulation. Regular healthcare statistics data show that chronic diseases are dominant in BiH when it comes to the leading causes of population diseases and mortality. Due to diagnostics costs, therapy, and rehabilitation of patients, such diseases are the leading health problems every year and they are a significant burden for the limited budget of the health sector and the entire community. Also, the results of the population surveys confirm unfavorable trends of life style and habits of the population with addiction diseases being dominant (smoking, alcoholism, drugs and psychotropic substances), inappropriate diet, overweight and obesity, as well as the lack of physical activity, which are the key risk factors for the health of BiH population. Organizational structure of the healthcare system is rather complex with the fragmentation of the system present, particularly in BiH Federation, where the cantons have the authority over healthcare services. Therefore, the healthcare system in BiH Federation includes: Federal Ministry of Health, ten cantonal ministries of health, Federal Institute of Health Insurance and Reinsurance, ten cantonal institutes of health insurance and eleven public health institutes. The healthcare system in RS is centralized at the entity level. 96 Journal of Economic and Social Studies �Possibilities of Development of Private Health Insurance in Bosnia and Herzegovina A large part of BiH population is not covered by health insurance and does not have the right to healthcare. The largest number of the uninsured persons in RS includes the employees of the companies in which employers do not pay health insurance contributions. There is an additional problem in BiH Federation for the unemployed who miss the 30-90 day deadline for registration at the employment bureau and then lose all rights to health insurance through this bureau. The public is not familiar enough with the process of passing and changing laws. The media do not sufficiently follow and inform on the laws in the field of healthcare that are in the process of passing and enacting in parliaments. Furthermore, authorities do not invest any efforts to make these new laws closer to citizens and introduce them to their rights. Empirical Research into the Possibilities for Private Health Insurance Development Research into Private Healthcare Institutions Based on the answers received from private healthcare institutions, it was established that female persons have a bigger share in their user list (63%). From the aspect of patients’ age structure, the highest number was in the range 19-55 years (41%), then 56-75 (32%), while the proportion of the patients aged 0-18 (15%) and 76-100 (12%) was relatively small. Almost all their patients have social health insurance (96%). The officials of the private healthcare institutions presented the reasons why patients choose to use the services in the private sector. They are given in Table 1. The most important reasons for using their services are high quality and fast service. Most private healthcare institutions (71%) believe that their services are of higher quality than those provided by the public healthcare institutions. Only 41% of the private healthcare institutions have contracts for certain services with the institutes for social health insurance. On the other hand, they are highly interested (75%) in contracting the services with these institutes. Table 1 shows that the satisfaction degree of those institutions that have the contracted services with the institutes is at a very low level (only 6% of them are completely satisfied). Volume 5 Number 1 Spring 2015 97 �Safet Kozarević, Senija Nuhanović, Irnela Hrnjić Only 43% of the private healthcare institutions support the policy of a complete or partial opening the space in the healthcare system of BiH. The reason for this is that 27% of the institutions believe that their current position compared to the public healthcare institutions is poor. Private healthcare institutions offer certain suggestions for patient’s better access to healthcare services, not only in private but also in the public healthcare sector as follows: • Increasing the involvement of private institutions in healthcare (57%). • Increasing the flexibility of contracts in terms of prices and other conditions (35%). • Strengthening the monitoring of the contracted services and public announcement of data in terms waiting, quality, satisfaction, accessibility, etc. (47%). • Improving the regulation in both sectors (37%). • Other (12%): controlling public procurements in the public sector, defining patients’ rights and obligations of medical service provider by introducing clinical guides into the law on health protection, providing a patient with the option to choose where to use healthcare services and equaling private and state healthcare. Private healthcare institutions are highly interested in cooperating with private insurance companies (59%), but only a small number of them have already concluded the contracts with insurance companies (14%). Only 9% of the institutions replied that they did not see their interest in such type of business arrangement. The institutions that stated they do not have an opinion on the subject (20%) believe that they lack sufficient information on advantages and disadvantages of such arrangement. 98 Journal of Economic and Social Studies �Possibilities of Development of Private Health Insurance in Bosnia and Herzegovina Table 1: Surveys’ Results Survey of private healthcare institutions Reasons why patients choose private healthcare institutions: Service speed 68,63% Service quality 84,31% Impossibility of services in the public sector 45,10% Higher patients' confidence 49,02% Other 11,76% Satisfaction by the conditions of contracted cooperation with the health insurance institutes: Completely 5,88% Partially No, due to prices No, due to payment overdue No, for some other reasons 17,65% 13,73% 11,76% 9,80% Survey of users of healthcare services Reasons for using the healthcare services provided by the private sector: Impossibility for getting the appropriate service in the public sector Impossibility for getting fast service in the public sector Lack of confidence in the services provided in the public sector None of the mentioned Other Citizens’ experience while using the services of public and private institutions: Public Rude staff 27,33% Long waiting for some services (tests, referral letters to 38,26% specialists, medications, etc.) Unprofessional healthcare staff 18,33% Low quality treatment 12,86% Other 3,22% Source: Authors’ research Volume 5 Number 1 Spring 2015 43,17% 50,82% 21,86% 10,38% 8,20% healthcare Private 3,76% 10,22% 5,91% 4,84% 75,27% 99 �Safet Kozarević, Senija Nuhanović, Irnela Hrnjić Research into the Users of Healthcare Services Most research subjects in the group of the users of healthcare services were male persons (67%). The largest number of them belongs to the age group in the interval 19-55 (87%), with significantly smaller proportions of other age groups 56-75, 0-18, and 76-100, in percentage 8%, 3% and 2%, respectively. Out of 92% of the subjects, who had social health insurance, 78% of them were not satisfied by the existing social health insurance. Only 20% of the subjects stated that they do not frequently use the services provided by the private healthcare sector. The reasons are given in Table 1, and it is evident that their reasons are rather similar to those stated by private healthcare institutions meaning speed of services, lack of certain service in the public sector, and higher confidence in the private sector. Regarding the quality of private versus public healthcare institutions, 73% of the subjects believe that the services in the private sector are of higher quality. The reasons for dissatisfaction by the existing social health insurance are given in Table 1, parallel with the rate given for the services provided by the private sector. It is evident that the subjects who had already used the services provided by the private sector rated their quality as much higher than in the public institutions. Similarly, Table 1 showed that the private healthcare institutions recognized long waiting for some services, unkind and unprofessional staff and low-quality treatment as the same reasons why patients/clients opt for the private sector services. More than 93% of the subjects believe that their social health insurance should provide them with a broader coverage of healthcare services. Only half of the subjects are familiar with the possibility for health insurance via insurance companies, while 86% of them would opt for private health insurance provided that their price is affordable. Research into Insurance Companies Underdevelopment of the private insurance market in BiH is evident from the realized structure of the premium on the market. The largest share belongs to the compulsory motor third party liability insurance. In the entire premium structure, the share of health insurance is 1.59% (BiH Federation 1.87% and RS 0.78%), and this is mainly for traveler’s health insurance. The market itself is highly fragmented, with a significantly higher number of insurers than needed for such a small market. As many as 14 insurers have the market share below 3%. Domestically owned 100 Journal of Economic and Social Studies �Possibilities of Development of Private Health Insurance in Bosnia and Herzegovina insurers cover less than half of the market. There are 10 active insurers on the market that are under majority foreign ownership, but they cover almost the entire life insurance market. The owners of these insurers are in Austria, Croatia, Serbia, and Slovenia. One company for reinsurance is also present on the market. Although all the insurance companies surveyed plan to introduce voluntary health insurance, only two of them currently offer these products. The insurance companies that provide the package of voluntary health insurance offer various products including those that cover the basic package of healthcare services to those that cover a wide spectrum of services. Female persons make 55% of the insured structure while the dominant age group is 19-55 (70%). Cooperation with the private healthcare institutions is registered for only one third of the products and 50% of the subjects believe that the private healthcare institutions are cautious because they are not well informed about the voluntary health insurance. Thirty-three percent of the subjects think that these institutions are interested in cooperation while the remaining 17% believe that the healthcare institutions are not interested as they do not see any benefit from such cooperation. Half of the subjects think that the insurance market is ready for the offer of voluntary health insurance package, while the other half estimate that the market is still not mature enough for such offer. Most of the insurers (83%) think that the reform of the healthcare system should envisage the room for voluntary health insurance provided by private insurance companies. Conclusion The research described in this paper shows the current situation in the healthcare system of BiH. A large number of indicators point at the system crisis, inefficiency, dissipation of scarce resources, large dissatisfaction of all participants, and other disadvantages. Regarding the private voluntary health insurance as the addition to the existing system of social health insurance, it is not developed due to many obstacles that need to be passed. On the other hand, interest in the introduction of such type of insurance, as showed by the results of the primary research, is high in the private healthcare institutions, users of healthcare services, and insurance companies. Development of voluntary health insurance is necessary and perhaps the only way out of the current situation. Unsustainability of Bismarck’s model of healthcare Volume 5 Number 1 Spring 2015 101 �Safet Kozarević, Senija Nuhanović, Irnela Hrnjić system, not only in BiH but globally as well, is obvious, and there are numerous arguments that prove this statement. That is the reason why for a long time alternatives have been sought as well as additions to the traditional models of healthcare systems. The main causes of unfavorable relationship between the payer of health contributions and the users of health protection are demographic changes, that is, an immense increase in the participation of the old population (retired persons) and high unemployment rate. Consequently, this reflects in the decrease in the number of those who pay contributions and the increased number of health protection users. Unfortunately, there is no universal solution or an optimum model of healthcare system that would be widely acceptable. However, depending on the country itself and its characteristics, it is possible to create a combination of one of the models with the additional insurance options such as voluntary health insurance provided by private insurance companies. In this respect, the development of voluntary health insurance in BiH should be observed as an important breakthrough towards the improvement of health protection. The disadvantage of the voluntary health insurance lies in the fact that it does not have social solidarity. This means that those with higher risks of diseases pay higher insurance premiums (sick, old, smokers, etc.). A good thing for these categories of citizens is the fact that they would still have their social insurance. In other words, relieving the burden of the healthcare system by means of voluntary health insurance would leave more room for more endangered categories of the population. Finally, it has been confirmed that in the forthcoming reform of the healthcare system, which is obviously necessary, one should search for the room to develop voluntary healthcare insurance provided by private insurance companies. 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Report No. 66253-BA. Bosnia and Herzegovina: Challenges and Directions for Reform – A Public Expenditure and Institutional Review. Retrieved February 22, 2013, from http://siteresources.worldbank.org/INTBOSNIAHERZ/Resources/ BHPEIR2012IzazoviPreporukeZaReforme.pdf Zrinščak, S. (1999). Health Policy Systems in the World: Basic Characteristics and Current. Revija za socijalnu politiku (online), 6(1), 3-19. Retrieved January 24, 2013, from http://www.rsp.hr/ojs2/index.php/rsp/article/viewFile/312/897 Volume 5 Number 1 Spring 2015 105 � 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. 2700 Title A name given to the resource Possibilities of Development of Private Health Insurance in Bosnia and Herzegovina Author Author Kozarević, Safet Nuhanović, Senija Hrnjić, Irnela Abstract A summary of the resource. Abstract: Increased rise in costs of healthcare in the last five decades has rapidly increased interest in the functioning of healthcare systems within every country. The reasons for growth in healthcare costs are related to demographic changes, technology advancement, increased number of educated persons, emergence of new diseases, etc. Financing the risk of poor health is mainly organized through programs of social and private health insurance. Regarding the management of the risks of poor health in Bosnia and Herzegovina (BiH), the social health insurance system is the basic solution for the population. However, in BiH, as in other countries in the world, the system of social insurance has become unfeasible and it is necessary to search for new solutions, that is, to reform the system. The research subject in this paper is private/voluntary health insurance offered by insurance companies, which can be an efficient addition to social insurance in BiH. It has become present on the market of private insurance in BiH only recently, so its share in the total premium of private insurance is still minor. Therefore, a primary research was conducted on the possibilities for its development as well as on the need and acceptance by the users of healthcare services. Besides, there was a need for examining the performance of the existing system of social health insurance, based on the principles of Bismarck’s model of financing, and recognizing its disadvantages. By identifying and eliminating obstacles for development of voluntary health insurance, it is possible to improve performance of the existing system of health insurance in BiH. Publisher An entity responsible for making the resource available International Burch University Date A point or period of time associated with an event in the lifecycle of the resource 2015-01-15 Keywords Keywords. Article PeerReviewed HN Social history and conditions. Social problems. Social reform https://omeka.ibu.edu.ba/files/original/78afd5e0935fa5ce6544cbd0a2064456.pdf 5b0ca31fe9d3b29cdd6293e97ce2490f PDF Text Text Journal of Economic and Social Studies Soap Opera Effect on Product Preferences in Terms of Country Image: A Case of Turkish TV Serials in Albanian Market Yüksel Köksal Mehmet Akif Ersoy University Burdur, Turkey ykoksal@mehmetakif.edu.tr Nihal İçöz Gjana Epoka University Tirana, Albania nihalgjana@gmail.com Abstract: TV serials can be leveraged as an effective mass communication means that is capable of sneaking into people’s lives, and altering their perceptions, habits and preferences. Today globalization has come to facilitate the way in which consumers are exposed to a myriad of foreign products, and country of origin and image emerge as major hints in assessing these products. Foreign TV programs that become popular in a country are known to contribute to the country of origin image of products involved. This study aims to study the way TV viewers in Albania, where Turkish soap operas are popular, perceive products of Turkish origin and whether Turkish TV programs have any effect on the purchasing decisions of Albanians. To this end, the data set of the study was compiled through one-to-one interviews with 413 participants in three Albanian cities (Tirana, Durrës and Kukës). Quantitative data were analyzed using factor analysis and structural equation modeling (SEM) methods while qualitative data were obtained using the in-depth interviews with the people from the field who hold opinions about the matter at hand. The study produced positive findings that imply that TV serials influence product preferences of consumers. Volume 5 Number 1 Spring 2015 Keywords: Opera; Country Image; Product Preference; Turkish TV Serials. JEL Classification: M31 Article History Submitted: 19 March 2014 Resubmitted: 5 June 2014 Resubmitted: 7 July 2014 http://dx.doi.org/10.14706/JEO CSS11513 219 �Yüksel Köksal, Nihal İçöz Gjana Introduction Films, TV serials and shows have the potential to influence the audience views and make them adopt certain attitudes in specific issues (Pervan & Martin, 2002; O’Connor et al., 2008; Busby & Klug, 2001; Desai & Basuroy, 2005; Cho, 2007; Hudson & Ritchie, 2006; Kim et al., 2007; Riley et al., 1998). The characters in TV serials may emerge as real life role models for viewers and the places where these serials were shot may turn into popular tourism destinations (Balli et al. 2013, Kim & Long 2012, Busby & Klug, 2001). Soap operas are seen as one of the successful advertising venues (Pervan & Martin, 2002). They have a significant role in influencing lifestyles, purchasing habits and brand preferences of viewers as well as in boosting the image of the country of origin (Cho, 2007; O’Connor et al., 2008). They are at least capable of increasing the level of awareness of their country of origin (Kim et al., 2007). The image effect created by films and soap operas do not tend to be short-lived in general. This applies to both positive and negative images. Advantages of the positive country of origin image created by films and soap operas or disadvantages of the negative image so created may last for years (Hudson & Ritchie, 2006). The soap operas that portray a positive country image can boost the country of origin as a popular brand, thereby giving a competitive edge to the products of that country in the international markets and influencing the purchasing preferences of consumers. Turkey started to sell soap operas to foreign countries in 2001. Its exports have increased in recent years and Turkish soap operas have come to enjoy a sizable audience in the Middle East and Balkans. As these shows that secured international followers made positive contributions to the country of origin image (Brljavac, 2011; Türbedar, 2012; Radic, 2011), this also changed the perspective on Turkey (Öktem, 2010). The first Turkish soap opera was aired in 2011 in Albania, a country located in the Balkans, but it was in 1980 when Albanians first got in touch with Turkish films. “Al Yazmalım” (The Girl with the Red Scarf) is the first Turkish film aired in Albania (Telegraf, 2012). After several films that were aired in those years, Turkish soap operas invaded Albanian TV stations and they quickly became very popular (Agolli, 2012). Despite the fact that both countries enjoyed a common past, little was known about Turkey in Albania, and this has changed thanks to Turkish soap operas (Dumani, 2012). Common past and culture and similarities in family life 220 Journal of Economic and Social Studies �Soap Opera Effect on Product Preferences in Terms of Country Image: A Case of Turkish TV Serials in Albanian Market between Albania and Turkey were cited as the reason why Turkish soap operas became popular by dethroning their previously popular Latin American counterparts (Tirana Times, 2012). Whether there has been a change in how products of Turkish origin are perceived in Albania in parallel to the image change attributable to the impact of Turkish soap operation was an object of curiosity, and this study aimed to measure the effect of Turkish soap operas on product preferences of Albanian consumers. Country-of-origin image The country of origin image (COI) consists of views and beliefs a person may hold about a specific country. Beliefs s/he may hold in his/her mind about that country may have been acquired from different sources and at different times. These beliefs may be real or unreal, but they still can affect that person’s attitudes and perceptions concerning the images of the products from that country. Before making a purchasing decision and during the phase of assessing the products, consumers tend to pay attention not only to their internal characteristics such as taste, design, performance and capacity to serve the purpose as well as to their external features such as price, packaging, brand and warranty (Bilkey & Nes 1982; Zain & Yasin, 1997; Agrawal & Kamakura, 1999). While characteristics such as price and brand signify the quality of a product (Rezvanil et al.), the country where that product is produced or the country which is represented by that product, i.e., the perceptions created in the minds of consumers by the country of origin image, may emerge as major hints and criteria for evaluating the products involved (Bilkey & Nes, 1982; Roth & Romeo, 1992; Ayyildiz & Cengiz, 2007; Zamantılı & Durmusoglu, 2008; Roth & Diamantopoulos, 2009; Lampert & Jaffe, 1998). This implies that the success of products in the international markets is determined not only by objective factors such as price and quality, but also subjective factors. It was Schooler (1965) who first used the term “country of origin” in the marketing literature (Pereira et al., 2005). Since then, a number of studies have been conducted on this topic (Lopez et al., 2011) and this concept has even become one of the most studied themes in the marketing literature (Agrawal & Kamakura 1999; Bloemer et al, 2009). Some literature studies (Al-Sulaiti & Baker, 1998) argued that the term country of origin should enter the literature as the fifth element of the marketing mix in addition to the product itself, its price, promotional activities and distribution channels (Dosen et al., 2007). In time, the term country of origin has come to be perceived as the country of origin image (Pereira et al, 2005). It was Nagashima Volume 5 Number 1 Spring 2015 221 �Yüksel Köksal, Nihal İçöz Gjana (1970) who was first to make a widely accepted definition of the country of origin image. Nagashima (1970) defined the country of origin image as “the picture, the reputation, the stereotype that businessmen and consumers attach to products of a specific country.” For Nagashima (1970), this image is created by such variables as representative products, national characteristics, economic and political background, history and traditions (Nagashima 1970; Pereira et al, 2005; Rezvanil et al, 2012; Lin & Chen, 2006). Means of mass communication enjoy a guiding effect in the shaping of the image in the minds of consumers, but personal experiences of consumers and opinion leaders in the society, too, play a role in this process. Given all these aspects, the country of origin image may guide consumers emotionally and behaviorally in the purchase decision process. A number of studies suggest that the country of origin image can make a significant impact on the consumer preferences (Bilkey & Nes, 1982; Agrawal & Sikri, 1996; Kaynak & Kara, 2002; Ozretic Dosen et al., 2007) and the relation between the country of origin image and the purchasing behavior becomes more important in the ongoing global marketing conception. Given the fact that developed countries enjoy a more positive image compared to the developing countries, we see that products and brands of developed countries tend to be perceived as having higher quality and more reliable (Abedniya & Zaeim, 2011). Numerous studies confirmed such consumer tendencies (Zain & Yasin, 1997). Some studies found that the products whose country of origin is not specified tend to be perceived as more reliable than the products of underdeveloped countries (Acharya & Elliott, 2001: Kaynak et al., 2000). Although the past studies found that consumers tended to perceive domestic products more positively compared to foreign products (Watson & Wright, 1999), the tendency to prefer domestic products over imported products is higher in developed countries (Chryssochoidis et al., 2007). Moreover, some studies suggested that when a choice is to be made between two countries with and without cultural similarity with the own country, consumers tend to prefer the products of the country with the cultural similarity (Crawford & Lamb, 1981; Wang & Lamb, 1983; Watson & Wright, 1999). Likewise, TV serials tend to bring about cultural and social convergence among different societies (Castello, 2010). This lends credence to the argument that increased popularity of Turkish TV serials in Albania will boost Turkey’s country image and foster Albanians’ preferences for Turkish products, given the sheer amount of cultural values historically shared between two countries. In support of this argument, it was observed that the increased popularity of Turkish TV serials in 222 Journal of Economic and Social Studies �Soap Opera Effect on Product Preferences in Terms of Country Image: A Case of Turkish TV Serials in Albanian Market the Middle East and Balkans led to an increase in Turkey’s trade and tourism revenues from the countries located in these regions that imported TV serials from Turkey (Balli et al., 2013). It is widely acknowledged that TV serials tend to increase overall consumption and are an effective advertisement tool (Pervan & Martin, 2001; Miller, 1995). The conceptual model and hypotheses developed in this framework can be listed as follows. Figure 1: Conceptual Model H1a Country Image H2 H1c Soap Opera Product Preference H1b Considering Country Origin of Product H3 H1a: There is a positive correlation between watching TV country and the image of that country. H1b: There is a positive correlation between watching TV country and noticing the country of origin of products. H1c: There is a positive correlation between watching TV country and preferring products of that country. H2: There is a positive correlation between having a good preferring products of that country. Volume 5 Number 1 Spring 2015 serials of a specific serials of a specific serials of a specific country image and 223 �Yüksel Köksal, Nihal İçöz Gjana H3: There is a positive correlation between noticing the country of origin of products and preferring specific products. Research methodology Quantitative method was employed in this study. The data were obtained from three Albanian cities, namely Tirana (the capital), Durrës (a tourism city) and Kukës. Face-to-face interviewing was adopted as the method of collecting quantitative data. In designing the questionnaire, three local linguists were consulted about the comprehensibility of the questions. A sample run was made with 20 questionnaires to revise certain questions and make additions to and omissions from the final questionnaire. 74 people from Kukës, 112 people from Durrës and 227 people from Tirana participated in the study. The face-to-face interviewing of the participants produced no invalid questionnaire. The questions which were asked to participants during the interview and which sought to measure their attitudes and approaches to identify the impact of Turkish TV serials on consumers in the Albanian markets are given in Table 3 with mean values, standard deviation and factor values. The conceptual model and questions were designed by the researcher in the light of literature (Castello, 2010, Chryssochoidis et. al, 2007, Kaynak et.al, 2000, Kim & Long, 2012) data as the literature review produced no study that measured the direct effect of TV serials on product preferences. 14 variables in the conceptual model were measured using the 5-level Likert item (ranging between “I strongly disagree” and “I strongly agree”). Exploratory factor analysis (EFA) and structural equation modeling (SEM) were used to test the conceptual models and obtain scientific findings. Analysis and Results The demographic information relating to participants, including gender, age, marital status, education, occupation and income is given in Table 1. 224 Journal of Economic and Social Studies �Soap Opera Effect on Product Preferences in Terms of Country Image: A Case of Turkish TV Serials in Albanian Market Table 1: Sample Characteristics Category Gender Freq. % Male Female 129 284 TOTAL Single Married one Marital Married child Status Married two Married three TOTAL 18 or younger 19-30 Age 31-40 Category 41-50 51 or more 413 172 76 54 70 41 TOTAL 413 45 174 112 60 22 413 Category € 200 or less € 201-350 € 351-700 € 7001-1,500 € 1,501 or more 100 TOTAL 41.6 Less than 18.4 high school 13.1 Education High school Bachelor 16.9 Post 9.9 Graduated 100 TOTAL 10.9 Own 42.1 Business 27.1 Occupation Student Worker 14.5 Private Sector 5.3 Public Officer Other 100 TOTAL 31.2 Monthly 68.8 Individual Income Level Freq. % 117 153 113 14 16 28.3 37.0 27.4 3.4 3.9 413 100 44 10.7 149 124 96 36.1 30.0 23.2 413 100 35 47 105 142 54 30 8.5 11.4 25.4 34.4 13.1 7.2 413 100 15.7% (65 people) of the participants said they do not watch Turkish TV serials regularly. The number and percentages of TV serials regularly watched by participants before and during the studied period are given as follows: Volume 5 Number 1 Spring 2015 225 �Yüksel Köksal, Nihal İçöz Gjana Table 2: Numbers of Watching Turkish TV Serials Number of Percent Number of Number of TV Serials (%) People TV Serials 1 26.2 108 4 2 22.5 93 5 3 23.7 98 6 Percent 9.4 1.7 0.7 Number of People 39 7 3 Participants were asked whether they prefer Turkish products while shopping, and 69 % (285) gave affirmative answers. 50.8 % (210 people) of the participants noted that Turkish TV serials make a positive effect on their preferences for Turkish products. To better understand the role of TV serials in driving product preferences, the relation between the “number of Turkish TV serials regularly watched” and the “preference for Turkish products” was tested using the chi-square method and a significant relation was found (p>0.000). Thus, while the rate of those who never watch Turkish TV serials regularly was 43.1%, this rate was 68.5% for those who regularly watch at least one TV serial, 78.6% for those who regularly watch three TV serials and 85.7% for those who regularly watch five TV serials and 100% for those who regularly watch six serials. The exploratory factor analysis (EFA) and structural equation modeling (SEM) were measured using four factors and 19 variables. For the reliability level of variables, Cronbach’s alpha was measured as 0.848. This rate is considered as sufficient and appropriate for the reliability of findings obtained (Kalaycı, 2010). Also the KMO measure of sampling adequacy has been measured as 0.875 and Approx. Chi-Square; 3907.102, df; 171, Sig; 0.000. Variables and mean values and factor loads are given in Table 3. Table 3: Factor Loads No Factors and Sub- Items S1 Soap Opera I often follow the Turkish serials S2 I like watching Turkish serials 3.63 .871 S3 I intend to follow also other Turkish serials in the future Turkish TV serials are among the most favourite programs for me 3.41 .857 3.27 .815 S4 226 Mean Factors Loads Values Factor Variance: 31.64% 3.47 .880 Journal of Economic and Social Studies �Soap Opera Effect on Product Preferences in Terms of Country Image: A Case of Turkish TV Serials in Albanian Market S5 I like all Turkish serials S6 When Turkish serials are broadcasted I don’t 2.79 .761 have any plan to do Considering Country Origin of Product Factor Variance: 6.88% I do not prefer products the countries I do not 2.96 .797 like The products of some countries not prefer 3.13 .775 consciously I prefer products according to the origin of the 3.41 .517 country Country of origin gives me ideas about products 3.73 .500 O1 O2 O3 O4 I1 I2 I3 I4 I5 P1 P2 P3 P4 3.17 .781 Country Image Factor Variance: 7.40% I believe that the products of developed countries 3.87 .804 are more quality I always prefer products of developed countries 3.47 .712 I mostly prefer products of economically 3.66 .702 developed countries I prefer products according to price and quality 3.97 .507 not to origin of the country Country of origin of the product should be 3.55 .454 respected Product Preference Factor Variance: 16.95% After I followed the Turkish serials my ideas have 2.91 .774 changed positively for Turkish products I always prefer Turkish products in shopping 2.65 .770 I have started preferring Turkish products after watching Turkish TV serials Before the Turkish serials I have not preferred Turkish products so much Total Variance Explained 2.76 .728 2.59 .613 62.87% The total variance of 62.87%, obtained via the exploratory factor analysis (EFA), is regarded as a significant rate in terms of representativeness of the general opinions and this rate should be at least 50% for acceptability of the analysis (Meyers et al., 2006). Volume 5 Number 1 Spring 2015 227 �Yüksel Köksal, Nihal İçöz Gjana The relationship between factors and variables was analyzed using the structural equation modelling (SEM). Initially, we couldn’t reach to the model reference values of Goodness of Fit with these EFA variables. So the model was refined by eliminating three items (S5, I1 and I3) that have largest error variances. After removing three items, the test of final measurement model showed a good fit as shown Figure 1. Figure 1: Conceptual Model H1a = .118 Soap Opera H1b = .029 Country Image H1c= .700 Considering Country Origin of Product H2 = .293 Product Preference H3 = -.185 The findings that were obtained in the SEM analysis and that indicated the Goodness of Fit results of the analysis are given in Table 4 while the findings showing the hypothesis results were given in Table 5. Table 4: Goodness of Fit Indication Chi-Square 1/Degrees of Freedom (x2/df) 228 Tested model 3.04 Reference values 0-5 interval Journal of Economic and Social Studies �Soap Opera Effect on Product Preferences in Terms of Country Image: A Case of Turkish TV Serials in Albanian Market Goodness of Fit Index (GFI) .915 ≥.90 Adjusted Goodness of Fit Index (AGFI) .884 ≥.90 Comparative Fit Index (CFI) .931 ≥.90 Tucker Lewis Index (known as NNFI) (TLI) .916 ≥.95 Incremental Fit Index (IFI) .931 ≥.90 Root Mean Square Error of Approximation (RMSEA) .07 < .08 Source: Meyers et al, 2006; Hooper et al, 2008; Ayyıldız and Cengiz, 2006. Table 5: SEM Hypotheses Hypotheses H1a Soap Opera H1b Soap Opera H2 Product H1c Soap Opera H2 Country Image (CI) St. p Results β Errors values .053 .118 .026** S Considering COO of .028 .029 .304 NS Product Preference .059 .700 .001*** S .094 .293 .002*** S Country Image (CI) Product Preference H3 Considering COO of Product Product .112 -.185 .098* Preference *** p<0.01, **p<0.05, *p<0.10, S: Supported, NS: Not Supported. S The findings obtained via the structural equation modeling indicate that people who watch TV serials of a specific country tend to prefer the products of that country. The most strongly supported hypotheses are the power of TV serials to influence product preferences of consumers and the effect of the country image in product preferences. Also, the hypothesis that TV serials tend to boost the image of the country where they are produced was found acceptable with a 5-percent margin of error. In this context, the increase in Turkey's exports to the countries where Turkish TV serials are followed (Balli et al., 2013) signifies a positive indication of this hypothesis in practice. Likewise, the hypothesis that the country of origin is respected in product preferences was another approach which was found acceptable with a 10-percent margin of error. No correlation was found between watching the Volume 5 Number 1 Spring 2015 229 �Yüksel Köksal, Nihal İçöz Gjana TV serials of a specific country and the checking the country of origin of products in shopping, and the hypothesis was rejected. Discussion and conclusions The basic purpose of this study is to examine whether there is correlation between watching TV serials of a specific country and preferring to buy products of that country and find out the potential of TV serials for influencing consumer preferences. The findings of the study indicate that many Albanian consumers have developed positive attitudes toward Turkish products after watching Turkish TV serials. Even 50.8% of the participants said Turkish TV serials are the main factor influencing their decision to buy Turkish products. In addition to other benefits, TV serials have created a new marketing sphere called destination marketing with which the places where TV serials take place are promoted as touristic locations or holiday resorts to be visited by the audience (Balli et al., 2013; Kim & Long 2012; Busby & Klug 2001; O’Connor et al., 2010). The findings obtained using the exploratory factor analysis and structural equation modeling as well as the hypotheses results indicate that TV serials play a major role in shaping consumer preferences directly or indirectly. The hypothesis that sports a direct correlation between watching TV serials of a specific country and preferring products of that country (H1c) was accepted most strongly (Table 5, p<0.01). The hypothesis that was accepted with the second highest values is H2 that shows the effect of the country image on the product preferences (p<0.01). The finding that TV serials affect product preferences also indirectly is found at the hypothesis H1a, which is accepted in the light of the findings (p<0.05). This is because the regularly watched TV serials of a country tend to have a positive effect on that country's image and they enhance the country image (Cho et al., 2007). Given the fact that H2, which indicates the role of the country image in the product preferences, is also supported, it is clear that TV serials have a direct or indirect effect on consumers' preferring the products of the country where those serials are produced. The hypothesis, H3, which signifies the impact of the image of the country of origin in product preferences, and which was extensively studied previously (Bilkey and Nes, 1982; Roth and Romeo, 1992; Lampert and Jaffe, 1998; Roth & Diamantopoulos, 2009) was verified in this study as well (p<0.10). However, as no correlation was found between watching the TV serials of a specific country and the 230 Journal of Economic and Social Studies �Soap Opera Effect on Product Preferences in Terms of Country Image: A Case of Turkish TV Serials in Albanian Market checking the country of origin of the products preferred and the hypothesis H1b was rejected. To sum it up in the light of the foregoing discussion, the rate with which the TV serials of a specific country are watched is effective in directly or indirectly driving the popularity of the products of that country. Of course, other marketing components, too, should be effectively employed in order to increase the popularity of products of a country. But it is clear that when other marketing components are well-designed, popular TV serials play a critical role in boosting the popularity of the products of the country where those serials are produced as well as enhancing the image of that country. Implications for managers That TV serials can play a strong role in facilitating the market penetration of the products of the countries where they are produced has important implications for firms and managers. Given the fact that the places featured in TV serials emerge as potential tourism destinations (Kim & Long, 2012), the products used or consumed in these serials are also advertised. Product placement has today become a widely used advertisement tool (Pervan & Martin, 2002). Thus, product placements in the serials and sponsor advertisements run before and after the serials are recognized as very effective way for ensuring product penetration in the countries to which these serials are exported. Brand managers may choose to focus more on the markets in the countries where the TV serials which feature advertisements and placements of their products are broadcast, and by doing so, they can increase their market share and launch branding efforts in those markets. Likewise, it is generally accepted that women are more resolved and eager to regularly watch TV serials (Stern et al., 2005: Thompson et al., 2000). Thus, the brand managers who sell products specifically geared for women may select TV serials as the media where their products are advertised. Limitations and future research This study focused on a topic which has not been intensively studied, but was restricted to a sample group of 413 people due to constraints imposed by lack of resources and time. Still the study's sample size is above 384 people, which is defined as the number for 5-percent margin of error (Balcı, 2010) and its sample size is Volume 5 Number 1 Spring 2015 231 �Yüksel Köksal, Nihal İçöz Gjana regarded as 'good' in terms of having 300 subjects and over for factor analysis (Meyers et al., 2006). That the study was conducted solely with Albanians due to lack of resources and costs can be considered as another restriction for the study. This study focused on the role of TV serials in product preferences, but future studies may choose to examine the product placement approaches by the firms which operate, or plan to operate, in international markets or their tendencies for sponsoring TV serials which have the potential for being exported, with a view to finding out the place and role of TV serials in marketing. 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Journal of International Business Studies. 25(3), 579-604. Thompson, T.L. Et Al. (2000). Women’s Health Problems in Soap Operas: A Content Analysis. Women’s Health Issues, 10(4), 202–209. 236 Journal of Economic and Social Studies �Soap Opera Effect on Product Preferences in Terms of Country Image: A Case of Turkish TV Serials in Albanian Market Wang, C. & Lamb, C. Jr (1983). The Impact of Selected Environmental Forces upon Consumers’ Willingness to Buy Foreign Products, Journal of the Academy of Marketing Science, 11(2), 71-84. Watson, J.J. & Wright, K. (1999). Consumer Ethnocentrism and Attitudes toward Domestic and Foreign Products, European Journal of Marketing, 34(9/10), 11491166. Xuehua, W. & Zhilin, Y. (2008). Does Country-Of-Origin Matter in the Relationship Between Brand Personality and Purchase Intention in Emerging Economies? Evidence from China’s Auto Industry, International Marketing Review, 25(4), 458-474. Zain, M.O. & Yasin, M.N. (1997). 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Volume 5 Number 1 Spring 2015 237 �Yüksel Köksal, Nihal İçöz Gjana Türbedar Erhan, “How is Turkish foreign policy perceived in the Balkans?”, Today’s Zaman, April 30, 2012, http://www.todayszaman.com/newsDetail_getNewsById .action?newsId=279073. 238 Journal of Economic and Social Studies � 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. 2701 Title A name given to the resource Soap Opera Effect on Product Preferences in Terms of Country Image: A Case of Turkish TV Serials in Albanian Market Author Author Köksal, Yüksel Gjana, Nihal İçöz Abstract A summary of the resource. Abstract: TV serials can be leveraged as an effective mass communication means that is capable of sneaking into people’s lives, and altering their perceptions, habits and preferences. Today globalization has come to facilitate the way in which consumers are exposed to a myriad of foreign products, and country of origin and image emerge as major hints in assessing these products. Foreign TV programs that become popular in a country are known to contribute to the country of origin image of products involved. This study aims to study the way TV viewers in Albania, where Turkish soap operas are popular, perceive products of Turkish origin and whether Turkish TV programs have any effect on the purchasing decisions of Albanians. To this end, the data set of the study was compiled through one-to-one interviews with 413 participants in three Albanian cities (Tirana, Durrës and Kukës). Quantitative data were analyzed using factor analysis and structural equation modeling (SEM) methods while qualitative data were obtained using the in-depth interviews with the people from the field who hold opinions about the matter at hand. The study produced positive findings that imply that TV serials influence product preferences of consumers. Publisher An entity responsible for making the resource available International Burch University Date A point or period of time associated with an event in the lifecycle of the resource 2015-01-15 Keywords Keywords. Article PeerReviewed HC Economic History and Conditions,HM Sociology https://omeka.ibu.edu.ba/files/original/aef7ebd1d23beb394dbcb605fbb804d8.pdf 3dac86bad355f08e33f2ba9441832bc2 PDF Text Text Journal of Economic and Social Studies Real Exchange Rate and Real Economic Fundamentals in Transition Economy of Bosnia and Herzegovina (BH) Adisa Omerbegović Arapović Sarajevo School of Science and Technology Sarajevo, Bosnia and Herzegovina adisa.omerbegovic@ssst.edu.ba Abstract: The paper estimates Equilibrium Real Exchange Rate (ERER) using co-integration methodology to observe relationship between Real Exchange Rate (RER) and selected economic fundamental variables over two different sample periods. Time period of observation influences results and we observe change in signs and direction of relationship between fundamentals and RER suggesting that fundamentals and RER do not have a stable relationship and direction of influence. The findings suggest that RER is not a significant transmission mechanism for real economy towards achieving external balance as RER depreciation is not associated with an improvement in resource balance. Therefore, RER does not have a postulated relationship with resource balance variable. More appreciated RER is associated with an improvement in the external balance of the BH economy which is opposite of an expected role of RER depreciation in brining economy towards external equilibrium. However, pressures on RER sustainability exist due to negative resource balance. Potential disequilibria therefore could not be caught with the existing data which cover the post-war period only, and were marked by continuous negative resource balances. Volume 5 Number 1 Spring 2015 Keywords: Open Economy Macroeconomics; Real Exchange Rates; Transition Economy; Bosnia and Herzegovina (BH); Liberalization. JEL Classification: F41, F31, C13 Article History Submitted: 10 August 2013 Resubmitted: 4 April 2014 Resubmitted: 18 July 2014 Resubmitted: 25 September 2014 Accepted: 26 September 2014 http://dx.doi.org/10.14706/JECOS S11516 59 �Adisa Omerbegović Arapović Introduction Evidence of nonstationarity in Real Exchange Rate (RER) was the basis of work which viewed Equilibrium Real Exchange Rate (ERER) as driven by real economic fundamentals in transition economies. Pons and Lacasta (2003) have used error correction equation and have estimated long-run cointegration equation of the ERER and the corresponding dynamic error correction specification which strongly corroborated the model and produced fairly consistent results across the countries under study. Utilizing the error correction method and corresponding dynamic error specification Omerbegovic (2005) has found similar results for Bosnia and Herzegovina (BH). The impact of the fundamentals on the RER behavior was suggested to be dependent on the time horizon studied (Egert, 2006). In this paper, the relationship between RER and fundamental economic variables is examined using the methodology of co-integration and error correction model as found in Omerbegovic (2005) and Omerbegovic-Arapovic (2009). The findings suggest that there are changes in direction of relationship between certain fundamental variables and RER for BH depending on the sample period under consideration. This suggests that direction of relationship between fundamentals and RER is not stable over time. The attempt to estimate ERER from observable data on RER and economic fundamentals of BH due to existing nonstationarity in RER has resulted in estimated slight RER overvaluation in 2005, that is, before the financial and economic crisis of 2007 (Omerbegovic, 2009). Utilizing same methodology this paper finds support of undervaluation of RER in the first half of 2012. Counterfactual estimation of fundamentals in order to estimate misalignment is resulting in RER undervaluation due to the observed changed direction of relationship between the resource balance variable and RER, so that improvement in resource balance variable is associated with required appreciation in RER, opposite to postulated theoretical relationship, suggesting that RER is not a significant transmission mechanism in achieving external balance. The findings show that estimated RER misalignment based on co-integration methodology, which uses data over the period of serious external and internal disequilibrium in economy of BH, can’t be determined from observable data on 60 Journal of Economic and Social Studies �Real Exchange Rate and Real Economic Fundamentals in Transition Economy of Bosnia and Herzegovina (BH) macroeconomic fundamental variables and RER behavior over the sample period, suggesting that RER misalignment in transition is difficult to detect using a time series methods. However, this does not mean that there are no pressures on RER due to fundamentals. Our findings also suggest that other factors, such as monetary phenomena should be examined as potential causes of RER nonstationarity in BH as Kanas (2009) has suggested that shifts between stationary and non-stationary epochs in RER behavior could be mainly determined by the monetary phenomena. The paper starts by examination of RER nonstationarity by estimation of ERER of BH in order to test the hypothesis of RER misalignment in the middle of 2012 and establish the role of real fundamental variables in RER behavior. Firstly, the literature review on real exchange rate behavior and patterns of real exchange rate behavior observed in transition economies is presented. Section on methodology provides analytical framework used in calculating ERER for BH. It is followed by empirical analysis of estimation of RER misalignment in BH over the two different time horizons. The test of relationship between RER and economic fundamentals of BH extends time series analysis from Omerbegovic (2005) to examine the stability of relationship between real economic fundamentals and RER behavior enabling us to test the effect of time horizon on relationship between fundamental economic variables and RER for BH. Overall, we do not see a large explanatory power of fundamental variables in explaining RER fluctuation in the second period, which is consistent with findings of Kanas (2009) who suggests different phases of RER behavior, where RER could have entered stationary phase compared to the first period. This is followed by discussion of results and concluding remarks. Literature Review: Equilibrium Real Exchange Rates in Transition Economies Equilibrium Real Exchange Rate (ERER) is the real exchange rate associated with internal and external balance of the economy and the topics of equilibrium real exchange rate and exchange rate misalignment in transition economies of Central and Eastern Europe (CEE) has been widely researched due to importance of this transmission mechanism in achieving equilibrium for the countries that have started transformation process from planned to market based economies in the late 1980s and early 1990s. In other words, it is very important question whether their currencies are fairly valued at a given point in time. Various methods are used in calculating equilibrium exchange rates, which have provided very different results in terms of conclusions of relationship of fundamental economic variables and real exchange rate. However the single equation approach to determining ERER has been Volume 5 Number 1 Spring 2015 61 �Adisa Omerbegović Arapović identified to be applicable to determining RER misalignment both in short-run and long-run (Egert et.al., 2005) The overview of these studies suggests that transition countries could go through the period of trend appreciation of the currency, so that during the periods of rapid change in relative economic development levels, the ERER may exhibit trending behavior. (Froot and Rogoff, 1994) It has also been observed that there is uncertainty related to fundamentals and that relationship between fundamentals and real exchange rate is not stable over time (Egert, 2006), which corroborates the argument of phases in real exchange rate behavior. Application of single equation approach to ERER determination has been used to determine potential real exchange rate misalignment in transition countries using real exchange rate as dependent variable and explanatory variables which depend on the theoretical underpinnings of the research methodology. ERER which rests on counterfactual estimation of sustainable level of fundamentals is the basis of NATREX model in which the evolution of net foreign assets is endogenous, so that if investment rises in the open sector, capital inflows, reflected in a decline in net foreign assets, cause the real exchange rate to appreciate in the medium-term. In the long-run, when investment starts working in the open sector, the trade balance improves, resulting in an increase in net foreign assets, and producing an appreciation of the real exchange rate in the second phase. Egert, Lahreche-Revil and Lommatzsch (2003) also provide explanation that countries can have different direction of relationship between net foreign assets (resource balance) and real exchange rate due to the phase in which they are. In the catch-up process they may have a negative steady-state net foreign asset position. In other words, in the medium term, they finance their growth via foreign capital. Strong capital inflows appreciate the real exchange rate in this phase. However, once the desired long-term foreign liabilities position is attained, the countries have to start servicing their debt. Thus, for any additional increase in net foreign liabilities, the real exchange rate depreciates. The panel of transition countries examined indeed confirmed postulated appreciation associated with negative resource balance while variable was positive for OECD countries, indicating depreciation of real exchange rate associated with worsening of the resource balance, which was taken to be reflecting the long run behavior of the transition economies. 62 Journal of Economic and Social Studies �Real Exchange Rate and Real Economic Fundamentals in Transition Economy of Bosnia and Herzegovina (BH) In the literature openness is associated with decreasing trade barriers, which raises imports more than exports. The deterioration in the trade balance would in this context depreciate real exchange rate. (Kim and Korhonen, 2005) Another important factor to consider in real exchange rate behavior in transition economies is role of regulated prices, as services such as public transport, communication, energy and water supply, communal services and government services have a large share in overall economy and could have been left unchanged during price liberalization, resulting in high inflation at the outset of the transition process. According to Zavoico (1995) in setting the price of regulated sectors only operational costs were considered initially because the capital stock of the sectors concerned was inherited from the communist era and because of political considerations. Eventually, once the general price liberalization is over, the progressive replacement of the capital stock at market prices, partly through privatization, led to huge increases in regulated prices because the cost of capital had to be taken into account as well. Therefore, price increases as an adjustment due to liberalization, are an additional argument in support for trend appreciation experienced in transition economies in initial phase. The above studies suggest that real exchange rate in transition could be going through changes in relationship between fundamentals and RER, which have important implications for policy making. RER settling in its long-term position will mean more depreciated level of RER required in order to service the debt obligations that have accumulated. There are limited studies on real exchange rate behavior in BH. In Omerbegovic (2005) real exchange rate of BH is related to fundamental variables of resource balance, openness, government consumption as share of GDP and debt over the period of 2002 to 2005, which has indicated that there was slight real exchange rate overvaluation in 2005. However, this could have been equilibrating phenomena as well. In this paper the study of real exchange rate in BH is extended over different time periods in order to answer the question as to whether the level of real exchange rate is appropriate at this point in time. The paper also attempts to provide explanation towards the phase in which BH real exchange rate behavior is in relation to the above mentioned postulated phases in the literature for transition economies. Due to importance of this transmission mechanism in reaching external and internal balance the paper looks at the behavior of BH real exchange rate, testing stability of Volume 5 Number 1 Spring 2015 63 �Adisa Omerbegović Arapović relationship of fundamentals and real exchange rate over the period of 2002 to 2012 and estimating RER misalignment in middle 2012. Methodology: The Cointegration Approach to ERER in BH The ERER can be estimated from a single equation- relating RER and fundamentals- which is a reduced form solution of an unspecified simultaneous equation system of the theoretical models of the likes of Edwards (1989), Lim and Stein (1995), and Montiel (1999) developed in Omerbegovic Arapovici (2009). The theoretical model provides for the postulated effects of change in fundamental determinants of trade policy stance, external terms of trade, composition of government spending, sectoral productivity differentials and resource balance and ERER. The improvement in the external terms of trade, increase in productivity differential in favor of traded goods and increased government consumption of nontrade goods are expected to cause ERER appreciation. The relaxation of trade barriers and improvement of resource balance are expected to cause ERER depreciation. Adopted empirical methodology is designed to capture this long-term relationship between economic fundamentals and real exchange rateii. The Empirical Model of ERER Estimation: Two Step Engle-Granger (1987) Cointegration and Error Correction Mechanism The empirical model consistent with adopted theoretical framework for ERER estimation is consistent with Two Step Engle-Granger (1987) Cointegration and Error Correction Mechanism as shown in Kemme and Roy iii (2002). Translated into stochastic terms the features of the theoretical model of ERER behavior requires that the disturbance term wt in Equation 1 is a mean-zero stationary random variable. et*=bFt*+wt (1) Where b is the cointegrating vector and wt is an uncorrelated random disturbance. Based on Engle and Granger iv (1987) who demonstrated an equivalence between cointegration and error correction for nonstationary variables in case on nonstationary variables the model implies that RER has a reduced-form error correction representation (Equation 2), which allows short run dis-equilibrium to be 64 Journal of Economic and Social Studies �Real Exchange Rate and Real Economic Fundamentals in Transition Economy of Bosnia and Herzegovina (BH) treated as ‘equilibrium error’ and we use it to tie short-term behavior of RER to its long-run value. det=a + bdFt + cut-1 + zt (2) Where d denotes first difference; ut-1 is the one-period lagged value of the residual from regression (Equation 1), the empirical estimate of the equilibrium error term; and z is the error term with usual properties. Calculating ERER After long run parameters b of Equation 1 are estimated using appropriate econometric tools given unit root properties of the data series estimation of sustainable fundamentals, F*, is next step in measurement of ERER. The sustainable fundamentals are then combined with b to arrive at ERER, that is ERER=bF*. The effect of sustainability of the net capital flows and other fundamentals on ERER in BH is captured in this step. The estimation of the value of sustainable fundamentals involves some methodological issues. Time series based (or data based) permanent values of fundamentals are by nature of construction of cointegration methodology unable to detect substantial misalignment (Baffes, Elbadawi and O’Connell v, 1999:443). However, in case of BH counterfactual estimation of the variables of debt service to export and net sustainable capital flows vi does not create pressures towards RER devaluation as the estimated direction of influence of these variables is opposite to theoretically postulated relationship, so that increase in these variables results in more appreciated ERER. In the case of exogenous variables and those that adjust very slowly the time series based estimates of their sustainable values are used along the methodology of Baffes vii et al. (1999) which use moving averages to estimate permanent values of fundamentals in ERER calculation. The import content of investment already reflected in high value of observed openness variable leaves conclusion that trade policy is already very open (imports and exports to GDP ratio have been above 1 for most of the sample period) and moving average of actual openness variable is used for BH. Government consumption in total expenditure is considered as slower changing so that its Volume 5 Number 1 Spring 2015 65 �Adisa Omerbegović Arapović permanent value is obtained as moving average of data series. Moving averages technique is one of simple 3 year moving average for all of the series. ERER calculation as “sustainable” RER, which is the fitted RER in which the fundamentals have been replaced by their sustainable values viii, enables us to calculate the RER misalignment for BH in the middle of 2012. Given the equilibrium real exchange rate the misalignment can be calculated as: mt=et*-et (3) Once the misalignment is calculated we have determined whether the currency is overvalued or undervalued at present and may make statements about the RER misalignment in BH in 2012. Empirical Analysis: Estimation of ERER Misalignment in BH In this section the misalignment of the real exchange rate in BH is estimated for the middle of 2012. We begin by defining and documenting the sources of data. After results of the time series properties of the data are obtained, tests for the existence of co-integrating relationship between the fundamentals and real exchange rate are performed. Estimation of the long run parameters b of the ERER vector (et*=b*Ft) using the appropriate econometric tools given the time series properties of the data is thenconducted. Lastly, the ERER is calculated given the sustainable values of fundamentals where counterfactual estimate of sustainable resource balance given sustainable net capital flows and time series estimates of slower adjusting fundamentals are combined with the estimated parameters b to calculate the degree of RER misalignment as the difference between the ERER and the actual RER. Definition and Measurement of the Variables The variables found in the reduced form single equation are the actual real exchange rate (et) and the fundamental determinants of the equilibrium real exchange rate (Ft). Real exchange Rate (RER) or e - is taken as the multilateral trade weighted index which is as a measure of RER used in evaluating competitiveness. It is necessary to use or construct a broad multilateral index of the real exchange rate (Edwards ix, 1989:88), which provides a measure of the degree of competitiveness of a country relative to a group of its trading partners. The Central Bank of Bosnia and 66 Journal of Economic and Social Studies �Real Exchange Rate and Real Economic Fundamentals in Transition Economy of Bosnia and Herzegovina (BH) Herzegovina (CBBH) construct of the multilateral index of the real exchange rate is used, which is consistent with the methodology of Edwards (1989: 88). Openness or OPEN is defined as the ratio of imports (IMP) and exports (EXP) to GDP (GDP): OPEN= (IMP+EXP)/GDP. Resource Balance to GDP Ratio (RESGDP). The value of exports (EXP) minus the value of imports (IMP), divided by the GDP (GDP). Thus RESGDP= (EXPIMP)/GDP. x DEBT is the ratio of debt service to exports expressed in percentage. GOVCON is simply the ratio of government consumption expenditure to total government expenditure. The data were obtained from two sources: 1) CBBH, 2) the IMF- International Financial Statistics. Time Series Properties of Data Series Table 1 presents the results of the standard Augmented Dickey-Fuller (ADF) (1979) statistics and the Philipps-Perron (PP) test (1988), which are used to assess the unit root properties of the data. The MacKinnon critical values (1991) are reported alongside of the results of the ADF and the PP tests. Table 1: Tests for Stationarity ADF PP Decision RER -3.62 -3.15 I(1) RESGDP -1.33 -1.40 I(1) OPEN -3.78 -3.80 I(0) GOVCON -2.57 -2.37 I(1) DEBT -1.02 -3.96 I(1) Notes: test assumption includes constant in test equation. For the Augmented Dickey-Fuller statistics (ADF), the MacKinnon critical values are: 1%=-3.62, 5%=2.94, 10%=-2.60. Critical values for the PP test are: 1%=-3.61, 5%=-2.93, 10%=2.60. Sample period is 2002Q2 to 2012Q2. The results obtained from the standard ADF and the PP test suggest that almost all of the variables under consideration exhibit unit root properties, that is, they are integrated of order one and their first differences are stationary. Volume 5 Number 1 Spring 2015 67 �Adisa Omerbegović Arapović Test of Cointegration Since the relevant data series used in the empirical analysis are nonstationary (integrated of order one) it follows that a cointegrating regression can potentially be formed if the series are found to be cointegrated. Table 2 contains the Johansen (1998) test for the number of cointegrating vectors for BH. The Johansen maximum-likelihood procedure which tests for the number of co-integrating vectors in Table 2, shows that there is 1 co-integrating vector for BH over the period of 2001Q1 to 2012Q2, consistent with findings of Omerbegovic (2005) over the shorter time span. Table 2: BH- Johansen Maximum Likelihood Procedure for Testing the Number of Cointegrating Vectors xi Null (1) R=0 Likelihood Ratio (2) 0.57 Max. eig. Stat. [95% crit] (3) 69.82 R<=1 0.40 47.86 R<=2 0.27 29.78 R<=3 0.13 15.50 The variable set is (RER, RESGDP, OPEN, DEBT, GOVCON) Sample period is 2002Q2 to 2012Q2. Trace test indicates 1 cointegrating equation(s) at the 0.05 level * denotes rejection of the hypothesis at the 0.05 level **MacKinnon-Haug-Michelis (1999) p-values Testing for Breaks Since the paper postulates that real exchange rate might be going through different phases in its behavior it tests for breaks in a time series regression function over the sample time period. Using the Chow test it is found that the suggested break point is 2005, which is a year when observation of time series data on resource balance indicates significant improvement in resource balance variable. This could have been situation of resource balance variable moving towards its long term position. The paper reports results of cointegrating equation over the whole sample as well, as these are then considered to be relationships that hold on ‘average’, in the sense that the estimate combines the two different periods. (Stock and Watson, 2012:599) 68 Journal of Economic and Social Studies �Real Exchange Rate and Real Economic Fundamentals in Transition Economy of Bosnia and Herzegovina (BH) Besides having these overall ‘average’ results reported, the paper estimates cointegrating equation over two sample periods divided by postulated structural break in data: first sample includes observations from 2001Q1 to 2005Q4 and second sample includes observations from 2006Q1 to 2012Q2. The examination of stationarity and cointegration indicators for these two sample periods indicates that series under examination are nonstationary over these periods and that there are cointegrating equations in these two periods as well. Estimation of Cointegrating Relationship between RER and Fundamentals The existence of cointegration between the variables of RER and the fundamentals suggests that the econometric techniques of Cointegration and Error Correction Mechanism are appropriate for estimating the relationship between RER and its fundamental determinants. Table 3 presents estimated cointegrating parameters, b, in using the two step Engle-Granger (1987) cointegration and error correction methodology (1987). Cointegration implies that the residuals of Equation 1, wt, are stationary, and this restriction provides a test for cointegration xii. Table 4 provides results of this EngleGranger (1987) two-step procedure test for cointegration. There is strong evidence of cointegration, as indicated by the unit-root test applied to the estimated residuals: the calculated value rejects nonstationarity in favor of stationarity at standard levels xiii. Finally, the short-term dynamics of real exchange rate, e, is examined by estimating an error correction model of Equation 2, where residuals from static regression (wt) in Equation 1, are used in place of the equilibrium error on the right hand side of the error correction equation to tie short-term behavior of RER (e) to its long-run value. Table 5 provides results of estimation of Equation 2 for BH, over the two sample periods. The findings suggest that the short run effects are generally in the same direction as the long run effects. A crucial parameter in estimation of short-term dynamics is the coefficient of the ERROR (w in Equation 1) in the second step of the Error Correction Procedure, which measures the speed of adjustment of the RER to its equilibrium level. Importantly, the error term is less than one in absolute terms and Volume 5 Number 1 Spring 2015 69 �Adisa Omerbegović Arapović statistically significant, hence the equilibrium real exchange rate is stable (Lim and Stein, 1995). Table 3: Step One Engle-Granger (1987) Cointegration and Error Correction Procedure-Long Run Parameter Estimates: BH Sample 2002Q2 to 2005Q4 1 2 Sample 2006Q1 to 2012Q2 3 4 5 Coeffic ient 105.32 t-stat Sample 2002Q2 to 2012Q2 6 7 8 9 Coefficient t-stat 105.02 2-tail signific 0.0000 Variable Coefficient t-stat Coefficient 95.12 4.41 2-tail significa 0.0000 47.49 2-tail signific 0.0000 OPEN 15.45 5.42 0.0173 0.45 2.86 0.8763 1.65 51.6 40.78 RESGDP 0.13 1.41 0.1868 -0.05 -0.65 0.5204 -0.04 -1.20 0.2350 DEBT -0.17 -0.86 0.4083 0.11 0.74 0.4619 -0.11 -1.05 0.2972 GOVCON -0.07 -2.20 0.0332 -0.26 -3.07 0.0058 -0.24 -3.53 0.0011 0.4358 Dependent variable: RER Notes column 1 to 3: Adjusted R-Square= 0.7449; Durbin-Watson=1.6745 ADF (ebF): UROOT (N,0) = -3.06; ADF critical value 5%= -2.92; Sample period is 2002Q2 to 2005Q4 for columns 1 to 3. Notes column 4 to 6: Adjusted R-Square= 0.1857; Durbin-Watson=1.2362 ADF (ebF): UROOT (N,0) =-4.64; ADF critical value 5%= -2.99; Sample period is 2006Q1 to 2012Q2. Notes column 7 to 9: Adjusted R-Square= 0.3106; Durbin-Watson=1.4355 ADF (ebF): UROOT (N,0) =-4.64; ADF critical value 5%= -2.93; Sample period is 2002Q2 to 2012Q:2. The explicit form of Equation 1 tested is: RER=c(1)+c(2)*OPEN+c(3)*RESGDP+c(4)*GOVCON+c(5)*DEBT+wt Table 4: Results on Engle-Granger (1987) Two Step Procedure for Testing Cointegration Unit Root Test of the Residuals From the Long Run Relations. Sample 2002Q2 to Sample 2006Q1 to Sample 2002Q2 Long run ADF Test Order of ADF Test Order ADF Order -3.06 I(0) -4.64 I(0) -4.64 I(0) equation 1 MacKinnon (1991) critical values for rejection of null of no cointegration are -2.92 at 5% level for Sample 2002Q2 to 2005Q4, -2.99 at 5% level for Sample 2006Q1 to 2012Q2 and -2.93 at 5% level for Sample 2002Q2 to 2012Q2. 70 Journal of Economic and Social Studies �Real Exchange Rate and Real Economic Fundamentals in Transition Economy of Bosnia and Herzegovina (BH) The important factor in considering the volatility of the model is to observe for serial correlation diagnostic since low Durbin-Watson statistic (DW) values accompanied by high R2 alert to the potential problem of spurious regression xiv. (Gujaratixv, 1995: 724) There are relatively lower AR2 values (0.22) accompanied by DW test statistic values of less than two as we observe DW to be 1.23 to 1.67 depending on the sample. Therefore, the problem of spurious regression is not suspected. These results are similar to those found in Baffes et al. xvi (1999) where the same empirical methodology produces results of DW in the range of 1.14 to 1.16, whereas others like AtiqurRahman and Abdul Basher xvii (2002) study for Bangladesh do not report the DW diagnostics test statistic while using similar time series fundamental determinants of ERER and empirical model of two-step ECM. Table 5: Short Run Dynamics: BH (Two-Step Engle–Granger (1987) Cointegration And Error Correction Mechanism) Variable Coefficient ERROR(-1) DOPEN DGOVCON DRESGDP DDEBT 1 Coefficient 0.50 -0.55 -0.33 -0.06 -0.13 -0.20 2 t-stat 0.08 -1.18 -0.05 -0.79 -1.41 -1.59 3 2-tail 0.9349 0.2708 0.9569 0.4505 0.1942 0.1491 4 Coefficient 0.02 -0.58 0.12 -0.08 -0.12 0.06 5 t-stat 0.01 -3.15 0.07 -1.02 -2.04 0.82 6 2-tail 0.9873 0.0052 0.9422 0.3194 0.0548 0.4180 7 Coefficie 0.25 -0.51 -0.09 -0.06 -0.16 -0.06 8 t-stat 0.19 -3.83 -0.07 -1.34 -5.34 -1.09 9 2-tail 0.850 0.000 0.946 0.186 0.000 0.282 Notes to columns 1 to 3: Dependent variable: DRER; Adjusted R-Square=0.4082; Durbin-Watson= 1.09; Sample period is 2002Q2 to 2005Q4. Notes to columns 4 to 6: Dependent variable: DRER; Adjusted R-Square=0.5396; Durbin-Watson=1.6657; Sample period is 2006Q1 to 2012Q2. Notes to columns 7 to 9: Dependent variable: DRER; Adjusted R-Square=0.6203; Durbin-Watson= 1.8374; Sample period is 2002Q2 to 2012Q2. The explicit form of Equation 2 tested is: dRER=c(1)+c(2)*dRESGDP+c(3)*dDEBT+c(4)*dGOVCON+c(5)*dOPEN+c(6)* w(t-1) +zt Calculating ERER and Degree of Misalignment The ERER is obtained as a fitted value of the estimated long run cointegrating equation using the sustainable values of fundamentals xviii. This ERER is referred to as “sustainable” ERER and is reported in column three of Table 6 for BH for the two step Engle-Granger (1987) Cointegration and Error Correction Mechanism. Volume 5 Number 1 Spring 2015 71 �Adisa Omerbegović Arapović Column 1 reports the actual real exchange rate while column 2 presents the fitted exchange rate from the first equation of Table 3 by using actual values of fundamentals. Column 4 shows the gap between the observed and equilibrium real exchange rates using the “sustainable” simulations for the equilibrium rate. The gap between these two series provides a measure of the real exchange rate misalignment. Since RER is measured as index where 100=1, the difference between RER and ERER is equal to percent overvaluation/undervaluation, with the positive sign representing overvaluation and the negative sign indicating undervaluation of RER. Figure 1 depicts graphically the observed, fitted and sustainable RER for BH based on Two Step Engle-Granger (1987) Cointegration and Error Correction Mechanism. The gap between the observed RER and ERER-sustainable represents graphically the percent misalignment for BH for each year from 2001Q1 to 2012Q2 based on the results of the Two Step Engle-Granger (1987) Procedure. 72 Journal of Economic and Social Studies �Real Exchange Rate and Real Economic Fundamentals in Transition Economy of Bosnia and Herzegovina (BH) Table 6: Observed and Equilibrium RER Indexes for BH 2002Q2 to 2012Q2 (2002=100) (Two Step Engle-Granger (1987) Cointegration and Error Correction Mechanism) Note: The observed RER is the one used in the econometric analysis. The fitted RER is the one estimated from the cointegration regression. The “sustainable” RER is the fitted RER in which the fundamentals have been replaced by their sustainable counterparts. The RESGDP sustainable is equal to actual RESGDP adjusted for the change in RESGDP required in case of capital flows outflows comprising 100 percent of foreign portfolio inflows and transfers. The OPEN and GOVCON are given by 3 year moving averages. Following the suggestion made by Klein (1994) we assumed that sustainable debt service to export ratio is at most 20% but slowly increasing from the current levels in view of the higher repayment obligations. Volume 5 Number 1 Spring 2015 73 �Adisa Omerbegović Arapović Misalignment is defined as 100(sustainable RER-observed RER)/observed RER. Misalignment over the sample period 2002Q2 to 2005Q4 and 2006Q1 to 2012Q2 is estimated using parameters presented in Table 3 for the respective sample. Figure 1: Misalignment – BH (as the Gap Between Real Exchange Rate And ERER) Two Step Engle-Granger (1987) Cointegration and Error Correction Mechanism RER misalignment in B&H 108.00 106.00 value of the index 104.00 102.00 100.00 98.00 96.00 RER observed ERER fitted ERER sustainable 94.00 Note: Misalignment is given by the gap between the RER and ERER. Higher level of the index indicates more depreciated level required by ERER compared to observed RER, indicating situation of RER overvaluation (misalignment). Discussion Finally, the paper evaluates the observed results in relation to the postulated theoretical relationships between real exchange rate and economic fundamental variables and postulated phase like behavior of RER in transition economies. 74 Journal of Economic and Social Studies �Real Exchange Rate and Real Economic Fundamentals in Transition Economy of Bosnia and Herzegovina (BH) In terms of overall ability of fundamentals to explain real exchange rate behavior it is concluded that fundamentals had much more power in explaining real exchange rate behavior over the period of 2002Q2 to 2005Q4. Figure 1 indicates that there was appreciating move in RER in 2006Q1 which then marks the period of change in relationship between fundamental variables and RER and much smaller explanatory power of fundamentals in RER behavior, as indicated by adjusted-R2 in Table 3 observed over these two sample periods. This evidence corroborates findings in the literature which claim the phase like behavior of RER in transition. Therefore, RER behavior first takes one pattern and then moves to another pattern, while these phases are due to the initial adjustments and transition that country has to go through until it reaches the pattern of RER behavior which is observed in developed matured market economies. In terms of the postulated theoretical relationship between fundamentals and RER, the evidence indicates change in sign and significance of resource balance (RESGDP) variable, which is in the second period (from 2006 onwards) having a negative sign and indicates that improvement in resource balance is associated with RER appreciation. As explained before, relationship between resource balance variable (which implies the change in net foreign assets) can be changing due to the phases that the country goes through in the catch up process. Country may have a negative steady state net foreign assets position. In other words capital inflows appreciate the real exchange rate in this phase. However, once the desired long-term foreign liabilities position is attained, BH will have to start servicing its debt, so that for any additional increase in net foreign liabilities RER will have to depreciate. It is suspected that BH is currently accumulating net foreign liabilities and once the servicing of that debt start RER will have to depreciate. The findings suggest that this momenthas not yet arrived so that we can expect much bigger shock to RER. Dueto the current exchange rate regime of the currency board required RER depreciation can be achieved only through flexibility of prices in product and factor markets if it is not to endanger the sustainability of the currency board arrangement itself. A significant and negative relationship between GOVCON and RER is observed, which indicates that increased government consumption is associated with RER appreciation. This sign is consistent with studies for other transition countries listed in Egert et.al. (2005:37) and in accordance to theoretically postulated relationship underpinning the single equation reduced form equation used to determine ERER. Volume 5 Number 1 Spring 2015 75 �Adisa Omerbegović Arapović This is due to the fact that GOVCON is expected to be increasing the price of nontraded goods sector, appreciating these prices in relationship to the price of traded goods prices, which causes RER to appreciate. As previously explained it is also expected that the size of non-traded prices (water, waste, energy, taxes) is large in transition economies Also due to administered and regulated prices, which are composed mainly of services representing a large component of CPI in transition economies and the fact that these prices initially did not represent true costs which are necessary in the long run in order to include cost of capital or in order to comply with competition rules in acquis communautaire, these prices have kept rising and this process may not be over yet. This price increase, known as the Baumol-Bowen effect (Baumol, 1996), might not have yet fully completed in BH and the price increase could be dampened via privatization and market liberalization, which are still processes to be undertaken in energy, water, communal services etc. The DEBT variable has not been statistically significant and there is change in relationship on DEBT variable in terms of direction of relationship with RER. In later period worsening in DEBT (which is measured as debt service to export ratio increasing) would be associated with more depreciated RER. This is expected since increase in debt servicing in relation to exports puts higher burden on the country in terms of servicing its debt and therefore is likely to lead to RER depreciation. In the future BH is likely to experience worsening of this ratio due to increased foreign debt which is likely to put depreciating pressure on RER in the future period. Observed sign on variable OPEN is capturing a theoretically postulated relationship as increased openness is assumed to be associated with trade liberalization, which raises imports more than exports. This variable has same sign in both samples, however it is not statistically significant. Number of studies on CEE transition countries cited in Egert et.al. (2005:37) observe the same relationship. The results are suggesting that cointegration methodology captures relationship between the fundamentals and RER which is specific to the situation of the post-war economy of BH characterized with high donations and transfers after the war, thathave coincided with negative resource balance. Exchange rate regime of the currency board has at the same time ensured stability of the exchange rate and low inflation, but it has taken away from RER as an important transmission mechanism in the economy, leaving only flexibility of goods and services and labor markets to cure for macroeconomic internal and external disequilibria. 76 Journal of Economic and Social Studies �Real Exchange Rate and Real Economic Fundamentals in Transition Economy of Bosnia and Herzegovina (BH) The results on relationship between RER and real economic variables in terms of the direction of relationship and significance of the fundamental variables in explaining RER behaviour indicate that the small open economy of BH has lost RER as a transmission variable in curing its external and internal disequilibria in its transition period towards a functioning free market economy. This result goes towards support of results obtained in Omerbegovic Arapovic (2011) which has indicated that choice of the exchange rate regime of currency board has been associated with much slower convergence of RER of BH towards the sample average, compared to Croatia and Macedonia, which have adopted more flexible exchange rate regime and, therefore, exhibited much faster convergence. From this we can deduce that their exchange rates were much more linked to the behavior of the fundamental economic variables compared to BH. Results obtained in this study and Omerbegovic Arapovic (2011) suggest that in order to access the readiness of each individual country in the region to join EU it is necessary to view the fundamental economic variables such as interest rates, inflation, government debt and deficits. The trends in fundamental economic variables of increased government debt and current account deficit create pressures which can notbe captured with our equilibrium real exchange rate misalignment approach as we do not show significant misalignment at present period. The existing relationship between real exchange rate and economic fundamentals for BH suggest detachment of RER from the fundamental economic variables. The resource balance variable does not show the expected direction of influence with RER, which is likely to occur once debt servicing becomes priority. The overall explanatory power of fundamentals in the period from 2006 to 2012 is low, which goes in support of the studies that find relationship between economic fundamentals and RER behavior to weaken once the RER enters a stationary period (Egert, 2006). Further studies on RER in BH should test the power of monetary variables in explaining RER as they are postulated to have more influence on RER once country enters the stationary mode of RER behavior. Conclusion Recognizing the endogeneity of the equilibrium real exchange rate and adopting a mild and testable assumption that distance between the actual and the equilibrium real exchange rate is a stationary random variable justifies the use of the cointegration method for estimating the long-run relationship between the real exchange rate and its fundamentals. Since the methodology adopted assumes that the economy was in Volume 5 Number 1 Spring 2015 77 �Adisa Omerbegović Arapović internal and external equilibrium on average over the sample period, it implies that the average degree of misalignment in the sample will tend, by construction, to be small, if depending only on the time series estimates of sustainable value of fundamental variable of resource balance. Due to this fact counterfactual estimation of sustainable values of fundamental economic variables was used to determine sustainable ERER. The findings do not suggest RER overvaluation in middle 2012. However, the fact that BH in its post-war history has observed stable RER with continuous external disequilibrium could limit the ability of detecting ERER misalignment using time series estimates of fundamental variables alone. The counterfactual estimation of change in sustainable value of net capital flows on ERER indicates that in BH, the real exchange rate was under-valued by less than 1 percent in April 2012 using the Two Step Engle Granger Methodology. In counterfactual estimation for BH, the smaller trade deficit associated with the smaller current account deficit produces an appreciation of the equilibrium rate and therefore tends to decrease the estimated degree of misalignment. This is evident in lower sustainable RER (ERER), or more appreciated value of sustainable RER compared to the fitted RER value calculated using the actual resource balance variable. This finding is due to observed negative relationship between resource balance variable and RER, which theoretical models associate with initial stages of capital account liberalization when price of non-tradable goods increases and causes RER to appreciate. These findings go in support of an argument that structural adjustments which would bring flexibility to labor and markets for goods and services are required in order to bring about external balance as RER is not found as significant transmission mechanism in correcting external disequilibria in BH economy. Labor market reforms in direction of more flexibility and inaction of more flexible hiring and firing rules compared to the existing law, which was inherited from the socialist era and practically makes firing impossible for employers, should be priority for policy makers in order to move BH economy towards equilibrium. The paper tested relationship between fundamentals and RER in BH over two different time periods and discovers that time period of consideration influences the direction of relationship between fundamentals and RER. Direction of relationship between resource balance and RER indicates that worsening of resource balance variable is associated with RER appreciation, opposite to postulated theoretical relationship and relationship between these two variables observed in shorter sample 78 Journal of Economic and Social Studies �Real Exchange Rate and Real Economic Fundamentals in Transition Economy of Bosnia and Herzegovina (BH) which included data until 2005. Examination of current account, and associated capital inflows that support current account deficit, indicates that negative correlation between capital inflows and RER is present, leading us to conclude that capital inflows associated with worsening of the current account deficit put appreciating pressure on RER. In the absence of these capital inflows there would likely exist the depreciating pressures on RER. This study also suggests that RER behavior exhibits phases in which RER initially exhibits much bigger connection to fundamental variables compared to the later period. This is in line with studies which suggest that RER could be first exhibiting trend appreciation after which it enters stationary periods. This needs to be further examined in future studies. Further research should also extend analysis and test whether other reasons exist for RER non-stationarity such as monetary phenomena and Balassa-Samuelson effect, which could not be fully assessed from the secondary data used in this analysis over the sample period. References AtiqurRahman, A.K.M.A. & Abdul Basher, S. (2002). Real Exchange Rate Behavior And Exchange Rate Misalignments In Bangladesh: A Single Equation Approach. North South University. Dhaka. Bangladesh. Baffes, J., Elbadawi, I.A. & O’Connell, S.A. (1999). Single-Equation Estimation of the Equilibrium Real Exchange Rate. In Hinkle L.E., Montiel P.J. (1999) Exchange Rate Misalignment, Concepts and Measurement for Developing Countries. A World Bank Research Publication. Oxford University Press. 405-465. Baumol, W.J. (1996). Children of Performing Arts, the Economic Dilemma: The Climbing Costs of Health Care and Education. Journal of Cultural Economics, 20, 183-206. Beko, J, Kavkler, A. & Borskic, D. (2012). PPP and nonlinearity of real exchange rates: new evidence from transition economies. Applied Economics Letters, 19(18), 1851-1855. Central Bank of Bosnia and Herzegovina (CBBH). Bulletin: Various Issues. Central Bank of Bosnia and Herzegovina Quarterly Publication. Volume 5 Number 1 Spring 2015 79 �Adisa Omerbegović Arapović Dickey, D.A. & Fuller, W.A. (1979). Distribution of the Estimators for an Autoregressive Time Series with Unit Root. Journal of the American Statistical Association, 74, 427-31. Edwards, S. (1989). Real Exchange Rate, Devaluation, and Adjustment. London: The MIT Press. Egert, B., Lahreche-Revil, A., & Lommatzsch, K. (2004). The Stock-Flow Approach to the Real Exchange Rate of Transisiton Economies. CEPII Working Paper No.14. Egert, B., Halpern, L. & Mac Donald, R. (2005). Equilibrium Exchange Rates in Transition Economies: Taking Stock of the Issues. William Davidson Institute Working Paper Number 793. Egert, B., Lommatzsch, K., & Lahreche-Revil, A. (2006). Real exchange rates in small open OECD and transition economies: Comparing apples with oranges?, Journal of Banking and Finance, 30 (12), 3393-3406. Engle, R., & Granger C. (1987). Cointegration and Error Correction: Representation, Estimation and Testing. Econometrica, 55, 251-76. Gujarati, D.N. (1995). Basic Econometrics. Singapore: Mc Grow Hill. Johansen, S. (1988). Statistical Analysis of Cointegration Factors. Journal of Economic Dynamics and Control, 12, 231-54. Froot, K., & Stein, J. (1991). Exchange Rates and Foreign Direct Investment: An Imperfect Capital Markets Approach. Quarterly Journal of Economics, 106, 11911217. Froot, K.A. & Rogoff, K. (1994). Perspectives on PPP and Long-run Real Exchange Rates. NBER Working Paper No.4952. International Labor Office, (2011). Employment Diagnostic Analysis: Bosnia and Herzegovina. Employment Working Paper no. 98. 80 Journal of Economic and Social Studies �Real Exchange Rate and Real Economic Fundamentals in Transition Economy of Bosnia and Herzegovina (BH) Kaminsky, G. (1988). The Real Exchange Rate in the Short Run and the Long Run. Discussion Paper, University of California at San Diego, Department of Economics (August). Processed. Kanas, A. (2009). Real Exchange Rate, Stationarity, and Economic Fundamentals. Journal of Econ Finance , 33, 393-409. Kemme, D.M., & Roy, S. (2002). Exchange Rate Misalignment: Macroeconomic Fundamentals as an Indicator of Exchange Rate Crisis in Transition Economies. Prepared for the European Association of Comparative Economics Meetings, Forli, Italy, June 6-8, 2002. Kim, B.Y. & Korhonen, I. (2005). Equilibrium Exchange Rates in Transition Countries: Evidence from Dynamic Heterogenous Panel Models. Economic Systems, 29(2), 144-162. Klein, T. M. (1994). External Debt Management: An Introduction. World Bank Technical Paper, Number 245. Lewis, M.K., & Šević, Ž. (2001). Currency Board in the Balkans. Kluwer Academic Publishers. Liargovas, P. (1999). An Assessment of Real Exchange Rate Movements in the Transition Economies of Central and Eastern Europe. Post-Communist Economies, 11(3), 299-318. Lim, G.C., & Stein, J.L. (1995). The Dynamics of the Real Exchange Rate and Current Account in a Small Open Economy: Australia. In Stein J., Allen P.R., and Associates (1995) Fundamental Determinants of Exchange Rates. Oxford University Press. MacKinnon, J.G. (1991). Critical Values of Cointegration Tests. Chapter 13. In Engle R.F., Granger C.W.J. (eds.) Long-Run Econometric Relationships: Readings in Cointegration. New York: Oxford University Press. Montiel, P.J. (1999) Determinants of the Long-Run Equilibrium Real Exchange Rate: An Analytical Model. In Hinkle, L.E., Montiel, P.J. (1999). Exchange Rate Volume 5 Number 1 Spring 2015 81 �Adisa Omerbegović Arapović Misalignment, Concepts and Measurement for Developing Countries. (pp. 264-293) A World Bank Research Publication, Oxford University Press. Omerbegovic, A. (2005). Real Exchange Rate in BiH and required macroeconomic adjustments in the context of BiH accession into the EU. Policy Development Fellowship Program. Sarajevo: Open Society Fund BiH. Omerbegovic, A. (2006). Equilibrium Real Exchange Rate in Bosnia & Herzegovina. Proceedings from Conference: International Management Development Association (IMDA) Conference 2006. Omerbegovic Arapovic, A. (2009) Real Exchange Rates in South East Asia: Misalignment and Currency Crisis. Saarbrucken: VDM Verlag Dr. Muller. Omerbegovic Arapovic, A. (2011). Exchange Rate in Transition: Testing for Real Exchange Rate Convergence; Case of Bosnia and Herzegovina, Croatia and Macedonia. Proceedings from Conference: International Conference on Economy of Integrations (ICEI) 2011. Univerzitet u Tuzli. UDK 336.748:330.342.14/.15 (497). Phillips, P., & Perron, P. (1988). Testing For A Unit Root In Time Series Regression. Biometrica, 75, 333-45. Pons, J.S., & Lacasta, J.P. (2003). Exchange Rate and Long Run Equilibrium in Transition Economies. IAER, 9(1), 35-50. Rajan, R.S., & Siregar, R. (2002). Economic Competitiveness and the Equilibrium Real Exchange Rate: The Case of Singapore. Central Bank of Singapore Publication. Stock, J.H. & Watson, M.M. (2012). Introduction to Econometrics. Harlow: Pearson. Williamson, J. (1994). Estimating Equilibrium Exchange Rates. Washington D.C.: Institute for International Economics. Williamson, J., & Mahar, M. (1998). Current Account Targets. Appendix A in Wren-Lewis S. and Driver R. (eds), Real Exchange Rates for the Year 2000. Washington, D.C.: Institute for International Economics. 82 Journal of Economic and Social Studies �Real Exchange Rate and Real Economic Fundamentals in Transition Economy of Bosnia and Herzegovina (BH) World Bank. (2005). Enhancing Job Opportunities in Eastern Europe and the Former Soviet Union. Tzanninis, D. (1999). Malaysia: Exports and Competitiveness. In Malaysia: Selected Issues, IMF Staff Country Report. No. 99/86. Zavoico, B. (1995). A Brief Note on the Inflationary Process in Transition Economies. IMF Publication. Mimeo. Xiaopu, Z. (2002). Equilibrium and Misalignment: An Assessment of the RMB Exchange Rate from 1978 to 1999. CREDPR Publications. i Omerbegovic Arapovic A. (2009) Real Exchange Rates in South East Asia: Misalignment and Currency Crisis, VDM Verlag Dr. Muller, Saarbrucken., 57-79. ii However, empirical considerations require compromise. First, it is not possible to construct a meaningful time series regarding productivity differential between traded and non-traded goods producing sectors because of data limitations. So the Balassa- Samuelson effect is ignored. Second data on government spending on tradables and non-tradables are not available as such. Government consumption mostly includes non-tradable items. Hence, the ratio of government consumption to total government spending is taken to capture the effects of government spending of tradables and nontradables following the methodology of AtiqurRahman and Abd. Basher (2002). Unit prices of exports and imports were not available for BH so the external terms of trade could not be captured meaningfully, and we ignored this effect. It is also very difficult to a have a correct and comprehensive measure of trade policy over a long time series. Hence, like other studies in the present field, the proxy for the trade policy is taken by a measure of openness following Edwards (1989), i.e., the ratio of export plus import to GDP. An increase in this ratio is supposed to be associated with trade liberalization. Thus the list of fundamentals affecting equilibrium real exchange rate includes ratio of government consumption to total government spending, resource balance, openness, and debt service to export ratio. The proxies for the fundamentals were: • Trade policy stance is captured by construct of openness measured as ratio of trade volume measure (imports plus exports) to GDP. • Debt is the ratio of debt service to exports expressed as percentage. • Government consumption is simply the ratio of government consumption expenditure to total government expenditure. Volume 5 Number 1 Spring 2015 83 �Adisa Omerbegović Arapović • And finally resource balance is given by the difference between exports of goods and nonfactor services and imports of goods and nonfactor services. These proxies are henceforward referred to as fundamentals. iii Kemme D.M., Roy S. (2002). Exchange Rate Misalignment: Macroeconomic Fundamentals as an Indicator of Exchange Rate Crisis in Transition Economies. Prepared for the European Association of Comparative Economics Meetings, Forli, Italy, June 6-8, 2002 iv Engle, R. and C. Granger (1987). Cointegration and Error Correction: Representation, Estimation and Testing.Econometrica.55. 251-76. v Baffes J., Elbadawi I.A., O’Connell S.A. (1999). Single-Equation Estimation of the Equilibrium Real Exchange Rate.In Hinkle L.E., Montiel P.J. (1999) Exchange Rate Misalignment, Concepts and Measurement for Developing Countries. A World Bank Research Publication. Oxford University Press. 405-465 vi In view of the likely rise in debt of BH and macroeconomic sustainability, the paper considers direction of change necessary for the debt service to export ratio and the resource balance variable. This is done by excluding part of the “unsustainable” net capital inflows used to finance resource balance following the argument by Williamson and Maharvi (1998), so that paper differentiates between private direct investment, which tends to be long-term in nature, and liquid private portfolio investment, remittances and grants by excluding these later inflows to arrive at the “sustainable” resource balance. The other fundamental determinants of ERER should also be in their permanent state in equilibrium. Following the suggestion made by Kleinvi (1994) the paper assumes that sustainable debt service to export ratio is at most 20% but slowly increasing from levels observed in the sample (around 5% in 2001) in view of the higher repayment obligations due to increased external debt, and reduced grants and transfers. vii BaffesJ., ElbadawiI.A., O’ConnellS.A. (1999). Single-Equation Estimation of the Equilibrium Real Exchange Rate. In Hinkle L.E., Montiel P.J. (1999) Exchange Rate Misalignment, Concepts and Measurement for Developing Countries. A World Bank Research Publication. Oxford University Press. 405-465 viii The equilibrium real exchange rate is then the predicted value from co-integrating equation (et=bFt) based on a given vector of macroeconomic fundamentals, Ft*, assumed to be sustainable long run equilibrium values, et*=bFt*. ix Edwards S. (1989). Real Exchange Rate, Devaluation, and Adjustment. London: The MIT Press. x Two RESGDP variables were tested. One was found using our estimate of quarterly GDP following moves in Index of Industrial Production and the other using GDP estimates from CBBH publication on estimates of quarterly GDP figures. No differences were found in observed relationship between RER and RESGDP and the paper continues using the estimated quarterly GDP figures. xi The Johansen (1988) cointegration imposes a restriction on the reduced form or VAR representation of the joint distribution of the real exchange rate and its fundamentals. (Baffes, Elbadawi and O’Connellxi, 1999) We use a lag length of one for the underlying VAR system; 84 Journal of Economic and Social Studies �Real Exchange Rate and Real Economic Fundamentals in Transition Economy of Bosnia and Herzegovina (BH) this is very restrictive even for annual data, but a longer length leaves us with very few degrees of freedom. The asymptotic tests indicate one co-integrating vector for B&H at the 1 % confidence interval. xii Baffes, Elbadawi and O’Connel (1999) note that estimates of b from the static regression are super-consistent, approaching the true parameters at a rate proportional to the sample size rather than the square root of the sample size; and they remain so even in the absence of weak exogeneity. xiii Note that the critical values for this test are more demanding than when testing for a unit root in a single variable since the OLS estimation tends to induce stationarity in the residual. (Gujarati, 1995) xiv Granger and Newbold, quoted by Gujarati (1995:724) have suggested: an R2> d (Durbin Watson statistic) is a good rule of thumb to suspect that the estimated regression suffers from spurious regression. xv Gujarati, D.N. (1995). Basic Econometrics. Mc Grow Hill Singapore. xvi Baffes J., Elbadawi I.A., O’Connell S.A. (1999). Single-Equation Estimation of the Equilibrium Real Exchange Rate. In Hinkle L.E., Montiel P.J. (1999) Exchange Rate Misalignment, Concepts and Measurement for Developing Countries. A World Bank Research Publication. Oxford University Press. 405-465 xvii AtiqurRahman A.K.M.A., Abdul Basher S. (2002). Real Exchange Rate Behavior And Exchange Rate Misalignments In Bangladesh: A Single Equation Approach. NorthSouthUniversity. Dhaka. Bangladesh. xviii Once the long run parameters b in Equation 1 relating RER and the fundamentals are estimated, the next step in the calculation of ERER is the estimation of sustainable fundamentals, F*, so that ERER (e*) is given by e*=bF*. Volume 5 Number 1 Spring 2015 85 � 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. 2770 Title A name given to the resource Real Exchange Rate and Real Economic Fundamentals in Transition Economy of Bosnia and Herzegovina (BH) Author Author Omerbegović Arapović, Adisa Abstract A summary of the resource. Abstract: The paper estimates Equilibrium Real Exchange Rate (ERER) using co-integration methodology to observe relationship between Real Exchange Rate (RER) and selected economic fundamental variables over two different sample periods. Time period of observation influences results and we observe change in signs and direction of relationship between fundamentals and RER suggesting that fundamentals and RER do not have a stable relationship and direction of influence. The findings suggest that RER is not a significant transmission mechanism for real economy towards achieving external balance as RER depreciation is not associated with an improvement in resource balance. Therefore, RER does not have a postulated relationship with resource balance variable. More appreciated RER is associated with an improvement in the external balance of the BH economy which is opposite of an expected role of RER depreciation in brining economy towards external equilibrium. However, pressures on RER sustainability exist due to negative resource balance. Potential disequilibria therefore could not be caught with the existing data which cover the post-war period only, and were marked by continuous negative resource balances. Publisher An entity responsible for making the resource available International Burch University Date A point or period of time associated with an event in the lifecycle of the resource 2015-01-10 Keywords Keywords. Article PeerReviewed HB Economic Theory https://omeka.ibu.edu.ba/files/original/39e086f08c6726d6ac6cece3b6c4effe.pdf a34be0af336450f59d689b45d0b06b2a 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. 2769 Title A name given to the resource Effects of the Demographic Changes on Private Consumption: An Almost Ideal Demand System Analysis for Austria Author Author Walder, Birgit Aigner Abstract A summary of the resource. Abstract: The following paper analyzes potential effects of the demographic changes on private consumption. An extended Almost Ideal Demand System is used to simulate changes in the consumption of goods and services due to the ageing of the population in Austria – on national as well as regional level. Therefore, age-specific income elasticity and price elasticity are estimated. The estimated model is used to simulate the consumption structure in 2030 for four scenarios: Firstly, only the ageing process of the population is considered. Secondly, the ageing as well as changes in household structure are taken into account. Scenario three and four furthermore consider potential changes in income distribution due to the ageing as well as price changes and its effects on the consumption structure of the ageing society. The results reveal direct positive effects of the ageing of the population on the consumption shares of food and non-alcoholic beverages, housing, water and fuel, health, as well as miscellaneous goods and services, while the consumption category transport looses the highest proportion in total consumption. But it can also be seen that these results do not hold anymore as soon as potential changes in income distribution – as indirect effect of the ageing – are considered. Publisher An entity responsible for making the resource available International Burch University Date A point or period of time associated with an event in the lifecycle of the resource 2015-01-10 Keywords Keywords. Article PeerReviewed HB Economic Theory https://omeka.ibu.edu.ba/files/original/68e63b612655c15d3965c60f870573e2.pdf b77f74f55ec0af9db4018c12c89a1c86 PDF Text Text Journal of Foreign Language Teaching and Applied Linguistics Body Parts As Frames In The Perception Of Turkish Learners Of English SauleAbdramanova KIMEP University, Kazahstan Submitted: 02.04.2014. Accepted: 25.11.2014. Abstract The aim of the research is to investigateconceptual framesofbody parts,as perceived by native Turkish speakers while they learn English idioms that employbody-part components. The study is mainly based on the assumptions of the theory of frames by Minsky (1974), who proposed the frame system forthe cognitive sciences. Vygotsky (1986) introduced conceptual frames in his theory of human development, and Fillmore (2006) operated with the term “frame” in his frame semantics. The abovementioned theories have been applied to make up a network of ‘nodes’ and ‘relations’ that Turkish learners of Englishbuilt up while guessing the meaning of English idioms, with the focus on their body-part components. The experiment was conducted among first-year students with an intermediate level of English from the department of English Language Education at Middle East Technical University, Ankara. Participants were asked to fill in questionnaires and to guess the meaning of 15 English idioms that employbody-part components such as eyes, hands, head, heart, leg/foot, nose, and tongue. To ensure thevalidity and reliability of the experiment, interviews were conducted with five respondents and a think-aloud protocol was conducted with six other respondents. The qualitative data obtained in the experiment were analyzed, and the results showed that Turkish students build different frames related tobody-part meanings based on their universal, cultural and personal world perception. Keywords: frames, idioms, body parts, English, Turkish Introduction The notion of frames was introduced to cognitive sciences by Minsky (1974), who defined it as a network of notions and interrelated links; together, they represent a situation that comes to the human mind when required. He identified different levels of frames: the top ones are basic characteristics of the typical situation, and the lower ones have slots that are open for being filled in by situation’s specifics. In other words, a situation has both general and specific features, and a frame network depicts those fixed and varied instances. In cognitive linguistics, Fillmore (2006) suggested a term of ‘frame’ instead of such terms as ‘schema’, ‘cognitive model’, ‘script’, ‘scenario’, etc., and he defined it as a system of concepts understood as a whole structure, parts of which are closely related to and dependent on each other. His ‘frame semantics’ is based on the assumption that all words are represented by categories that are motivated by situations, and grounded by experience and knowledge. Vygotsky (1986) introduced conceptual frames to his theory of human development; he contends thatthe social aspect of language is closely connectedto the society, and the environment plays a crucial role in the development of human beings’ thinking abilities. Newborn children acquire the surrounding world through conceptual frames; those concepts originate from personal mental models (mostly models of the physical world constructed by people) and cultural models (shared resources of the community formed by negotiation). Fillmore and Baker (2009) distinguish two types of frames: core (central concepts) and peripheral (circumstantial notions); however, they admit that there is a vague 259 �Body Parts As Frames In The Perception Of Turkish Learners Of English distinction between them. They also name extra-thematic elements of frames irrelevant to any description of a phenomenon, situation or lexical unit. English and Turkish languages belong to different language families; therefore, there are certain differences in the way body part components are structured and conceptualized in idioms, and how they are perceived and utilized in two languages. Those differences are justified by geographical, historical, political, social and cultural features of two nations. Meanwhile, a similarity may be found in the meaning of English and Turkish idioms as well as in conceptual representation of their body-part components due to common perception of the surrounding world by representatives of two nations and due to the universality of body-part functions. Method of research The objective of this study is to investigate the frames Turkish learners articulate while guessing the meaning of English idioms that employ body-part components. The data were collected by conducting an experiment among 20 first-year students with an intermediate level of English from the department of English Language Education at Middle East Technical University, Ankara. Participants were asked to fill in questionnaires that contained15 English idioms that use components of body parts, such as eyes, hands, head, heart, leg/foot, nose, and tongue; participants had to guess the meaning of the idioms, which were culled from National British Corpus. The selection of idioms was based on the frequency of their usage, a wider representation of body parts as components, and the representation of English idioms not/having equivalent and analogous Turkish idioms.Questionnaires were designed to identify the meaning of idioms and to reveal background information about the respondents (gender, age, how long they had been learning English, mother tongue and family language). To ensurethe validity and reliability of the experiment, interviews were conducted with five respondents and a thinkaloud protocol was conducted with six other respondents. Data analysis The data obtained from the group of participants withan intermediate level of English were analyzed to find out how learners at this level of English tend to define idioms. The analysis is based on the results received from questionnaires, interviews and think-aloud protocols. The answers were classified according to their relation to idioms’ components. Only two groups of responses were considered – those that directly or indirectly referred to body part components. The definitions identified as relating to other parts of idioms were not included in the analysis. Eyes EYES are associated with seeing/watching/observing, and its conceptual interpretationis SEEING IS KNOWING. A considerable amount of respondents attributed the notion of VISION IS CONTROL to the idiom ‘To keep your eyes on the ball’ (If you keep your eye on the ball, you stay alert and pay close attention to what is happening): a ball is round, so it can go anywhere, keep it in front of your eyes; gözünütoptanayırma; gözünükırpmamak; gözünübirşeydenayırmamak; gözünütoptanayırmamak; to focus on the subject; çokodaklamak, gözünüayırmamak; gözleriniayırmadankonuyaodaklamak; gözünüdörtaçmak; göz kulak olmak. It is implied that if someone controls the situation, it will bring success, and vice versa: If somebody loses control, it will lead to failure. Two respondents attributed the notion of BEING BEWARE (to watch out); and one participant conceptualized SEEING IS UNDERSTANDING (to watch somebody carefully to understand what s/he is doing). One student indicated the notion of SEEING IS MOVING TO GOALS: always on the way to your goal. The eyes are given the function of ‘seeing the goals’ and ‘stimulating a human being to move in their direction’. 260 �Journal of Foreign Language Teaching and Applied Linguistics The idiom ‘Blink of an eye’ (If something happens in the blink of an eye, it happens so fast it is almost impossible to notice it) also refers to VISION IS CONTROL: closing the eyes indicates a loss of control, but the action happens so quickly that control is still underway and has never been lost. Answers of some respondents related to the function of EYES FOR SEEING: bırbakışatmak, seeing just a second. Six respondents referred tothe Turkish idiom ‘Gözkırpmak’ (to wink); one learner extended the latter meaning to, ‘To close and then quickly open the eyes to approve something’ – EYES FOR APPROVING. One participant attributed an evaluative function to the act of seeing – EYES ARE EVALUATION: gözününkararması. There were also answers that can be referred to peripheral frames: something valuable/important for somebody; something that is very close to us; and to an extra-thematic one: being happy. Mouth The idiom ‘To put your foot in your mouth’ (If you put your foot in your mouth, you say something stupid or embarrassing) is more related to the image-schema of ‘mouth’ as a CONTAINER rather than ‘foot’ as a means of movement. When a container is closed by another object, then the way is blocked and nothing can be taken out of it, nor can be taken easily.If the path for verbal articulation is not free, the mouth, as a container, produces defective utterances, i.e. says stupid things. An overwhelming number of participants provided answers related to MOUTH IS (NOT) FOR SPEAKING: talk considerably; mantıklıkonuşmak; düşünüptaşınarak, tartarakkonuşmak; ağzınıhayraaçmak; shut up; not to talk about a secret; to withhold permission for somebody to speak; not to say anything,trying to hold yourself backfrom saying it. There was also a metonymical shift of ‘mouth’ to ‘lips’ and their engagement in producing an act of smiling with further extension to the state of ‘happiness’ – MOUTH IS SMILING → BEING HAPPY: ağzıkulaklarınavarmak, to be quite happy. And one answer was absolutely disassociated with whole framework of the MOUTH concept based on situational experience of the respondent: canınıdişinetakmak (a Turkish idiom – to take one’s life in one’s hands). Nose In the idiom ‘Pay through the nose’ (If you pay through the nose for something, you pay a very high price for it) the nose is connected to the frame of PATH through which the air passes. If the passage through the path is difficult, the movement is hindered, and the destination is not reached. Also, the nose is related to the source-concept of LIFE: the movement of the air along the path, i.e. the nose, implies staying alive because air is a condition of life. So, if the path is blocked, i.e. you pay through the nose, then it may cause you difficulties or even death. Participants provided different meanings to the idiom giving an extended range of explanations based on functions of the nose – NOSE SMELLS: burnunakokulargelmek, sezmek, to guess beforehand (lit. smell comes to the nose); smelling bad; and NOSE SNOTS: burundanahilahilgelmek (to come from the nose in large amounts). Nose is associated with BEING GRUMPY: burnundankılaldırmamak (lit. not let a hair be taken from the nose); and TO REGRET: burnundangetirmek/ gelmek (to regret things that have been done); inatlaşmakvebununsonucunakatlanmak(lit. to be obstinate and to suffer from that); difficulty in doing something back. Two respondents based their definitions on the frame of NOSE IS CONTAINER/OBJECT - be beaten, havingabroken nose; her işeburnunusokmak.Associations have been developed either in connection with the difficult conditions of executing any actions through the nose, or emotions related to those situations. Ears Ears also refer to the notion of PATH; the sound goes in and out along the path, i.e. ears, to reach the destination. When the path is free, the movement is easy and fast. Almost all respondents referred to 261 �Body Parts As Frames In The Perception Of Turkish Learners Of English the frame of EARS FOR HEARING/LISTENING while guessing the idiom ‘All ears’ (If someone says they're all ears, they are very interested in hearing about something): listening carefully; all people are hearing something; can kulağıyladinlemek kulak kesilmekdıkkatledinlemek. Two participants extended the act of ‘listening’ to EARS FOR KNOWING: knowing/being aware of everything; to know everything. Hands Hands are means of taking and giving, and the concept is motivated by the metaphtonymies of HOLDING IS CONTROLLING and CONTROL IS PHYSICAL GRASP. Kövecses (2010) suggests the following conceptual metaphors for Hands: HAND STANDS FOR CONTROL, HAND STANDS FOR THE ACTIVITY, and HAND STANDS FOR THE PERSON. When processing the idiom ‘Play into someone’s hands’ (If you play into someone's hands, you do what they were expecting you to do and take advantage of this), participants produced the definitions based on the concept of HOLDING IS CONTROLLING: birininelindekuklaolmak; birininelindeolmak, birşeyebağlıolmak, to be up to somebody/ something; kaderielindeolmak (to hold the fate in someone’s hands). Two participants referred to the palm of the hand: avucundaoynatmak; avucununiçindeoynatmak. Legs LEGS and FEET are parts of the body responsible for walking; they are based on the frame LEG/FOOT FOR ABILITY TO WALK. They are also related to metaphor WALKING FORWARD IS PROGRESS, a reverse action (inability to move) is understood as failing to achieve success. The idiom ‘To pull someone’s leg’ (If you pull someone's leg, you tease them, but not maliciously) indirectly relates to the abovementioned metaphor: if somebody pulls your leg you will not be able to walk, and it will definitely hinder your progress. But the implication for this idiom is that pulling somebody’s leg is perceived as a minor disturbance and a slight annoyance that occurs among friends for fun. Two respondents provided the frame of WALKING to the idiom: to trip up; birineönayakolmak. Eight participants referred to PREVENT FROM WALKING: to displace somebody; birineengelolmak; (birinin) ayağınıkaydırmak; birinezararvermek; ayağınıkaydırmak, to make somebody worse; birkişininişiengellemek. Head Five learners provided the meaning of ‘Hit the nail on the head’ idiom by referring to HEAD FOR THINKING: to think about; to think deeply; to think carefully; karakaradüşünmek (fig. to brood over); düşünmek. Five respondents extended the process of ‘thinking’ to other mental operations – HEAD FOR UNDERSTANDING: make somebody remember or understand by giving clues/examples; jetondüşmesi; jetondüşmek, understand immediately; ‘coming immediately to one’s mind: birandaaklinagelmek; and HEAD FOR REFERRING önemlibirnoktayadeğinmek. Heart The HEART is typically associated with emotional spheres, and metonymically motivated as HEART FOR FEELINGS. It also has an image-schema of a CONTAINER FOR CONTENT; the content is a range of emotions people usually have towards each other. The idioms ‘Wear your heart on your sleeve’ (Someone who wears their heart on their sleeve shows their emotions and feelings publicly) and ‘Eat your heart out’ (If someone tells you to eat your heart out, they are saying they are better than you at something) refer to the abovementioned concepts: if the heart is worn on the sleeve, it is 262 �Journal of Foreign Language Teaching and Applied Linguistics exposed to the outer world and feelings are not hidden; and if other people are better than you at something, you would better eat your heart not to display bad emotions concerning that fact. Most learners gave definitions to idioms based on the concept HEART FOR FEELINGS - to ‘Wear your heart on your sleeve’ idiom: do not be heartless; to behave like you do not have a heart; duygusaldavranmak, mantığıyladeğil, duygylarıyladavranabilmek; kalpkırmamayadikkatetmek, duygusaldavranmak; kalbiniellerinevermek, it is like kalbımsenindir; and to ‘Eat your heart out’ idiom: to be very emotional; you are a heartless person; kalbininsesindinlemek (lit. listen to the sound of your heart); acımasız, kalpsız; acımasızolmaz (it is not possible without pain). An exposure of the HEART on the sleeve is perceived as its OPENNESS to public: herşeyiaçıkçayapmakya da söylemek (lit. to do and to speak openly). HEART removed from its location implies logical and unemotional actions: to think reasonably, not emotionally; HEART eaten implies LOGIC and COMMON SENSE: düşüncesizcedavranmak (to behave thoughtlessly); being romantic, but logical; to follow common sense; to think about something so much and make it a problem inside. Two learners matched the English idiom with the Turkish one – a semantic shift from HEART to SOUL: canınıdişinetakmak (fig. to take one’s life in one’s hands). One answer was associated with an impossible task, similar to wearing the heart on the sleeve: to try hard to accomplish something. Lastly, participants referred to characteristics of human beings: always being in a nervous situation/to be nervous all the time – an association with STRESS; elinivicdanınakoymak, to be honest; kalbinielinealmak, cezaretlifalan; to be brave/being brave – an association with MORALE/ SPIRIT - moral/spiritual features of a human being; to be merciful; to be kind, understanding. Conclusion The qualitative data obtained in the experiment were analyzed, and the results showed that Turkish students provided different frames of body-part meanings based on their universal, cultural and personal world perception. EYES are associated with the ability to see and understand the surrounding world, accept and approve it, to be able to control the situation and evaluate it, to see risks and be able to guard yourself against dangers. MOUTH is for speaking and smiling, and as a consequence, feeling happy. NOSE is a container/an object that provides the ability to smell, as well as snot; at the same time, it is related to the condition of being grumpy. EARS are for hearing and listening; through them, people learn about the world. HANDS are associated with holding something and, consequently, controlling it. LEGS represent the ability to walk/not walk; HEAD is related to the mental functions of thinking, understanding and identifying similarities and differences in people and things. Lastly, HEART is referred to feelings and soul, expressing feelings and displaying human features openly. Respondents mostly presented core frames to body parts while guessing the meaning of English idioms. Since body parts function similarly in all human beings, particularlythe five senses through which people experience the world, there was universality in the way representatives of Turkish culture perceive them. There were also some peripheral frames that represent facets of cultural knowledge. There were also some extra-thematic notions that were mostly grounded on the experience and knowledge of respondents. The respondents’perception of idioms that use body-part components offersinsights about their experiences, values, and culture. This knowledge contributes to anunderstanding of young Turkish people’s interpretation of body parts. 263 �Body Parts As Frames In The Perception Of Turkish Learners Of English References Fillmore, Ch.J. (2006). Frame semantics. In D.Geeraerts (Ed.).Cognitive Linguistics:Basic (pp. 374-400). Berlin, New York: Mouton de Gruyter. Readings Fillmore Ch.J. & Baker, C. (2009).A frame approach to semantic analysis. In B.Heine&H.Narrog (eds). The Oxford Handbook of Linguistic Analysis (pp.313-339). Oxford: Oxford University Press. Kövecses, Z. (2010). Metaphor: a practical introduction. Oxford & New York: Oxford Press. Minsky, (1974).A Framework for Representing Knowledge.MIT-AI Laboratory Memo 306. Vygotsky, L. (1986). Thought and language. Cambridge, MA: The MIT Press. 264 University � 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. 2799 Title A name given to the resource Body Parts As Frames In The Perception Of Turkish Learners Of English Author Author Abdramanova, Saule Abstract A summary of the resource. The aim of the research is to investigateconceptual framesofbody parts,as perceived by native Turkish speakers while they learn English idioms that employbody-part components. The study is mainly based on the assumptions of the theory of frames by Minsky (1974), who proposed the frame system forthe cognitive sciences. Vygotsky (1986) introduced conceptual frames in his theory of human development, and Fillmore (2006) operated with the term “frame” in his frame semantics. The abovementioned theories have been applied to make up a network of ‘nodes’ and ‘relations’ that Turkish learners of Englishbuilt up while guessing the meaning of English idioms, with the focus on their body-part components. The experiment was conducted among first-year students with an intermediate level of English from the department of English Language Education at Middle East Technical University, Ankara. Participants were asked to fill in questionnaires and to guess the meaning of 15 English idioms that employbody-part components such as eyes, hands, head, heart, leg/foot, nose, and tongue. To ensure thevalidity and reliability of the experiment, interviews were conducted with five respondents and a think-aloud protocol was conducted with six other respondents. The qualitative data obtained in the experiment were analyzed, and the results showed that Turkish students build different frames related tobody-part meanings based on their universal, cultural and personal world perception. Keywords: frames, idioms, body parts, English, Turkish Publisher An entity responsible for making the resource available International Burch University Date A point or period of time associated with an event in the lifecycle of the resource 2015 Keywords Keywords. Article PeerReviewed P Philology. Linguistics,PE English,PJ Semitic,PK Indo-Iranian,PR English literature https://omeka.ibu.edu.ba/files/original/d84fc0654055e7ad75fba355245ceee9.pdf 8e97f887a96a664697e8fd9f86c6c274 PDF Text Text Journal of Foreign Language Teaching and Applied Linguistics Semantic Group of Units with the Semanteme "Thinking" in the Uzbek Language: A Contrastive Analysis with Bosnian and English Lexicons Azamat Akbarov International Burch University Sarajevo, Bosnia and Herzegovina Saodat Muhamedova Tashkent State Pedagogical University Tashkent, Uzbekistan Submitted: 12.04.2014. Accepted: 18.11.2014. Abstract The article deals with the semantic field units with semanteme "thinking" in Uzbek, Bosnian and English languages, defined by their integral seme, on the basis of the criteria specified internal semantic groups. Lexical units refer to the meaning “thinking” and semantic field, integral and distinctive meaning have been investigated, inner groups have been classified in the example of the Uzbek language. The study of linguistic units on the basis of semantic fields is widespread in the world linguistics. They are mainly directed at the study of semantic groups of verbs. Our research will compare the semantic fields of units with semanteme "thinking" in the Uzbek language. The given lexical-semantic field includes not only the lexeme of the verbs, but the lexemes of nouns, lexemes of adjectives, lexemes of adverbs and also some of the idioms. In the result of the analysis of the factual material revealed the following semantic groups of units with semantepe "thinking" in the Uzbek language. Keywords: semanteme “thinking,” semantic fields of units, idioms, factual material, Uzbek language Introduction Known works of Russian linguists devoted to the study of lexical-semantic fields (groups) include verbs as action verbs (Kildibekova, 1985), verb relations (Gysin , 1981, 1982 ), speech, feelings, thoughts and behavior (Vasiliev, 1981), verbs initiation object (Kuznetsov, 1974) and desire (Vorkachev, 1994), emotions ( 41 �Semantic Group of Units with the Semanteme "Thinking" in the Uzbek Language: A Contrastive Analysis with Bosnian and English Lexicons Rudakov, 1994, Fomenko, 1974), giving (Gonchareva , 1981), compliance (Gysin , 1989), speech ( Rubtsov , 1976), gender inequality (Gysin, 1977), verb classification relations (Gysin , 1980), full coverage ( Paducheva Motherland, 1993), verbs of communication (Glowinski , 2000). In Uzbek linguistics, the previous research was conducted in the semantic fields of the verbs of speech ( I.Kuchkartaev , 1977), states ( R.Rasulov , 1989), motion (S.Muhamedova, 2007) , relationships ( M.Sodikova, 1992) , feelings (T.Musaev) and view (Z.Siddikov, 2000). In German linguistics as well, previously the research was conducted in detail with the lexical-semantic group of verbs both by the German and the Russian linguists. These are the verbs of the event semantics (Vaysgerber, 1964, Vikmane, 1989), thinking ( Kozhevnikov, 1970), verbs with the meaning of connection (Rumin, 1970), verbs of receiving and withdrawal (Shcherbakov, 1975), verbs of motion (Orthen, 1976), verbs of directed motion (Alexandrov, 1993), and verbs of motion gehen kommen (Irgashev, 1985), sound (Savina, 1978), beliefs ( Egorchenkova, 1985), promotion (Paly, Slepko, 1999), verbs of behavior (Grishaeva, 1999), verbs of state (Vinokurov , 2002), verbs of surprise (Kolayan 2001), verbs expressing liquid (Vintsova, 2001), verbs haben and possession besitzen (Kalinin, 2002), auditory perception verbs (Vliegel , 1988), verbs with the meaning "see" in German and French (Schpping, 1982). Also in comparative linguistics method of semantic fields is widely applied as well as in this field it is applied mainly in respect to the lexical-semantic groups of verbs. There are some PhD thesis such as "verbs of movement in German and English" (Zlobin, 1993), "Visual verbs in German and Georgian" (Karegauli , 1991), "The German and Russian verbs of motion" ( Shamne, 2000), "Verbs of perception of English and German languages" (Babalova, 1989)," The verbs of sound in German and Russian " (Dementieva, 1982)," Russian and German verbs with the meaning of beginning (Shihanova, 1987), and others. Thus, the field of linguistics presently has no special research on the object of our study - the semantic field units with semanteme "thinking." There is the study in Russian linguistics that considers the verbal speech means of the physical and intellectual activities, recorded in the dictionaries of the Russian and English languages also functioning the class of verbs of intellectual activity in all poetry of the Russian texts of Joseph Brodsky. In these studies, detailed and comprehensive semantic features are considered only some of the verbs with seme "thinking." 42 �Journal of Foreign Language Teaching and Applied Linguistics According to Steven Pinker, in order to analyze and compare the words, we should find a case in which the rule and the words themselves express the same content; however, even when compared, and when an equivalent was found (among the languages), they (the words) would still be psychologically and neurologically distinguishable (Pinker, 1999). Therefore, in the following examples we will try to find some equivalents of Uzbek words in the Bosnian language, with their explanations in English language, but always bearing in mind that the words can never be completely the same in two languages. 1. Units with seme "thinking, the thought." This group includes such linguistic units of the Uzbek language as Tafakkur (thinking), тафаккур қилмоқ (think), ўй (thought), ўйламоқ (think), ўй сурмоқ (think over), фикр (thought), фикрламоқ (think), фикрлашмоқ (share thoughts), фикран (mentally), фикрли (thinking), фикрий (mental, intellectual) and others. (Siddikov, 2000) In the Bosnian language the term for thought is Misao. From this word the following forms were made: misliti (thinking – to think), promišljati (to think over), premišljati (se) (to think through or to be indecisive), promijeniti misao (to change one’s mind), podijeliti mišljenje (to share thoughts), misaono (mentally), istomišljenik (the person that has the same opinion as someone else). (Halilović, 1996) In the English language, the word thought originally meant, “to conceive in mind, consider” (Harper, 2001). As seen above, most of the English equivalents of thought exist in both the Uzbek and Bosnian languages, except for Bosnian word istomišljenik (the person that has the same opinion as someone else). English language recognizes this word as supporter, however the word supporter means the one who supports the idea, but istomišljenik is the one who has the same idea as someone else, and shares that idea with the person. 2. Units with seme "Decision.” This group includes such linguistic units of the Uzbek language as аҳд (determination), аҳд қилмоқ (decide), аҳдлашмоқ (decide together), қарор (decision), қарор қилмоқ (decide), қарорга келмоқ (come to a decision), қарорида тўхтамоқ (stay on the decision), ҳисобламоқ (think that decision is right) and others. (Kuchkartaev, 1977) In the Bosnian language the derivations from the word decision are: određivanje (determination) or odluka (determination), odlučiti (to decide), odluka (decision), donijeti odluku (make a decision), držati se odluke (stay firm when making a decision), etc. (Halilović, 1996) 43 �Semantic Group of Units with the Semanteme "Thinking" in the Uzbek Language: A Contrastive Analysis with Bosnian and English Lexicons The Uzbek word аҳдлашмоқ (decide together), actually has a lot in common with the English word decision: settlement, agreement. The action of agreeing requires at least two participants, and sometimes the derived word in one language describes the original thought behind the main word in another language – in this case, English. (Harper, 2001) 3. Units with seme "discuss, deliberate." This group includes such linguistic units of the Uzbek language as муҳокама 1,2 (discussion), муҳокама қилмоқ (этмоқ, юритмоқ) (discuss), ақллашмоқ (advice), кенгаш 1,2 (discussion), кенгашмоқ 1 (confer, consult), маслаҳат 1,2,3 (advice, recommendation), маслаҳатлашмоқ 1 (advice) and others. (Glowinski, 2000) The Bosnian forms are: rasprava (discussion) and raspravljati (to discuss). (Halilović, 1996) 4. Units with seme "Awareness , understanding thought." This group includes such linguistic units of the Uzbek language as англамоқ 1,2 (understand, realize), тушунча 1,2,3 (concept), тушунчали (having a vision, knowing), тушунмоқ 1 (understand), тушунмоқ 2 (penetrate), идрок 1 (mind, intellect), идрок қилмоқ (этмоқ) (to work out, realize), зеҳн (mind, intellect, consciousness), фаҳм (ingenuity, resourcefulness), фаҳмламоқ (think, guess, know, understand, to catch onto), уқув 1 (understand, bright), уқмоқ 1, 2 (understand, know, take in a sense) and others. (Kuchkartaev, 1977) The Bosnian language has similar equivalences in these terms: shvatati, poimati (understand, realize), shvatanje (understanding). (Halilović, 1996) In the English language, the word “awareness” has two meanings. The one is that of thought: being aware of something. However, the original form of this word means to be cautious, to be aware of danger. This meaning is not very odd if we make a closer comparison with both the Uzbek and Bosnian languages, where in some of the forms (in Uzbek этмоқ: to work out, realize, and in Bosnian shtavanje – understanding), we perceive that all three languages at some point identify the word “awareness” with caution. 5. Units with seme "to justify somebody’s thoughts." This group includes such linguistic units of the Uzbek language as асосламоқ (justify), исбот (evidence, argument), исботламоқ (prove, argue), изоҳ 1 (explanation, interpretation), изоҳламоқ (to clarify, explain, interpret), талқин 2 (interpretation), талқин қилмоқ 3 (to interpret), тушунтирмоқ (to clarify, explain, expound, cram), уқдирмоқ (to 44 �Journal of Foreign Language Teaching and Applied Linguistics clarify, explain, expound, cram, to make it clear), шарҳ (interpretation, explanation), шарҳламоқ (explain, cram, comment) and others. (Vasiliev, 1981) Bosnian: opravdati (justify), dokaz (evidence), dokazati (to prove), objašnjenje (explanation), protumačiti (interpret) pojasniti (clarify), razjasniti (to make something clear) etc. (Halilović, 1996) In this aspect, English language recognizes few more examples of justifying someone’s thoughts: to bear out (verify), confirm, and validate. (The Oxford Thesaurus) 6. Units with seme "Knowledge." This group includes such linguistic units of the Uzbek language as ақл (mind, intelligence, reason, intellect), ақлли (smart, intelligent), онг I, 1 (conscious, mind, reason), онгли (conscious, intelligent, clever), мия 3 (figuratively) mind, intelligence), мияли (smart, intelligent), интеллект, интуиция, билим 1 (knowledge, cognition), билмоқ 1 (know, possess the knowledge, to understand, to think), билимли ( knowing, having deep knowledge), билимдон (having deep knowledge), илмий 1,2,3 (scientific), олим 1,2 (scientist) and others. (Vinokurov, 2002) The Bosnian equivalents of these are: pametan (smart), inteligentan (intelligent), svjestan (conscious), oštrouman (smart, intelligent), znalac (the one who knows things). (Halilović, 1996) 7. Units with seme "Mental comparison." This group includes such linguistic units of the Uzbek language as солиштирмоқ 2 (match, compare), чоғиштирмоқ (match, compare), қиёс 1 (comparison and contrast, analogy), қиёслашмоқ (compare, to draw an analogy), таққосламоқ (contrast, compare) and others. (Vasiliev, 1981) Bosnian equivalents: porediti (compare), suprotstavljati (contrast), razlikovati (distinguish), analogija (analogy). (Halilović, 1996) English sources: to match up to, be on par with, be in the same class, come close to, hold a candle to; etc. (The Oxford Thesaurus) 8. Units with seme "Think for a specific purpose." This group includes such linguistic units of the Uzbek language as мақсад (goal), ғoя 3 (idea, concept), кўзламоқ 1 (scheduled to pursue, keep in mind), мўлжал 1.2 (basting, preliminary calculation), мўлжалламоқ 1.2, 3 (schedule , estimate, expect) , чоғламоқ 1,2,3 ( assume, schedule, to plan), режа 2 (plan, basting) , режа тузмоқ (режалаштирмоқ) (build-up, schedule), ният (intention, purpose, plan ) and others. (Vasiliev, 1981) 45 �Semantic Group of Units with the Semanteme "Thinking" in the Uzbek Language: A Contrastive Analysis with Bosnian and English Lexicons Bosnian equivalents: cilj (goal), ideja (idea), držati na umu (to keep in mind), promišljati (to think), očekivati (expect), pretpostaviti (assume), planirati (to plan), isplanirati (build up a schedule), namjera (intention). (Halilović, 1996) 9. Units with seme "has a sharp mind and talent." This group can be divided into two subgroups: A. Units with seme "has a sharp mind." B. Units with seme "has talent and ability." A. Units with seme "has a sharp mind." This sub-group includes such linguistic units of the Uzbek language as зеҳнли (smart, quick-witted, shrewd, clever), иқдидорли (sensible, intelligent, understanding), тазимли 1.2, (clever, clever), фаросатли (perceptive, very clever), зийрак (smart) дид 2 (insight, intelligence), дидли 2 (shrewd, smart), заковат (bright, insight, intelligence), заковатли (clever, shrewd, smart), уқувли 1 (smart, quick-witted, shrewd, clever ) фаҳмли (smart, quick-witted, quick on the uptake ). (Taranov, 2012) The terms for this category in Bosnian language are the same as ones mentioned in part 6. In the English language, the expressions are: brilliant, expert, competent, adept, and proficient. (The Oxford Thesaurus) B. Units with seme "has talent and ability." This sub-group includes such linguistic units of the Uzbek language as истеъдод (talent) 1 истеъдодли (talented), иқдидорли (with a strong, powerful mind, gifted) қобилият 2 (ability, gift, giftedness, talent), қобилиятли 2 (capable of, gifted, talented) лаёқат 2 (giftedness, talent), лаёқатли 2 (gifted, talented) and others. (Taranov, 2012) Bosnian: talenat (talent), nadarenost (talent), oštrouman (strong, powerful, gifted mind), nadarenost (giftedness). (Halilović, 1996) English language: gifted, skillful, skilled, brilliant, top-notch. (The Oxford Thesaurus) 10. Units with seme "Imagination and presentation." This group can be divided into two subgroups: A. Units with seme "Imagination." B. Units with seme "Representations". 46 �Journal of Foreign Language Teaching and Applied Linguistics A. Units with seme "Imagination." This sub-group includes such linguistic units of the Uzbek language as хаёл 1 (imagination, representation, thought), хаёлкаш (haёlparast) (dreamy, visionary), хаёллий (imaginary, fictional, seemingly) хаёлланмоқ (think, stargaze, dream), хаёлчан (dreamy, pensive) хаёлан (mentally, in dreams ) and others . (Taranov, 2012) Bosnian: mašta (imagination), bujna mašta (vivid imagination), sanjar (dreamer), sanjariti (to dream), vizionar (visioner). (Halilović, 1996) English: vision, inspiration, insight, by any stretch of the imagination, a flight of fancy (shows a lot of imagination, but it’s not very practical in use). (The Oxford Thesaurus) B. Units with seme "Representations." This sub-group includes such linguistic units of the Uzbek language as тасаввур 1.2 (presentation), тасаввур қилмок (present), хаёлига келтирмоқ (idiom) (pictured in the imagination), кўз олдига келмоқ (idiom) (present before the eyes) and others. (Muҳamedova, 2007) Bosnian: zamisliti (to picture), vidjeti kao pred očima (present before the eyes). (Halilović, 1996) 11. Units with seme "processes associated with memory." This group can be divided into two subgroups: A. Units with seme "Total Recall." B. Units with seme "Forget." A. Units with seme "Total Recall." This sub-group includes such linguistic units of the Uzbek language as хотир 1.2 (memory, mind, thought) хотирламоқ (remember, recall, restore memory), эс 2 (memory, mind, thought) эсламоқ 1.2 (recall, restore memory) ёд (memory), ёдламоқ 1.2 (remember, restore memory), ёдаки (memory, learn by heart), ёдга олмоқ, ёдга солмоқ, ёдга тушмоқ (idioms) (remember, recall, restore memory), эсга олмоқ (idiom) (remember, remember), эсга тушмоқ (idiom) (restored in memory, etc.) (Muhamedova, 2007) Bosnian: memorija, pamćenje, sjećanje (memory), pohraniti u memoriji (restore in ones memory – more used as a computer term), zapamtiti, naučiti napamet (learn by heart – in Bosnian language learn by mind). (Halilović, 1996) 47 �Semantic Group of Units with the Semanteme "Thinking" in the Uzbek Language: A Contrastive Analysis with Bosnian and English Lexicons English: consciousness, recollection, flashback, retrospection, camera-eye (meaning: the one that memorizes almost everything, mind’s eye (meaning: bright) (The Oxford Thesaurus) B. Units with seme "Forget." This sub-group includes such linguistic units of the Uzbek language as унутмоқ 1, 2, 3 (forget, pass into oblivion), ёдидан кутармоқ, ёдидад чиқармоқ (idioms) - (go to tradition), эсидан чиқармоқ, эсидан чақарилмоқ (idioms) (delete from memory, forget), хаёлидан кўтарилмоқ (idiom ) - ( forget ) and others . (Vasiliev, 1981) Bosnian: zaboraviti (forget), izbrisati iz sjećanja (idiom: delete from ones memory). (Halilović, 1996) English: fail to remember, deliberately cease to think of, neglect to behave in an appropriate way. (The Oxford Thesaurus) 12. Units with seme "Guess, guess what." This group includes such linguistic units of the Uzbek language as чама 2 (assumption, reckoning, a rough calculation, the approximate definition), чамаламоқ 1.2 (assume, estimate, determine approximately), тахмин (guess, approximate), тахминан (presumably approximate), тахмин қилмоқ (assumed to figure), тахминий (presumably approximate) фараз (suggested hypothesis, assumption), фараз қилмоқ (assume, estimate, determine approximately) тусмол (assumption, reckoning, about the definition), тусмолламоқ (assumeestimate, to determine approximately), гумон (guess suspicion , doubt) , гумон қилмоқ (assume suspect doubt) and others. (Vasiliev, 1981) Bosnian: pretpostavka (assumption), pretpostaviti (guess, assume), odlučiti “otprilike” (colloquial use: to decide approximately), sumnja (doubt), etc. (HAlilović, 1996) So, a special study of the object of our research – the semantic field units with semanteme "thinking" – is not observed in general linguistics. There are studies in Russian linguistics in which verbal speech means considering the physical and intellectual activities, recorded in the dictionaries of the Russian and English languages and also functioning class of verbs of intellectual activity in the poetry of the Russian text by Joseph Brodsky. Conclusion 48 �Journal of Foreign Language Teaching and Applied Linguistics At present, the lexical-semantic field includes not only the lexeme verbs, but the lexemes of nouns and adjectives, as well as some idioms. An analysis of the factual material revealed the following semantic groups of units with semanteme "thinking" in Uzbek language: 1. Units with seme "thinking , the thought ." 2. Units with seme "decision". 3. Units with seme "discuss , deliberate ." 4. Units with seme "awareness , understanding thought." 5. Units with seme "to justify their thoughts." 6. Units with seme "knowledge.” 7 Units with seme "mental comparison." 8 Units with seme "think for a specific purpose ." 9. Units with seme "has a sharp mind and talent." A. Units with seme "has a sharp mind." B. Units with seme "has the talent and ability." 10. Units with seme "imagination and presentation." A. Units with seme "imagination." B. Units with seme "representations". 11 Units with seme "processes associated with memory." This group can be divided into two subgroups: A. Units with seme "total recall." B. Units with seme "forget." 12 Units with seme "guess, guess what." The study of the semantic field units with semanteme "thinking" in the Uzbek language allows new possibilities for compiling dictionaries with valence and with the units of automatic data analysis. 49 �Semantic Group of Units with the Semanteme "Thinking" in the Uzbek Language: A Contrastive Analysis with Bosnian and English Lexicons References Johnson-Laird, P. (1987), The Mental Representation of the Meaning of Words, Cognition 25, 189-211 Klima, E. and U. Bellugi (1979), The Signs of Language, Cambridge, Mass, Harvard University Press 1979 Meyer D. and R. Schvaneveldt (1971), Facilitation in Recognizing Pairs of Words: Evidence of a Dependence Between Retrieval Operations. Journal of Experimental Psychology 90, 227-234, 1971 Halilović, Senahid (1996), Gnijezdo lijepih riječi (The Nest of Beautiful Words), Baština Sarajevo, 1996 Harper, Douglas (2001), Online (http://www.etymonline.com), 2001-2014 Etymology Dictionary Pinker, S. (1995), The Language Instinct, New York: HarperPerennial, 1995. Pinker, S. (1999), Words and Rules, Massachusetts Institute of Technology, 1999 Pisoni, D, and P. P. Luce (1987), Acoustic-phonetic Representation in Word Recognition; In Frauenfelder and Tyler 1987. Taranov, A. (2012), Uzbek Vocabulary for English Speakers, T&P Books Publishing 2012 Tsohatzidis, S. ed. (1990), Meaning and Prototypes, London: Routledge, 1990. 50 � 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. 2784 Title A name given to the resource Semantic Group of Units with the Semanteme "Thinking" in the Uzbek Language: A Contrastive Analysis with Bosnian and English Lexicons Author Author Akbarov, Azamat Muhamedova, Saodat Abstract A summary of the resource. The article deals with the semantic field units with semanteme "thinking" in Uzbek, Bosnian and English languages, defined by their integral seme, on the basis of the criteria specified internal semantic groups. Lexical units refer to the meaning “thinking” and semantic field, integral and distinctive meaning have been investigated, inner groups have been classified in the example of the Uzbek language. The study of linguistic units on the basis of semantic fields is widespread in the world linguistics. They are mainly directed at the study of semantic groups of verbs. Our research will compare the semantic fields of units with semanteme "thinking" in the Uzbek language. The given lexical-semantic field includes not only the lexeme of the verbs, but the lexemes of nouns, lexemes of adjectives, lexemes of adverbs and also some of the idioms. In the result of the analysis of the factual material revealed the following semantic groups of units with semantepe "thinking" in the Uzbek language. Keywords: semanteme “thinking,” semantic fields of units, idioms, factual material, Uzbek language Publisher An entity responsible for making the resource available International Burch University Date A point or period of time associated with an event in the lifecycle of the resource 2015 Keywords Keywords. Article PeerReviewed P Philology. Linguistics,PI Oriental languages and literatures,PL Languages and literatures of Eastern Asia, Africa, Oceania https://omeka.ibu.edu.ba/files/original/7e6af845abdcf765a9b9cf76a932c422.pdf 53a2a9b32061952ee21eff18e5992eb1 PDF Text Text Complex Predicate Constructions in Uzbek Language Azamat Akbarov & Lola Türker International Burch University, Bosnia and Herzegovina Abstract Complex predicates are defined as constructions consisting of preverb/converb/coverb + ‘light verb’ (Bowern 2006). Each component of the complex construction contributes to the internal argument structure. The typology of complex predicates exhibits cross-linguistic similarities and differences. This study investigates the complex predicate constructions in Uzbek, which possesses a rich variety of light verb constructions. Novel data from Uzbek is provided, and it is analyzed on the basis of proposed criteria in the government and binding theory (GB) literature for complex predicates. The analysis reveals that these constructions express simultaneity, cause and effect, and consecutivity. Both verbs in complex constructions share the same subject, and they describe a single event. However, the object may or may not be shared by both verbs. What is significant about Uzbek light verbs is that they both host inflection, and contribute to the event structure. That is, tense and agreement markers, as well as aspectual markers are carried by the light verb. The constituency is strict in complex predicates, and there cannot be an intervention between the converb and the light verb by such elements as interrogatives, negation, or temporal adverbs. Key words: Complex predicates, light verbs, Uzbek language, construction, derivation Introduction Many languages of the world possess complex verb constructions. Their typology includes various types of serial verbs (e.g. in languages of East and Southeast Asia, languages of West Africa and Oceania), light verbs of the languages of Asia, and converbal complex predications in Japanese, Korean, and Turkic (Bowern 2006; Öztürk 2003). Butt and Geuder �(2001:325) define complex predicates as constructions in which each component contributes to the meaning carried by the head. Moreover, predicate structure of these constructions is established by more than one element, which makes it difficult to decide which element in the clause is assigning the theta-role, or more than one element is assigning it simultaneously. In Turkic complex predicates, the structure which consists of V+V, the coverb determines the argument structure of the predicate (Bowern 2006). However, the inflecting verb carries finite inflection, and it occupies the head position of the predicate. Research on complex verbs has been approached within various theoretical frameworks. The importance of work in contrastive perspective and integrating different language families in the analyses has been emphasized. 2. Definitions and Previous Research 2.1. Complex Predicates Complex predicates are constructions in which more than one component is involved in functions associated with the head. These functions involve the argument structure and the thetarole assignment, and they appear to be determined ad interim by more than one element in the clause. Butt (1995:2) presents the definition in (2) to explain the nature of complex predicates: (2) a. complex predicates are multi-headed; argument structure is complex, and is spread across multiple constituents. b. they are composed of more than one grammatical element, each of which contributes to part of the information normally associated with a head; c. their grammatical functional structure, however is that of a simple predicate; contributes part of the information normally associated with a head; d. light verb structures can be formed lexically or syntactically. To sum up, what makes complex predicates ‘complex’ is the fact that they consist of two (or more) constituents which behave the same way as the simple verbal predicates do; multiple constituents take part in expressing the function of the predicate. 2.2 Light verbs �The term light verb has been coined by Jespersen (1965, Volume VI: 117), and it referred to the English V+NP constructions, as in (1) below: (1) Have a rest, a read, a cry, a think Take a sneak, a drive, a walk, a plunge Give a sigh, a shout, a shiver, a pull, a ring The reason behind the notion of ‘light’ as used here is that the verbs do not exhibit full predication. In other words, one does not actually ‘give’ a shout but ‘shouts’, or does not ‘take’ a drive, but ‘drives’. In this regard, verbs serve as a verbal licenser for nouns. However, it cannot be concluded that verbs entirely lack semantic content, as there is a clear difference between take a ride and give a ride. All things considered, these types of verbs do not preserve their full semantic content, nor are they semantically empty. Butt (1995), based on agreement, anaphora, and control analysis proposes light verb constructions to be monoclausal. Within the GB framework, complex predicates are referred to as light verbs, and their argument structure is suggested to consist of X+ V (see e.g. Grimshaw and Mester 1988). Various definitions are given by many other researchers to describe light verbs, and it has also been observed that light verbs exhibit different argument structure cross-linguistically. As for the semantics of light verbs, it exhibits cross-linguistic analogy. In the languages that possess only one light verb, the most prototypical light verb is ‘do’ or ‘make’. Other examples appear as (4): a. motion verbs such as ‘go’ or ‘come’ b. verbs of impact such as ‘hit’ or ‘spear’ c. ‘give’ d. verbs of trajectory such as ‘catch’ or ‘fall’ e. psych verbs and verbs of volition such as ‘think’, ‘want’ and ‘try’ (Adapted from Bowern (2006:8). 2.2.1 Event structure of the light verbs (in Turkic) Butt (1995) proposes that light verbs embody information about the event structure. So they can be stated to be semantically bleached light verbs which contribute to the structure of the event, such as duration or telicity. �Light verb constructions in Turkic complex predicates possess certain distinctions which require a special treatment. The light verb constructions can contribute to the predicate meaning in the following four ways (5): (Bowern 2006:8): (5) a. Internal event structure: The light verb gives additional information about the internal structure of the event denoted by the coverb. b. Trajectory: The light verb marks associated motion, i.e., the path of the action/ event denoted by the coverb. c. Quasi-modal information: The light verb encodes modal information about the event. d. Participant information: The light verb provides information about the theta-role of clause participants and in some cases adds a theta-role to the argument structure of the predicate. Lexical verbs too, can be used in complex predicates, in which a gerund or participle combines with an inflecting verb. An example is provided in (6): (6) Bola kitobni Child book –ACC o’qib read-GER turdi. (Uzbek) ‘stand’3-PST. ‘A child kept on reading the book’. In example (6) above, the finite verb is tur- ‘stand’. However, the theta-role is assigned by the verb o’qi- ‘read’, and the same verb is assigning ACC case to the NP kitob ‘book’. The main lexical meaning of the predicate is expressed by gerund o’qi‘read’, and tense/aspect and agreement are marked on the finite verb tur- ‘stop’. Bowern (2004) proposes verb classification in order to describe the functional properties of this type of light verb constructions in Turkic languages. In Turkish, for instance, the verb ‘durmak’ is effectively used to form the complex predicates. In Uzbek, on the other hand, there are more than twenty such verbs used to form these constructions, and they display more idiosyncratic and lexicalized meaning (Bowern 2006). Section 4 will provide and analyze examples for various types of light verb constructions. 3. Approaches for analyzing complex predicates Studying the syntax of complex predication involves the analysis of relationship between the preverb and the light verb, and their role in clause internal argument assignment. The two main approaches implicate argument unification (e.g. Butt 1995; see also Wilson 1999) versus �argument transfer (Grimshaw and Mester (1988). The former would involve merging of the preverb with the light verb, thereby contributing to the argument structure of the derived complex predicate. As for the latter case, the light verb lacks the argument structure of its own, and the argument structure of the preverb is passed on to the light verb. However, Hale and Keyser (2002) argue for a different approach with regards to the analysis of the verbal predicates. Under this analysis all verbal structures are complex, since they are proposed to have a root and a verbal head which undergo conjoinment. This theory attempts to bring together all alternations in argument structure in L-syntax, arguing that roots themselves have complex derivational structure. It argues that intransitive verbs such as ‘work’ or ‘fish’ are derived conflating a nominal element with an abstract verbal head, and it views the difference between simple and complex predicates in the realization of S-syntax. Hale and Keyser (2002) theory explains numerous constructions and argument structure variations. Verbs such as ‘redden’, ‘darken’, ‘clear’, etc. are proposed to consist of an adjectival complement and an abstract verbalizing head. The tree structure in (7) below illustrates it in the example of ‘darken’, as in ‘the room darkened’. (7) VP V’ NP room V A -en dark As for the transitive verb construction as in ‘Alan darkened the room’, another abstract causative head is introduced in the structure (8), and the adjective-verb complex conflates into the higher verb. (8) VP NP V’ �Bertie VP VP CAUSE NP room V’ V -en A dark 3.1. Phrase structure of light verb constructions Various opinions have been proposed within the GB literature to capture the tree structure representations of the X+V constructions. The VP shell hypothesis (dates back to Larson, 1988, 1990; Hale and Keyser 1991, 1993; Chomsky 1995) treats the light verb as a ‘little-v’ above the VP (9): (9) vP v’ DP VP v V’ DP VP V DP V’ obj V 3.2. Criteria for identifying complex predicates �Bowern (2006) lists a set of formal criteria according to which complex predicates can be identified. Those criteria will be directly cited below: a. Event structure – the predicate describes a single event (as viewed by speakers) and not a sequence of conjoined events; b. Selection criteria – almost any verb can be in the coordinate construction as long as the two events are consecutive and the subjects are identical, but the verb in complex predicate constructions is confined to a set of up to approximately 20 verbs (Wurm 1953:514). c. Word-order – the converb and the inflected verb cannot be separated by intervening material, and constituency is strict; d. Nominalization – predicate as a whole may be nominalized; e. Interrogatives – the predicate behaves as a single unit for interrogative marking; f. Negation and temporal adverbs – have scope over the entire predicate, not just the converb. The following section will analyze complex predicate constructions from Uzbek based on the abovementioned criteria. 4. Data and analysis The previous section discussed certain criteria which can be elaborated in order to identify and analyze complex predicate constructions. The first criterion sets the event structure of the predicate and states that a predicate describes a single event (as viewed by speakers) and not a sequence of conjoined events. This will be checked in the example (10) below: (10) Qiz girl NOM ko’chadan o’t-ib street DAT pass-IB bor-yap-ti. go-PRS-PROG-3SG ‘The girl is walking along the street’. As seen in (10) above, the predicate consists of V+V, the verb o’t ‘ pass’, and the light verb bor ‘to go’. Both verbs refer to the same event, which is ‘walk along/past’. The light verb is expressing aspectual meaning of continuity. The second criterion, the selection criterion, proposes that not all verbs can be used in complex predicate constructions, yet that there are certain verbs that can be used in such constructions. The number of verbs varies cross-linguistically, from a single verb to almost twenty. With more than twenty verbs, Uzbek is very rich when it comes to the number of light verbs. Some of these verbs are ‘ol’ (take), ‘bor’ (go), ‘kel’ (come), ‘qil’ (do), ‘ket’ (leave), ‘qol’ �(stay), ‘o’t’ (pass), ‘ber’ (give) and ‘qo’y’ (put). In (11) and (12) examples with some of these verbs are provided: (11) Erkak ko’rkam guldasta Man beautiful bouquet sotib ol -di. buy-IB take-3PST (Uzbek) ‘The man bought a beautiful bouquet’. (12) Bunaqa ishlarni Such o’rganib business qo’ygin. learn- IB put -2IMP ‘You should learn these kind of things’. In (11) the light verb ‘ol’( take )is used with aspectual meaning to express completeness. Although two verbs are being used, ‘sot’(buy) and ‘ol’(take), the predicate is referring to the single event of buying. In (12) we have an example of a different light verb, ‘qo’y’ (put). This verb is used with a meaning similar to English modal verb should. The converb ‘o’rgan’ (learn) together with the light verb is expressing the overall idea ‘should learn’ The third criterion proposed that there is a rigid word order and that the converb and the inflected verb cannot be separated by intervening material and constituency is strict. In order to check this criterion, let us have a look at example (13 a, b, c): (13) a. Ahmadjon shoshib A ketib qoldi. hurry-IB go-IB remain-3.PST ‘Ahmadjon left hurriedly ‘ b. * Ahmadjon shoshib qolib ketti. hurry-IB remain –IB go-3.PST. A c. Ahmadjon A darrov shoshib ketib qoldi. immediately hurry-IB go-IB remain-3.PST ‘Ahmadjon left immediately in a hurry’ d. * Ahmadjon A shoshib hurry-IB ketib go-IB darrov immediately qoldi remain-3.PST Examples (13 a, b, c, d) prove the third criterion to be true, since changing the order of the converb and the light verb, as in (13 b), and inserting an adverb between the converb and the light verb, as in (13 d) results in ungrammatical structures. To sum up, no element can be �inserted between the converb and the light verb, nor can the order of the converb and the light verb be changed. The fourth criterion proposes that the whole complex predicate can be nominalized. Nominalization markers in Uzbek are suffixes such as –lik, -moq, -(y)ish, - gan, -ajak, and –ma. Examples (14) and (15) exhibit nominalization of the predicates and it applies to the whole predicate: (14) Kitob-ni qachon sotib book ACC when ol-gan-i-ni buy-IB bil-may-man. take-3PRS-NMLZ know-NEG-AGR ‘I don’t know when he bought the book’. (15) Uning he-GEN ketib qolish-i shubhali tuyil- di. doubtful seem-3PST leave-IB stay-NMLZ ‘His leaving seemed doubtful/mysterious’. According to the fifth criterion, the predicate behaves as a single unit for interrogative marking. Examples (16 a, b) demonstrate how interrogatives are formed: (16) a. Erkak ko’rkam guldasta Man beautiful bouquet sot-ib buy-IB ol –di-mi? take-3PST-Q ‘Did the man buy a beautiful bouquet?’ (16) b. *Erkak ko’rkam guldasta Man beautiful bouquet sot-ib-mi ol –di? buy-IB-Q take-3PST? And the final criterion about negative marking proposes that negation and temporal adverbs have scope over the entire predicate, not just the converb. Therefore the negative marker appears after the light verb, and its appearance with the converb results in ungrammatical structures (17 a, b): (17) a. Erkak ko’rkam guldasta Man beautiful bouquet sot-ib buy-IB ol –ma-di. take-NEG-3PST ‘The man didn’t buy a beautiful bouquet’ (17) b. *Erkak man ko’rkam guldasta beautiful bouquet sot-ma-ib buy-NEG-IB ol -di. take- 3PST �Based on the provided examples above it can be concluded that complex predicate constructions in Uzbek behave in line with the criteria proposed by Bowern (2006). The next section will make final remarks and draw conclusions in reference to the analyzed data. 5. Conclusions There are important elements to be investigated at all levels of analysis, from basic discussions of what constitutes a complex predicate, to how they are shaped, how they vary, and how they change. This study has discussed examples of complex predicate constructions by providing novel data from Uzbek and by discussing them. Uzbek is extremely productive when it comes to this type of constructions. Unlike many languages that possess a single light verb, Uzbek is rich in variety of verbs used in complex constructions. They can employ agreement markers, which differentiates them from serial verbs. Provided examples have shown that converbials express simultaneity, cause and effect, and consecutivity. Both verbs in complex constructions share the same subject, i.e. they describe a single event. However, the object may or may not be shared by both verbs. Light verbs may differ cross-linguistically, some receive inflection, and others may be subject to argument transfer. What is significant about Uzbek light verb constructions is they both host inflection and contribute to the event structure. That is, tense and agreement markers, as well as aspectual markers are carried by the light verb in these structures. The constituency is strict in complex predicates in Uzbek, and there cannot be an intervention between the converb and the light verb by such elements as interrogatives, negation, or temporal adverbs. �References Bowern, Claire (2004a). Historical change in complex predication: Bardi verb morphology in historical perspective. PhD dissertation, Harvard University, Cambridge, Massachusetts. Bowern, Claire (2004b). (Some notes on) complex predicates in Turkic. In Heejeong Ko and Maryanne Walter (eds.), Proceedings of the First Workshop on Altaic Formal Linguistics, Cambridge, Mass: MIT Working Papers in Linguistics. Bowern, Claire (2006). Inter-theoretical Approaches to Complex Verb Constructions, Eleventh Biennial Rice University Linguistics Symposium Butt, Miriam (1995). The structure of complex predicates in Urdu. Stanford, Calif.: CSLI Publications. Butt, Miriam (1997). Complex predicates in Urdu. In Alsina et al. (eds.), Complex Predicates. Stanford: CSLI Publications. Butt, Miriam and Wilhelm Geuder (2001). On the (semi)lexical status of light verbs. In Norbert Corver and Henk van Riemsdijk (eds.), Semi-lexical categories : the function of content words and the content of function words, Mouton, pp. 323–369. Chomsky, N. (1995). The Minimalist Program, MUT Press, Cambridge, MA. Grimshaw, Jane and Armin Mester (1988). Light verbs and marking. Linguistic Inquiry 19(2): 205–232. Hale, Kenneth and Samuel Keyser (1991). On the Syntax of Argument Structure, Lexicon project Working papers, MIT, center for Cognitive Science, Cambridge, MA Hale, Kenneth and Samuel Keyser (1993).’On argument structure and the lexical expression of semantic relations’, in Hale and Keyser (eds.) The view from building 20, MIT Press, Cambridge, MA, pp.53 109. �Hale, Kenneth and Samuel Keyser (2002). Prolegomenon to a theory of argument structure. Cambridge, Mass: MIT Press. Jespersen, Otto (1954/1909). A modern English grammar on historical principles, Part VI, morphology. London: George Allen and Unwin Ltd. Larson, R. (1988). On the double object construction, Linguistic Inquiry 19:335 91. Larson, R. (1991). Promise and the theory of control, Linguistic Inquiry 21:589 632. Öztürk, Balkız (2003). Complex predicates in Turkish. Harvard Working Papers in Linguistics 9: 171–192. Wilson, Stephen (1999). Coverbs and complex predicates in Wagiman. CSLI Publications, Cambridge University Press. Wurm, Stephen (1953). Das ozbekische. Jean Deny et. al ( eds.) Philologiae Turcicae Fundamenta 1, Wiesbaden: 489-524. � 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. 2938 Title A name given to the resource Complex Predicate Constructions in Uzbek Language Author Author Akbarov, Azamat TÜRKER, Lola Abstract A summary of the resource. Complex predicates are defined as constructions consisting of preverb/converb/coverb + ‘light verb’ (Bowern 2006). Each component of the complex construction contributes to the internal argument structure. The typology of complex predicates exhibits cross-linguistic similarities and differences. This study investigates the complex predicate constructions in Uzbek, which possesses a rich variety of light verb constructions. Novel data from Uzbek is provided, and it is analyzed on the basis of proposed criteria in the government and binding theory (GB) literature for complex predicates. The analysis reveals that these constructions express simultaneity, cause and effect, and consecutivity. Both verbs in complex constructions share the same subject, and they describe a single event. However, the object may or may not be shared by both verbs. What is significant about Uzbek light verbs is that they both host inflection, and contribute to the event structure. That is, tense and agreement markers, as well as aspectual markers are carried by the light verb. The constituency is strict in complex predicates, and there cannot be an intervention between the converb and the light verb by such elements as interrogatives, negation, or temporal adverbs. Key words: Complex predicates, light verbs, Uzbek language, construction, derivation Publisher An entity responsible for making the resource available International Burch University Date A point or period of time associated with an event in the lifecycle of the resource 2015 Keywords Keywords. Article PeerReviewed P Philology. Linguistics