97 10 3494 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. 940 Title A name given to the resource EFL Teacher Trainees' Perceptions of the Sufficiency of the Coursebooks in terms of Proverb Instruction Author Author CAN, Nilufer Hatipoglu , Ciler Abstract A summary of the resource. Proverbs are formulaic expressions that mirror the culture of a language (Hirsch et al. 2002) and it is said that every native speaker possesses ‘proverb competence’ (De Caro, 1978) which allows them to comprehend and employ those expressions where necessary. When proverbs are used, the speech can become more fluent, natural and colourful (Prodromou, 2003; Sinclair, 1992). For these reasons, proverbs can be influential in the development of communicative competence (CC) which is an essential attribute of a successful language teacher. The research also shows that coursebooks are the main sources in Turkish EFL classrooms where prospective language teachers are learning the language (Can 2011). Therefore, in this study, EFL teacher-trainees were asked to evaluate the sufficiency of the English coursebooks they used in Anatolian Teacher Training High Schools (ATTHS) in Turkey in terms of proverb instruction. Teacher-trainees as language learners were chosen as a focus group in this study since as the prime users and the reasons why coursebooks are developed they can provide very useful feedback to other stakeholders in the educational system (Cunningsworth 1995; McGrath 2002). The data for this study were collected using questionnaires and interviews specifically designed for this study. Both qualitative and quantitative analyses of the data were performed and the following results were obtained: (1) the bulk of the informants thought that many of their coursebooks did not include a sufficient number of proverbs; (2) some students stated that their books incorporated proverbs randomly without adequate instruction; (3) all of the informants wanted the coursebooks to include more proverbs and to emphasise the teaching of their various aspects. The findings of the study highlight the importance of obtaining continuous student feedback for material selection, evaluation and revision; and show how there sometimes might be discrepancies between administrative decisions and users’ needs and perceptions. Date A point or period of time associated with an event in the lifecycle of the resource 2012 Keywords Keywords. Conference or Workshop Item PeerReviewed P Philology. Linguistics 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. 978 Title A name given to the resource Motivation and Student Perception of Acquiring L2 in the Tertiary Education Author Author Bujak, Samra Akbarov, Azamat Abstract A summary of the resource. This research concerns the study of the perception of the importance of motivation in English language learning. It aims to find out how important students perceive the importance of motivational factors in arousing their motivation learn EL. Motivation in learning has captured a lot of attention from researchers as a complicated, yet important phenomenon that decides learners’ learning performance. Dornyei (2001, pp.1-2) states that motivation is what influences people’s behavior and it has been largely agreed to play a very important role in determining the success or failure of learners in any learning context. Language learning is, of course, not an exception. In particular, the overall findings of research in ELT show that learner’s positive attitudes and motivation are related to success in second language learning (Gardner, 1985, cited in Lightbown & Spada, 1999). As a result, understanding factors that have impacts, either negative or positive, on learners’ motivation is of great importance. Having given the general content of the significance of motivation in education, it is important to take into consideration that motivation plays a significant and a decisive role in language learning, and the motivational factors are regarded as effective in determining the success or failure of language learning. Among the important contextual factors is the environment where students should have the chance to participate and decide on their learning, students' curiosity should always be aroused and their attention must be attracted in order to guarantee a successful acquisition of the foreign language. Other motivational factors considered important in language learning are personality factors, related to the learner himself such as his anxiety, his self feeling and how far his interests are met in the course of learning foreign language. The other important side of motivational factors is related to the instructional factors, and how far the teacher is capable to enhance students' motivation to learn through proper interaction. The issue of motivation in language learning and student perception of studying English language will be discussed in further details through my paper. Date A point or period of time associated with an event in the lifecycle of the resource 2012 Keywords Keywords. Conference or Workshop Item PeerReviewed P Philology. Linguistics 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. 982 Title A name given to the resource Taking the Bull by the Horns: A Cognitive Linguistic Approach to Teaching Idioms Author Author Berberovic, Sanja Hundley, Lisa Abstract A summary of the resource. During the course of their English language studies, many students are asked to learn various kinds of idiomatic expressions in English, ranging from phrasal verbs to idioms. While learners may be able to memorize the standard meanings of such phrases, they frequently lack the contextual knowledge in order to use them appropriately. This presentation will describe a series of classroom activities conducted with 20 first-year English language students at the University of Tuzla in Bosnia & Herzegovina. The activities are designed based on cognitive theory of metaphor and metonymy (Lakoff and Johnson 1980, Kövecses 2002, Radden & Kövecses 1999) and are intended to bridge the gap between learners’ understanding of meaning and usage of idioms. Specifically, these activities will encourage learners to hone their fluency via appropriate use of idioms while also suggesting ways for instructors to devise assessment mechanisms for appropriate use of these phenomena. The benefits of linking cognitive linguistic theory to meaning-focused classroom approaches and materials design will also be discussed. Date A point or period of time associated with an event in the lifecycle of the resource 2012 Keywords Keywords. Conference or Workshop Item PeerReviewed P Philology. Linguistics https://omeka.ibu.edu.ba/files/original/e35850b3e59f26c9e8e1da59d69ed48b.pdf e6801fcf6614d0479eb3b63131364eec PDF Text Text Journal of Economic and Social Studies Roles of Investment and Innovation in Business Cycle from Kalecki’s Perspective with a Schumpeterian Approach: An Empirical Analysis for Turkey and Greece Başak Gül AKTAKAS Faculty of Economics Çukurova University, Adana, Turkey bgaktakas@cu.edu.tr Cengiz AYTUN Kozan Vocational School Çukurova University, Adana, Turkey cengiza@cu.edu.tr Cemil Serhat AKIN Yayladagı Vocational School Mustafa Kemal University, , Hatay, Turkey. csakin@mku.edu.tr Abstract: Business cycles are one of the best sources to understand current situation of a country’s economy. Michal Kalecki denotes investment as the best explanatory for the dimension and reason of cycles; on the other hand Schumpeter considers that innovation should be placed in a different position in this regard. In addition, both Kalecki and Schumpeter verify that investment and innovation are related with each other because innovation is also an important subject for investment. It is expected that investment and innovation have the effect in the same direction on output. In this study, business cycles have analyzed for 19712009 period by using the yearly data in Turkey and Greece and it has been dealt effects of investment and innovation on cyclical fluctuation. In this paper which growth rates have been discussed, ordinary least square estimation method has been used. In this respect firstly, it has been examined that the effect of innovation on investment and income. After that examined that effect of investment on output and finally innovation and investment have been evaluated by considering the effects on the output. It has been found that the obtained results support the views of Kalecki for both of the countries. KEYWORDS: Investment, Innovation, Business Cycles, Michal Kalecki ARTICLE HISTORY Submitted: 05 March 2012 Resubmitted: 12 May 2012 Resubmitted: 06 December 2012 Accepted: 24 December 2012 JEL codes: E12, E22, O31 95 �Başak Gül AKTAKAS, Cengiz AYTUN & Cemil Serhat AKIN Introduction Business cycles are the one of the important topic which macroeconomics has focused on. In this context, it has been seen that emphasis on balance results. Some of the neo-classical economists' perspective on this issue is how output and price act together throughout the cycle (Sawyer, 1985). In spite of these dominant views, it is seen that Post-Keynesians consider differently for the business cycles. In contrast to the main economic streams which see the all macroeconomic cycles as a function of external powers, Post-Keynesians think that business cycle is derived from internal powers (Snowdon and Vane, 2005; Harvey, 2011). It is seen that Kalecki who is one of the precursors of Post-Keynesian economics shares this view and creates a difference along with his views on business cycles. Kalecki refers specifically a central role for investment because of the effect on demand and output. According to him, the main reason of these cycles is resulted from the differences in investment. The determiner role of investment upon output presents his opposite views about Orthodox economic streams. Besides, it is seen that innovation has a significant place in the subject of investment. Whereas innovation has a positive effect on investment, herein the output has an effect in the same direction as well. Whilst Joseph Schumpeter deals with the effect of innovation upon output as a different topic all by itself, Kalecki shows investment as the main source of the shifts of output. However, there are some ideas which supports both investment and innovation have an effect on output together as dependent on conditions in current period (Courvisanos and Verspagen, 2004). In this study, it is addressed that the issue of cyclical fluctuations. In this regard, it has been examined relationships of investment and innovation with output for Turkey and Greece. Firstly, it will be given some information about primarily role attributed to investment as to Kalecki. Then, the connection of this topic with innovation will be placed. Afterwards, taking the topic as investment and innovation together, their relationship with business cycles will be handled. Lastly, after examining the effect of innovation for Turkey and Greece separately for both 96 Journal of Economic and Social Studies �Roles of Investment and Innovation in Business Cycle from Kalecki´s Perspective with a Schumpeterian Approach: An Empirical Analysis for Turkey and Greece investment and output, the effect of innovation and investment upon output will be dealt as being combined. The contribution of our study to the literature is composing an application upon Turkey and Greece by analyzing a concept within Kalecki perspective together with a Schumpeterian innovation idea. Theoretical Explanations It is seen that Kalecki, who is one of the leaders of Post-Keynasian economics, shows a difference with his views on business cycles. According to him, the growth models of today tend to be solving this problem being away from controlling stability. In addition, these models do not adopt the approach which is applied in the business cycles theory. Business cycles theory is composed with the foundation of two relationships. The first one depends on the effective demand effect which is created by investment. Here, investment is investigated within its role upon profit and national income. This relation does not include complicated problems. The other relationship is related with the way of determination of investment decisions to show the exchange ratio and level of economic activity. According to Kalecki, it is the most central topic of economics (Kalecki, 1968). In the approach presented by Kalecki to explain the business cycles, it is stated that cycles in investment expenditures is the basic factor, which created the macroeconomic change. The changes in investment have to be dealt in the respect of a growing economy. Because of the additional investment made upon the capital stock, an improvement occurs in economy and a growth expectation creates a net investment demand (Sawyer, 1985). The analysis of Kalecki takes the total levels into consideration and gets the conditions together which are not applicable only in firm level but also in total levels. The marginal efficiency of capital subjects to general demand level which depends on investment expenditures. If the firm plans more investment in the future period, demand and hence profit will be higher, due to the increased investment. Then the marginal efficiency of capital will be increased and the firms will therefore begin to plan to increase the investment again. This cumulative perspective towards the investment has been overlooked by not only Keynesians but also Neo-Classicals (Sawyer, 1985). 97 �Başak Gül AKTAKAS, Cengiz AYTUN & Cemil Serhat AKIN Kalecki, who developed many models about investment, gave the final shape to the investment model in 1968. Kalecki has improved a model in which consistently movement exists via a short-term and semi balanced sequence. Moreover, this movement will not return to any point of ultimate equilibrium and be cyclical because the business cycles continuously occur. According to this, it is supposed that the demand extending is a needed condition for growth in a long term and a sufficient one in the model of Kalecki. Indeed, the long term effective demand theory of Kalecki is the long term investment decisions theory. According to him, investment under capitalism is the main determiner of aggregate demand (Lopez and Assous, 2010). The proceeding of business cycles mechanism presented by Kalecki could be seen in Figure 1 (Kalecki, 1990): Figure 1. The Mechanism of the Business Cycle Source: Kalecki, 1990 98 Journal of Economic and Social Studies �Roles of Investment and Innovation in Business Cycle from Kalecki´s Perspective with a Schumpeterian Approach: An Empirical Analysis for Turkey and Greece θ : The time-lag between investment orders and obtaining of new equipment D : The curve of obtaining of new equipment I : The curve of investment orders A : The curve of the production of investment goods K : Volume of capital equipment t : Time In the Figure 1., investment orders (I) shows deviations from the average to produce of investment goods which is equal to gross capital accumulation (A) and obtain of new equipment (D); that is, I-I 0, A-A 0 , D-D 0 . The all averages (I 0 , A 0 , D 0 ) are equal and also equal to the need of renewal. While the D curve is positive, K will increase throughout this cycle (D ↑ K ↑ ; D↓ K ↓ ). In the current mechanism, it is accepted that the production of investment goods is equal to the gross capital accumulation. This is possible when the investors stay in a constant ratio. The obtaining of new fixed assets results in an enlargement in the volume of capital accumulation. This case can be illustrated in the shape as D-U. Herein U shows the need on renewal. This need stays fix in the course of business cycles. While the investment orders (I) is an increasing function of gross capital accumulation (A), the size of capital equipment is a decreasing function. When the D curve which shows the delivery curve is shifted within a course of time in an amount as θ to the place where the investment orders curve is I, the investment goods production curve-A catches the investment orders curve -I within a course of time as the half of θ (Kalecki, 1990). Kalecki states that there is a sharp line between investment decisions and realized investment expenditures. This difference is derived from the fact that there is a time difference between them. It takes time that goods are prepared for using. At the same time, firms can reschedule or cancel their investment orders in return of the change in the economic and political conditions. Therefore, why the most of investment goods are not achieved immediately is clarified in this sense (Laramie et al., 2004; Sawyer, 1985). 99 �Başak Gül AKTAKAS, Cengiz AYTUN & Cemil Serhat AKIN The process generally operates in following way (Kalecki, 1990): An increase in the order of investment goods results in another increase in the production of investment goods. This production increase is equal to the gross capital accumulation. As a result of this, a rise in investment activities occurs. Yet, after a course of time when investment orders exceed the need on renewal, the volume of capital equipment begins to increase. Initially, this case restricts the investment activity which is already increasing. On the other stage, it causes a decrease in the investment orders. It is actually impossible to stabilize the investment activity in a ratio that exceeds the need on renewal. Indeed, if the investment orders stay in a constant level, the production of investment goods, which is equal to gross capital accumulation, will stay unchanged. In addition to this, while the capital equipment is increasing, the investment will be greater than the need on renewal. However, under these sorts of situations, the investment orders will begin to decrease and move away from a fixed investment level. During the depression, the process will reverse. The investment orders are far away from the need on renewal. This case affects negatively the volume of capital equipment. As a result, a process in which an increase in the investment orders is taken back occurs. Stabilizing the investment in a lower ratio than the level, which establishes a sufficient renewal, is as impossible as stabilizing in a ratio, which exceeds the renewal need. In the recovery period, the investment orders are above the renewal need. Yet, the need on capital equipment has not begun to increase because the delivery of new equipment is still below the need on renewal. The production of investment goods (A) is equal to gross capital accumulation and increasing, but there is still a reduction in the size of equipment (K). When all of these occur, the investment orders increase rapidly. 100 Journal of Economic and Social Studies �Roles of Investment and Innovation in Business Cycle from Kalecki´s Perspective with a Schumpeterian Approach: An Empirical Analysis for Turkey and Greece Throughout the boom period, the obtainment of new equipment has already begun to exceed the need on renewal. As a result, the capital equipment (K) begins to increase. The increase on K restricts the rate of increase on investment orders at the beginning. This results in the diminishing of investment orders after all. In the second half of revival period, this is followed by a decrease in the production of investment goods. During recession, the investment orders take place below the need on renewal. However, the volume of capital equipment still continues to increase because the new equipment deliveries still above this level. In this whole process, the production of investment goods which is equal to gross capital accumulation continues to decrease. This decrease occurs together with an increase in K. In this case, a sharp decrease happens in the investment orders. Within the depression period, the new equipment deliveries are still below the need on renewal. As a result, the capital equipment decreases. This decrease in K reduces the velocity of decreasing of investment orders firstly. Hence it results in the increase of investment orders. It is followed by an increase in the production of investment goods in the second half of depression period. As can be seen, the investment orders, capital accumulation and capital equipment are the elements, which make up the business cycle. Here, changes of the abovementioned factors are taken into account correlated with each other. In addition to all these, the capital accumulation exists within the concept of innovation (Courvisanos, 2005). The concept which is handled within the context of innovation is the technology (Kalecki, 1962). Technology is the stimulator of the change and economic growth. The contribution of Post-Keynesians in this context is a technological innovation concept which is demand centred. This mentioned innovation helps the increase of volatility which is created by the economic growth and modern neo-liberalism. Actors for Post-Keynesians have a central role on determining the technological innovation. It is accepted that those actors are capitalist. These capitalists set a relationship between innovation and the determinacy of investment decisions. Indeed, the items belonging to shifts in 101 �Başak Gül AKTAKAS, Cengiz AYTUN & Cemil Serhat AKIN effective demand and cycle are related with the cumulative process in all shapes of innovation at the firm/industry level on the broad base (Courvisanos, 2005). The classical proposal of an investment model which contains innovation is come up with Schumpeter. According to him, it is seen that wave action, namely the cycle, is embraced on an economic development base under capitalism. Real economic development1 and growth depend basically on the increase of productivity which is based on innovation. For Schumpeter, this view covers many steps: presenting a new good or bringing a new quality to a good; switching on a new production method, opening a new market, obtaining the new supply sources and finally actualizing a new activity type, which will be realized in any industry. The person who will make these all is the entrepreneur. This discussed person is the same actors whom a central role by Post-Keynesians is given, and the economic growth will begin when an entrepreneur applies an innovation which presents to him an extra monopolistic income. One of the reasons of in terms of imperfect competition outlook of Schumpeter on this topic can be considered as if pure competition does not result in high profitability. In such case, new reasons for innovation is out of question as well. Another reason is that the pure competition can not provide an inducement for capitalist, and the entrepreneur takes on the risk and uncertain projects because this type of competition can not guarantee an award in the form of extra income. What is more certain is that switching on the new technologies and new activity types, the innovations create a surplus of income on the costs. Competition is prone to eliminate these excess returns, but the diffusion of monopolistic structures and the power of large enterprises on enlarging ability about innovation recreate constantly these incomes again (Schumpeter’s study as cited in Michaelides etc, 2010; Ferlito, 2011). The analysis of Kalecki is composed under a different roof from a free competition hypothesis. According to this, imperfect competition and oligopolies structures dominate the market (Sardoni, 2011). As understood from these structures, Kalecki states that business cycles are derived from the cycles in private industrial enterprises in a capitalist economy. Capitalists receive their expenditures. The expenditures made upon investment are cyclical (Osiatynski, 1992). 102 Journal of Economic and Social Studies �Roles of Investment and Innovation in Business Cycle from Kalecki´s Perspective with a Schumpeterian Approach: An Empirical Analysis for Turkey and Greece According to investment-profit relation presented by Kalecki, two determiners of the real profit increase of new investments are discussed. The first determiner appears in such a case that technical process is overlooked for a moment when new investment catched the yearly increase of profit in only a small part. Kalecki builds his arguments on imperfect competition due to the tendency on being held by market forces, old equipment and the previous profit in the market. The second determiner emerges in the existence of the technical process. The new equipment which is more productive than the old one includes a new income. In the mean time, the profits gained from old equipment for given total volume of profit drop with the same amount because the real cost of using these goods increase, as a result of using the new ones (Lopez and Assous, 2010; Sawyer, 1985). If the investment is put forward in order to maintain the profitability, there will be both a positive expansion effect and a negative "kickback effect". If the positive effect is embraced as to the demand, it is the one, to increase the profitability of investment. The negative effect presented by Kalecki reveals at the supply side. As to this, if a demand increase occurs, the risk of decreasing profitability will be engaged (Lopez and Assous, 2010; Asimakopulos, 1971; Driver, 1994; Toporowski, 2003). A risky profitability and even a decreasing profitability ratio make the investments more fragile. Investment is more intensive towards a collapse case. If it is looked at in the historical context, this sort of a high sensitivity can be identified with the increasing financial costs and gearing ratios and decreasing utilization ratios. In the Post-Keynesian analysis, one of the main factors of intensivity is innovation. This factor associates with investment decisions (Courvisanos and Verspagen, 2004). As it is seen the susceptibility relation between the investment and innovation as to the perspective of Schumpeter, an investment function is drawn attention in response to the cycles of optimism and permission defined by him. This function causes an innovation cluster. Therefore, a bunch of investment arises. This case generates susceptibility towards unstable investment activities and actually develops a trigger mechanism to start new innovation systems which have long cycles. Herein, it should be stated that the thing which results in long cycles in economy is the results of the innovation cluster (Courvisanos and Verspagen, 2004; Courvisanos, 2003). 103 �Başak Gül AKTAKAS, Cengiz AYTUN & Cemil Serhat AKIN In order to analyze the relationship among the Schumpeterian and Kaleckian dynamics, a differentiation between the three stages of Schumpeterian basic innovation life cycle and the high and low intensivity cases in Kaleckian cycle. This situation can be seen more clear in the following table (Courvisanos and Verspagen, 2004): Table 1. The relationship among Schumpeterian and Kaleckian dynamics The Basic Stages of Innovation’s Life The Low Intensivity of Investment The Primitive (Undeveloped) Period The most appropriate conditions for the “take off paradigm”, which are fragile and sensitive rises, being The possible obstacles in the formed with the diffusion of new diffusion of new main innovation. technological system at the beginning stages. Middle (Early or Developing) Period Long, fast, and strong rises, the fast diffusion of new technological system. Short, weak falls, the slow diffusions of new technological system. Maturement Period The rapid development of intensivity: Short and weak improvement, the pressure for the crash of old paradigms. Strong and rapid declines, possible long straits “sailing ship effect” as the most appropriate conditions. The High Intensivity of Investment Source: Courvisanos &Verspagen, 2004. 104 Journal of Economic and Social Studies �Roles of Investment and Innovation in Business Cycle from Kalecki´s Perspective with a Schumpeterian Approach: An Empirical Analysis for Turkey and Greece As it is seen in the Table 1., the increase of innovation has an important place in the early and matureness stages. The abundance of technological opportunities (scarcity) shows a difference as the early (matureness) periods. An old basic innovation's matureness period generally overlaps with a new basic innovation's primitive (undeveloped) period, because of the "creative destruction". Therefore, the differentiation of the first and last stages is hard in practice. The Kaleckian and Schumpeterian cycles are fed by different extensions throughout the periods different from each other. When the basic innovations are new and newly made, they generate a cluster of innovation. At this point, the Schumpeterian cycle is strong. When the cycle is weak periods, the basic innovations will be exhausted. These types of different pressures in business cycles affect directly the investment decisions process. Disappearance of low susceptibility, strong strategic competitive pressures and investment obstacles encourages the technological innovation. In spite of this, high susceptibility prevents the technological innovation by way of largely prevent the diffusion of innovation and increase the pressure for the postponement of investment decisions (Courvisanos and Verspagen, 2004). The amount of innovation will not only affect the enhancement of investment cycles but also change the trend growth line, via vicious circle if it is hard and severe, otherwise via a productive circle. The effect generated by the productivity of cycle exists when the density of innovation increased. This increase reveals with the increase of investment activities and the shift of trend line upwardly (Courvisanos, 2003). According to Kalecki, innovation has a cyclic trend effect on the investment function. This important factor is the innovation effect on the investments which generates an increase in the productivity owing to the technical process2 (Courvisanos, 2003; Kalecki, 1968). Kalecki who admits the innovation as a development factor also accepts that this factor is an explanatory for the long- term upward trend (Richardson and Romilly, 2008). This positive effect of technological innovation on growth reveals because of its positive relation with employment in the meantime. This effect involves a common perception for not only Schumpeter but also Kalecki (Gamulka, etc., 1989). Being one of the main components of autonomous expenditures, a high investment means a high total demand and output level. Output's being at a high level will reflect a high profitability and capital 105 �Başak Gül AKTAKAS, Cengiz AYTUN & Cemil Serhat AKIN utilization ratios. In this case, for the next period, it will generate a tendency towards stimulating high investment ratios and output. If the investment decisions are indifferent to capital utilization and the changes in the profitability relatively, the time path followed by the output will converge to the long term equilibrium (Skott, 2003). Conversely, if there is the high sentiment of investment, this situation makes it difficult to reach long-term equilibrium. Economy can not turn into the equilibrium, but move into a more point (Skott, 2003). The effect of a hard and severe cycle will show itself in the downward movement. A low technical process will mean a low investment inducement. For instance, the firms which can not compete with new firms and make innovation will be harmed and new investment will be limited. Therefore the facilities presented by innovation will be exhausted. According to Schumpetter, this downward tendency coincides the same period with recession. This decrease continues because of optimism excess and faults. Indifferent, faithless and other unsuccessful enterprises occur in the excess of optimism. This discussed type of entrepreneur can not engage in successful activity during the recession periods. This kind of enterprises is eliminated and eventually a status panicus will exist. Due to firms’ not maintaining out of action pressure, a decrease in their activities will occur. This case pushes them under the balance level they exist. This case coincides with depression in Schumpeterian cycle. This case on being at the bottom will continue until all investments will be rectified. When this point is reached, there will be a new movement towards the balance (more precisely towards a point, which is near to the equilibrium) and this stage will correspond to the “revival” in Schumpeterian model (Schumpeter’s study as cited in Michaelides etc, 2010; Courvisanos and Verspagen, 2004; Courvisanos, 2003; Sawyer, 1985; Michaelides etc, 2010). Innovation changes the types of susceptibility as to whether it is internal or external. The internal and external innovation determines how the innovation passes into the process of cumulative causality (Courvisanos and Verspagen, 2004). The concept used by Kalecki in order to show the given capital investment level with the density of innovation is the “external innovation”. As to this, any shift in the density of innovation is derived from the basic business opportunities which are defined as the source of a scientific invention or innovation. Indeed, a decrease in the density of innovations will cause a deterioration in business cycles at first. Therefore, it will be 106 Journal of Economic and Social Studies �Roles of Investment and Innovation in Business Cycle from Kalecki´s Perspective with a Schumpeterian Approach: An Empirical Analysis for Turkey and Greece suggested that a collapse case has occurred. Eventually, a lower long-term investment level will occur (Kalecki’s study as cited in Courvisanos, 2005). This condition will result in a downward shift in the long term. Because, if an increase in the density of innovation occurs, the line followed by the economic growth in the long period will be upward. As to Kalecki, a stable growth ratio is an increasing function of the density of innovations. In the contrary case, downward swings will occur. This kind of an approach has a close relation with Schumpeter’s “clust-bun” effect3 (Kalecki, 1962; Courvisanos, 2005). Moreover, the internal innovation has also similar meanings for Kalecki and Schumpeter. The concept considered as internal innovation by Kalecki seems as the increasing innovation for Schumpeter. The development period seen as the second phase of a basic innovation in Table 1 provides appropriate conditions for this innovation type. This type of innovation is rather seen in entrepreneur activities and involves new investment expenditures. When Kalecki is dealt with in relation to investment cycle, this kind of an innovation is named as internal. In the perspective of Kalecki upon innovation the internal innovation has a secondary importance regarding the scientific aspect. This situation is arisen from three reasons. The first one is the insignificant condition of adapting the previous capital equipment. The second one is the esthetic improvement of the old goods. And the last one is related with the improvement of the sources of previous raw material. This kind of innovations is named as internal. Because this is a cycle in which it stimulates innovation and the increase of investment order level by itself. The analysis with the internal innovation occurred in a Kaleckian macro economy, focuses on how this kind of innovations with will increase at the firm or industry level and eventually affect the economy. When a firm decides to increase the investments at a relatively low sentiment level under competitive pressures and higher suspension costs, the research-development (R&D) investments in the past gets ready to realize these innovations. R&D expenditures have an important place in the internal innovation process in which strong firms with great profits exist. These profits provide the increase of R&D expenditures. R&D investments increase the strategic profitably capacity of firm effectively. In an industry in which the innovation has a regular competition strategy, R&G expenditures will be great and change under susceptibility pressures like capital expenditures. When the innovation is made occasionally in an industry, R&D expenditures will be small and relatively fix on the investment cycle. Nonetheless, firms at the high susceptibility level are under the pressure of the 107 �Başak Gül AKTAKAS, Cengiz AYTUN & Cemil Serhat AKIN suspension of investment orders. This state includes the same process for the internal innovations. Nevertheless, the R&D activities which generates the patents are meant, and the decrease of these activities is possible in respect of process (Courvisanos and Verspagen, 2004; Courvisanos, 2003). In our study, Kaleckian and Schumpeterian cycle for the two Balkan States as Turkey and Greece is analyzed. According to this, after the effect of internal innovations on the investments and income is handled separately for both countries taking the decisiveness of investments on business cycle into consideration, the investment-national income relation will be tested. In this way, the effect of investment and internal innovation upon national income for both Kaleckian and Schumpeterian perspective will be primarily tested separately, and included into the model in an aggregated manner. Related Literature Klette and Kortum (2004) have attempted to present the relationship between innovation and growth in their articles in which it was stated that Schumpeterian “creative destruction” concept diffuses into all of their studies. The measurement of the innovation output is made according to the patent data about which it is stated that it has a positive correlation with productivity and research-development. According to this, it is stated that firms are getting bigger with making innovation, and economy is getting bigger, because the quality of innovation product set increased (Klette and Kortum, 2004). In the study of Aghion and Howitt (1992), they emphasize that a successful innovator will have a patent exists. It is stated that this bellowed right can be used in order that the innovators keep the intermediate goods in their monopolies. In the available their studies, it is stated that growth is derived from technological process at a large scale. The developments in the technology are seen as a result of the competition among the firms which make innovation (Aghion and Howitt, 1992). Supporting this argument in their studies, Lentz and Mortensen (2008) shows that the more productive firms grow more rapidly and eventually in the steady state, they are excluded from the less productive firms. A more innovator firm, namely the one which got its good involved into a qualified development process can set the higher price and will be in a more profitable status. As a result of this, the firm invests more on innovation and relatively gets bigger more rapidly (Lentz and Mortensen, 2008). It is seen in the 108 Journal of Economic and Social Studies �Roles of Investment and Innovation in Business Cycle from Kalecki´s Perspective with a Schumpeterian Approach: An Empirical Analysis for Turkey and Greece study of Allred and Park (2007) in which they have dealt with the relationship between patent and innovation in both national and firm level, two different results for the developed and developing countries exist. According to this, there is a positive linear relationship between research-development and getting patent. Yet as this result is proved in the countries in which patent system is developed very well, because innovation of patent right stimulate at a large scale, this kind of a case is not valid for developing countries. Andres and Goel (2012) tests inversely the effect of items which affect the innovation like patent on growth. In their study which examined effect of software piracy on economic growth for the in the medium-term, they found negative relationship between the two variables. Great computer software reduces the economic growth. However, the relationship among these factors is not linear. Decrease in the economic growth reduces piracy. The low piracy ratios, slows down the growth, due to decreasing investments (Andres and Goel, 2012). By obtaining a result, which is reverse to the general, Gangopadhyay and Mondal (2012) state that intellectual property rights which represents patent in our study might not always stimulate the innovation or economic growth. The key point in these findings the assumption that the free circulation of the right of which license is given might prevent the diffusion of scientific knowledge and the reveal of the talents of researches on the previous studies. According to the findings obtained, the intellectual property rights of which license was taken are increasing the benefit which is expected from innovation and because of the limited knowledge diffusion, they are complicating the innovation future (Gangopadhyay and Mondal, 2012). While the elements effecting on innovation and the effect of these factors on output with innovation are generally in this way, in the recent periods, it presents with the production function of neoclassical statement, it is seen that a different result is focused on. According to this standard function, output is taken as a function of labor, capital and technological innovation. Looking at the recent studies, it is seen that the relationship between fixed capital investments and output has been dealt. The studies of De Long and Summers (1992) seems to us as a study in this sense like a sample and provision study. Their analysis is set on the assumption that there is a strong relationship between the machine-equipment investment and growth. According to this, the equipment investment is a pushing force in a role for economic growth (De Long and Summers, 1992). Temple concluded in his study in 109 �Başak Gül AKTAKAS, Cengiz AYTUN & Cemil Serhat AKIN which he dealt with the relationship between machine-equipment investment and growth that the social bring out of the fixed capital investment for the developing countries is at very high levels. According to this, it is detected that in this set of countries, the machine-equipment investments has a central role on the growth of countries (Temple, 1998). Madsen’s study (2002) in which he questioned the causality relation between investment and economic growth supports this finding. Madsen has a result that machine-equipment investment is heavily effected by supply and as well demand factors when he has also concluded that demand items only effect the investments in the structures. For the latter, the direction of causality is from income towards investment. Both demand and technological process are effective on machine-equipment investment. According to this, it is concluded that there is no feedback from growth to investment in effect (Madsen, 2002). In Crowder and Jong (2009)’s investigations in the continents as Asia, Africa, Europe and America, they have found two-way relationship generally between output and fixed investments. As Kalecki supports as well, the causality relationship which is from investment to output keeps the validity at %19 for all the countries included in Crowder and Jong’s studies (Crowder and Jong, 2009). In Herrerias and Orts’ analysis (2012) for the machine-equipment investment and growth, the long-term causality relation is valid for China. This case is true of all models predicted. Along with it regarding the period dealt, it is mentioned that the investment usually increases more rapidly that GDP. It is seen that the equipment investment is obtained via the positive relationship between both the output and productivity (Herrerias and Orts, 2012). 110 Journal of Economic and Social Studies �Roles of Investment and Innovation in Business Cycle from Kalecki´s Perspective with a Schumpeterian Approach: An Empirical Analysis for Turkey and Greece Data and Empirical Methodology For the model to be used in the article, the study done by Courvisano and Verspagen (2004) is followed. In the discussed study, as to Schumpeterian and Kaleckian dynamics, an effort of study, which covers the years 1870-2000 for United States, United Kingdom, Japan, Germany and France, has done. At the end of the study, getting the approaches of Kalecki and Schumpeter together an aggregated application has done. The way followed in our available study is an application which has been done by both composing Kaleckian and Schumpeterian dynamics and separately using them. When Kaleckian cycle is integrated Schumpeterian innovation it can seen that there is a strong relationship between life cycle of innovation and susceptibility of investment. Thus, they influence together to length of wave. However, in our study there are two differences. Firstly, in the aim of using gross domestic product (GDP), a different path has followed. While Courvisanos and Verspagen (2004) take GDP data as a profitability indicator, we included the data as a real national income, along with its meaning represented, into our applications. Because, looking at the aim of the handling style of article in Kaleckian and Schumpeterian business cycles approaches, it is seen that GDP is evaluated by regarding its self-significance. Secondly, it can not been analyzed a long period in the followed article. Because fixed capital investment and gross domestic product data are not available for Turkey. Meantime, being appropriate to the followed model in our study, the patent serial has taken representing the internal innovations, and the fixed capital investments have used representing the investments. The sample period covers quarterly data from 1971 to 2009. The raw data have been collected from OECD (Organization for Economic Co-operation and Development) data set. Being studied in different countries, taking the data from the same source has paid attention. All variables have been included in the analysis in terms of growth ratio. Gross domestic product and fixed capital investment variables are used with 2005 based prices. In this paper used variables which are gross domestic product (GDP), fixed capital investment (FC) and patent numbers (PT) is consistent with Kalecki and Schumpeter’s approaches. According to this, patent numbers are 111 �Başak Gül AKTAKAS, Cengiz AYTUN & Cemil Serhat AKIN efficient on fixed capital investment and length of cycles. On the other hand, fixed capital investment influences size of business cycles. After all these effects are handled separately for both Turkey (TR) and Greece (GR) being aggregated a gathered evaluation will be done. The Ordinary Least Square (OLS) estimation method has preferred, as series are constant at the level and testing the average relation among variables in a sense being mostly real-alike. Therefore, OLS method has used to be on the point of patent explanatory variable in order to show the relation between investment-patent and GDP-patent. In addition to this, in order to see the effect of investment upon GDP and in respect of presenting the relationship of investment with GDP in a way by embracing it with innovation, again the same method has applied. In this study, auto correlation, heteroscedasticity and normality tests have done, and any problem has not met. 112 Journal of Economic and Social Studies �Roles of Investment and Innovation in Business Cycle from Kalecki´s Perspective with a Schumpeterian Approach: An Empirical Analysis for Turkey and Greece Empirical Results In this part empirical results are given in order. In the first section unit root test results are given. Second section presents the ordinary least square test results. Unit root test results The results from unit root tests are given in Table 2 and suggest that all the variables are integrated of the same order, i.e. I(0). Table 2. Unit Root Test Results Variables Level ADF ADF_Prob. Greece KPSS Turkey Greece Turkey Greece Turkey GDP -5.6057 [0]* -4.6138 [0]* (0,0000) (0,0007) 0.0866 FC -6,5636 [0]* -5,2418 [0]* (0,0000) (0,0001) 0.0615 0.1046 PT -5,6586 [0]* -5,9044 [0]* (0,0000) (0,0000) 0.0628 0.1374 0.182 The critical values with constant for the ADF and KPSS are from Davidson-MacKinnon (1993) and Kwiatkowski, etc. (1992). Lag length in [ ], Asterisk (*) shows significance at 5% level. 113 �Başak Gül AKTAKAS, Cengiz AYTUN & Cemil Serhat AKIN Ordinary least square test results The results from ordinary least square tests are given in Table 3-4-5-6. Table 3. Patent-Fixed Capital Investment Relationship Independent Variable Coefficient Std.Error t-Statistic Prob. Turkey Greece Turkey Greece Turkey Greece Turkey Greece C 0.0738 0.0288 0.0261 0.0176 2.8201 1.6314 0.0077 0.1113 PT -0.2295 -0.0223 0.0829 0.0237 -2.7689 -0.9403 0.0087 0.3531 R-squared 0.1716 0.0233 Adjusted R-squared 0.1492 -0.0030 F-statistic 7.6668 0.8842 Prob (F-statistic) 0.0087 0.3531 Model 1: ΔFC=β 0 + β 1 PT ΔFC TR =0.0738 - 0.2295PT (0.0261) (0.0829) ΔFC GRC =0.0288 - 0.2223PT (0.0176) (0.0237) 114 Journal of Economic and Social Studies �Roles of Investment and Innovation in Business Cycle from Kalecki´s Perspective with a Schumpeterian Approach: An Empirical Analysis for Turkey and Greece According to this result, the positive relationship between innovation and investment was not validated for both countries. Moreover, it is seen that the force on explaining the shifts in the fixed capital investment with patent is considerably weak. Table 4. The Effects of Fixed Capital Investment and Patent on Gross Domestic Product Independent Variables Coefficient Std. Error t-Statistic Prob. Turkey Greece Turkey Greece Turkey Greece Turkey Greece FC 0.1831 0.2454 0.0264 0.0315 6.9188 7.7813 0.0000 0.0000 C 0.0303 0.0200 0.0048 0.0034 6.2508 5.7664 0.0000 0.0000 R-squared 0.5640 0.6207 Adjusted R-squared 0.5522 0.6104 PT -0.0540 -0.0028 0.0203 0.0074 -2.6519 -0.3866 0.0117 0.7012 C 0.0444 0.0268 0.0055 6.9154 0.0000 R-squared 0.1597 0.0040 Adjusted R-squared 0.1370 -0.0228 0.0064 4.8141 0.0000 Model 2: ΔGDP=β 0 + β 1 FC ΔGDP TR =0.0303 + 0.1831FC (0.0048) (0.0264) ΔGDP GRC =0.0200 + 0.2454FC (0.0034) (0.0315) 115 �Başak Gül AKTAKAS, Cengiz AYTUN & Cemil Serhat AKIN Model 3: ΔGDP=β 0 + β 1 PT ΔGDP TR =0.0444 - 0.0540PT (0.0064) (0.0203) ΔGDP GRC =0.0268 - 0.0028PT (0.0055) (0.0074) According to Table 4, there is a positive relationship between fixed capital investment and output which supports Kalecki’s argument for Turkey and Greece. It is seen that while the 56% of GDP changes in Turkey is explained with fixed capital investments, this ratio for Greece is found as 62%. Conversely, the positive relationship between innovation and GDP which is confirmed by literature is not validated for both countries. It is seen that the force on explaining on changes in GDP with patent is considerably weak. 116 Journal of Economic and Social Studies �Roles of Investment and Innovation in Business Cycle from Kalecki´s Perspective with a Schumpeterian Approach: An Empirical Analysis for Turkey and Greece Figure 2. The Path Followed by Fixed Capital Investment and GDP Together for Turkey .6 .4 .2 .0 -.2 -.4 1970 1975 1980 1985 1990 GDPTR 1995 2000 2005 FCTR Figure 3. The Path Followed by Fixed Capital Investment and GDP Together for Greece. .3 .2 .1 .0 -.1 -.2 -.3 -.4 1970 1975 1980 1985 1990 G D PGRC 1995 2000 2005 F C G RC 117 �Başak Gül AKTAKAS, Cengiz AYTUN & Cemil Serhat AKIN The significant relationship between investment and GDP can be seen in the figures numbered as 2 and 3, in the path they followed. As to Figure 2, in the periods in which the investment in Turkey is highly sensitive that is excessively in the tendency about falling, output shows a similar trend. The same positive relationship keeps on its validity in the conditions in which the investment is lowly sentiment. As is seen in Figure 3, the effect of investment on GDP supports the results in Table 4. According to this, being as to the cases in which the investment is high or low susceptibility the output collaterally moves. Table 5. Fixed Capital Investment and Patent-Gross Domestic Product Relationship Variables Coefficient Std.Error t-Statistic Prob. Turkey Greece Turkey Greece Turkey Greece Turkey Greece C 0.0317 0.0196 0.0051 0.0035 6.2006 5.4690 0.0000 0.0000 FC 0.1723 0.2482 0.0291 0.0322 5.9098 7.7049 0.0000 0.0000 PT -0.0144 0.0026 0.0161 0.0047 -0.8932 0.5637 0.3777 0.5764 R-squared 0.5734 0.6240 Adjusted Rsquared F-statistic 0.5497 0.6031 24.2033 29.8755 Prob (F-statistic) 0.0000 0.0000 Model 4: ΔGDP=β 0 + β 1 FC+ β 2 PT ΔGDP TR =0.0317 + 0.1723FC - 0.0144PT (0.0051) (0.0291) (0.0161) ΔGDP GRC =0.0196 + 0.2482FC + 0.0026PT (0.0035) (0.0322) (0.0047) As to the Table 5, the 57% of GDP shifts in Turkey is explained with the variable involved in the model, and for Greece this ratio is found as 62%. As can seen, fixed capital investment is a significant determinant on output for both countries. In spite of that, explanatory of patent is weak for GDP. 118 Journal of Economic and Social Studies �Roles of Investment and Innovation in Business Cycle from Kalecki´s Perspective with a Schumpeterian Approach: An Empirical Analysis for Turkey and Greece Conclusion A business cycle, which exists in the primary topics of macro economy, has also a great importance for Post-Keynesian economics in a central role. It is seen that, Kalecki correlates this subject with investment. The perspective of Schumpeter towards the business cycles is mostly upon innovation. In addition to this, both economists present that investment and innovation are related with each other in the mean time. In addition, while Kalecki draws attention on the determiner position of investment on output in relation to investment-innovation-output, Schumpeter gives important essentially upon innovation. In the current paper, these all relationships have been estimated by using the OLS method for both Turkey and Greece. Gained results show that the innovation has no significant relationship with investment and output for both countries and the explanatoriness of innovation upon investment and output is considerably low. On the other hand, the explanatory power of investment upon output is at the high levels. At same direction movements in the business cycles because of a positive correlation between investment and output present reasonable results for both Turkey and Greece in accordance with Kalecki’s argument. 119 �Başak Gül AKTAKAS, Cengiz AYTUN & Cemil Serhat AKIN References Aghion, P. & Howitt, P. (1992). A model of growth through creative destruction. Econometrica, 60,2, 323-351. Allred, B.B. & Park, W.G. (2007). Patent rights and innovative activity: evidence from national and firm-level data. Journal of International Business Studies, 38,6, 878900. Andres, A.R. & Goel, R.K. (2012). Does software piracy affect economic growth? Evidence across countries. Journal of Policy Modeling, 34, 284-295. 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A panel error-correction model analysis. Applied Economics, 43, 773-785. Davidson, R. & MacKinnon, J.G. (1993). Estimation and inference in econometrics, New York:Oxford University Press. 120 Journal of Economic and Social Studies �Roles of Investment and Innovation in Business Cycle from Kalecki´s Perspective with a Schumpeterian Approach: An Empirical Analysis for Turkey and Greece De Long, J.B. & Summers, L.H. (1992). Equipment investment and economic growth: How strong is the nexus?. Brookings Papers On Economic Activity, 2, 157211. Driver, C. (1994). Investment theory and radical perspectives. In P.Arestis & M.Sawyer (Eds.), UK: Edward Elgar Publishing Limited. Ferlito, C. (2011). Sylos Labini’s Unpublished Notes on Schumpeter’s Business Cycles. The Quarterly Journal of Austrian Economics, 14,1, 88-129. Gangopadhyay, K & Mondal, D. (2012). Does stronger protection of intellectual property stimulate innovation. Economic Letters, 116, 80-82 Gomulka, S., Ostaszewski, A. & Davies, R.O. (1990). The innovation rate and Kaleki’s theory of trend, unemployment and business cycle. Economica, 57, 525-540. Harvey, J.T. (2011). United States business bycles From 1971 through 2010: A post keynesian explanation. Journal Of Economic Issues, XLV, 2, 381-390. Herrerias, M.J. & Orts, V. (2012). Equipment investment, output and productivity in China. Empirical Economics, 42,1, 181-207. Johansen S. & Juselius J.K. (1990). Maximum likelihood estimation and inference on cointegration with applications to demand for demand. Oxford Bulletin of Economics and Statistics, 52, 169-210. Kalecki, M. (1962). Observations on the theory of growth. The Economic Journal, 72,285, 134-153. Kalecki, M. (1968). Trend and business cycles reconsidered. The Economic Journal, 78,310, 263-276. Kalecki, M. (1990). Collected Works of Michal Kalecki Vol.I. Edited by J.Osiatynsky, Oxford University Press. Klette, T.J. & Kortum, S. (2004). Innovating firms and aggregate innovation. Journal Of Political Economy, 112,5, 986-1018. 121 �Başak Gül AKTAKAS, Cengiz AYTUN & Cemil Serhat AKIN Kwiatkowski, D., Phillips, P.C.B., Schmidt, P. & Shin, Y. (1992). Testing the null hypothesis of stationarity against the alternative of a unit root: How sure are we that economic time series have a unit root?. Journal of Econometrics, 54, 159-178. Laramie, A.J., Mair, D. & Miller, A.G. (2004). Kalecki’s investment theory reconsidered, In Z.L.Sadowski and A. Szeworski (Eds.), Kalecki’s Economics Today, London:Routledge Lentz, R. & Mortensen, D.T. (2008). An empirical model of growth through product innovation. Econometrica, 76,6, 1317-1373. Lopez G, J. & Assous, M. (2010). Michal Kalecki, UK: Palgrave Macmillan MacKinnon, J.G. & Haug, A.A. & Michelis, L. (1999). Numerical Distribution Functions of likelihood ratio tests for cointegration. Journal of Applied Econometrics, 14,5, 563-77. Madsen, J.B. (2002). The causality between investment and economic growth. Economics Letters, 74, 157-163. Michaelides, P.G., Milios, J., Vouldis, A. and Lapatsioras, S. (2010). Emil Lederer and Joseph Schumpeter on Economic Growth, Technology and Business Cycles. Forum For Social Economics, 39,2, 171-189. Osiatynski, J. (1992). Price and monopoly in Kalecki’s theory, In P.Arestis&V.Chick (Eds.), Recent Developments in Post-Keynesian Economics, UK:Edward Elgar Publishing Richardson, C. & Romilly, P. (2008). Investment functions and the profitability gap. Journal of Post Keynesian Economics, 31,1, 35-56 Sawyer, M.C. (1985). The Economics of Michal Kalecki, New York:M.E.Sharpe Armonk. Sardoni, C. (2011). Unemployment, Recession and Effective Demand-The Contributions of Marx, Keynes and Kalecki, UK:Edward Elgar Publishing. 122 Journal of Economic and Social Studies �Roles of Investment and Innovation in Business Cycle from Kalecki´s Perspective with a Schumpeterian Approach: An Empirical Analysis for Turkey and Greece Skott, P. (2003). Business cycles, In J.E.King (Ed.), Post-Keynesian Economics, UK:Edward Elgar Publishing. Snowdon, B. & Vane, H.R. (2005). Modern Macroeconomics. UK:Edward Elgar Publishing. Temple, J. (1998). Equipment investment and the Solow model. Qxford Economic Papers, 50, 39-62. Toporowski, J. (2003), Kaleckian Economics, In J.E.King (Ed.), Post Keynesian Economics, UK:Edward Elgar Publishing Notes 1. Herein it has to be highlighted that he embraces the development as an evolution. 2. It caused that profits change direction from the old equipment to the new one. 3. According to this effect, effective demand should be stimulator via the diffusion of clustering case. Clustering can be achieved through availability of the funds belonging to public sector or profits for investment. At this point, the investment analysis of Kalecki explains how the triggering mechanism works (Corvisanos & Richardson, 2008). 123 � 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. 1390 Title A name given to the resource Roles of Investment and Innovation in Business Cycle from Kalecki’s Perspective with a Schumpeterian Approach: An Empirical Analysis for Turkey and Greece Author Author Başak, Gül AKTAKAS Cengiz , AYTUN Cemil , Serhat AKIN Abstract A summary of the resource. Business cycles are one of the best sources to understand current situation of a country’s economy. Michal Kalecki denotes investment as the best explanatory for the dimension and reason of cycles; on the other hand Schumpeter considers that innovation should be placed in a different position in this regard. In addition, both Kalecki and Schumpeter verify that investment and innovation are related with each other because innovation is also an important subject for investment. It is expected that investment and innovation have the effect in the same direction on output. In this study, business cycles have analyzed for 1971-2009 period by using the yearly data in Turkey and Greece and it has been dealt effects of investment and innovation on cyclical fluctuation. In this paper which growth rates have been discussed, ordinary least square estimation method has been used. In this respect firstly, it has been examined that the effect of innovation on investment and income. After that examined that effect of investment on output and finally innovation and investment have been evaluated by considering the effects on the output. It has been found that the obtained results support the views of Kalecki for both of the countries. 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 2012 Keywords Keywords. Article PeerReviewed H Social Sciences (General),HB Economic Theory,HG Finance https://omeka.ibu.edu.ba/files/original/59946c2880a65b856ec96837b21dee3d.pdf f9d751befef4ce4106edb27eca86a198 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. 1391 Title A name given to the resource The Efficiency of Banking Sector in Bosnia and Herzegovina in Comparison to Slovenia: Comparative Analysis Author Author Azra, Bičo Mehmed, Ganić Abstract A summary of the resource. This paper analyzes the banking sector's performance of the two former Yugoslavian republics, Slovenia and Bosnia and Herzegovina. This study is the first study examining the efficiency of banking sector of two countries. Countries have formed their banking systems, with their central banks as central and main monetary institutions. Performance of the banking sector of the two countries is being examined, taking into account that one country is a post war country, while other succeeds to join to European Union. It is determined using the data on return on assets (ROA) as indicator of profit, and return on equity (ROE) as an expression of rentability of banking sector, then compared to nonperforming loans (NPL) in order to foreseethe affect on future lending. Foreign direct investment is also being examined due to the large portion of it was initially made into banking sector. Financial health of the banking sector is analyzed by comparing deposits to loans figures, in several structural aspects. Based on data Slovenia’s banking sector has higher return on equity throughoutyears, therefore it is more profitable.On the other hand Bosnia and Herzegovina’s banking sector is more risk protected, since banks have higher adequate capital that offers protection against risk. 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 2012 Keywords Keywords. Article PeerReviewed H Social Sciences (General),HB Economic Theory,HG Finance 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. 1305 Title A name given to the resource Ethno-Linguistical and Dynamic Transformation Process of Bosnia and Herzegovina Author Author Azamat, Akbarov Ulku, Ayhan Abstract A summary of the resource. Language and identity are two items impossible to ignore in a `nation` defined by following different elements within it and with language indicating feelings of group belonging. Bosnia and Herzegovina has a very distinguished place in the world with its history and mosaic-like unity, and has included three ethnicities over recent centuries. fromt time to time, similarities have bounded in contrast to the differences seperating and deepening the `otherness feeling`. Governing rules in the Bosnia and Herzegovina territories have had the leading effect of shaping the characterisitics of those areas. The most distinct turning points writing the fate of those territories were the Ottoman Empire and the former Yugoslavia. In our study, we aim to study that process in terms of ethnical and linguistic perspectives. Key Words: Ethnicity, Language, Boshnjak, Serbian, Croatian, Transformation Date A point or period of time associated with an event in the lifecycle of the resource 2012 Keywords Keywords. Article PeerReviewed P Philology. Linguistics,PE English,PR English literature https://omeka.ibu.edu.ba/files/original/abe64c1576495e2c05427e6b3cbdcd70.pdf db0443009bffa567e421a3914fcb932c PDF Text Text Journal of Economic and Social Studies Utilizing Information Systems for Measuring Impact on Social Sustainability: Survey of Microcredit Organizations in Bosnia and Herzegovina Alica PANDZO Department of Information Systems Sarajevo School of Science and Technology Sarajevo, Bosnia and Herzegovina alica.pandzo@ssst.edu.ba Kemal TALJANOVIC Department of Information Systems Sarajevo School of Science and Technology Sarajevo, Bosnia and Herzegovina kemal.taljanovic@ssst.edu.ba Selma JAHIC Microcredit Foundation Partner Tuzla, Bosnia and Herzegovina Abstract: Microfinance has been used selma@partner.ba as a tool for social sustainability and development since the 1970s. In microfinance, assessment of social sustainability is often conducted through client impact monitoring. This study explores the impact measurement practices of microcredit organizations in Bosnia and Herzegovina and their use of information systems in this process. We draw on the latest trends of using shared measurement systems for impact monitoring, to point out the potential of using such systems to achieve sustainable impact on wider social issues in Bosnia and Herzegovina. This paper outlines the roles and responsibilities that different stakeholders should play in the system development process. KEYWORDS: Microfinance, Microcredit, Bosnia and Herzegovina, Social Impact, Information Systems, ICT, Shared Measurement Systems. ARTICLE HISTORY Submitted: 4 July 2012 Resubmitted: 17 October 2012 Accepted: 5 November 2012 JEL codes: O32, G21 219 �Alica PANDZO, Kemal TALJANOVIĆ & Selma JAHIĆ Introduction Since its conception, microfinance has been promoted as an essential economic tool for social sustainability and poverty alleviation. Microfinance is based on a premise that providing financial services (most commonly in form of credit) to the most vulnerable populations, who would otherwise not have access to standard bank financing, would empower people to get out of poverty by capitalizing on their own skills and ideas. In developing and post-conflict countries, such as Bosnia and Herzegovina (BiH), microfinance has been used as a tool to raise employment and revive economic activity by targeting micro-business by microcredit organizations (MCOs). This ‘bottom up’ approach has received popularity as an alternative to the traditional top-down approach used by international aid organizations to stimulate economic growth and development through various projects and funds delivered to governments of developing countries.1 Even though microfinance has been around since the 1970, there is still no agreement on the real impact of microfinance. While many studies have shown results of positive economic and social impact of microfinance (Dunn, 2005) the appropriateness of different tools and methods applied is often questionable and makes them impossible to compare. This has contributed to growing criticism of microfinance in recent years (Bateman 2007, 2010, 2011). A recent study assessing the use of microfinance in BiH (Welle-Strand et al., 2010) concludes that microfinance is a better tool for improving individual economic performance of micro finance institutions (MFI) and their individual clients, than for achieving broader social goals. What is clear is that amidst such hard times and controversy, having a clear social mission and the ability to track and measure organizations realization of that mission and goals, is of increasing importance for individual MCO and the microfinance sector as a whole. It is also clear that major social issues such as poverty or equality cannot be solved by any single institution or type of organization. Collaborative efforts and sharing of information and knowledge are needed. Journal of Economic and Social Studies 220 �Utilizing Information Systems for Measuring Impact on Social Sustainablity: Survey of Microcredit Organizations in Bosnia and Herzegovina The increasing capability and availability of Information and Communication Technologies (ICTs), is allowing innovative solutions to be applied in this field supporting collaboration and resulting in resource and cost savings, while maximising outputs. The latest trends in impact measurement systems are the development of web-based systems which coordinate efforts of impact monitoring by many different organizations who share the same social goals. The goal of this study is to assess the current practices and potentials of using information systems to support realisation of social mission and goals of microfinance organizations in Bosnia and Herzegovina. In order to do this, we focus on answering the following research questions: 1. Do MCOs have a systematic approach to measuring their social performance and impact? 2. Do MCOs have the necessary ICT infrastructure and capabilities to support impact monitoring? 3. How can information systems be used to more accurately and efficiently measure social impact of microcredit at the level of BiH? We first provide an overview of microfinance as a tool of social sustainability and development and introduce the innovative ways in which ICTs are being used to facilitate/enhance the process of social performance and impact measurement. We then present the findings of an empirical study of social impact measurement practices among MCOs in BiH. Recommendations are given for strengthening social performance and impact monitoring practices of the microfinance sector in BiH by applying the most innovative ICT trends in the field. Overview of Microfinance Social sustainability and microfinance Social sustainability is an element of sustainable development which “occurs when the formal and informal processes, systems, structures and relationships actively support the capacity of current and future generations to create healthy and livable communities. Socially sustainable communities are equitable, diverse, connected and democratic and provide a good quality of life” (Barron and Gauntlett, 2002, pp.18). At a practical level, social sustainability assessment is often conducted through social impact assessment by focusing on principles such as income and employment, education, skills, consumption or participation (Oman and Spangerberg in Colantonio, 2009). 221 �Alica PANDZO, Kemal TALJANOVIĆ & Selma JAHIĆ Modern microfinance was pioneered in the late 1970’s by a Bangladeshi banker and economist, Muhammed Yunus, who used small credits as a way to provide self employment to people (primarily women) who had talent but no money. Such people could not access regular loan facilities through banks as they had no collateral, were unemployed or worked in the informal sector hence could not prove income generation. Hence, they would often fall prey to loan sharks charging huge interest rates (Kumar, 2010). The social objective most MCOs today is poverty alleviation, while many also focus on small business start-ups, employment generation, empowerment of women, increasing level of education among children and youth, etc. Poverty eradication is also the no.1 Millennium Development Goal (MDG) with a target of cutting extreme poverty in the world by half by the year 2015. To help achieve this goal, the UN designated 2005 as the International Year or Microcredit, with a goal of promoting access to finance to the poor. It is now estimated that 160 million people in developing countries are today served by microfinance through MFIs which range from small nonprofit organizations to large commercial banks. In addition to microcredit, some offer other services such as deposit, saving accounts, financial and business advice or marketing and technology services. The average interest rate charged by MFIs is 27%, which is significantly higher than what is charged by the banks (CGAP, 2006). High interest rates are justified by higher risk profile of this client category and high administrative costs of serving clients in remote areas Even though the terms 'social performance' and 'social impact' are often used interchangeably, it is important to stress the difference between the two. The Social Performance Taskforce defines social performance as “the effective translation of an institution’s mission into practice in line with accepted social values” so it is concerned with effectiveness of internal organisational processes in order to achieve the organisational mission. Social impact, is the improvement in the lives of people that can be directly linked to organizations activities (SPT, n.d.). Social impact is therefore just one element of social performance. Journal of Economic and Social Studies 222 �Utilizing Information Systems for Measuring Impact on Social Sustainablity: Survey of Microcredit Organizations in Bosnia and Herzegovina Microfinance in Bosnia and Herzegovina BiH has a population of 3.8 million (BiH Agency for Statistics, n.d.). Microfinance was first introduced to BiH in 1996, shortly after the war ended, through a Local Initiatives Microfinance Project (LIP I) financed by the World Bank and a number of donor countries. First MCOs issued loans to micro-businesses (both formal and informal), who were affected by the war and otherwise had no access to regular credit lines. Currently there are 23 MCOs registered in BiH, of which 19 are non-profit microcredit foundations (MCF) and 4 are profit microcredit companies (MCC). Both types of institutions are limited to providing credit services, while deposit taking is reserved only for banks. The Association of Microfinance Institutions (AMFI) was formally set up in 2003 as a network which promotes synergies and allows knowledge sharing and transparency between its members. Today, the 12 largest MCOs in BiH are members of AMFI and together they cover more than 98% of the market share in the country. After 10 years of flourishing growth, end of 2008 marked the start of a crisis for the microfinance sector in BiH. The downturn closely followed the 2008 economic crisis. The most quoted reason for it by industry experts is the over-indebtedness of clients. The over-indebtedness was caused by concentrated market competition and erosion of MFI lending discipline (Chen, Rasmussen, and Reille, 2010). At the end of 2011 the total portfolio of the microfinance sector in BiH was at EUR 308 million, which is drastically down from its peak of EUR 699 million at the end of 2008.The sector is now showing signs of improvement and recovery. Total MCO sector has recorded a profit in 2011 (EUR 6.9 million), after two years of significant sector losses (Banking Agency of FBiH and Banking Agency of RS, 2012). ICT Enabled Trends and Innovation There is quite a lot of guidance and information about tools and methods used for social performance monitoring (SIM Pilot project, 2008, pp.6), however there is very little about the use, effects and role of ICTs in supporting this process. As majority of MCOs operate in developing countries and remote areas they commonly have a problem with a lack of basic reliable ICT infrastructure and lack of local knowledge (Blantz, 2010). 223 �Alica PANDZO, Kemal TALJANOVIĆ & Selma JAHIĆ Another common problem of effective outcome measurement is that it is made up of isolated efforts, using non standardised methods and indicators, producing results which cannot be compared. Major social issues such as poverty or child education cannot be solved by efforts of any single program or type of organization. There is also a lot of duplication of effort, time and resources as organizations with the same objectives try to measure and evaluate their outcomes. Such issues, combined with the advancements in ICT have led many organizations to develop innovative webbased systems for coordinating efforts in measuring performance and outcomes of hundreds or thousands of social enterprises within a field (Kramer, Parkhurst, and Vaidyanathan, 2009). A report produced by FSG (Kramer et al, 2009) provides details of 20 such systems and groups them into three different categories, characteristics and benefits of which are summarised in the Table 1. Table 1. Characteristics and benefits of shared measurement systems Source: adapted from FSG report Journal of Economic and Social Studies 224 �Utilizing Information Systems for Measuring Impact on Social Sustainablity: Survey of Microcredit Organizations in Bosnia and Herzegovina Such systems can provide numerous advantages to all organizations with a social mission and a need to measure performance and outcomes, including MFIs. Setting up such systems requires strong leadership and engagement of different organizations in the design phase. It also requires substantial funding through a multi – layer development period (Kramer et al, 2009). Participating organizations often pay a fee to have access to data a report generation, while they also input their own data into the system. Research Methodology Current ICT capability and impact measurement practices of MCOs in BiH were studied using a survey questionnaire and follow-up interviews. The data was collected during March and April, 2012. The survey was sent to the person in charge of ICT (IT managers) in all 23 registered MCOs, however for most organizations marketing manager and IT managers both took part in completing the survey. The survey questions can be grouped in the following main areas: Organisational goals and services; ICT infrastructure, ICT use and management; Impact measurement process; Perceptions. Analysis of Results We received a total of 10 survey responses of which 6 were followed up with phone interviews. The survey response rate of 43% is considered satisfactory as the survey was sent to all existing BiH MCOs and the 10 institutions that have responded cover 75% percent of the microcredit market in BiH. One of the respondents is registered as a microcredit company, while the others are microcredit foundations. Figure 1 shows the distribution of surveyed MCOs. 225 �Alica PANDZO, Kemal TALJANOVIĆ & Selma JAHIĆ Figure 1. Size of MCOs according to portfolio size (left) and number of active loans (right) Organisational Goals The prime target market for 60% of respondents is the low income population and hence their primary development goals are poverty reduction and employment generation. Second highly ranked target market are women, followed by microbusinesses. On average, 68% of clients are from rural areas. Average loan amount issued is EUR 1,123. ICT Infrastructure and Spending Our results show that MCOs in BiH are overall well equipped with reliable ICT infrastructure. All credit officers and office staff have PCs and use PCs them in everyday tasks. 40% of organizations also supply their field credit officers with laptops and 30% with mobile or smart phones. All credit officers have e-mail accounts which they use daily and have access to internet at their offices. These are pleasing results considering that a survey of internet usage in BiH conducted by GFK in 2009, (UNDP, 2010, pp. 175) showed that only 30% of BiH companies have internet connections. 50% of MCOs have their offices linked via a VPN, while all offices have their PCs linked in a local network. MCOs employing over 50 staff, have IT/IS departments, whereas the smaller ones usually have one person in charge of all ICT in the organisation. Very little attention is paid to strategic use of information systems which is reflected by non existence of IT strategy in 70% of surveyed MCOs. Use of Journal of Economic and Social Studies 226 �Utilizing Information Systems for Measuring Impact on Social Sustainablity: Survey of Microcredit Organizations in Bosnia and Herzegovina cross functional information systems is also low. Enterprise Resource Planning system is implemented in one and Management Information Systems are used in 50% of the surveyed MCOs. None of the MCOs indicated use of CRM, GIS, DSS, KMS or Experts Systems. Impact Measurement Practices Only two of the survey participants, collect information which is used in social impact measurement. MCF EKI (EKI) was found to have a systematic approach to measuring impact of microcredit on poverty – their primary development goal. EKI’s strategic goal is to service 40% of poor clients, and at least 5% of these clients to achieve a significant improvement within 12 months of taking out a loan. In order to measure achievement of this end statement, EKI has developed its own poverty assessment method, which is used to categorise all clients at the time they first take out a loan. Indicators used in this categorization are: income, education, housing, formal employment, no. of children, place of residence and physical ability. A point scale is applied, and all client scoring over 6 points are categorized as poor. Twelve months later, a sample of 300 clients from the poor category are followed up in focus groups to assess whether there has been any significant improvement in their quality of life. To assess quality of life EKI uses a second set of indicators which include: monthly household income, possession of a car / PC / LCD, internet access, level of competed education, preventative healthcare, travel outside of place of residence, etc. EKI holds about 8 – 10 focus groups every year at different locations. The results are a combination of qualitative and quantitative data (MKF EKI, 2009). Field staff collects information from clients in paper form. Back at the office, the data is inputted into a web-based, in-house developed system for collecting and analyzing impact data. MCF Partner (Partner) was founded by Mercy Corps in late 2000. Partner is focused on creation of jobs, increased income and creating a more stable environment. Partner's target population is rural (84.91% of active clients) and women (42.62 % of active clients) (Partner, n.d). Partner has initiated the incorporation of social performance management (SPM) into all business processes, which include: strategic planning, client relationships (loyalty and adjusting our service and product offer to clients' needs), financial management, human resources, information systems and organisational culture. Poverty measurement tools used by Partner are per capita household expenditure and per capita household income. 227 �Alica PANDZO, Kemal TALJANOVIĆ & Selma JAHIĆ Another MCO, not included in our results, who has been actively managing its social performance and impact is MCF Prizma (Prizma). With 67,742 active borrowers, and employing over 250 staff, Prizma is also amongst the largest MCOs in BiH (Prizma MKF, n.d). Prizma explicitly targets poor entrepreneurs (primarily women). Like EKI, Prizma has developed its own poverty assessment scorecard which is used in poverty monitoring by assessing clients on entry and every time they take out a new loan. The following indicators are included as part of the poverty scorecard: education level of woman partner or household head, residence, employment status, family size, the frequency of the consumption of luxury foods (sweets and meat) and the ownership of a television, stereo and motor vehicle (IFAD, 2009, pp.35). Prizma also conducts exit monitoring twice a year, using semistructured interviews. The third component of Prizma’s social performance monitoring system are focus groups, used to obtain information on reaching, serving and impacting the target market (Crnkic, 2010). The Social Performance Management information system at Prizma is developed internally and consists of five core components: monitoring poverty outreach, monitoring the change of poverty status, exit monitoring, client satisfaction monitoring and focus group discussions. Perceptions The final section of the questionnaire looks at participants perceptions regarding the effectiveness of the outcome measurement process within their organisation, the use of ICT by staff in general and use of ICT to support the outcome measurement process. Table 2 show the average answers to those questions. Scale: 1- strongly disagree, 5 – strongly agree. Journal of Economic and Social Studies 228 �Utilizing Information Systems for Measuring Impact on Social Sustainablity: Survey of Microcredit Organizations in Bosnia and Herzegovina Table 2. Perceptions category averages Question a) The results of measuring the impact of microcredit are of great importance to strategic planning in our organisation b) The process of measuring impact is of crucial importance to our organisation c) My organisation has effective, systematic approach to measuring social impact on customers. d) My organisation is using ICT to support the process of social impact measurement in the best possible way e) Employees of my organisation are highly capable in conducting their everyday work tasks using a computer. f) Employees within my organisation are willing to accept new technologies and adjust to the new ways of carrying out their work. g) MIS in my organisation is highly effective for collecting, analysing and reporting on our social impact. h) The existing system for measuring impact of microcredit allows us for effective monitoring of the realisation of our strategic goals. i) The existing system for measuring impact of microcredit allows us to effectively evaluate our existing products and develop new products. j) Government of BiH should work more on setting up a system of social performance monitoring. k) Having access to a central database of social performance measures at the level of Bosnia and Herzegovina would be of great value to our organisation. l) We are willing to share the results of our measurements with other organizations for mutual benefits. Average 3.8 3.7 2.1 2 4 3.8 3.3 2.5 2.5 4.5 4.5 4.2 Some MCOs who in the previous section answered that they do not collect data that can be used for social impact measurement rated the effectiveness of their process and MIS in supporting the impact measurement process, fairly highly. We interpret this inconsistency as an indication of a lack of understanding of the social impact measurement process. A large majority of the MCOs agrees that a central database of social performance measures at the state level is needed (questions j. and k. in table 2). There is also a very high level of willingness to share the results of measurements with other organizations for mutual benefits (4.2). MCOs appear to have highly skilled IT staff and employees who are willing to embrace new technologies. Respondents were asked to rate which of the given issues pose the biggest obstacle to the optimisation of the social impact measurement process for their organisation. Table 3 shows the total points awarded to each issue. Scale: 1 – smallest issue, 5 – biggest issue. 229 �Alica PANDZO, Kemal TALJANOVIĆ & Selma JAHIĆ Table 3. Perceived obstacles for optimisation of the impact measurement process Stated issue Lack of coordination at the level of the sector Lack or inconsistency of legislation Lack of human resources for conducting field studies Lack of knowledge about impact measurement methods Lack of accurate information received from clients Lack of information about the benefits of impact studies for MCOs Lack of awareness about the need to measure impact Lack of financial resources Lack of skilled IT staff Lack of management support Total Points 44 42 38 36 34 32 30 30 26 20 Highest ranking issue was the lack of coordination at the level of the sector (44). This indicates that there is an agreement amongst MCOs about the need to pool efforts and minimise duplication. Lack of financial resources and field staff was rated as an issue by smaller MCOs. Lack of skilled IT staff and management support was consistently rated as a low issue across all MCOs. Discussion Our results show that MCOs in BiH are overall well equipped with reliable ICT infrastructure. MCOs also appear to have (based on their perceptions) highly skilled IT staff and employees capable of using ICT to perform their business tasks and willing to embrace new technologies. However, very little attention is paid to strategic use of information systems which is reflected by non existence of IT policy in 70% of surveyed MCOs. ICTs should be viewed as one of key organizational resources and not just as a support function or a cost. This means that ICT can play a crucial role in realisation of organizational goals. Organizational goals (social and financial) have to be aligned with IT goals and applications must be developed and implemented according to those plans in order to ensure that goals are achieved most efficiently. Overall, MCOs in BiH show a low commitment to systematically managing their social performance and measuring social impact. Majority do not have systems in place for assessing and tracking the realisation of their social mission. Reports and data presented on MCOs websites is focused on financial indicators, with social indicators being obviously neglected. MCOs need to put more effort into showing equal commitment to both elements of the double-bottom-line. This study found only three MCOs who have placed considerable Journal amountofofEconomic effort inand systematically Social Studies 230 �Utilizing Information Systems for Measuring Impact on Social Sustainablity: Survey of Microcredit Organizations in Bosnia and Herzegovina managing their social performance. All three are funded by international aid agencies for whom social performance is a key issue These MCOs have built notable internal expertise in managing social performance and two have developed their own measurement tools and methods such as the poverty assessment scorecard developed by MCF Prizma (IFAD, 2006 and Crnkic, 2010,) and MCF EKI (MKF EKI, 2009). During phone interviews 4 MCOs said that they had to put in a lot of time and effort into conducting assessment of market potential studies, as no statistical data was readily available. Availability of measure such as (household income, average pay, level of education, etc.) would have cut down on time and duplication of effort across MCOs. BiH has undergone many changes over the last 20 years, especially after the war in early 1990s .The last census was conducted just before the war broke out in 1992. Many people have migrated since then or have been displaced. Because of this lack of centrally managed data, there is a lot of duplication of effort and resources in the MCO and NGO sector in general. Centralised data is currently available through AMFI and the Central Bank of BiH. AMFI members quarterly report on financial data which is distributed to all members. The Central Credit Registry of Central Bank of BiH is a database off all individuals and legal entities in the country indebted with commercial banks, microcredit organizations, savings - credit organizations and Leasing. This registry is used for checking client credit history by the same institutions and the registry is updated daily since April 2012 (Public relations of CBBH, 2012). Conclusion and Recommendations The goal of this research was to assess the current practices of using information systems to support realisation of social mission and strategic goals of microfinance organizations in Bosnia and Herzegovina. Our findings show that the existing ICT infrastructure capabilities are at a pleasing level but they are not being effectively used by MCOs for monitoring and evaluating their social mission. We recommend that the best way to achieve better results in this field is by developing a shared measurement system for impact monitoring at the level of microcredit sector in BiH. Use of such system would enable the coordination of efforts within the microcredit 231 �Alica PANDZO, Kemal TALJANOVIĆ & Selma JAHIĆ sector which is necessary in order to achieve broader social goals. Further research is needed to investigate the most appropriate type of shared measurement system, impact measurement methodologies and measures that should be reported on. Implementation of such systems is not an easy task and relies on commitment from various stakeholders. We will try to briefly outline the possible responsibilities of those different stakeholders. Donors and creditors can play a big part by funding different phases of shared system development. They can also influence MCOs to pay more attention to achieving their social mission, by putting more weight on evidence of social performance management practices when providing future financing to MCOs. The association of microfinance institutions in BiH – AMFI has a big role to play in promoting, educating and raising awareness about social performance management practices among its members. They should further promote the achievements that some of their members have made in this field and encourage collaboration. AMFI could also be the central coordinator for the planning and development of the shared system of impact measurement at the sector level. Another possible coordinating body could be the Central Bank of BiH. Whoever decides to take on this complex task needs to show good leadership and coordination ability. A possible limitation could be the willingness of MCOs to provide social data on their clients and the regulatory limitations regarding privacy of information. Even though participants in our study indicated high level of willingness to share data, this should be further explored. Accuracy of data provided by clients may also be an issue, as indicated by participants of our study. Use of shared systems for impact measurement should be further explored by the microfinance sector in BiH as it has potential to play a key role in solving major social problems. Further research is needed to investigate the most appropriate type of shared measurement system, impact measurement methodologies and measures that should be reported on. Journal of Economic and Social Studies 232 �Utilizing Information Systems for Measuring Impact on Social Sustainablity: Survey of Microcredit Organizations in Bosnia and Herzegovina References Banking Agency of Federation of BiH. (2012). Information about the microcredit system of Bosnia and Herzegovina, on 31-12-2011. Sarajevo, BiH. Retrieved from http://www.fba.ba/images/Micro_Documents/Informacija_MKO_31122011_bos.p df Banking Agency of Republic of Srpska. (2012). Report on the current state of the banking system of Republic of Srpska as at 31-12-2011. Banja Luka, BiH. Barron, L., & Gauntlett, E. (2002). Stage 1 report – Model of social sustainability, Housing and sustainable communities indicators project. Perth, Australia: WACOSS. Bateman, M. (2007). De-industrialization and social disintegration in Bosnia. In T. Dicher & M. Harper (Eds.) What’s wrong with microfinance? Warwichshire: Intermediate Technology Publications. Bateman, M. (2010). Why doesn’t microfinance work? The destructive rise of neoliberalism. New York, NY: Zed Books. Bateman, M. (2011). Confronting microfinance: Undermining Sustainable Development. Sterling, USA: Kumarian Press. ISBN 978-1-56549-341-4. Dunn, E. (2005). Impact of microcredit on clients in Bosnia and Herzegovina, Final report, Sarajevo and Banja Luka: LIP II. Retrieved from http://www.europeanmicrofinance.org/data/file/benchmark/Impacts_of_microcredit_on_clients_in_BiH. pdf BiH Agency for statistics. (n.d). Retrieved from http://www.bhas.ba/ Blantz, E. (2010). Accelerating microfinance impact with ICT: Learning from Democratic Republic of Congo (DRC) and Sierra Leone. San Francisco, CA: Inveneo. Retrieved from http://www.inveneo.org/download/accelerating_microfinance_impact_with_ict_03_ 2010.pdf 233 �Alica PANDZO, Kemal TALJANOVIĆ & Selma JAHIĆ CGAP. (2006). Why do MFIs charge high interest rates? http://www.cgap.org/p/site/c/template.rc/1.26.1309/ Retrieved from Chen, G., Rasmussen, S., & Reille, X. (2010). Growth and Vulnerabilities of Microfinance. Washington,DC: CGAP. Retrieved from http://www.microfinancegateway.org/gm/document-1.9.42432/Growth and Vulnerabilities.pdf Colantonio, A. (2009). Social sustainability. Linking research to policy and practice. Paper presented at the conference “Sustainable development: A challenge for European research”, Brussels, 26- 26th May 2009. Crnkic, K. (2010). Managing social performance through integrated approach – Prizma case study. Collection of monographs No.13. Madrid, Spain: Foro nantik lum de microfinanzas. ISBN: 978-84-693-2691-6. IFAD, (2006). Assesing and managing social performance in microfinance. Rome, Italy: IFAD. Retrieved from http://www.ifad.org/ruralfinance/pub/performance.pdf Kramer, M., Parkhurst, M., & Vaidyanathan L. (2009). Breakthroughs in shared measurement and social impact. FSG Social Impact Advisors. Retrieved from www.fsg.org Kumar, V. (2010, April 15). Need to draw a line between microfinance and loan sharking: Prof Yunus. Microfinance focus. Retrieved from http://www.microfinancefocus.com/news/2010/04/15/need-to-draw-a-line-betweenmicrofinance-and-loan-sharking-prof-yunus/ MKF EKI. (2009). Changes in poverty lines. Retrieved from http://www.mixmarket.org/sites/default/files/EKI_Changes_in_poverty_lines_for_ MIX.doc Partner MKF, (n.d) http://www.partner.ba Partner Microcredit Foundation. Retrieved from Prizma MKF. (n.d). Welcome to the Microcredit Foundation Prizma. Retrieved from http://www.prizma.ba/index.php?lang=en Journal of Economic and Social Studies 234 �Utilizing Information Systems for Measuring Impact on Social Sustainablity: Survey of Microcredit Organizations in Bosnia and Herzegovina Public relations of CBBiH. (2012). Daily updating of the Central credits registry. Central Bank of Bosnia and Herzegovina. Sarajevo 26.04.2012. Retrieved from http://www.cbbh.ba/index.php?id=809&lang=en Social Performance Taskforce (SPT). (n.d) What is social performance? Retrieved from http://www.sptf.info/what-is-social-performance SIM pilot project. (2008). Social impact measurement: Project document. Results of a pilot project to develop a tool for measuring social impact of microfinance. Dakar Fann, Senegal: INAFI International Foundation. United Nations Development Programme (UNDP). (2010) eGovernanace and ICT Usage Report for South East Europe - 2nd Edition, Sarajevo: UNDP Welle-Strand, A., Kjollesdal, K. & Sitter, N. (2010). Assesing microfinance: The Bosnia and Herzegovina case. Journal Managing global transitions, 8 (2) 145 – 166. University of Primorska, Faculty of Management. Retrieved from http://www.bi.edu/OsloFiles/MICRO/2010/Assessing%20Microfinance.pdf (Endnotes) 1 The traditional top-down approach provides large sums of aid to governments of developing countries, with benefits expected to trickle down to citizens. However a large percentage of the aid is lost in costly logistics, political interference and corrupt practices. The bottom-up approach consists of issuing aid (in form or loans) directly to individual citizens. 235 � 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. 1395 Title A name given to the resource Utilizing Information Systems for Measuring Impact on Social Sustainability: Survey of Microcredit Organizations in Bosnia and Herzegovina Author Author Alica , Pandzo Kemal, TALJANOVIC Selma, JAHIC Abstract A summary of the resource. Microfinance has been used as a tool for social sustainability and development since the 1970s. In microfinance, assessment of social sustainability is often conducted through client impact monitoring. This study explores the impact measurement practices of microcredit organizations in Bosnia and Herzegovina and their use of information systems in this process. We draw on the latest trends of using shared measurement systems for impact monitoring, to point out the potential of using such systems to achieve sustainable impact on wider social issues in Bosnia and Herzegovina. This paper outlines the roles and responsibilities that different stakeholders should play in the system development process. 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 2012 Keywords Keywords. Article PeerReviewed H Social Sciences (General),HB Economic Theory,HG Finance https://omeka.ibu.edu.ba/files/original/38387530f976dd190727cd4d0162915c.pdf 4f6217ff9e9d2381fe824aa39014d214 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. 1397 Title A name given to the resource The Channels of Contagion in the Global Crisis: The Case of the Southeastern Europe (SEE-7) Countries Author Author Ali , Sen Huseyin, ALTAY Abstract A summary of the resource. Prior to the global crisis, the SEE-7 had a strong growth performance through increasing in exports and capital inflows. However, they also, just like developing countries, suffered from the global economic crisis. The purpose of this paper is to analyze through what channels the global crisis had an impact on economic activity of the SEE-7. Initially, we reviewed literature about contagion, including its definitions and its channels. We used panel data regression to analyze the impacts of external variables on GDP. According to empirical findings obtaining from the panel regression results, until the global crisis, the external variables significantly promoted the abilities of their growth. However, the contributions of external variables on their growth rate reduced sharply with the global crisis. 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 2012 Keywords Keywords. Article PeerReviewed H Social Sciences (General),HB Economic Theory,HG Finance 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. 968 Title A name given to the resource Effect of Collaborative Strategic Reading on Omani EFL Students’ Reading Performance Author Author Al Mashrafi, Said Abstract A summary of the resource. Intending to talk about a study that aimed at studying the effect of Collaborative Strategic Reading(CSR) on EFL students’ reading performance. CSR is a teaching technique that was originally developed by Klingner and Vaughn and which aims at improving the learners' reading skill. CSR is defined by many educators as an instructional program in which students work in pairs or in small groups to help one another master the academic content. It consists of four main strategies: preview, click and clunk, get the gist and wrap-up. The study population consisted of grade seven students studying the English language course in Omani basic Education schools during the academic year 2009-2010. Two grade seven basic education classes of a total of thirty-four students from a male school in Sharqiyah South educational district represented the sample of the study. A class of seventeen students represented the experimental group, which was taught the reading texts using Collaborative Strategic Reading. The other class represented the control group, which received traditional classroom instruction. A reading comprehension test was used to explore the research question. The major results of the reading test revealed a statistically significant difference between the students’ achievement of the experimental group and the students’ achievement of the control group using t-test that favored the experimental group that was taught using Collaborative Strategic Reading Date A point or period of time associated with an event in the lifecycle of the resource 2012 Keywords Keywords. Conference or Workshop Item PeerReviewed P Philology. Linguistics 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. 946 Title A name given to the resource L'Académie française (the French Academy) and the Encumen-i Danis Author Author Sarıkaya, Orhan Abstract A summary of the resource. The Hatt-ı Sherif of Gülhâne (Imperial Decree of the Rose Chamber) is the confirmation of the impact of Western influence in social and political realms to the Ottomans. The influence of French culture and literature on Turkish culture and literature up to the present has been analyzed and studied from various perspectives. However, the Encumen-i Danis has not drawn the attention of researches perhaps due to its short existence. In this study L'Académie française or the French Academy that acted as an official authority on the French language, and the Encumen-i Danis is juxtaposed, their emphasis on mother tongue is analyzed. Date A point or period of time associated with an event in the lifecycle of the resource 2012 Keywords Keywords. Conference or Workshop Item PeerReviewed P Philology. Linguistics