338 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. 3504 Title A name given to the resource A STUDY ON THE IDENTIFICATION OF THE READING STRATEGY TYPES USED BY STUDENTS Author Author Dikmen, Nazım Abstract A summary of the resource. This study is conducted in order to investigate the generic awareness of reading strategy use of students and state the types of reading strategies used by them while performing a reading task. The students responded to a 45-item scale that included three categories of reading strategies; before, during and after. The findings obtained in this study indicated that the overall usage-level of the designated reading strategies were at a medium frequency-level; therefore, it revealed that the students use the designated strategies but not necessarily enough. On the other hand, the overall frequency of before-reading strategy use was found to be highest among three categories, so it indicated that the students are generally conscious of their comprehension process and they are planned before performing a reading task. Keywords: Reading, Reading Comprehension, Awareness of Reading Strategy Date A point or period of time associated with an event in the lifecycle of the resource 2016 Keywords Keywords. Conference or Workshop Item PeerReviewed PE English https://omeka.ibu.edu.ba/files/original/14a430719d98239eb843e9242c23cca0.pdf d9e7575ab8aeefe868d3d8229854da7a PDF Text Text “IMPLEMENTATION OF AN ENTERPRISE RESOURCE PLANNING (ERP) AND ITS EFFECT ON THE MANAGEMENT ACCOUNTING SYSTEM” Amar Čolaković International Burch University Bosnia and Herzegovina amarchola@hotmail.com Abstract: In the previous period, organizations from very different sectors have successfully adopted ERP systems. In this study, we will research the impact of ERP in the accounting industry regarding the case study from company in Bosnia and Herzegovina. By many theorists, accounting is usually described as the process of collecting, analyzing, and presenting financial data required for taking appropriate management decisions. Studies have explored the effects of IT in the business and accounting, but they didn’t cover complex technologies such as ERP. Utilizing ERP in accounting allows spending more time on analyzing the data instead of collecting it. This is possible because all information is stored in one place (database) which is easily accessed by everyone allowed to use it. With the successful implementation of ERP in company, accountants have more time to spend for analyzing and reporting, enhancing their roles, and shortening common tasks and activities. The aim of this paper is to explore the significance of ERP systems in management accounting. This research will try to understand what is the role of modern accountants. Enterprise resource planning software has shaped activities and processes in the accounting sector. Keywords: accounting software, ERP, Enterprise resource planning, modern accountants. JEL Classification: M41, L86. Introduction In this paper, we will analyze recent sensational changes that have reshaped accounting practice and research. In particular, the advanced upheaval, has changed the very way of work for accountants and constrained analysts and specialists alike to battle with a large group of new threats and opportunities confronting. Accounting specialists specifically should manage a wide cluster data handling and choice making issues that did not exist before two decades. Thus, we are meant to research how accounting is moved to another level of value and importance by joining the effect of information technologies on human mentality and performance. In this work, we will look at the part of certain elements that impact the accounting, in light of innovation. We will likewise concentrate on the collaboration impact between a possibility variable and the data framework. In today’s time of computerized innovation, each business is going digital. From exceptionally old organizations to incipient developing organizations, this change is universal and exponentially expanding, with incredible number of rate of new businesses now picking an advanced stage on which to acquaint themselves with purchasers. We will focus our area of research mainly on the accounting sector, and ICESoS 2016 - Proceedings Book 99 �International Conference on Economic and Social Studies (ICESoS’16) we will try to give the answer on the question what is the role of modern accountant. Opposing achievement and disappointment results consolidated with the way that there is no accord on the effect of ERP implementation identified with business is the motivation behind why scientists, specialists and researchers are progressively inspired by breaking down components which decide ERP achievement and ERP client fulfillment. The utilization of big enterprise resource planning (ERP) innovation has encouraged us to analyze this vision. Literature review The presentation of ERP innovation has in a general sense changed the accounting practices either at the budgetary reporting and administration bookkeeping level or at the reviewing strategies and assessment level (Scapens and Jazaeyri, 2003). As per Malinić and Todorović (2012) the genuine center and desire of ERP is coordination of the considerable number of offices and elements of big business into one data framework, which can address specific issues of different clients. As contended in Grabski et al. (2007), ERP frameworks are not the same as customary frameworks in scale, unpredictability, authoritative effect, cost and resulting business sway. The ascent and fall of the e-transformation has been breathtaking; be that as it may, the guaranteed connection will continue to go on (Desmukh, 2006). Peccarelli (2004) sees the achievement of accountants in light of how they utilize their time, how quick and simple they get to information from various sources, and how well they comprehend coordinated frameworks and virtual office capacities using the web. While, IT specialists and ERP specialists can be considered as interpersonal channels to give illumination and extra data on the ERP framework and along these lines encourage the presentation of new accounting work (Daoud and Triki, 2013). Pierce and O’Dea (2003) have analyzed managers’ sentiment concerning the future part of management accounting and found that the real components include: association, physical area, collaboration and comprehension of the business. Pierce and O’Dea (2003) propose that future management accountants need information of accounting and back as well as learning of the organization’s business, particularly comprehension of production and sales exercises. Organizations which have better AIS, have upper hand. Additionally, organizations need to enhance their frameworks with a specific end goal to coordinate their data requirements for better basic leadership (Ballada and Ballada, 2012). Cutting edge period of organized registering is described, in programming sense, by the control of customer server design. Key programming components of this configuration are system programming and administration database framework. By their specialized attributes and exhibitions, they give, as administration suppliers, for the clients (customers) to get to and utilize the information and data from databases in system environment. On the bases of customer engineering, business data or coordinated data framework (ERP) was created (Malinić and Todorović, 2012). 100 ICESoS 2016 - Proceedings Book �Regional Economic Development: Entrepreneurship and Innovation Despite the fact that ERP frameworks are outlined by non-accountant specialists, they prompt bookkeeping forms (Chapman, 2005). Since modules of accounting are the heart of ERP framework which include: ledger, receivable records, payable records, settled resources, transferable and non-transferable resources, administration of money, cost control and planning. For organizations, we ought to concentrate on reinforcing its cost idea to workers, fortify the nature of development representatives, and continually upgrade their education specialists to ERP as the center, the foundation of interior control instruments and venture advancement to adjust to persistently enhance the inner administration of undertakings Level (Zheng, 2014). Along these lines, to put it plainly, straightforward terms, Cloud Computing can be characterized as an answer for use outer IT assets (servers, stockpiling media, applications and administrations), by means of Internet. Distributed computing is just the guarantee of a simple open innovation. On the off chance that the guarantee will inevitably transform into something certain yet stays to be seen (Mihai, 2015). Data The goal of this study is to recognize, assess and examine the effect of ERP on the management accounting framework and management accountants. A research gap appears to exist concerning how management accounting is bolstered by various information systems. Along these lines, it is the purpose for this research undertaking to build up a comprehension of the relationship between management accounting and ERP. In this research, data is obtained from online surveys, which were distributed to the participants of the research. Sample, and participants in this survey, are employees of accounting agency in Bosnia and Herzegovina, which have successfully adopted ERP system in their work. The sample is relatively small with the number of participants being equal to 20. Because of this reason we have used Nonparametric tests to analyze the data. The term nonparametric is not intended to infer that such models totally miss parameters yet that the number and nature of the parameters are adaptable and not settled in advance. In the table 1. We have analyzed descriptive statistics of the data obtained. Variables for this analyze were age, gender and education level of respondents. We can see that N is 20, what is the number of respondents included in this research. Those three variables help us shape the image of the accountants employed in one company. In the next section of this paper, we will show graphically results of the obtained data. ICESoS 2016 - Proceedings Book 101 �International Conference on Economic and Social Studies (ICESoS’16) Table 1. Descriptive Statistics Statistic Mean 95% Confidence Interval for Mean 3.50 Lower Bound Upper Bound 5% Trimmed Mean 4.674 Range 22 Interquartile Range ERP_2_gender 1 Lower Bound Upper Bound 4.219 .512 18.370 .992 5% Trimmed Mean 1.55 .114 Median 1.31 Variance 1.79 Std. Deviation 1.56 Range 2.00 Interquartile Range .261 Skewness Kurtosis Mean 95% Confidence Interval for Mean 5% Trimmed Mean ERP_3_education 5.69 21.842 Std. Deviation Mean 1.31 2.00 Variance Skewness Kurtosis Mean 95% Confidence Interval for 1.045 2.56 Median ERP_1_age Std. Error Lower Bound Upper Bound .510 1 1 -.218 Median -2.183 Variance 2.15 Std. Deviation Range 1.84 Interquartile Range 2.46 Skewness 2.17 Kurtosis 2.00 .512 .992 .150 .450 .671 2 1 102 ICESoS 2016 - Proceedings Book -.177 .512 -.548 .992 �Regional Economic Development: Entrepreneurship and Innovation Figure 1: Gender of employees From this figure, we can see that relation between male and female in the company is almost equally distributed, where number of female employees is bigger for one employee. This is interesting case, when there is a bigger number of women than men in one company. Figure 2: Education level In figure 2. We can analyze education level of employees. With only 3 employees who have finished high school, we can say that education level of employees in this company is relatively big, considering that 11 employees have finished their undergraduate level of faculty, and that six of them have graduated. ICESoS 2016 - Proceedings Book 103 �International Conference on Economic and Social Studies (ICESoS’16) Figure 3: Understanding ERP In the figure number three we have analyzed understanding of the broader term of ERP. We can see from the figure 3, that less than half of employees are aware of term ERP. Nine employees answered that they understand ERP, five of them don’t understand ERP concept, and six of them answered that they understand partially. We can comment that maybe they have heard of that term but are not sure what does it represent truly, or so what does it contains from the operational side of it. Figure 4: Work in the accounting sector without ERP support 104 ICESoS 2016 - Proceedings Book �Regional Economic Development: Entrepreneurship and Innovation In this question, respondents were asked if they are able to work in the accounting company, without ERP support. It is reasonable that 19 of them have answered that they are not able to work in the accounting sector without proper IT software. In our case, it is ERP software. From the figure 4, we can see that only one employee think that it is possible to properly do the job without ERP support. We can comment, that it is reasonable that not all employees in the company are accountants, and that this answer can come from the non-accountant. H1. IT doesn’t shape the role of modern accountants Table 2: Information technology influence We have analyzed our hypothesis in statistical software IBM SPSS, and following data has been obtained. With the significance level of 0.000 which is less than 0.05 our hypothesis is rejected what means that IT strongly influence and shape the role of modern accountant. In the table 3. we can see that observed meidan is 9.00 what is bigger than the hypothetical median 5.00. Table 3: One-Sample Wilcoxon Signed Rank Test H2. Accountants are not fully aware what ERP concept represents ICESoS 2016 - Proceedings Book 105 �International Conference on Economic and Social Studies (ICESoS’16) Table 4: Understanding of ERP concept In the table 4 we have analyzed understanding of ERP concept. This means that employees are fully aware and have understanding what actually ERP bring to them. With the result of 0.439 which is bigger than 0.05 we accept H0. In table five we see that observed median is equal with the hypothtetical. Table 5: One-Sample Wilcoxon Signed Rank Test H3. There is relation between extent that organization’s information system have impact on reporting, and whether IT influence employees’ work 106 ICESoS 2016 - Proceedings Book �Regional Economic Development: Entrepreneurship and Innovation Table 6: Correlations In this table we have analyzed correlation between extent that organization’s information system have impact on reporting, and whether IT influence one’s work. With the significance level of 0.005 our hypothesis is accepted. Correlation Coefficient is 0.604. This is highly positive correlation. H4. There is a relation between department of studying concerning employees and their opinion on actual changes in the accounting processes brought in via ERP systems Table 7: Correlations In the table 7. we have analyzed correlation between department of studying concerning employees and their opinion on actual changes in the accounting processes brought in via ERP systems. With the significance level of 0.008 which is less than 0.05 our hypothesis is accepted. Correlation coefficient is -0.592, with the negative sign, what means that this is a negative correlation. H5. Accountants agree that organization’s information system has impact on Operational planning, Reporting and Flexibility and efficiency. ICESoS 2016 - Proceedings Book 107 �International Conference on Economic and Social Studies (ICESoS’16) Table 8: Kruskal-Wallis Test In the table 8. we have analyzed whether accountants agree based on their ages if organization’s information system has impact on Operational planning, Reporting and Flexibility and efficiency. With the significance level of 0.511; 0.464 and 0.202 all respectively bigger than 0.05 we accept the null hypothesis in all three cases which concern planning, reporting and flexibility and efficiency. CONCLUSION A research gap appears to exist concerning how management accounting is bolstered by various information systems. Along these lines, it is the purpose for this research undertaking to build up a comprehension of the relationship between management accounting and ERP. The fact is that technology is a key driver of progress, and more particularly, it highlights the developing significance of the web, knowledge management and the computerization of financial information taking care of. Information technology progressions have incredibly helped the accounting frameworks of business units. Because of today’s modernized accounting data frameworks, business framework seems to move forward. Numerous exchange procedures were streamlined consequently making productive operations. The reasonableness of information innovation for business units makes new way for these elements to enhance their business. In the years to come, business sector union will be an absolute necessity, to make strong arrangements that would draw in consideration and would assemble trust of the business sector in this better approach for overseeing organizations. ERP systems likewise have the capacity to help in the present management accounting processes. This conclusion strengthens the case that having an ERP system is still superior to having no ERP system. 108 ICESoS 2016 - Proceedings Book �Regional Economic Development: Entrepreneurship and Innovation REFERENCES • Ballada, W., & Ballada, S. (2012). Basic Accounting-Made Easy. • Chapman, C. S. (2005). Not because they are new: Developing the contribution of enterprise resource planning systems to management control research. Accounting, Organizations and Society, 30(7), 685-689. • Daoud, H., & Triki, M. (2013). Accounting information systems in an ERP environment and Tunisian firm performance. • Deshmukh, A. (2006). Digital accounting: The effects of the internet and ERP on accounting. IGI Global. • Grabski, S.V., & S. Leech (2007) Complementary controls and ERP implementation success. International Journal of Accounting Information Systems, 8(1), 17-39. • Malinić, S., & Todorović, M. (2012). How Does Management Accounting Change under the Influence of ERP?. Economic Research-Ekonomska Istraživanja, 25(3), 722-751. • Mihai, G. (2015). Cloud ERP and Cloud Accounting Software in Romania. • Peccarelli, B. (2004). Technology in accounting. Practical Accountant, 37(6; SUPP), 10-11. • Pierce, B., & O’Dea, T. (2003). Management accounting information and the needs of managers: Perceptions of managers and accountants compared. The British Accounting Review, 35(3), 257-290. • Scapens, R. W. and Jazayeri, M. (2003). ERP Systems and Management Accounting Change: Opportunities or Impacts? A research note. European Accounting Review, Vol. No. 1 pp. 201-233. • Zheng, H. (2014). Research of Enterprise Accounting Information System Internal Control Based on ERP. International Conference on Management Science, Education Technology, Arts, Social Science and Economics (MSETASSE 2015). ICESoS 2016 - Proceedings Book 109 �� Dublin Core The Dublin Core metadata element set is common to all Omeka records, including items, files, and collections. For more information see, http://dublincore.org/documents/dces/. Extent The size or duration of the resource. 3311 Title A name given to the resource IMPLEMENTATION OF AN ENTERPRISE RESOURCE PLANNING (ERP) AND ITS EFFECT ON THE MANAGEMENT ACCOUNTING SYSTEM Author Author Colakovic, Amar Abstract A summary of the resource. Abstract: In the previous period, organizations from very different sectors have successfully adopted ERP systems. In this study, we will research the impact of ERP in the accounting industry regarding the case study from company in Bosnia and Herzegovina. By many theorists, accounting is usually described as the process of collecting, analyzing, and presenting financial data required for taking appropriate management decisions. Studies have explored the effects of IT in the business and accounting, but they didn’t cover complex technologies such as ERP. Utilizing ERP in accounting allows spending more time on analyzing the data instead of collecting it. This is possible because all information is stored in one place (database) which is easily accessed by everyone allowed to use it. With the successful implementation of ERP in company, accountants have more time to spend for analyzing and reporting, enhancing their roles, and shortening common tasks and activities. The aim of this paper is to explore the significance of ERP systems in management accounting. This research will try to understand what is the role of modern accountants. Enterprise resource planning software has shaped activities and processes in the accounting sector. Date A point or period of time associated with an event in the lifecycle of the resource 2016 Keywords Keywords. Conference or Workshop Item PeerReviewed H Social Sciences (General) 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. 3467 Title A name given to the resource FORGING SYNERGY BETWEEN A FOREIGN LANGUAGE AND INTERCULTURAL EDUCATION Author Author Chodzkienė, Loreta Abstract A summary of the resource. Expansion of the borders of the European Higher Education Area (EHEA) provides members of academic communities with a challenging opportunity to participate in various exchange programmes. The phenomenon of mobility tests the proficiency level of the participants’ Intercultural Communicative Competence that enables them not only to speak a common language but also interact effectively and appropriately in the context of a hosting country. The paper focuses on the case study of internationalisation process implemented by eight European Teacher Training institutions – Cá Foscari University (Italy), Pedagogical University of Tirol (Austria), the University of Cyprus (Cyprus), the School of Education of Aarhus University (Denmark), University of Nantes (France), Eötvös Loránd University in Budapest (Hungary), Jagiellonian University, Krakow (Poland), the Institute of Foreign Languages, Vilnius University (Lithuania) via the designed educational project carried out within the framework of an Intensive Programme in the socio-cultural context of the Republic of Lithuania. The data of the study based on the participants’ reflections reveals that no matter how positive the respondents’ attitudes towards mobility are, and how willing they are to participate in various exchange programmes, the level of their ICC does not always meet the desired internal and external outcomes. This proves the necessity of Intercultural education to be integrated into the content of many subjects, foreign languages, above all. Date A point or period of time associated with an event in the lifecycle of the resource 2016 Keywords Keywords. Conference or Workshop Item PeerReviewed PE English 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. 3607 Title A name given to the resource VOICE ACTIVATED SMART HOME AS AID FOR PERSONS WITH DISABILITIES Author Author Bušatlić, Bekir Abstract A summary of the resource. Smart home refers to the application of various technologies to control the home remotely or automatically. It refers to systems that control temperature, lighting, door locks, windows and many other appliances. The interaction with those devices and systems can be through smartphones, computers, control panels or even advanced technologies such as voice and gesture. Apart from improving and simplifying many everyday operations to ordinary people, such technologies can also be used to aid people with disabilities who find many everyday tasks hard or even impossible to perform. This study evaluates the efficiency and possibilities of using a voice activated smart home system as an aid for people with disabilities. Key words: Smart home, voice activated, voice interactive, people with disabilities Date A point or period of time associated with an event in the lifecycle of the resource 2016 Keywords Keywords. Thesis NonPeerReviewed T Technology (General) 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. 3613 Title A name given to the resource Analysis of ACE I/D polymorphism in Gorani population Author Author Buljubašić, Sanida Abstract A summary of the resource. Angiotensin converting enzyme (ACE) gene is 21 kb long gene that is located on chromosome 17q23. Protein coded by this gene, ACE enzyme causes conversion of inactive angiotensin I to active angiotensin II that presents key component of Renin Angiotensin System(RAS) that is known to functions in control of blood pressure and balance of fluids and salts in the body. ACE also increases degradation of bradykinin. It has been shown that ACE gene contains a polymorphism based on the presence (insertion [I]) or absence (deletion [D]) of 287 bp Alu sequence in intron 16. Accordingly, it leads to the generation of three genotypes: deletion homozygotes (DD), insertion homozygotes (II), and heterozygotes (ID). Studies have identified correlation between ACE polymorphism and different diseases as well as correlation between one of three genotypes and sport performance. The main aim of this study was to identify genotype and allele frequencies of ACE gene in Gorani population. Comparison of these results to the results of other population studies on ACE polymorphismswe aimed to understand genotype composition of studied population as well as to see if ACE gene presents suitable genetic marker that could be used in population studies. Genotypes of hundred unrelated individuals were determined by using method initially described by Rigat et al (1992). As overamplification of D allele can cause ID genotype mistyping, DD individuals were subjected to second PCR in which presence or absence of I allele was controlled. Results of the first and second PCR were detected by 2% and 1,5 % gel electrophoresis, respectively. Results of ACE testing revealed that Gorani population is in Hardy Weinberg equilibrium, where the most common genotype is ID(63%), followed by DD (20%) and II (17%) genotypes. When results of present study where compared to other population studies, the highest correlation was observed with Hungarian, Croatian, Serbian and Turkish populations. MDS plot as well as dendrogram revealed grouping of population according to geographical position, being more reliable based on continental distribution. Keywords: ACE gene, ACE polymorphism, Gorani population, Polymerase Chain Reaction, MDS, Dendrogram Date A point or period of time associated with an event in the lifecycle of the resource 2016 Keywords Keywords. Thesis NonPeerReviewed Q Science (General) https://omeka.ibu.edu.ba/files/original/9cceef2651e05259c82484c7135f81c0.docx be7c932d66d54b0ec1e281e0050db78d 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. 3302 Title A name given to the resource Investigating the Drivers of Choice Behavior in Tourism: Corporate Image, Perceived Risk and Trust Interactions through Reputation Management Author Author Bozkurt, Mesut Özkul, Emrah Abstract A summary of the resource. Abstract: This study examines how reputation management (RM) activities influence consumers’ choice behaviors. In order to understand the relationship between them the possible consequences of RM activities such as corporate image, consumer trust, and perceived risk were analyzed as the antecedents of consumers’ choice behavior. Specifically, a structural equation model was developed for hypothesized relations between the constructs of the study. Empirical research was conducted using data from 232 individual consumers in Albania (n=109) and Turkey (n=123) to test our conceptual model. The data were analyzed through t-test and structural equation modelling (SEM). The study shows that RM activities obviously determine the constructs of corporate image and consumer trust positively, whereas they affect perceived risk by consumers negatively. The lower level of perceived risk through RM activities was found as a significant determinant of consumers’ choice behavior. 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 2016 Keywords Keywords. Article PeerReviewed H Social Sciences (General) https://omeka.ibu.edu.ba/files/original/fe9797ebf9c6dc388f544b1b46805884.pdf ae0a268c61387cfe51a557b6857edcd9 PDF Text Text Journal of Economic and Social Studies Role of the State in Financial Sector Development and Achieving Pro-Poor Growth: Evidence from Bosnia and Herzegovina Amra Babajić Faculty of Economics, University of Tuzla Bosnia and Herzegovina amra.babajic@untz.ba Meldina Kokorović Jukan Faculty of Economics, University of Tuzla Bosnia and Herzegovina meldina.kokorovic@untz.ba Abstract: This paper provides theoretical background and empirical research on state’s role in financial sector development, focusing on state’s role in achieving pro-poor economic growth through its activities in development of the financial sector. To this end, in the theoretical part of the paper, it is explained that pro-poor growth depends on the strong private sector, while at the same time private sector development is dependent on the degree of financial sector development. The empirical part of the paper discusses the role of the state in financial sector development and its contribution to economic growth and poverty reduction in Bosnia and Herzegovina (BH), arguing that this growth needs to be pro-poor oriented as BH is the poorest country in Europe. In order to assess the state’s role in financial sector development and its implication to pro-poor growth in BH, surveys among small and medium enterprises (SMEs) and government representatives were conducted. The research shows significant disagreement between the two surveyed groups about the efforts currently being implemented by BH government in supporting the private sector through financial sector development. It is concluded that government needs to work more closely with the private sector as well as with the financial sector so as to better identify the private sector needs and then create policies and take actions necessary for the private sector to develop, which would consequently lead to poverty reduction. Volume 6 | Number 2 | Fall 2016 Keywords: state, financial sector, pro-poor growth, Bosnia and Herzegovina (BH) JEL Classification: O40, G00, I32 Article History Submitted: 9 April, 2016 Resubmitted: 20 September 2016 Accepted: 14 October 2016 http://dx.doi.org/10.14706/JECO SS16621 5 �Amra Babajić, Meldina Kokorović Jukan Introduction The year 2015 was set as the target year by the United Nations (UN) to implement the Millennium Development Goals (MDGs), with halving absolute poverty set as the first most important goal. Unfortunately, evidence shows that in many developing countries, mostly in Sub-Saharan Africa and Oceania, this goal would not to be met (UN, 2015). In order to reduce poverty, governments need to take necessary actions to assure what in academic literature is referred as the pro-poor economic growth. Broadly, pro-poor economic growth can be defined as one that enables the poor to actively participate in and significantly benefit from economic activity. Promoting pro-poor growth requires a strategy that is deliberately biased in favor of the poor so that the poor benefit proportionally more than the rich (Kawani 2000:3). Pro-poor economic growth can be achieved through private sector development (e.g. promotion of entrepreneurship) as the generator of work places. Government role in private sector development is of crucial importance, since the government is responsible for policies and regulations promoting positive environment for private sector development. One of the aspects of promoting pro-poor growth through private sector development is by means of support and development of the national financial system (creating adequate financial market structure and stable financial institutions, as well as assuring adequate prudential supervision). Financial system development requires government support to provide stable and favorable environment for different types of financial institutions to develop, and furthermore, to provide incentives for financial institutions to create financial products/services tailored to the needs of private enterprises and of poor people to be able to selfemploy. The main goals of this paper are twofold. The first goal is to investigate the role of the state in financial sector development with the main focus to establish the link between government efforts to achieve sustainable pro-poor growth and its efforts to develop the financial system which will be in the function of pro-poor growth. The second goal is to analyze the current state of government intervention in the financial sector oriented to poverty reduction in Bosnia and Herzegovina (BH). Also, the paper is to provide guidelines and recommendations for the improvement of 6 Journal of Economic and Social Studies �Role of the State in Financial Sector Development and Achieving Pro-Poor Growth: Evidence from Bosnia and Herzegovina government policies regulating financial sector and for greater involvement of the state in providing financial support to private sector development. BH is a rather dysfunctional country with a relatively high poverty rate. According to UNICEF’s poverty measure AROPE (At-Risk-of-Poverty and Social Exclusion), BH has the greatest risk of poverty and social exclusion among European countries. AROPA for BH is 58.6% (of population), and it fairly deviates from the EU-27 AROPE that totals to 24.2% as well as from the new member countries whose AROPE totals to 30.6%. This evidence shows that BH needs the shift in current economic policies. The first part of the paper provides the theoretical background on the financial sector impact on poverty reduction. It focuses on establishing the link between state’s role in financial sector development and state’s role in contributing to poverty reduction by creating policies (among other policies) that ensure the development of the financial sector. In the second part of the paper a review on the existing literature and previous research on the subject is presented. In the third part of the paper empirical research results on the state’s role in financial sector development in BH are presented. Using discriminant analysis, it was found that a huge gap exists between government perceptions of their influence on financial sector development and perceptions of private sector participants on the government role in financial sector development. Theoretical Background on State’s Role in Poverty Reduction through Financial Sector Development Economic growth, which is in the function of poverty reduction, requires macroeconomic stability, efficient investment in human and physical capital including infrastructure, regulation of enterprises and well-functioning financial sector (financial institutions as well as financial markets). Private sector, dominated by small and medium enterprises, is perceived as the most important key for assuring economic growth and job creation. In that respect, government efforts should be directed to enforce policies and create positive environment for promoting private sector development which, in the end, will deliver pro-poor economic growth. Moreover, an important precondition for strong private sector development and its ability to deliver pro-poor growth is the existence of a sound financial system. According to the UK government’s Department for International Development, the Volume 6 | Number 2 | Fall 2016 7 �Amra Babajić, Meldina Kokorović Jukan financial system contributes to factors needed for private sector to deliver pro-poor growth by the following activities (DFID, 2004:4-5): - Mobilizing savings for productive investment, and by facilitating capital inflows and remittances from abroad. The financial sector has a crucial role to play in stimulating investment in both physical and human capital, and hence increasing productivity; - Reducing transactions costs, facilitating inward investment, and making capital available for investment in better technologies. The financial sector can promote technological progress, thus increasing productivity, and improving resource use; - Enabling the poor to draw down accumulated savings and / or borrow to invest in income-enhancing assets (including human assets e.g. through health and education) and start micro-enterprises, wider access to financial services generates employment, increases incomes and reduces poverty; - Enabling the poor to save in a secure place, the provision of bank accounts (or other savings facilities) and insurance allows the poor to establish a buffer against shocks, thus reducing vulnerability and minimizing the need for other coping strategies such as asset sales that may damage long-term income prospects. Developed financial sector contributes to poverty reduction in two different ways: directly and indirectly (see Figure 1). 8 Journal of Economic and Social Studies �Role of the State in Financial Sector Development and Achieving Pro-Poor Growth: Evidence from Bosnia and Herzegovina Figure 1: Financial Sector Development and Poverty Reduction Source: Zhuang J. et al., 2009:10 Directly, financial sector contributes to poverty reduction through improving the access to financial service for poor and underprivileged people. Government may enforce policies which promote and create opportunities for self-employment and SMEs development. Furthermore, government can invest in better education and human capital development. Through better allocation of fiscal revenues for social spending, government can contribute to consumption smoothening among different population groups. Indirectly, the financial sector contributes to poverty reduction through boosting economic growth. In most developing countries, the major challenge of financial systems development is to provide access to formal financial sources (products and services) to the poor. Poor people are usually deprived of accessing commercial bank loans and financial services since poor people are observed as risky clients. For that reason, poor people mostly rely on the informal or semi-formal financial institutions which, in general, offer much more expensive financial products/services. Empirical evidence (Beck, Demirgüç-Kunt, and Martinez-Peria, 2007) confirms that the most important direct channel through which financial sector development impacts on poverty reduction is better access to financial services. Furthermore, it is important to emphasize that state’s role in financial system development is extremely important. Through regulation and supervision, the state Volume 6 | Number 2 | Fall 2016 9 �Amra Babajić, Meldina Kokorović Jukan creates secure and stable environment for financial institutions and markets to develop. To assure poverty reduction, governments need to implement policies which would lead to the increase in economic growth rates. But, efficiency of economic growth in poverty reduction depends on the capacity of the poor to participate in the growth (WB, 2005). Poor people can participate in achieving the economic growth only if they are given an active role in job creation. This is confirmed by the World Bank study titled ”Pro-Poor Growth in the 1990s: Lessons and Insights from 14 Countries”, where it is emphasized that policymakers who seek to reduce poverty should implement policies that enable their countries to achieve a higher rate of growth. But growth is more effective in reducing poverty in some countries than in others, depending on the capacity of poor people to participate in and benefit from growth. 1 As emphasized, development of the private sector as the new job creator is of key importance. The biggest responsibility for private sector development is on the government, because they need to create stimulative environment for development of the existing and the opening of new enterprises. There is persuasive evidence from all over the world confirming that rising levels of competition have been unambiguously associated with increased economic growth, productivity, investment and increased average living standards (OECD, 2006:41). Therefore, based on the modern regulatory regimes for development of the private sector which include competition policy regimes, economic growth model based on the pro-poor principles is desirable in BH. The existing model of economic growth in BH is not pro-poor oriented, because the Strategy for poverty reduction in BH adopted in 2004 is not fully implemented. Literature Review Literature review shows that early researches aimed to understand the relation between financial system and social welfare, while more recent studies (last decade) are more oriented to find the link between financial sector development and poverty reduction/alleviation. 1 We argue that the private sector, if properly supported by the government (especially in terms of development of entrepreneurship culture), is in the function of building the capacity of the poor people to participate in the country’s economic growth. 10 Journal of Economic and Social Studies �Role of the State in Financial Sector Development and Achieving Pro-Poor Growth: Evidence from Bosnia and Herzegovina Vast theoretical and empirical academic literature exists on the subject of financial sector impact on the social welfare. The majority of the papers in the 1990s debated mainly on the relation between financial system development and economic growth in general (Bencivenga & Smith, 1991; King & Levine, 1993; Levine, 1997) and on industrial growth in particular (Rajan & Zingales, 1998). Levine (2004) argues that countries with better functioning banking sector and financial markets grow faster. Bencivenga and Smith (1991) found positive relation between financial intermediation development and increase in real growth rates. Furthermore, they conclude that regulation policies (such as reserve requirements and interest rate caps) might have an impact on economic growth and need to be considered by developing countries. King and Levin (1993) formulated and empirically proved the model showing that better (more developed) financial systems stimulate economic growth by accelerating productivity rates. It is shown that more developed systems make more efficient selection for financing entrepreneurial activities and, therefore stimulating faster economic growth. Fields (2001) argues that through better access to finance poor people have better opportunities to participate in economic activities. Most recent empirical studies shows the existence of a significant positive effect of financial system development on poverty reduction, where countries with more developed financial systems are more likely to have lower poverty rates. (e.g. Akhter et al. 2010; Ho S. and Odhiambo, N. M , 2011; Azra. D et al. 2012; Uddin, G. S. et al. 2012). Honohan (2004) shows that correlation between financial development and sustainable economic growth needs to be drawn by more comprehensive statistics than merely banging sector depth. Furthermore, Quartey (2005) investigated the relation between savings mobilization and poverty reduction showing the existence of correlation between the two variables, but emphasizing the role of the government and its policy in stimulating domestic savings. It was also observed that institutional quality and adequate regulation of financial institutions play a crucial role in positive relationship between financial system development and poverty reduction (Dhrifi, 2013a.) Moreover, Dhrifi concludes that government must cooperate closer with the financial market and the banks acting as the regulator for formalizing models for the poorest access to formal and informal finance. Such actions of policy intervention should normally facilitate institutions providing financial services to the poor. In Volume 6 | Number 2 | Fall 2016 11 �Amra Babajić, Meldina Kokorović Jukan addition, it should foster cultures of households to invest in profitable projects. Political solutions must be tailored to the problems of the financial sector. (Dhrifi, 2013b:477). Having in mind the importance of government involvement in financial sector development aiming to achieve pro-poor economic growth, further research focuses mainly on the government role in BH in reducing poverty through financial sector development. Contribution of Financial Sector Development to Poverty Reduction in BH Overview of the Institutional Framework in BH Supporting the Private Sector and SMEs The general climate in the society should lead individuals to consider the option of starting their own business as attractive, and acknowledge that SMEs contribute substantially to employment growth and economic prosperity (EC 2008:3). In that respect, institutional infrastructure is necessary to support SMEs in proving growth and economic prosperity. When it comes to creating stimulative environment for private sector development in general, government’s role is of the utmost importance. Nevertheless, institutions forming infrastructure for private sector development are not just governments, but also non-government, private and non-profit organizations. There is no unique institutional infrastructure for private sector development and it differs from country to country. Support provided by government institutions is usually related to providing consulting and professional services, presenting good practices, etc. The majority of countries have developed different types of institutions such as government agencies, ministries, associations, chambers, and financial institutions. These institutions operate on different levels, from local, regional, state to international level. In context of creating adequate institutional infrastructure for supporting the private sector, especially for supporting SMEs, the European Union (EU) has made significant improvements. By adopting “Small Business Act” for Europe, the European Commission has laid a set of principles for implementation of policies both at the EU and Member State level in order to improve the legal and administrative environment throughout the EU for SMEs. These principles are the following (EC, 2008:4): 12 Journal of Economic and Social Studies �Role of the State in Financial Sector Development and Achieving Pro-Poor Growth: Evidence from Bosnia and Herzegovina • • • • • • • • • • Create an environment in which entrepreneurs and family businesses can thrive and entrepreneurship is rewarded, Ensure that honest entrepreneurs who have faced bankruptcy quickly get a second chance, Design rules according to the “Think Small First” principle, Make public administrations responsive to SMEs’ needs, Adapt public policy tools to SMEs’ needs: facilitate SMEs participation in public procurement and better use State Aid possibilities for SMEs, Facilitate SMEs access to finance and develop the legal and business environment supportive to timely payments in commercial transactions, Help SMEs to benefit more from the opportunities offered by the Single Market, Promote the upgrading of skills in SMEs and all forms of innovation, Enable SMEs to turn environmental challenges into opportunities, and Encourage and support SMEs to benefit from the growth of markets. By turning these principles into practice, many different institutions supporting SMEs have been established across the EU with coordinating efforts to provide better institutional framework for SMEs. By adopting EU Acquis Communautaire, BH has accepted these principles to create adequate institutional setting for SMEs development. Currently, there are several institutions that provide institutional support for SMEs in BH. This infrastructure is rather complicated due to the elaborate olitical and legal system in the country. BH operates on the state level with two entities: Federation of BH (FBH) and Republic of Srpska (RS), and Brcko District. FBH is further divided into ten cantons, each operating as a state within the state. The overview of BH government institutions and governmental financial institutions supporting SMEs is given in Table 1. On the state level, development of SMEs is coordinated by the Ministry of foreign trade and economic relations. Within this Ministry the Sector for Economic Development and Entrepreneurship is responsible for SMEs development and is in charge of the following basic activities: normative-legal, study-analytical, technicaloperational, information-documentary, and administratively-technical. These activities include different areas such as: macroeconomic analysis and economic Volume 6 | Number 2 | Fall 2016 13 �Amra Babajić, Meldina Kokorović Jukan growth forecast of BH; collaboration with international institutions and organizations; collaboration with domestic and foreign scientific and research institutions; preparation of treaties, agreements, and other acts for projects and programs of economic restoration and development; projects and programs of bilateral and multilateral donations and credits for economic restoration and development; coordination of international economic assistance to BH except the part regarding the European Union assistance; preparation of bilateral and multilateral agreements and other acts regarding economic restoration and development of BH; development of entrepreneurship, support to the development of SMEs; SMEs promotion. 2 Nevertheless, the fund for financial support for SMEs on the state level does not exist. Financial government support for SMEs is under the jurisdiction of the entities. On the level of FBH, SMEs are supported by the Ministry of Development, Entrepreneurship and Crafts and Development and the Development Bank of FBH. Furthermore, each of the ten cantons has cantonal ministry which deals with SMEs. In RS, SMEs development is supported by the three following institutions: the Ministry of Industry, Energy and Mining of RS, the Agency for SMEs and the Development Bank of RS. Table 1: The overview of BH government institutions supporting the private sector and SMEs Level of government State level Entity level Federation of BH Entity level Republic of Srpska Cantonal level Brcko District 2 Government institution Ministry of foreign trade and economic relations of BH Ministry of development, entrepreneurship and crafts Ministry of industry, energy and mining of RS Agency for SMEs Designated ministry for SMEs Government of Brcko District – Government financial institution Does not exists Development Bank of FBH Development bank of RS Development bank of RS. Development Grant Fund of Brcko District www.mveteo.gov.ba 14 Journal of Economic and Social Studies �Role of the State in Financial Sector Development and Achieving Pro-Poor Growth: Evidence from Bosnia and Herzegovina Besides the government institutions, there is a wide network of non-government institutions providing support to SMEs development in BH, such as REDAH Regional Development Agency for Herzegovina, REZ – Regional Development Agency for Central BH region, NERDA - Regional Development Agency for North-East BH, SERDA – Sarajevo Regional Development Agency, etc. This existing legal infrastructure in BH, with different laws adopted on different government levels (state, entities, and cantons) and problems in the implementation of the Strategy for SMEs development, is rather complicated and does not provide proper conditions for enterprises to operate. Laws adopted on different government levels are not harmonized. Furthermore, there is no single state register of SMEs. Other infrastructural problems are related to complicated public administration, high costs of maintaining public administration, redundancy in functions of different institutions on all government levels with unclear responsibilities, etc. The number of registered enterprises in BH is reduced year by year, and conditions for the operation of the existing enterprises are worsened. Overall, it can be concluded that the current infrastructure supporting SMEs in BH is not in favor of achieving sustainable growth in the country. The Strategy of SMEs development is not being implemented properly and Strategy for poverty reduction is nothing more than cold facts on paper, as government is doing nothing to enforce and achieve strategy objectives. These strategies are not producing pro-poor growth. Overview of the BH Financial Sector The BH financial system is bank centric, where the dominant role is played by the commercial banks. The non-bank financial sector is relatively underdeveloped with the following financial institutions operating within the sector: microcredit organizations, leasing companies, investment funds and insurance companies. As Figure 2 shows, commercial banks account for 84% of the total financial asset within the BH financial system, while the remaining financial institutions account for 5% or less of the total assets. Volume 6 | Number 2 | Fall 2016 15 �Amra Babajić, Meldina Kokorović Jukan Figure 2: Structure of financial institutions of the BH financial sector in 2013 5% 4% 4% 3% Banks Leasing companies 84% Insurance companies Investment funds Microcredit organisations Source: CBBH (2014) Stability and security of the overall banking sector is adequate, according to the data provided by the Banking Agencies of Federation of BH and of Republic of Srpska. In 2012, capital adequacy rate of the banking sector, as the most important measure of banking sector performances, was 16.4%, which is substantially above the regulatory minimum of 12%. Regardless of the financial crisis, the financial system of BH remains strong in terms of its ability to provide financial support to nonfinancial sector (companies and households). On the other hand, statistical data shows that credit activity of banks was decreased during 2012, where 51.6 % of total credits (approx. BAM 16 billion) was granted to non-financial companies (public and private), 42.6% to households and 5.2% to the government. In the same period, microcredit financial institutions in Federation BH granted only 2% of the total credits (BAM 400 million) to companies and 98% to households. According to the Annual Report for 2012 of the Central Bank of BH, there were 28 licensed banks in BH, with 18 of them operating in FBH and 10 in RS. There were 19 microcredit financial institutions (13 in FBH and 6 in RS), with 15 of them 16 Journal of Economic and Social Studies �Role of the State in Financial Sector Development and Achieving Pro-Poor Growth: Evidence from Bosnia and Herzegovina organized as microcredit foundation and 4 as microcredit organizations. 3 Leasing companies are less developed financial institutions with only 9 being licensed for providing leasing contracts (7 in FBH and 2 in RS). Furthermore, capital markets in BH are not used to their full potential. Organized capital markets exist within two securities exchanges (Sarajevo Stock Exchange and Banja Luka Stock Exchange), but the annual turnover at these exchanges is rather symbolic. The structure of the securities exchanges turnover shows the lack of foreign investors and dominance of government debt securities. Private companies do not use securities exchanges to raise capital funds through stock or bonds issuing or initial public offerings. Research Methodology and Sample For the purposes of assessing government involvement and policies impact on strengthening the financial sector oriented to poverty reduction and pro-poor growth, we conducted the research among SMEs and government bodies. The aim of the research was to better understand the perceptions of SMEs as the most important creators of work places, as well as of the perceptions of government agencies representatives about the level of government involvement in financial sector development. In order to collect the research data two types of questionnaires were created, one for SMEs and other for government representatives. The questionnaires were structured to collect data about government policies and actions impact on private sector development and poverty reduction focusing on the financial sector impact. 4 The questionnaires were created consulting the OECD document - Promoting Pro-Poor 3 One of the main differences between microcredit foundations and microcredit institutions is related to the maximum amount of granted credit. Microcredit foundations can grant a credit in the maximum amount of BAM 10,000 (approx. EUR 5000 ), while microcredit organizations can grant a credit in the maximum amount of BAM 50,000 (approx. EUR 25,000 EUR). 4 The research results, presented in this paper, are part of the broader research on government role in poverty reduction in BH which, besides its role in strengthening the financial sector, covered government role in strengthening entrepreneurial environment and the overall support to the private sector by eliminating different barriers, such as regulatory, administrative and financial. Volume 6 | Number 2 | Fall 2016 17 �Amra Babajić, Meldina Kokorović Jukan Growth: Private Sector Development and the European Commission document - The European Platform against Poverty and Social Exclusion: A European framework for social and territorial cohesion. The questionnaire for SMEs included thirteen questions, while the one for government bodies included eighteen questions. The sample of the surveyed SMEs was created based on the partial data on the number and types of SMEs from the Indirect Taxation Office of BH and the Agency for Statistics of BH, since the state level database of SMEs operating in BH does not exist. Having in mind that the sample would be rather large to collect the data, it was decided to include 250 SMEs in the sample. The size and structure of the sample is shown in Table 2. The response rate among SMEs was 50%. Table 2: Size and structure of the sample of the surveyed SMEs Group Number of employees 1 0 – 10 2 10 – 50 3 50 – 250 ∑ Type of SME Micro Enterprises Small Enterprises Mid-sized Enterprises Stratums Number of enterprises % Sample Number of enterprises 31,102 78.58 196.45 6,539 16.52 41.3 41 1,938 4.90 12.25 12 39,579 100.00 250.00 250 Number of enterprises in the sample 197 Source: Authors’ research The survey of government institutions included the following institutions and agencies: Federal Ministry of Development, Entrepreneurship and Crafts, FBH Development Planning Institute, Agency for Development of Small and Midsized Enterprises of Republic of Srpska, Government of Brcko District – Development Grant Fund of Brcko District, Federal Ministry of Energy, Mining and Industry, Ministry of Foreign Trade and Economic Relation of BH, and ten cantonal ministries of entrepreneurship. The response rate among government institutions was 81%. 18 Journal of Economic and Social Studies �Role of the State in Financial Sector Development and Achieving Pro-Poor Growth: Evidence from Bosnia and Herzegovina The data was collected in the period from May to November 2014, by e-mail, phone and direct contact. Research Results and Discussion As it was indicated in the previous part of the paper, economic pro-poor growth implies orientation to poverty reduction through different government measures, including financial sector development. Financial sector development contributes to pro-poor growth by creating a network of different types of financial institutions as well as a variety of financial products/services for the private sector and supporting entrepreneurial development, which contributes to poverty reduction by increasing employment and self-employment. SMEs Perceptions of State’s Role in Financial Sector Development in BH In general, the survey shows negative SMEs perceptions of the state’s role in financial sector development and its contribution to entrepreneurial development and, therefore, to poverty reduction. Figure 3 shows the results of the level of the surveyed SMEs agreement with different aspects of government (state) support to financial sector development. Figure 3: Perceptions of SMEs on the state’s role in financial sector development State regulates microcredit organization and… 24,3 State creates positive business environment… 25,7 32,9 State works continuously on development… State ensures guaranties and subventions… State creates conditions for development of… 35,7 State encourage entrepreneurial and… Supporting financial institutions,… 0% Strongly disagress Disagree 28,6 38,6 14,3 14,3 41,4 21,4 40 27,1 21,4 41,4 35,7 25,7 34,3 40% Agree 10 2,9 7,1 4,32,9 47,1 32,9 20% 7,12,9 47,1 31,4 Undecided 14,3 0 28,6 44,3 27,1 State finances investment in equipment,… 28,6 15,7 60% 80% 7,10 7,12,9 4,3 1,4 4,3 1,4 14,3 0 100% Strongly agree Source: Authors’ research Volume 6 | Number 2 | Fall 2016 19 �Amra Babajić, Meldina Kokorović Jukan As Figure 3 shows, 23% to 44% of the surveyed SMEs strongly disagree, while 28% to 41% of the surveyed SMEs disagree that the state supports financial sector development oriented towards helping SMEs and entrepreneurial firms. The majority of the surveyed SMEs disagree that state: • ensures guaranties and subventions for debt financing of the companies (85.7% of the surveyed SMEs), • creates conditions for development of different types of financial products/services for micro/small/mid-sized companies (78.5% of the surveyed SMEs), and • works continuously on development and strengthening of the financial sector (72.9% of the surveyed SMEs). Furthermore, the research results show that most of the surveyed SMEs have either a negative or neutral attitude towards the state regulations on microcredit organizations and prevention of misuse of these organizations, state’s role in creating positive business environment and support to microcredit organizations, and state’s support to financial institutions. It is interesting to observe that less than 15% of the surveyed SMEs expressed a positive attitude towards the state’s role in financial sector development and its impact on entrepreneurial development. Government Bodies Perceptions of its Role in Financial Sector Development in BH In contrast to SMEs negative perception, the survey shows a more positive attitude among government bodies of the state’s role in financial sector development. The results of the survey are shown in Figure 4. 20 Journal of Economic and Social Studies �Role of the State in Financial Sector Development and Achieving Pro-Poor Growth: Evidence from Bosnia and Herzegovina Figure 4: Perceptions of government bodies on the state’s role in financial sector development State regulates microcredit organization and prevent misuse of these… 7,7 7,7 76,9 State creates positive business 7,7 environment and support microcredit… State works continuously on development and strengthening of financial sector 53,8 7,7 State ensures guaranties and subventions for debt financing of the… 7,7 7,7 0% Strongly disagress Disagree 0 30,8 23,1 23,1 30,8 State encourage entrepreneurial and 07,7 investment activities Supporting financial institutions, 0 government contributes to… 15,4 46,2 23,1 38,5 23,1 Undecided Agree 15,4 0 0 23,1 0 7,7 7,7 69,2 40% 7,7 46,2 76,9 20% 15,4 0 61,5 23,1 15,4 State finances investment in equipment, technology and education 23,1 30,8 23,1 State creates conditions for development of different types of financial… 7,7 0 60% 7,7 0 80% 100% Strongly agree Source: Authors’ research The majority of the surveyed government bodies are undecided (neutral) towards the statements related to state policies and to the entrepreneurial development through strengthening the financial sector. Government bodies agree that the state does not create conditions for development of a wide range of financial products/services for micro/small/medium enterprises and, moreover that it does not create positive environment and financial support for microcredit organizations. In contrast to the perceptions of the surveyed SMEs, government bodies express a positive attitude towards the state’s role in creating the conditions for debt financing for start-ups and enterprise development, as well as towards the state’s role in ensuring grants and subventions for debt financing of SMEs. Volume 6 | Number 2 | Fall 2016 21 �Amra Babajić, Meldina Kokorović Jukan Using discriminant analysis existence of the significant difference among attitudes between the private and government sectors on the state’s role in strengthening the financial sector was tested. In that respect, one discrimination function was determined, where the function describes 100% of the variation of the between groups variation, which is shown in Table 3. Table 3: Discrimination analysis for the state’s role in strengthening financial sector F eigenvaules λ % of Variance 1 0.278 100 Cumulative % 100 Canonical Correlation rc 0.467 Wilks’ Lambda λ 0.782 Chisquared χ2 18.788 df Sig. 9 0.027 Source: Authors’ research Squared canonical correlation (rc), the effect size for the discriminant functions, is (0.4672)=0.278. Wilks Lambda is rather high (Wilks λ=0.782) showing low discrimination strength of discriminant functions. Chi-squared test (χ2) for function 1 is statistically significant (χ2=18.788, sig.=0.027), showing that discrimination model is significant, and therefore can adequately measure group membership, but determined differences between groups are rather small. Table 4 shows discriminant function coefficients and group centroids for the state’s role in strengthening financial sector. Table 4: Discriminant function coefficients and group centroid for the state’s role in strengthening financial sector Discriminant Coefficient (DC) State encourages entrepreneurial and investment activities State ensures guaranties and subventions for debt financing of companies State creates conditions for debt financing of start-up/development of firms 0.629 State finances investment in equipment, technology and education 0.569 22 0.823 Group Centroid Private sector -0.225 Government 1.209 0.624 Journal of Economic and Social Studies �Role of the State in Financial Sector Development and Achieving Pro-Poor Growth: Evidence from Bosnia and Herzegovina Supporting financial institutions, government contributes to entrepreneurial development 0.536 * Difference does not exist Source: Authors’ research Table 4 shows differences between the observed groups for chosen variables in the hierarchical order. The mayor difference in perceptions among the private and government sectors is observed in respect to the following: state’s role in encouraging entrepreneurial and investment activities (DC=0.823), and state’s role in ensuring guaranties and subventions for debt financing of companies (DC=0.629). On the other hand, there is no significant difference between perception among the private and government sectors on the state's role in creating positive business environment and support to microcredit organizations. It can be observed that even though some differences in perceptions among the private and government sectors, on the multivariation level, do exists, where the private sector gives a lower grade than the government bodies for the state’s involvement and contributions to financial sector development, those differences are rather insignificant. Conclusions and Recommendations In order to reduce poverty, governments in developing countries need to take necessary actions to assure pro-poor economic growth. Pro-poor economic growth can be achieved by greater role of the state in developing private sector and creating environment for entrepreneurship. In that respect government needs to establish economic environment which would boost private sector to create more work places for the poor. Furthermore, the state needs to engage in development of the financial sector, as financial sector development is one of the preconditions for private sector to develop. Without proper financial sector infrastructure for private sector and entrepreneurs to obtain external financial sources (more precisely, without availability of different types of external financial sources tailored to their needs), it cannot be expected that a pro-poor growth can be achieved through private sector development. As the research shows, based on the BH experience, it is not enough to create the regulation framework of the financial system and regulation for SMEs, but it is Volume 6 | Number 2 | Fall 2016 23 �Amra Babajić, Meldina Kokorović Jukan important that regulations and government actions are in line with the expectation of the private sector. The research shows that private sector is not satisfied with actions undertaken by the state for supporting financial sector. The analysis of SMEs perceptions reveals that SMEs have negative perceptions towards the state’s role in financial sector development. The surveyed SMEs are of the opinion that the state interventions in financial sector are not contributing to entrepreneurial development in BH, regardless of the fact that BH financial sector is well developed and well regulated. On the other hand, the analysis of perceptions of government bodies at all levels (municipal, cantonal, entity and the state level) reveals that the state is not aware of the needs of private sector, as well as of entrepreneurial sector. It is obvious that a huge lack of understanding between the state and private sector exists. In that respect, it is important that government work more closely with private sector as well as with financial sector to identify the needs of private sector and create policies and take actions necessary for private sector to develop. In particular, when it comes to financial sector development, government bodies need to: • rethink and better distribute guaranties and subventions for debt financing of companies, • create conditions for development of different types of financial products/services specially tailored for the needs of SMEs, • work continuously on development and strengthening of financial sector, hold workshops or focus groups where all interested parties (the state, financial institutions and SMEs) would be able to discuss the problems in access to financial products and services. References Akhter, S., Liu , Y., & Daly, K. (2010). Cross Country Evidence on the Linkages between Financial Development and Poverty. International Journal of Business and Management, 5(1), 3-19. Azra, K. D., Ahmad E., & Ullah W. (2012). Financial Development and Poverty Reduction: Time Series Evidence from Pakistan. World Applied Sciences Journal 18(11), 1576-1581. 24 Journal of Economic and Social Studies �Role of the State in Financial Sector Development and Achieving Pro-Poor Growth: Evidence from Bosnia and Herzegovina Beck, T., A. Demirgüç-Kunt, & M. S. Martinez-Peria. (2007). Reaching Out: Access to and Use of Banking Services across Countries. Journal of Financial Economics, 85(1), 234–66. Bencivenga, V.R, & Smith, B.D. (1991). Financial Intermediation and Endogenous Growth, Review of Economic Studies, 58, 195-209. Central bank of Bosnia and Herzegovina (2014). Annual Report of CBBH for 2013. Retrieved from: http://www.cbBH.ba/files/godisnji_izvjestaji/2014/GI_2013_bs.pdf DFID (2004). The Importance of Financial Sector Development for Growth and Poverty Reduction Policy Division Working Paper, Department for International Development, UK. Retrieved from: http://ageconsearch.umn.edu/bitstream/12886/1/fi04im01.pdf Dhrifi, A. (2013a). Financial Development and Poverty: What Role for Growth and Inequality?, International Journal of Academic Research in Accounting, Finance and Management Sciences, 3(4), 119–129 Dhrifi, A. (2013b). Financial Development and the "Growth-Inequality-Poverty" Triangle: A Comparative Study between Developed and Developing Countries, International Journal of Economics, Finance and Management, 2(7), 472 -481. European Commission (2008). “Think Small First” - A “Small Business Act” for Europe {SEC(2008) 2101} {SEC(2008) 2102}, COM/2008/0394 final. Retrieved from: http://eur-lex.europa.eu/legalcontent/EN/TXT/?uri=CELEX:52008DC0394 Fields, G. (2001). Distribution and Development: A New Look at the Developing World. NY: Russell Sage Foundation, and Cambridge, MA: MIT Press. Ho, S., and Odhiambo, N. M. (2011). Finance and Poverty Reduction in China: An Empirical Investigation, International Business & Economics Research Journal, 10(8), 103 -114. Honohan, P. (2004). Financial Development, Growth and Poverty: How Close is the Links, World Bank Policy Research Working Paper 3203, February 2004, Retrieved from: http://www1.worldbank.org/finance/assets/images/3203.pdf Volume 6 | Number 2 | Fall 2016 25 �Amra Babajić, Meldina Kokorović Jukan King. R. G, and Levine R. (1993). Finance, Entrepreneurship and Growth: Theory and Evidence, Journal of Monetary Economics, 32(3), 513-542. Levine, R. (2004). Finance and Growth: Theory and Evidence. NBER Working Paper No. 10766, National Bureau of Economic Research, MA: Cambridge Levine, R. (1997). Financial Development and Economic Growth: Views and Agenda, Journal of Economic Literature, 35(4), 688-726. Quartey, P. (2005). Financial Sector Development, Savings Mobilization and Poverty Reduction in Ghana, UNU-WIDER. 2005, Research Paper No. 2005/71, United Nations University, Helsinki, Finland. Rajan, R.G. Zingales, L. (1998). Financial Dependence and Growth, The American Economic Review, 88(3), 559-586. Rajan. R.G, a Zingales L. (2003). The Great Reversals: The Politics of Financial Development in the 20th Century, Journal of Financial Economics, 69(1), 5-50. OECD (2006) Promoting Pro-Poor Growth - Private Sector Development. Retrieved from: http://www.oecd.org/development/povertyreduction/36427804.pdf Uddin G.S., Kyophilavong P., Sydee N. (2012). The Casual Nexus of Banking Sector Development and Poverty Reduction in Bangladesh, International Journal of Economics and Financial Issues, 2(3), 304-311. UN (2015). Millennium Development Goals: 2014 Fact Sheet. Retrieved from: http://www.un.org/millenniumgoals/2014%20MDG%20report/MDG%202014% 20Progress%20Chart_English.pdf WB (2015). Pro-Poor Growth in the 1990s: Lessons and Insights from 14 Countries. Retrieved from: http://siteresources.worldbank.org/INTPGI/Resources/3426741119450037681/Pro-poor_growth_in_the_1990s.pdf 26 Journal of Economic and Social Studies � Dublin Core The Dublin Core metadata element set is common to all Omeka records, including items, files, and collections. For more information see, http://dublincore.org/documents/dces/. Extent The size or duration of the resource. 3340 Title A name given to the resource Role of the State in Financial Sector Development and Achieving Pro-Poor Growth: Evidence from Bosnia and Herzegovina Author Author Babajic, Amra KOKOROVIĆ JUKAN, Meldina Abstract A summary of the resource. This paper provides theoretical background and empirical research on state’s role in financial sector development, focusing on state’s role in achieving pro-poor economic growth through its activities in development of the financial sector. To this end, in the theoretical part of the paper it is explained that pro-poor growth depends on the strong private sector, while at the same time private sector development is dependent on the degree of financial sector development. Defining pro-poor growth as a set of policies aiming to reduce poverty, it is argued that pro-poor growth is dependent on financial sector development both, directly and indirectly. Financial sector development contributes to poverty reduction directly through improvement of the access to financial products/services to the poor, and indirectly through private sector’s better access to financial sources which as a consequence impacts the overall economic growth of the country. By analyzing theoretical approaches, it is shown that government policies and actions in financial sector development might positively impact private sector development, and therefore (indirectly and directly) contributes to pro-poor growth. The empirical part of the paper discusses the role of the state in financial sector development and its contribution to economic growth and poverty reduction in Bosnia and Herzegovina (BiH), arguing that this growth needs to be pro-poor oriented as BIH is the poorest country in Europe. In order to assess state’s role in financial sector development and its implication to pro-poor growth in BIH, surveys among small and medium enterprises (SMEs) and government representatives were conducted. The aim of the surveys was to analyze the perceptions of private sector participants and of government institution employees perceptions about the government role in development of the financial sector oriented to SMEs. The research shows significant disagreement between the two surveyed groups about the efforts currently being implemented by BIH government in supporting the private sector through financial sector development. It is concluded that government needs to work more closely with the private sector as well as with the financial sector so as to better identify the private sector needs and then create policies and take actions necessary for the private sector to develop, which would consequently lead to poverty reduction. 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 2016 Keywords Keywords. Article PeerReviewed H Social Sciences (General) https://omeka.ibu.edu.ba/files/original/8eaa93678a504adca4f14aaa273689e4.docx 5ed69917dfe616dc39a96aa804637ae8 https://omeka.ibu.edu.ba/files/original/68b7a867daa7b8e6df54c94ea103df4b.pdf 1f1dac8c0b96900a386b9e8aeebfeb77 PDF Text Text Development of Intercultural Education through English language textbooks used in elementary schools in B&H Assist. Prof. dr. Senad Bećirović Abstract In today’s globalized world mono-cultural societies have been gradually disappearing. A trend towards the creation of multicultural societies began in 1960s. New multicultural societies were forced by the virtue of new conditions to engage themselves with others. The number of international institutions has adopted documents, which became the backbone of new education policy. Therefore, school systems worldwide began to work intensively on the promotion of intercultural values among young people. Intercultural education is most explicitly accomplished through textbook contents which encourage interaction, exchange, desegregation, interdependency and solidarity among people belonging to different cultural groups living in the same territory. Yet nowadays many multicultural nations encounter difficulties in holding together multicultural diversity and in establishing harmonious interpersonal relationships. This work deals with content analysis as one of the most frequently applied research methods in the field of education; and it is concerned with the analysis of the intercultural content in English language textbooks used in B&H in elementary schools. The main goal of this research is to determine the quantity and quality of content that point to intercultural education in the textbooks of English language used in elementary schools in the Bosnia and Herzegovina. The research involves both quantitative and qualitative analysis. We selected nine categories, important for intercultural education throughout English language textbooks: identity, cooperation and friendship, respect, tolerance, cultural relativism, stereotype, prejudice, oppression, and labeling. Results of textual analysis will offer scientific insight about the possible contributions of English language textbooks to intercultural education in B&H. This research for us is important because we believe that if multiculturalism is accepted as an asset not as a burden, with its proper utilization within the education system, multicultural nations would inevitably continue to benefit from their diversity. � 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. 3190 Title A name given to the resource Development of Intercultural Education through English language textbooks used in elementary schools in B&H Author Author BEĆIROVIĆ, Senad Abstract A summary of the resource. In today’s globalized world mono-cultural societies have been gradually disappearing. A trend towards the creation of multicultural societies began in 1960s. New multicultural societies were forced by the virtue of new conditions to engage themselves with others. The number of international institutions has adopted documents, which became the backbone of new education policy. Therefore, school systems worldwide began to work intensively on the promotion of intercultural values among young people. Intercultural education is most explicitly accomplished through textbook contents which encourage interaction, exchange, desegregation, interdependency and solidarity among people belonging to different cultural groups living in the same territory. Yet nowadays many multicultural nations encounter difficulties in holding together multicultural diversity and in establishing harmonious interpersonal relationships. This work deals with content analysis as one of the most frequently applied research methods in the field of education; and it is concerned with the analysis of the intercultural content in English language textbooks used in B&H in elementary schools. The main goal of this research is to determine the quantity and quality of content that point to intercultural education in the textbooks of English language used in elementary schools in the Bosnia and Herzegovina. The research involves both quantitative and qualitative analysis. We selected nine categories, important for intercultural education throughout English language textbooks: identity, cooperation and friendship, respect, tolerance, cultural relativism, stereotype, prejudice, oppression, and labeling. Results of textual analysis will offer scientific insight about the possible contributions of English language textbooks to intercultural education in B&H. This research for us is important because we believe that if multiculturalism is accepted as an asset not as a burden, with its proper utilization within the education system, multicultural nations would inevitably continue to benefit from their diversity. Date A point or period of time associated with an event in the lifecycle of the resource 2016 Keywords Keywords. Article PeerReviewed P Philology. Linguistics,PE English,PR English literature https://omeka.ibu.edu.ba/files/original/8875d0627aff9664c2b7ed1cc29be923.docx 7b43ab9abf0fcf86fd2322a3e1d76a30 https://omeka.ibu.edu.ba/files/original/0b4897e80a2a662d4d43ec1c2c86aca4.pdf 979071c23ee9e3fbc12fc2fcaf328eff PDF Text Text Classroom Group Works Under Scrutiny: A Case Study at International Burch University Harun Bastug1 , Selma Salihagic2 and Ahmet Özkan3 ABSTRACT In the last couple of decades in contemporary societies, educators and educational institutions have required their students to participate actively and devotedly in their educational process in order to prepare them for the future employment which almost always includes team work and cooperation, Besides, methods that include students’ cooperation and collaboration within group learning have been used increasingly in all levels of teaching and in all subjects. The present study attempts to provide an insight into students’ perspectives on these issues in the international and multicultural environment of International Burch University. Students were given the opportunity to express their own opinions through the interviews evaluated by taking into consideration key elements of cooperative learning situations. The researchers have aimed to indicate possible shortcomings in the implementation of group work methods applied in practice and to attract students’ attention to their importance by offering possible solutions for their overcoming. � 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. 3240 Title A name given to the resource Classroom Group Works Under Scrutiny: A Case Study at International Burch University Author Author BASTUG, Harun SALIHAGIC, Selma OZKAN, Ahmet Abstract A summary of the resource. In the last couple of decades in contemporary societies, educators and educational institutions have required their students to participate actively and devotedly in their educational process in order to prepare them for the future employment which almost always includes team work and cooperation, Besides, methods that include students’ cooperation and collaboration within group learning have been used increasingly in all levels of teaching and in all subjects. The present study attempts to provide an insight into students’ perspectives on these issues in the international and multicultural environment of International Burch University. Students were given the opportunity to express their own opinions through the interviews evaluated by taking into consideration key elements of cooperative learning situations. The researchers have aimed to indicate possible shortcomings in the implementation of group work methods applied in practice and to attract students’ attention to their importance by offering possible solutions for their overcoming. Date A point or period of time associated with an event in the lifecycle of the resource 2016 Keywords Keywords. Article PeerReviewed PE English,PR English literature 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. 3446 Title A name given to the resource CLASSROOM GROUP WORKS UNDER SCRUTINY: A CASE STUDY AT INTERNATIONAL BURCH UNIVERSITY, IN BOSNIA AND HERZEGOVINA Author Author BASTUG, Harun SALIHAGIC, Selma OZKAN, Ahmet Abstract A summary of the resource. In last couple of decades in contemporary societies, educators and educational institutions have required their students to participate actively and devotedly in their educational process in order to prepare them for the future employment which almost always includes team work and cooperation, Therefore, methods that include students’ cooperation and collaboration within group learning have been used increasingly in all levels of teaching and in all subjects. Nevertheless, it seems that in practice this type of learning is still encountering dependence, passivity, and even anxiety on the part of students. Thus, this paper attempts to provide an insight into students’ perspectives on these issues in the international and multicultural environment of International Burch University. Students were given the opportunity to express their own opinions through the interviews evaluated by taking into consideration key elements of cooperative learning situations (Johnson and Johnson, 1991). Thus, the purpose of this research is to indicate possible shortcomings in the implementation of group work methods applied in practice and to attract students’ attention to their importance by offering possible solutions for their overcoming. Date A point or period of time associated with an event in the lifecycle of the resource 2016 Keywords Keywords. Conference or Workshop Item PeerReviewed PE English