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THE ANNALS OF THE
"ŞTEFAN CEL MARE"
UNIVERSITY SUCEAVA .
FASCICLE OF THE FACULTY OF
ECONOMICS AND
PUBLIC ADMINISTRATION
VOLUME 9, NO. 1(9), 2009
EDITORIAL BOARD:
Editor-in-chief: Carmen NĂSTASE
General editorial secretary: Adrian Liviu SCUTARIU
Editors: Elena HLACIUC, Carmen CHAŞOVSCHI, Mariana LUPAN, Ovidiu Florin HURJUI
SCIENTIFIC COMMITTEE:
Angela ALBU, „Ştefan cel Mare” University of Suceava, Romania George P. BABU, University of Southern Mississippi, USA
Christian BAUMGARTNER, International Friends of Nature, Austria Grigore BELOSTECINIC, ASEM, Chi şinău, Republic of Moldova Ionel BOSTAN, „Alexandru Ioan Cuza” University of Iaşi, Romania Aurel BURCIU, „Ştefan cel Mare” University of Suceava, Romania
Gheorghe CÂRSTEA, Academ y of Economic Studies, Bucharest , Romania Slobodan CEROVIC, Singidunum University, Belgrade, Serbia
Simion CERTAN, State University of Chişinău, Republic of Moldova
Carmen CHAŞOVSCHI, „Ştefan cel Mare” University of Suceava, Romania Liliana ELMAZI, Tirana University, Albania
Cristian Valentin HAPENCIUC, „Ştefan cel Mare” University of Suceava, Romania Elena HLACIUC, „Ştefan cel Mare” University of Suceava, Romania
Elena IFTIME, „Ştefan cel Mare” University of Suceava, Romania Marian JALENCU, State University of Chişinău, Republic of Moldova Miika KAJANUS, Savonia University of Applied Sciences, Iisalmi, Finland Stefanos KARAGIANNIS, Institute of Tourism Research, Athens, Greece Maria MUREŞAN, Academy of Economic Studies, Bucuresti, Romania Carmen NĂSTASE, „Ştefan cel Mare” University of Suceava, Roman ia Alexandru NEDELEA, „Ştefan cel Mare” University of Suceava, Romania Ion PÂRŢACHI, ASEM, Chişinău, Republic of Moldova
Rusalim PETRIŞ, „Ştefan cel Mare” University of Suceava, Romania Abraham PIZAM, University of Central Florida, Orlando, Florida Ion POHOAŢĂ, „Alexandru Ioan Cuza” University of Iaşi, Romania Gabriela PRELIPCEAN, „Ştefan cel Mare” University of Suceava, Romania Gheorghe SANDU, „Ştefan cel Mare” University of Suceava, Romania Petru SANDU, Elizabethtown College, Pennsylvania, USA
Pavlo SHYLEPNYTSYI, Bucovina State Academy of Finance, Chernivtsi, Ukraine Doru TILIUŢE, „Ştefan cel Mare” University of Suceava, Romania
Ion TORONCIUC, National University Yuri Fedcovici, Chernivtsi, Ukraine Viorel ŢURCANU, ASEM, Chişinău, Republic of Moldova
Diego VARELA PEDREIRA, University of A Coruna, Spain
Răzvan VIORESCU, „Ştefan cel Mare” University of Suceava, Romania
Valeriy YEVDOKYMENKO, National University Yuri Fedcovici, Chernivtsi, Ukraine
Text review:Ovidiu Florin HURJUI, Adrian Liviu SCUTARIU. Cover design:Adrian Liviu SCUTARIU
Contact:
Faculty of Economics and Public Administration „Ştefan cel Mare” University of Suceava Str. Universităţ ii nr. 13, Corp H, Camera H108 720229 SUCEAVA, ROMANIA
Phone: (+40) 230 216147 int. 294 E-mail:cercetare@seap.usv.ro
CONTENTS
SECTION 1
ECONOMY, TRADE, SERVICES ... ... ... 9
PROGNOSTICATION OF PRODUCTION OF GOODS ON THE BASIS OF FUZZY
SETS ... ... ... ... ... 11 Senior teacher Olesya TOTSKA
Volyn National University, Ukraine
Associate Professor Ph.D. Alexandru NEDELEA “Stefan cel Mare” University of Suceava, Romania
THE OBJECTIVE AND THE INSTRUMENTS OF EUROPEAN POLITICS IN THE
COMPETITION DOMAIN ... ... ... ... 16 Professor PhD. Maria MUREŞAN
The Academy of Economical Studies, Bucharest, Romania
AN ANALYSIS OF THE COMPANIES’ ECONOMIC GROWTH CAPACITY ... 23
Associate Professor PhD. Camelia BURJA Professor PhD. Vasile BURJA
University„1 Decembrie 1918”of Alba Iulia, Romania
THE LINK BETWEEN LOCAL AND GLOBAL MANAGEMENT IN THE RURAL
TOURISM... ... ... ... ... 31 Lecturer PhD. Rodica-Manuela GOGONEA
Professor Ph.D. Cristian-Valentin HAPENCIUC Associate Professor PhD. Irina -Maria DRĂGAN Academy of Economic Studies, Bucharest, Romania
DEVELOPMENT OF LIVESTOCK SEC TOR THROUGH LEADING NGO IN
BANGLADESH ... ... ... ... 36 Assistant Professor Mohammad SHAMSUDDOHA
Department of Marketing, University of Chittagong, Chittagong, Bangladesh
THE LASTING DEVELOPMENT OF THE ROMANIAN AND THE RELATION
SERVICES-ECONOMIC GROWTH -ECONOMIC DEVELOPMENT ... . 45 Teaching Assistant, doctoral student Cristina MANIU
Romanian-American University – Bucharest, Romania Lecturer PhD. Manuela-Rodica GOGONEA
Academy of Economic Studies - Bucharest, Romania Professor PhD. Marian ZAHARIA
Romanian- American University– Bucharest, Romania
REGIONAL DEVELOPMENT IN THE CONTEXT OF THE EUROPEAN UNION
INTEGRATION... ... ... ... 51 Lecturer PhD. Mihai POPESCU
Associate Professor PhD. Carmen NĂSTASE Assistant PhD. Student Adrian Liviu SCUTARIU “Ştefan cel Mare” University of Suceava, Romania
GLOBALIZATION VS. RO MANIAN COMPETITIVENE SS ... ... 57 Associate Professor Ph.D. Mihaela BÎRSAN
University Lecturer, Ph.D. candidate Ştefăniţ ă ŞUŞU „Ştefan cel Mare” University of Suceava, Romania
FREE TRADING – THE STRONG DIMENSION OF ECONOMIC LIBERALISM ... 64 Lecturer PhD. Rozalia KICSI
COMPETITIVENESS OF ROMANIAN TOURISM IN THE AGE OF GLOBAL IZATION 71 University Lecturer, Ph.D. candidate Ştefăniţ ă ŞUŞU
Associate Professor Ph.D. Mihaela BÎRSAN „Ştefan cel Mare” University of Suceava, Romania
STRATEGIC OPTIONS OF THE LOW-COST COMPANIES ... ... 81 Assistant PhD. Student Laura DIACONU
Faculty of Economics and Business Administration “Al. I. Cuza” University Iaşi, Romania
INTEGRATED MARKETING COMMUNICATION IN POLITICS? ... ... 88 Assistant PhD. Student Ovidiu -Aurel GHIUŢĂ
University Ştefan cel Mare Suceava, Romania
COMPETITIVITY AND THE IMPACT OF SERVICE COMMERCE LIBERALIZATION ON THE ACTIVITY OF TOURISM AGENCIES ... ... .... 94
Associate Professor PhD. Daniela FIROIU Ec. PhD. Student Cristina Laura MANIU
Romanian– American University, Bucharest, Romania
SECTION 2
MANAGEMENT AND BUSINESS ADMINISTRATION ... ... 100
ENTREPRENEURIAL PROGRAM FOR WOMEN: AN EVALUATIVE STUDY ON ASA AND BRAC ... ... ... ... 101
Associate Professor Mohammad SHAMSUDDOHA
Department of Marketing, University of Chittagong, Bangladesh Associate Professor Ph.D. Alexandru NEDELEA
Stefan cel Mare University Suceava, Romania
A STUDY REGARDING TH E LEADERSHIP AND ORG ANIZATION CULTURE OF A SERVICE PROVIDER ... ... ... ... 110
Professor Ph.D. Marian ZAHARIA
Romanian American University, Buchares t, Romania Professor Ph.D. Cristian-Valentin HAPENCIUC University “Ştefan cel Mare”, Suceava, Romania Lecturer Ph.D. Nicoleta-Rossela DUMITRU
Romanian American University, Buchares t, Romania
ASPECTS REGARDING THE EVOLUTION OF THE FOREIGN DIRECT
INVESTMENTS IN ROMANIA BETWEEN 1990 -2007 ... ... 117 Assistant PhD. Student Adrian Liviu SCUTARIU
Associate Professor PhD. Carmen NĂSTASE “Ştefan cel Mare” University of Suceava, Romania
HUMAN RESOURCES MANAGEMENT STATE OF THE ART IN TERRITORIAL
PROFILE ... ... ... ... .. 124 Associate Professor PhD. Carmen CHAŞOVSCHI
Asistant Otilia ALBU
Master Student Codrin COCIERU Stefan cel Mare University of Suceava
GLOBALIZATION APPROACHES – IDEAS CONFRONTATIONS ... . 132 Lecturer PhD. Mariana LUPAN
Professor PhD. Gabriela PR ELIPCEAN
MICROECONOMIC FUNDAMENTS OF FOREIGN DIRECT INVESTMENTS
CONTAGION EFFECTS: ROMANIA AND EUROPEAN UNION CASE ... 141 Professor PhD. Ioan TALPOŞ
Professor PhD.Bogdan DIMA
Assistant Professor PhD. Ioan Mihai MUTAŞCU
Teaching Assistant PhD. Candidate Oana Ramona LOBONŢ
West University, Timisoara, Faculty of Economics And Business Administration, Romania THE NATION STATE IN THE CONTEXT OF THE INTERNATIONAL MARKET
GLOBALIZATION ... ... ... ... 151 Lecturer PhD. Student Carmen BOGHEAN
Lecturer PhD. Mihai POPESCU Lecturer PhD. Mariana LUPAN
Lecturer PhD. Student Florin BOGHEAN
“Ştefan cel Mare” University of Suceava, Romania
THE FINANCING POLICY ON THE REAL ESTATE MARKET IN ROMANIA ... 157 Lecturer PhD. Oana Mihaela VĂSIOIU
Ecological University from Bucharest, Romania
THE IMPACT OF CULTURAL AND MOTIVATIONAL ENVIRONMENT WITHIN AN ORGANISATION UPON HUMAN RESOURCES ... ... 163
Lecturer Ph.D. Alunica MORARIU
“Stefan cel Mare” University of Suceava, Romania Ec. Ph.D. Candidate Răzvan SERGHIUŢĂ
”Al. I. Cuza” University of Iasi, Romania
Associate Professor Ph.D. Carmen CHAŞOVSCHI “Stefan cel Mare” University of Suceava, Romania
FOREIGN DIRECT INVES TMENTS– CATALYST FOR ECONOM IC GROWTH IN
CENTRAL AND EASTERN EUROPE ... ... ... 170 Lecturer PhD Roxana HETEŞ
Lecturer PhD student Cosmin ENACHE
Associate Professor PhD Nicoleta MOLDOVAN
West University of Timisoara, Faculty of Economics and Business Administration, Romania
MARKETING BUDGET DURING THE ECONOMIC CRISIS PERIOD IN ROMANIA .. 177 Assist. Professor PhD. Candidate Monica BÎJA
Associate Professor PhD. Ramona LILE
Aurel Vlaicu University, Faculty of Economic Sciences, Arad, Romania
SHORT INTROSPECTION IN FORMATION PROGRAMS FROM ROMANIA AS EU STATE MEMBER ... ... ... ... 182
Assistant PhD. Student Lucia MOROSAN -DANILA Assisant Otilia Maria ALBU
„Stefan cel Mare” University of Suceava, Romania
SECTION 3
ACCOUNTING - FINANCES ... ... ... .. 191
ASSESSMENT AND RECOGNITION OF STOCKS IN ACCOUNTING ACCORDING TO INTERNATIONAL STANDARD OF FINANCIAL REPORT IAS 2 – STOCKS ... 192
Professor PhD. Elena HLACIUC
Stefan cel Mare University of Suceava, Romania Professor PhD. Dorel MATES
Stefan cel Mare University of Suceava, Romania
THE REGIME OF INFORMATION DERIVED FROM THE APPLICATION
PROCEDURES FOR STATUTORY AUDIT ... ... ... 198 Professor PhD. Ionel BOSTAN
“Ştefan cel Mare” University of Suceava, Romania
THE PERTINENCE OF INFORMATION FURNISHED BY FINANCIAL
SITUATIONS... ... ... ... 202 Lecturer PhD. Student Florin BOGHEAN
Professor PhD. Elena HLACIUC
Lecturer PhD. Student Carmen BOGHEAN “Ştefan cel Mare”University of Suceava, Romania
A RESEARCH ON THE FINANCIAL DISCLOSURE CHOICES WITHIN LISTED
COMPANIES ... ... ... ... 209 Associate Prof. PhD. Daniela Artemisa CALU
Lecturer PhD. Mădălina DUMITRU Lecturer PhD. Ileana Cosmina PITULICE Associate Prof. PhD. Viorel AVRAM Associate Prof. PhD. Aurelia ŞTEFĂNESCU Lecturer PhD. Student Andreea PONORÎCĂ ASE Bucureşti, România
CORRELATIONS CONCERNING THE ASPECTS OF CORPORATE GOVERNANCE AND THE USERS OF FINANCIAL – ACCOUNTING INFORMATION ... 219
Lecturer PhD. Camelia Cătălina MIHALCIUC „Ştefan cel Mare” University of Suceava, Romania Professor PhD. Silvia Melania PETRESCU „Al. I. Cuza” University of Iaşi, Romania
THE CONSEQUENCES OF THE CAPITAL REGULATI ON IN CREDIT INSTITU TIONS ACCORDING TO THE BAS EL I AGREEMENTS ... ... 225
Lecturer PhD. Student Mariana VLAD
Associate Professor PhD. Mihaela TULVINSCHI “Ştefan cel Mare” University of Suceava, Romania
HARMONIZED STATUTOR Y AUDIT - LEGAL LIABILITY AND SANCTIONS ... 231 Professor PhD. Ionel BOSTAN
Universitatea “Ştefan cel Mare” Suceava, Romania
SUPREME AUDIT INSTITUTIONS. COMPARATIVE STUDY FOR THE CENTRAL AND EASTERN EUROPEAN COUNTRIES MEMBERS OF THE EUROPEAN UNION ... 235
PhD. Student Mirela-Oana PINTEA
Faculty of Economics and Business Administration, Babeş-Bolyai University Cluj-Napoca, Romania
Lecturer PhD. Sorin Adrian ACHIM
Faculty of Economics and Business Administration, Babeş-Bolyai University Cluj-Napoca, Romania
COMPARATIVE STUDY REGARDING EVOLUTION OF THE HARMONISATION OF THE ACCOUNTING PROCESS AT NATIONAL, EUROPEAN AND INTERNATIONAL LEVEL ... ... ... ... ... 243
Associate Professor PhD. Felix ARION USAMV-Cluj Napoca, Romania
University Assistant PhD Student Veronica GROSU “Stefan cel Mare” University of Suceava, Romania Lecturer PhD.Cristian PERES
West University of Timisoara, Romania
West University of Timisoara, Romania
THE LIQUIDITY RATIOS AND THEIR SIGNIFICANCE IN THE FINANCIAL
EQUILIBRIUM OF THE FIRMS ... ... ... 252 Lecturer PhD. Student Ciprian Dan COSTEA
Vasile Goldis West University of Arad, Satu Mare branch, Romania PhD. Student Florin HOSTIUC
Alexandru Ioan Cuza University of Iasi, Romania
OFFSHORE AREAS – THE KEY TO SUCCESS IN THE FISCAL REGIME ... 262 Economist Engineer Florin Ovidiu HURJUI
Professor Doctor Gheorghe SANDU
“Ştefan cel Mare” University, Suceava, Romania
SECTION 4
STATISTICS, DATA PROCESSING (INFORMATICS) AND MATHEMATICS ... 267
BACKTRACKING APPLICATIONS DEVELOPED IN C # ... ... 268 Assoc.Prof. PhD. Valeriu LUPU
„Stefan cel Mare” University, Suceava,Romania PhD. Student Engineer Cătălin LUPU
Ministry of Administration and Interior, Suceava, Romania Grigore VASILACHE
Financial-Banking College, Head of IT Depa rtament, Chisinau, Moldova THE SYNTHETICAL INDI CATORS OF VARIABILIT Y
AN APPROACH IN TOURI SM ... ... ... 279 Associate Professor PhD Elisabeta R. ROŞCA
„Stefan cel Mare” University of Suceava, Romania
SOME ASPECTS OF DATA WAREHOUSING IN TOURISM INDUSTRY ... 290 PhD. Mirela DANUBIANU
PhD. Candidate Tiberiu SOCACIU PhD. Candidate Adina BARILA
“Stefan cel Mare” University of Suceava, Romania
ECONOMETRIC ANALYSIS ON THE INFLUENCE OF DIFFERENT FACTORS
OVER THE SHARE OF TURNOVER IN TOURISM ... ... 297 Lecturer PhD. Student Anamaria G. MACOVEI
Assistant PhD. Student Ionuţ BĂLAN
“Ştefan cel Mare” University of Suceava, Romania
IMPLEMENTATION METHOD "DIVIDE AND IMPERA" USING OBJECT -ORIENTED PROGRAMMING IN C # ... ... ... ... 307
PhD. Student engineer Cătălin LUPU
Ministry of Administration and Interior, Suceava, Romania Assoc. Prof. PhD.Valeriu LUPU
„Stefan cel Mare” University, , Suceava,Romania Professor of Informatics Petru ARCAN
National College of Commerce , Chisinau, Moldova
BHP UNIVERSALITY HYP OTHESIS VERIFICATION FOR BET-FI INDEX OF
BUCHAREST STOCK EXCH ANGE... ... ... 320 PhD. Student, Tiberiu SOCACIU
PhD. Mirela DANUBIANU
SECTION 5
LAW AND PUBLIC ADMINISTRATION ... ... ... 326
PUBLIC POLICIES FOR FLEXIBILITY CONCERNING
THE EUROPEAN MARKET OF HUMAN RESOURCES ... ... 327 Lecturer PhD. Alunica MORARIU
“Stefan cel Mare” University of Suceava, Romania Associate Professor PhD. Vadim DUMITRAŞCU „Petre Andrei” University of Iasi, Romania Associate Professor PhD.Marian JALENCU „State University from Moldova
Lecturer PhD. candidate Cristina BĂLĂNEASA “Stefan cel Mare” University of Suceava, Romania
ECONOMICS’ DIPLOMACY AND ROMANIA’S FOREIGN
INTERESTS PROMOTION ... ... ... .... 335 Lecturer Ph.D. Marilena -Oana NEDELEA
Stefan cel Mare University Suceava, Romania
THE ROLE OF TRADE UNIONS IN REGULATING LABOR RELATIONS ... 341 Lecturer Ph.D. Candidate Cristina BĂLĂNEASA
“Stefan cel Mare” University of Suceava, Romania Professor PhD. Aurel MANOLESCU
Academy of Economic Studies Bucharest, Romania
THE JUDICIAL COOPERATION IN CRIMINAL MATTERS
WITHIN THE EUROPEAN UNION ... ... ... 348 Professor PhD. Vasile PAVALEANU
“Stefan cel Mare” University of Suceava, Romania
DECENTRALIZATION AND DECONCETRATION - NECESSARY CONDITIONS FOR THE EMERGENCE OF LOCAL DEMOCRACY ELEMENTS ... ... 352
Lecturer PhD. Student Irina Adriana BILOUSEAC „Stefan cel Mare” University of Suceava, Romania
THE EUROPEANIZATION OF THE CIVIL SERVICES IN THE COMMUNITY
TERRITORY ... ... ... ... 358 Lecturer PhD Student Ciprian UNGUREANU
"Ştefan cel Mare" University of Suceava, Romania
BOOK REVIEW
THE GOVERNMENT OF THE EUROPEAN UNION , DIEGO VARELA ... 365 Andreea GOVNA
Alexandru Ioan Cuza University of Iaşi, Romania
SECTION 1
PROGNOSTICATION OF PRODUCTION OF GOODS ON THE BASIS OF FUZZY SETS
Senior teacher Olesya TOTSKA Volyn National University, Ukraine Associate Professor Ph.D. Alexandru NEDELEA
“Stefan cel Mare” University of Suceava, Romania
Abstract:
In the article the authors forecast the issue of commodities by the enterprises of food retail industry of the Volyn region of Ukraine by the use of the fuzzy sets theory. The algorithm of such foresight consists in passing of the following stages: construction of dynamic rows of issue of ten basic food stuffs in the last few years; equipping them after growth; construction fuzzy interval for every commodity; determination optimistic estimation for every index. On the basis of obtained information the ge neral issue of food products is calculated also in next years. Determination of optimistic estimation is conducted after the original method developed by an author. Basic its idea consists in that an interval which answers the “golden” mean of dynamic row is most credible.
Keywords: fuzzy intervals, food retail industry, production of goods, optimistic estimation, pessimistic
estimation.
JEL Classification: A12, D24
INTRODUCTION
As known, the logistic is the system instrument of management, which allow s to manage all material streams and supplies, and also financial and informative streams which accompany moving of materials and services on an enterprise. And one of functions of management is prognostication on the basis of which managers carry out plan ning of activity of the enterprises.
For prognostication of issue of commodities in any sphere, in particular in food retail industry, next to classic (least squares and exponential smoothing), infrequently -accessed (probabilistic) and it is comparative ne w (neurons networks) by methods it is expedient to apply also fuzzy numbers and to examine them as fuzzy information.
To the use of unclear measures and integrals for the decision of the poorly structured tasks devoted the scientific publications S. Arapov, I. Arapova, A. Matvijchuk, N. Mytsa, O. Rybytska, M. Siavavko, M. Solyanichenko, L. Zadeh, G. Zaichenko et al [1-7]. In particular, they are applied for estimation of internals of public service [1], decision -making close [2-3], previous analysis of issuer of securities [4, 177-186], prognostication of income of enterprises of playing business [5], prognostication of volume of realization of products by bread -making factories [6] and others like that. And basic work in the fuzzy sets theory considers the book of the American mathematician L. Zadeh published in 1965.
The purpose of writing of this article is prognostication of indexes of production of basic types of food products by the enterprises of the Volyn region of Ukraine with the help of fuzzy sets. For its realization it is needed to untie such tasks:
1) to build the dynamic rows of issue of commodities in the last few years (1990 and 1995 -2005);
2) to put in order them after growth;
3) to build for every commodity fuzzy interval of production; 4) to define optimistic estimation for every index.
EXPOSITION OF BASIC MATERIAL
Above the fuzzy sets, as well as above ordinary, it is possible to conduct the varied operations, in particular addition (logical objection), association (logical copula “or”), crossing (logical copula of “³”), work, presentation to the degree, concentration (presentation to the degree 2), tension (presentation to the degree 0,5), protuberant combination [2, 39], difference, Dekartian work and others like that.
During the decision-making on the basis of fuzzy sets use both fuzzy numbers and fuzzy intervals.
An unclear number is the prot uberant normalized fuzzy set A of the set of material numbers X=R, for which one number is only x0 with µА(х0)=1, and µА(х)it is a lump-continuous function.
An unclear interval is the protuberant normalized fuzzy set A of the set of material numbers X=R, for which exists anymore as one number with µА(х)=1, and µА(х) it is a lump-continuous
function [7, 84].
As expedience of image of fuzzy sizes in the form of trapezoids consists in the comfort of mathematical calculations and considerable possibilities fro m presentation of functions [5, 181], we will give the indexes of production of basic food stuffs exactly in the form similar to the trapezoid fuzzy intervals by such four:
commodity i =(li; hi; ai; bi),
where li is lower value of optimistic (with most mea sure of belonging) estimation of parameter i;
hi- it is high value of optimistic estimation of parameter i;
ai- it is difference between the low bounds of optimistic and pessimistic (with the least measure of belonging) estimations of parameter i;
bi- it is difference between the high bounds of pessimistic and optimistic estimations of parameter i.
Thus there is a question, how on the basis of rows of dynamics of issue of food products to choose the high values of optimistic and pessimistic estimations l ower and. Pessimistic estimations we decided to depict as least and most value of production of food stuffs in Volyn region of Ukraine for analyzable period (1990 and 1995 -2005).
And for determination of optimistic interval we developed such method: 1) location of elements of sentinel row in the order of growth;
2) calculation of amount of elements of sentinel row of n;
3) determination of optimistic interval (with most measure of belonging):
а) if n is not pair number and size n/2 – also not pair, central n/2 elements will be included in the sought interval after, thus the first from these elements will be his low bound, and last – overhead. The row of dynamics in this case will consist of such three parts: n/4+n/2+n/4=n. Number of lower element of optimistic interval – (n/4+1), and overhead – (n/4+n/2=3/4*n);
б) if n is not pair number, and size n/2 it is odd, central n/2+1 elements will be included in the sought interval after, thus the first from these elements will be his low bound, and last – overhead. The row of dyna mics in this case will consist of such three parts: (n/4 -1/2)+(n/2+1)+(n/4-1/2)=n. Number of lower element of optimistic interval – ((n/4-1/2)+1=n/4+1/2), and overhead – ((n/4-1/2)+(n/2+1)=3/4*n+1/2);
в) if n is odd number, central n/2 -1/2 elements will be included in the sought interval after, thus the first from these elements will be his low bound, and last – overhead. The row of dynamics in this case will consist of such three parts: (n/4+1/4)+(n/2 -1/2)+(n/4+1/4)=n. Number of lower element of optimistic in terval – ((n/4+1/4)+1=n/4+5/4), and overhead – ((n/4+1/4)+(n/2-1/2)=3/4*n-1/4).
The basic idea of this method consists in that most credible, to our opinion, there is an interval which answers the “golden” mean of dynamic row.
Table no. 1 Volumes of output of food stuffs in the Volyn region of Ukraine, thousand of tons
Year
Commo-dity 1
Commo-dity 2
Commo-dity 3
Commo-dity 4
Commo-dity 5
Commo-dity 6
Commo-dity 7
Commo-dity 8
Commo-dity 9
Commo-dity 10
1990 61,8 13,5 18,3 106,0 6,0 221,0 271,2 184,2 15,7 6,4
1995 23,1 4,7 6,3 22,9 2,0 81,5 136,4 59,5 4,3 2,1
1996 21,8 4,0 5,7 15,8 1,7 103,3 112,9 49,3 4,3 2,8
1997 20,9 4,7 4,7 9,4 1,5 67,9 84,7 44,5 4,6 1,8
1998 16,2 3,0 4,0 8,2 1,5 67,8 83,0 39,9 5,4 2,7
1999 12,5 3,1 4,8 9,7 1,3 76,4 84,1 41,5 7,1 6,2
2000 13,6 6,7 6,3 12,4 3,2 71,0 90,6 42,7 7,4 7,0
2001 13,2 12,1 7,1 27,8 5,9 70,5 70,3 45,4 6,0 4,5
2002 12,3 16,7 4,0 25,2 6,2 77,8 63,5 45,7 3,9 5,2
2003 16,1 13,8 4,0 32,8 6,4 223,2 74,8 49,2 8,2 10,4
2004 19,8 17,0 3,7 37,1 8,7 181,2 78,1 48,7 11,0 9,9
2005 22,2 13,9 4,3 40,9 8,5 198,7 72,3 46,6 8,5 10,2
It is concluded by an author on basis [8, 67; 9, 79; 10, 83; 11, 83]
In this table: commodity 1 is meat and meat wares of 1-st category; commodity 2 are sausages wares;
commodity 3 is animal butter;
commodity 4 is products from a full -milk (in the count on milk); commodity 5 are fat cheeses, including a brynza;
commodity 6 is the granulated sugar; commodity 7 is flour;
commodity 8 is bread and bread wares; commodity 9 are pastries wares; commodity 10 are macaronis wares.
Farther we will dispose the elements of sentinels rows in the order of growth (see table 2).
Table no. 2 Production volumes of food stuffs in the order of gr owth, thousand of tons
Commo-dity 1
Commo-dity 2
Commo-dity 3
Commo-dity 4
Commo-dity 5
Commo-dity 6
Commo-dity 7
Commo-dity 8
Commo-dity 9
Commo-dity 10
12,3 3,0 3,7 8,2 1,3 67,8 63,5 39,9 3,9 1,8
12,5 3,1 4,0 9,4 1,5 67,9 70,3 41,5 4,3 2,1
13,2 4,0 4,0 9,7 1,5 70,5 72,3 42,7 4,3 2,7
13,6 4,7 4,0 12,4 1,7 71,0 74,8 44,5 4,6 2,8
16,1 4,7 4,3 15,8 2,0 76,4 78,1 45,4 5,4 4,5
16,2 6,7 4,7 22,9 3,2 77,8 83,0 45,7 6,0 5,2
19,8 12,1 4,8 25,2 5,9 81,5 84,1 46,6 7,1 6,2
20,9 13,5 5,7 27,8 6,0 103,3 84,7 48,7 7,4 6,4
21,8 13,8 6,3 32,8 6,2 181,2 90,6 49,2 8,2 7,0
22,2 13,9 6,3 37,1 6,4 198,7 112,9 49,3 8,5 9,9
23,1 16,7 7,1 40,9 8,5 221,0 136,4 59,5 11,0 10,2
61,8 17,0 18,3 106,0 8,7 223,2 271,2 184,2 15,7 10,4
We will represent the fuzzy int ervals of volumes of output of basic food commodities by such four:
commodity 1=(13,6; 21,8; 13,6 -12,3; 61,8-21,8)=(13,6; 21,8; 1,3; 40); commodity 2=(4,7; 13,8; 4,7 -3; 17-13,8)=(4,7; 13,8; 1,7; 3,2);
commodity 3=(4; 6,3; 4-3,7; 18,3-6,3)=(4; 6,3; 0,3; 12);
commodity 5=(1,7; 6,2; 1,7 -1,3; 8,7-6,2)=(1,7; 6,2; 0,4; 2,5);
commodity 6=(71; 181,2; 71 -67,8; 223,2-181,2)=(71; 181,2; 3,2; 42); commodity 7=(74,8; 90,6; 74,8 -63,5; 271,2-90,6)=(74,8; 90,6; 11,3; 180,6); commodity 8=(44,5; 49,2; 44,5 -39,9; 184,2-49,2)=(44,5; 49,2; 4,6; 135); commodity 9=(4,6; 8,2; 4,6 -3,9; 15,7-8,2)=(4,6; 8,2; 0,7; 7,5);
commodity 10=(2,8; 7; 2,8 -1,8; 10,4-7)=(2,8; 7; 1; 3,4).
And the sum of common production of food stuffs will be association of previous ten four: S=(13,6; 21,8; 1,3; 40) (4,7; 13,8; 1,7; 3,2) (4; 6,3; 0,3; 12)(12,4; 32,8; 4,2; 73,2) (1,7; 6,2; 0,4; 2,5)(71; 181,2; 3,2; 42) (74,8; 90,6; 11,3; 180,6) (44,5; 49,2; 4,6;
135)
(4,6; 8,2; 0,7; 7,5)(2,8; 7; 1; 3,4)=(13,6+4,7+4+12,4+1,7+71+74,8+44,5+4,6+2,8; 21,8+13,8+6,3+32,8+6,2+181,2+
+90,6+49,2+8,2+7; 1,3+1,7+0,3+4,2+0,4+3,2+11,3+4,6+0,7+1; 40+3,2+12+73,2+2,5+42+180,6+135+7,5+3,4)=
=(234,1; 417,1; 28,7; 499,4). We will represent the gra phically got unclear interval on fig. 1.
0 0,2 0,4 0,6 0,8 1 1,2
0 200 400 600 800 1000
thousand of tons
m
e
a
su
r
e
o
f
b
e
lo
n
g
in
g
Figure no. 1. Fuzzy interval of common production
From him evidently, that in next years the general issue of food products is most credible in scopes from 234,1 to 417,1 thousand of to ns. In any case he can not go down below 205,4 thousands of tons (234,1 -28,7) or to rise higher 916,5 thousands of tons (417,1+499,4).
For acceleration of calculations to our opinion it is expedient to project in any algorithmic language program which will automatize construction of similar to the trapezoid fuzzy intervals for dynamic rows.
CONCLUSIONS
As a result of the conducted analysis it is possible to draw such conclusions:
2) the general issue of basic food stuffs in next years will be in scopes from 234,1 to 417,1 thousand of tons;
3) developed by an author the method of determination of optimistic estimations of unclear intervals can be used in the different spheres of production, as at t he level of one enterprise so industries on the whole.
BIBLIOGRAPHY
1. Arapova I., Arapov S., Solyanichenko M. Public service quality evaluation by methods of fuzzy logic. Conception // Modern state and problems of innovative development of the state: Materials of international conference. Theses of lectures. (October, 6 -7, 2006).– Lutsk: Vezha, 2006.– p. 316-318.
2. Matvijchuk A. Analyze and management by the economic risk.– Kyiv: Center of educational literature, 2005.– 224 p.
3. Mytsa N. Prognostication of inco me of enterprises of playing business on the basis of fuzzy logic // Sciences. messages of Ostrogian academy. Series “Economy”. – Ostrog: Ostrogian academy.– 2003.– №5.– p. 179-184.
4. Siavavko M. Use of fuzzy sets and integrals for the decision of the poorly structured tasks of economy // Announcer of the Lviv university. Series economic.– Lviv.– 2007.– № 37 (2).– p. 46-58.
5. Siavavko M., Rybytska O. Design on conditions of vagueness.– Lviv: Ukrainian technologies, 2000.– 320 p.
6. Statistical annual Volyn-2003.– Lutsk: Main administration of statistics in Volyn region, 2004.– 560 p.
7. Statistical annual Volyn-2004.– Lutsk: Main administration of statistics in Volyn region, 2005.– 558 p.
8. Statistical annual Volyn-2005.– Lutsk: Main administration of statistics in Voly n region, 2006.– 584 p.
9. Volyn for years independence: Statistical collection. Anniversary edition.– Lutsk: Nadstyr’ja, 2001.– 408 p.
10. Zadeh L. Concept linguistic variable and his application to the decision -making close: Transl. from English.– Moscow: World, 1976.– 168 p.
THE OBJECTIVE AND THE INSTRUMENTS OF EUROPEAN POLITICS IN THE COMPETITION DOMAIN
Professor PhD. Maria MUREŞAN
The Academy of Economical Studies, Bucharest, Romania mar_muresan50@yahoo.com
Abstract:
One of the base conditions for the existence of an economic functional market, beside the freedom movement of the goods, persons, services, and of the capital, is r epresented by a competitive undistorted environment. In this way, the dealers, either at national or communitary level, must interact as much as possible in a free mode, without negative influence from the strong agents found in privileged positions, the a ssociations of economic agents or the state. In an economic functional market, the respecting of the norms about the competition assures the economical progress, the defense of the consumer interest and the competitively of the products and services among the respective economy confronted by the products from other markets.
One of the elements specific to the ordinary market is the affirmation of market economy. That is why, both training Treaty of European Community (TCE) (1), and derived law proposed to r emove effective all the threatening at the competitivety address, both of the part of the private actors, especially against competition agreements and the abuse of the dominant position, as well as public actors, especially public help and public markets.
Keywords: European Union, European politics, competition, against competition agreements, European
Committee.
JEL Classification: F59
INTRODUCTION
One of the base conditions for the existence of an economic functional market, beside the freedom of movement of the goods, persons, services, and of the capital, is represented by an competitional undistorted environment. In this way, the dealers, either at national or communitary level, must interact as possible in free mode, without negative influence fr om the strong agents found in privileged positions, the associations of economic agents or the state. In a economic functional market, the respecting of the norms about the competition assures the economical progress, the defense of the consumer interest a nd the competitivity of the products and services among the respective economy confronted by the products from other markets.
The competitor environment can be negative affected by against competition activities which represent the object or the result of agreements or practices concretized between economic agents, the abuse of dominant position of some strong agents. Also, the competition can be distorted by subventions adjusted for the state to some economic agents, which creates an advantageous position confronted by the others competing on the respective market.
THE COMPETITION AND RIVALRY POLITICS
The “competition” term designates the “relations between all that take action on the same market for the realization of their own interests in economical freedom conditions”. In the same time the competition reflects “the rivalry, dispute, between the respective economic entity which follow the same purpose and that is why their interests become contradictory”.
The competition is a fundamental condition of t he market economy being considered the most important cause of the economic and technically scientific progress.
In an enough comprehensive sense, the competition is a rivalry, a fight with economic means (the reduction of the costs, launching new products , buying actions) and extra economics (industrial espionage, sabotage actions) between producing or dealer, monopoles, countries for producing and detachment of some goods, buying some markets and obtaining big profits.
competition politics follows to realize markets with a perfect competition and to prevent the forming of the monopoly and oligopoly which impose to themselves their prices in consumer detriment. There were state monopoles in European Union in transports, postal services and telecommunications.
It must be underlined the fact that in reality, the perfect compet ition does not exist being an ideal situation to which it tends to, and the concrete form to manifest the competition is the imperfect one, in which the participants that differentiate between them after a series of criterion, dispose of a different econom ical force, of more limited or more ample information and with a different importance.
The perfect competition presumes an organization form of the economy with very strict rules which have as a purpose setting up a certain equality kind of the conditions for all the economic agents.
The competition politics follows the ensuring of the necessary frame for manifesting a loyal competition in other words of a competition that has place in the conditions of respecting by the economic agents of the norms and way s considered correct and recognized as such thought the regulation in vigor from each state.
If the competition is not loyal (has place with means and actions contrary to the usage and legal regulation) than it gets to a distort and a defalcation of the co mpetition from his purpose thought the favor of one or many economic agents and not in the favor of others.
In European Union, one of the success keys of the economic integration was constitute by the existence, even from the beginning of the communitary b uilding of a common politics in the competition domain. After 40 years of function, this politics continues to be a necessary condition for the existence of the Internal Unique Market that assures free circulation of the goods services, capitals and persons.
In last, the main beneficiary of a free competition politics is the citizen in his triple quality: consumer (free competition gets to a diversification of the offer and to a reducing of the
selling price);
participator on the working force market (free competition obliges to a continuous process innovation for the realized product, and for the production process as well); stockholder (free competition gets to the efficiency rise and of the realize of rised
profits).
Free competition between firms favors the innovation, reduces the production costs, raises the economic efficiency and as a consequence, raises the competition level of the European economy. Stimulated by the competitional environment, the firms offers competitive products and services regarding the quality and price.
The politics competition in UE, as well as in the other big word economic powers, bases on the conception that the markets of a pure and perfect competition are the most suitable, assuring the wellbeing of the population. In con sequence, the competition politics vises the restriction, supervising, even forbidding the behaviors of the enterprises which bring the touching of the perfect competition.
Still many economists admit that can exist in certain conditions so named “market failure” which justify than the inobservance of the free competition rules between enterprises, or the direct intervention of the state for correcting these effects. These failures can, for example keep of the existence of the market external effects consi dered (the researching development activity realized of a big enterprise can crate an environment or can generate a series of useful knowledge for other enterprises too without these to support their cost) or the outputs rising scale. In this case the enterprises efficiency increases depending on their size and can not be wished, in some conditions, for the society aggregate, for the markets not to be “atomistic”, constitute from a big number of small enterprises, like in the reference model of the pure and perfect competition.
The term of “competition po litics” is general enough, referring in big lines to certain laws and actions taken by the government, or in this case, of the European Community in it’s own aggregate (which acts through the instrumentality of European Committee), meant to remove or at least to discourage the commercial restrictive practices as the cartels, monopoles or other obstacles with no tariff which could have as effect, in the terms of Treaty “preventing, restriction or distorting of the competition”.
The politics in competition d omain forbids practices as:
giving public help which creates distorts in the competition relations between economic agents;
establishing the prices through previous agreements between producing and purveyor; creating cartels which to share their market, to not compete with each other;
the abuse of dominant position on the market; realizing fusions which distorts free competition;
The competition politics in UE have the following essential characteristics: the big principles of the competition politics are f ixed by treaties;
in the Rome Treaty it shows that in the competition domain (the community must establish an regime which to assure that in the common Market the competition is not denatured):
there area lot of regulations which specifies putting in appl ication of the competition politics principles;
European Committee is charged with the correct application of the law and of the communitary dispositions;
Law Courts arbitrates the litigations and fixes the jurisprudence.
The objective of the European co mpetition politics consists in warranting the unit of the common Market. The market monopolization can have a place through accord or fusion. Besides, it supervises the actions of the Member States Governments which could distort „the playing rules” by the application of discriminating measures for some enterprises, favoring public enterprises or by giving assistance to the enterprises from the private sector.
In some cases, the incidents in the competition domain are solved through the competition politics modification of the states or of the companies involved. In other cases, Committee pleads for the application of a penalty, that can rise above the sum of 75 million Euro.
Succinct dotted, the objectives vised by the politics in the competition domain are wellbeing rising and consumers protection, incomes redistribution, protecting little and middle enterprises, markets integrations, but having regional social or sectorial considerations.
JURIDICAL BASES OF THE POLITICS IN THE COMPETITION DOMAIN
Even if communitary politics in the competition domain is more and more determined of economical reasons, the compulsions it is submissive of are in essence juridical.
The legal base of the politics in the competition domain is offered, by the foresight included in UE Treaty, respective:
Article 81, about restrictive practices;
Article 82, about the dominant position on the market; Article 86, about public enterprises;
Article 87-89, about state help.
In the second row, references found in the secondary legislati on, adopted of UE Council and of European Committee, under the form of Regulations and Norms. In this way, we find references in the secondary legislation, adopted of UE Council and European Committee, under the form of Regulations and Norms. Like this, in this category are included:
Council Regulation 17/1962 about the application of the foresight Art.85 and 86 from Rome Treaty;
Regulation nr.3385/1994 about the form, content and other details about notification mode to UE Committee;
Articles 28 and 86 from Amsterdam Treaty (2) about the monopoles and exclusive rights, in connection with Art.30, 34 and 59 from Rome Treaty;
The Regulations and Norms about the expectation in the block, gi ven in the case of some accords about precise determined situations, as: technologic transfer, research and development, motor vehicle distribution, etc.
In the third row, one instruction rising number, which are not in formal mode obligatory, offer essential information destined to show how the obligatory rules could be interpreted or in which mode it will take action the Committee in this domain. Thought those, the Committee wants to raise predictability rank of its own acts. To these law sources adds the decisions of European Justice Courts and of First Instance Tribunal.
Not in the last row, we mention the international accords as well were there is express referring at specific situations about competition.
THE MAIN ACTORS INVOLVED IN POLITICS IN THE C OMPETITION DOMAIN
The responsible institution at communitary level of politics implementation in competition domain is European Committee, which European Commission (3) for competition is, from 22 November 2004, Neelie Kroes.
European’s Committee roll is the promotion of competing politics in the authorizations base, examining the denunciation putted by one of the Member States, by a producing or by particulars. This administrates the Common Market for ensuring the European consumer protection. It keeps vast authorizations in the application of the competitional legislation and, beginning with 1989, was authorized to examine and to block big proportion fusions. Supervising the Committee acts is made by European Justice Court (4) and The First Instance Court (Kroes,N., 2008)
The Committee disposes of General Directory for Competition DG COMP (previously known as DG IV), which concerns of competition politics promotion.
The base mission of General Directory for Competition (DG COMP) is to establish and implement a competitional coherent politics inside European Union. Of DG COMP competence is the control execution of the communitary legislation implementing in competition domain. As well, DG COMP concerns of the international politics of UE in the competitio n domain in quality of partner of industry developed states (ex. SUA, Japan, Canada etc.) or in quality of consultant of the states during development (ex. Central Europe States and East Europe States).
The decisions are prepared by General Directory for Competition which reports to the commissary responsible with the politics in competition domain, Neelie Kroes, the approval is made by simple majority.
As a procedure, any agreement which Rome Treaty don’t agree follows to be led to European Committee kno wledge. According the Articles 81 and 82 foresights, the companies can hope to a „negative settle” of the incident, which means that, after examine of the case, the Committee will not undertake acts contrary to involved companies, giving immunities. The Committee disposes of vast investigations possibilities. It can make the control of enterprises documents without preventive announcement. Before taking the final decision, the Committee can apply a penalty of 10% from the annual income.
The companies can contest the decision of the Committee at European Justice Court, which frequently reduces the penalty sum. The European legislation in the competition domain offers priority to the national legislation and is direct applicable in the Member States. ( Cosmovici, M.P., Munteanu, R., 2001)
European Congress estimates the Committee activity as well as the evolution of this domain by publishing an annual report.
Ministers Council (5) authorizes the excepting in bl ock and makes modifications in the legal base of the politics.
In the same frame acts the national authorities too invested with competences in this domain (in Romania the authority in domain Concurence Council).
THE MAJOR EUROPEAN POLITICS OBJECTIVES IN THE COMPETITION DOMAIN
The applicable rules in European Union vise generally the following aspects:
1. The agreement against competition - “The forbidding of any kind of agreements/accords between enterprises, association decisions and concerted practice s, which are susceptible to affect the market between member states and which have as object or as effect the prevention, restricting or the falsification of the competition inside the common market”.(Rome Treaty)
The treaty offers examples of this kind of agreements that are “nulls of law”: Fixing direct or indirect the buying or selling prices of other deals conditions; Limiting or controlling the production, technique developments or investments; Sharing the markets or provision sources;
The application of commercial partners, of some unequal conditions or equivalent labor conscriptions, making them support disadvantage in competition fight;
Subordination of contracts settlements of accepting by the partners of some supplementary labor conscriptions which through their nature or according the commercial usages have no connection with the object of the respective contracts. The forbidding of these practices depends of some conditions:
Firstly, intra-communitary exchanges must be review according to the juri sprudence of the European Community’s Justice Court even if the partners are in the same state; Secondly, the agreements must been have as object or like effect the restriction or
swindle competition inside the communitary market, what excludes the agreeme nts between UE enterprises which vise third countries;
The last imposed condition has in consideration that the touch brought to the competition to be important: in this way the minor importance agreements get in the derogation sphere, for example, for SME s, an agreement does not affect significant the market’s conditions when the market quote own by the respective enterprises does not pass to 5%, and the annual business number does not pass to 300 mil Euro;
The Treaty foresee a derogation series for the agreements that: contributes “to the products melioration or to the deliver of the products” and at “the technique or economic progress promotion” and which in the same time allow to the user to get an equitable part of the profit that results”. This kind of situations is tolerated just if the producing maintains their capacity of offering competitional goods or services. The exception is of individual nature and practices when the Committee authorizes an agreement previous verified.
Another kind of derogati ons has collective charactere and applies to an entire series of agreements, being necessary one regulation conceived by the Council and which specifies certain demands.
common market and forbidden, in the measure in which the commerce between member states is affected, the fact that, for one or more enterprises, exploiting abusive a dominant position in the common market or on a substantial part of this.
To determine if one enterprise is or is not in a dominant position, unimportant if it belongs to the Community or to a third country, it judges first the market quote owned (which should be bigger than 50%, and the enter prise must have the capacity of maintaining it). When the enterprise takes possession 70-80% the qualification is made automatic, and if it is not the case, than intervene other complementary elements as: the reputation, the product’s brand, commercial net work efficiency, the technologic advance, economic power of the completive, the existence of a hidden competition, the access of resources and technologies.
The next level is the establishment of the abuse, if this exists, considering only the effects of the firm’s behavior and excluding any accusation fraud intention.
There are presented in many situations:
Imposing in unperformed conditions (too large or too small prices for the elimination of some rival producing);
Limiting the production or technique development in the consumer’s detriment; The application of a discriminatory treatment for commercial partners.
There is no derogation stipulated in agreements case, and the penalty is pronounced by the Committee which, by decision, orders to the enterpris e to finish the constant situation and can apply a penalty.
3. The concentration – wasn’t provided in Rome Treaty, but the Committee always considered that this can get to one abusive exploitation of the dominant position. The regulations from December 1989 and from September 1990 covered this gap, imposing a obligatory notification of fusions and acquisition projects at European Committee. In this way, it institutes one preventing control of the Committee, which can forbidden the concentration operations w hich present a European dimension, if it risks to get to a dominant susceptible position and to obstruction significant the competition.
In this way it allows to the competition politics to intervene, at a precocious stage of a concentration process, appr oving or forbidding the alliances had in consideration. The preventive control apply the following types of operations: fusing, taking over control, common entities creating starting from a minimal threshold. This minimal threshold was modified through the regulations of the Council from 30 June 1997. The respective enterprises, from which at least one belongs to a UE member state, must accomplish certain criterions:
The world turnover (CA) number cumulated which should be bigger than 5 milliards ECU (6) from the beginning was brought to 2.5 milliards;
CA realized inside communitary space which previous had to be bigger than 250 millions ecu for at least two of the unities was brought 100 millions;
Each enterprise does not have to realize more than 2/3 from total CA from the Community inside one and the same member state.
In this case, the agreement protocol must be ratified in obligatory mode by the Committee, this having the possibility to suspend it too. Practical the Committee estimated if there is or the re is not a dominant position which constitutes a significant obstacle for the competition and decides the approval or the forbidden of the agreement.
CONCLUSIONS:
The comunitary politics of the competition complete reflects the individual liberalism’s principles which were at the Rome Treaty’s base, both private domain, and public domain.
Amsterdam Treaty consolidated the place of the competition inside the base elements of the communitary economic constitution, adding anot her dimension to the enterprises economic performances.
With all these, the competition does not have to be understood in absolute sense, but as a way that must be interpreted thought comparison with the other fundamental interest of the Community (Cairns, W., 2001).
As follow from the European Constitution project contain, the Committee role in European legislation application of the competition will diminish. Concomitant, the member states and the communitary justice role in domain will increase.
ENDNOTES:
(1) The treaty of institution of the European Community (The Rome Treaty) established the Economical European Community (EEC), was sighed to Rome on 25 March 1957 and come into effect starting with 1 January 1958. The treaty of institution of the Eu ropean Community of atomically energy (EURATOM) was signed on the same date, both of them being known as the Rome Treats. The consolidated variant published in the Official Journal C 325, 24 December 2002 is available on the website http://eur -lex.europa.eu/en/treaties/dat/12002E/htm/12002E.html
(2) Amsterdam Treaty, signed in 2 October 1997, entered in vigor at 1 May 1999, amended and renumbered
European Union’s and European Committee’s Treaties. The consolidated versions of the UE and EC treaties were
attached at it. Amsterdam Treaty modified European Union’s Treaty articles, identified thought letters from A to S,
numerical.
(3) The European Commission represents the interest of Europe as a whole. It is independent against the national governments. The Eu ropean Commission propose new European lows, which are presented to the European Parliament and to the Board observe the breaches, treaties and European Laws
(4) The European Justice Court assures that the European law is interpreted and unitary applied i n all countries of the EU
(5) The Council of European Union (Minister Council) shares with the European Parliament the responsibility of the approval laws and application of the decisional politics. The main responsibility is to decide the UE actions in domains as external business, security politics, some justice actions.
(6) ECU– (European currency unit) it was an artificial currency which it was used by the member states of the UE, as intern account unity. ECU is was introduced on 13 March 1979 by the Economical European Community, the predecessor of the EU, as accounting unity of the currencies from the area named Monetary System (EMS). ECI was the predecessor of the European unique currency, EURO, which it was introduced on 1 January 1999.
BIBLIOGRAPHY:
1. Cairns, W., Introducere în legislaţ ia Uniunii Europene, Ed. Universal Dalsi, 2001;
2. Cosmovici, M.P., Munteanu, R., Înţ elegerile între întreprinderi, Ed. Academiei Române, 2001;
3. Kroes,N., Comisarul european pentru politici concurenţ iale - Comisia lansează o anchetă
sectorială în domeniul farmaceutic. Remarci introductive la conferinţ a de presă , Bruxelles,
16 ianuarie 2008;
AN ANALYSIS OF THE COMPANIES’ ECONOMIC
GROWTH CAPACITY
Associate Professor PhD. Camelia BURJA University„1 Decembrie 1918”of Alba Iulia, Romania
cameliaburja@yahoo.com
Professor PhD. Vasile BURJA
University of „1 Decembrie 1918” Alba Iulia, Romania
vasileburja@yahoo.com
Abstract:
The sustainable economic growth of companies constitutes a strategic management objective as it is of general interest. The companies’ accrued net worth and their capacity to generate profit result in increased competitiveness. This paper presents a general model to analyze the companies’ economic growth grounded on the invested capital profitability that is illustrated in an adequate case study. The described model highlights the major factors influencing economic growth at a microeconomic level as well as the direction they act, providing the possibility to better substantiate decisions that serve this purpose.
Key words: economic growth, net worth, financial profitability, invested capital, factor analysis
JEL code: O47, O12, D92, D61
1. INTRODUCTION
In the market economy, the success of a business requires well -founded management decisions, based on the analysis of the information received from inside and outside the company. On these lines, the company’s economic performance analysis and the assessment of its economic growth capacity implies a continuous process, which is a part of the basic responsibilities of the management. This is the necessary instrument able to supply information to the various stakeholders [9].
Because the main objective of the management’s actions targets the increase in efficiency and profitability, the financial analysis techniques must underline the quality of the leaders’ decisions [16]. The coherence of their actions determines the optimum capital budge ting, the efficient use of all resources, aspects that can lead to the growth of the business’ value if integrated into the right financial strategies and policies.
The information resulted from the analysis are also important for other beneficiaries. F or the investors (shareholders), the economic viability of the firm is important. The company must first show the business continuity through its activity and its resource management. At the same time, the capital owners are interested in the possibility o f the company to improve the financial profitability on the long term, and based on this, to increase the value of the owned shares and of the collected dividends.
Regarding the creditors, who finance the business for a certain period of time, they trac e the economic and financial performance of the firm, especially from the point of view of its existence and from the perspective of the positive cash flows proving the company’s liquidity and a warranty for the recovery of the loan.
Under these circumstances, all the stakeholders interested in the success or the failure of the business follow the assessment and the prediction of the economic performance, w hich synthesizes its capacity for economic growth. To reach this objective, the analysis of the indicators is of real interest. It defines the net assets of the company, the profitability, the cash -flow, the economic value added, the growth of the owners’ equity, the market performance, the stability and financial autonomy, etc.
The analysis of the businesses’ performances constitutes a necessary step to identify the company’s growth reserves.
2. AN ANALYSIS MODEL FOR THE COMPANIES’ ECONOMIC GROWTH
CAPACITY BASED ON THE NET WORTH INDICATOR
A starting point in the analysis of the company’s economic growth capacity is the Net Worth indicator (NW), studied in its dynamic.
The net worth is an element with great information value for the investors, cred itors, etc. It represents the net assets of a company and is calculated as a difference between the amount of the total monetary assets and of the non -monetary assets which the company holds ( At) and the monetary and non-monetary debts (Dat) [14]:
Dat At
NW (1)
The Net Worth usually has positive values and, if in time it shows a growing trend, this indicates a good management of the company’s total assets, a growth of the equity and thus, an increase of the shareholders’ wealth, reflecting a sustainable economic growth. The growth of the Net Worth is determined by the reinvestment of some of the net profit and other accrual elements: regulated provisions, subsidies, reserves, etc.
In the cases where negative values are recorded for th e net worth, there is a bankruptcy risk because the real assets exceed the level of contracted debts, which signifies insolvency. A decreasing dynamic of this indicator reflects a reduction of the owners’ equity and thus, depletion for the shareholders. Obviously, the prospect of the company’s economic growth is not possible unless we record an increase of the shareholder’s equity and the financial policy of the firm is adequate, realistic and can ensure this trend in the future [ 2].
Stated in absolute units, the companies’ economic growth capacity for a time period is given by extend of the net assets’ growth:
0
1 NW
NW
NW
(2)
Yet, it is not enough to diagnose that a company has the capacity for economic development based solely on an indicator that includes all the influences of the various variable factors, but it is necessary to identify those elements that impact its change.
The factorial analysis of the economic growth capacity needs to find a complex model that presents the factors leading through their action to the growth of the net assets and of the shareholders’ equity.
Because increasing the capitals is only possible in the case of an efficient activity of the company, the economic growth capacity is closely tied to the ana lysis of the profitability trend. If in time the company is defined by profitability, and thus has an income from the operational, investment or financial activities, a capital increase and the reinvestment of a profit’s part can take place, which contribute to the growth of the business’ economic value.
Kpr Pn
Rf (3)
where:
Rf is the financial profitability rate; Pn - net profit;
Kpr - invested own capitals;
If the entire obtained net profit is reinvested (no dividends are paid) and the compan y works without loans, the financial profitability rate reflects the economic growth capacity of the company and the analysis model is [ 8]:
Rf
g ;
Kpr Pn
g (4)
in which g represents the growth rate of the ow n capitals (net worth) in relative sizes.
But, if we take into consideration the most frequent case, which is the existence of a certain degree of indebtedness and of the payment of dividends, then, the general analysis model of the economic growth is the following [8]:
Rd
GpKpr Dat Gp
g Re Re (5)
where:
Gp is the proportion of the non -allotted profits in the net profit; Dat - debts;
Re - return on invested capital (ROIC); Rd - the interest rate.
In its turn, the financia l profitability and, implicitly, the economic growth of the company, is influenced by the rotation speed of the invested own capitals (expressed by the number of rotations done through the turnover - VRKinv) and by the commercial profitability rate (the ne t profit correspondent to a certain level of the turnover - Rcom). On these lines, the previous model (5) becomes:
Gp ) Rd (Re Kpr Dat Gp CA Pn Kinv
CA
g (6)
where:
Kinv represents the invested capital (Kinv= Kpr + Dat), or:
Gp ) Rd (Re Kpr Dat Gp Rcom VRKinv
g (7)
Next, in order to show the influence of the mentioned factors over the rate of economic growth, the development of the model is presented:
- The influence of the invested capitals’ rotation speed:
0 0
)
(VRKinv Rcom VRKinv Gp
g
(8)
- The influence of the net commercial p rofitability rate:
0 1
)
(Rcom Rcom VRKinv Gp
g
(9)
- The influence of the non -allotted profits’ weight for dividends (reinvested profits):
Gp )] Rd (Re Kpr Dat VRKinv
Rcom [ ) Gp (
g 0 0
0 0 1
1
(10)
- The influence of the financial structure (degree of indebtedness ):
1 0
0 Rd ) Gp
(Re Kpr Dat Kpr
Dat
g
(11)
- The influence of the difference between the return on invested capital and the interest rate:
1 1
1 (Re )
)
(Re Rd Gp
Kpr Dat Rd
g
(12)
The analysis of the influence factors over the company’s economic growth potential shows that a firm on the rise needs investments in fixed and circulating assets financed from equities and debts, which will contribute to an adequate turnover and a high profit.
3. APPLICABILITY OF THE ECONOMIC GROWTH CAPACITY MODEL. A CASE STUDY
The case of an industrial comp any is shown to substantiate the general model of economic growth capacity and to highlight its essential aspects. The indicators necessary for the analysis were extracted from the financial statements, for two consecutive years (table 1).
Table 1. Economic- financial indicators (thousand RON)
Deviation
Indicators Basic
period
Current
period ± %
Total equities
18089 19599 1510 8.3
Debts 2483 3299 816 32.8
Invested Capital 20572 22898 2326 11.3
Net profit 3800 4357 557 14.6
Interests payable 425 525 100 23.5
Allotted dividends 570 436 -134 -23.5
Source: company’s financial statements
The dynamic of the main factors that contribute to the economic development of the company is presented in table 2.
Table 2. Influence factors of the economic growth (%)
Indicators Symbol Basic
period
Current period
Absolute deviation (±)
The rate of the reinvested profits
Gp 85 90 5
Degree of indebtedness Dat/Kpr 13.72 16.83 3.11
Interest rate Rd 17.1 15.9 -1.2
Return on invested capital Re 18.47 19.03 0.56
Commercial profitability Rcom 13.83 14.02 0.19
The rotation speed of the invested capitals (number of rotations)
VRKinv 1.33 1.36 0.03
The difference Return on invested capital–Interest rate
Re-Rd 1.37 3.13 1.76
The economic growth rate g 15.79 17.63 1.84
We can see in table 2 that for both time periods, the economic growth rate has higher values (over 10%), which places the enterprise in the category of companies with a fast economic growth [7]. The economic growth rate of the analyzed firm, calculated on the basis of the model suggested, has increased by 1.84%, which indicates a high quality management. The growth was determined by the influence of the mentioned factors, as follows:
- The change in the invested capitals’ speed rotation, expressed through the number of rotations indicator based on the turnover:
% 35 . 0 85 . 0 03 . 0 1383 . 0 )
(VRKinv Rcom0 VRKinvGp0
g
- The change of the commercial profitability:
% 22 . 0 85 . 0 36 . 1 0019 . 0 )
(Rcom RcomVRKinv1Gp0
g
- The change of the reinvested profits weight:
% 96 . 0 05 . 0 ) 0137 . 0 1372 . 0 36 . 1 1402 . 0 ( )] (Re [ )
( 0 0
0 0 1 1
Rd Gp
Kpr Dat VRKinv Rcom Gp g
- The change of the company’s financial structure:
% 04 . 0 9 . 0 0137 . 0 0311 . 0 )
(Re0 0 1
