Despite the importance of high-growth firms (HGFs) for job creation, innovation, and economic development in transition economies, current knowledge on the role of financial decisions in explaining their profitability is limited. The aim of this paper is to examine the relationship between working capital management and firm profitability. Using a panel data set on HGFs from Central, Eastern, and South-Eastern Europe during the time span 2006–2015, we found an inverted U-shape relationship between working capital level and firm profitability. Our findings indicate that HGFs should find and maintain the optimal working capital level that maximizes their profitability. Our results proved to be robust when we employ different methodology (quantile regression), different sub-samples as well as alternative measures of profitability and working capital management. The study highlights the importance of short-term financial decisions in enhancing HGFs’ profitability, with significant implications for academics and practitioners. We contribute to the extant literature by providing empirical evidence on the existence a concave relationship between working capital level and firm profitability for a cross-country sample of firms.

In this paper, we present a comparative investigation of the multifractal properties of seven Central and Eastern European (CEE) stock markets using recent financial data up to August 2018 by employing seasonal and trend decompositions before applying multifractal detrended fluctuation analysis. We find that stock indices returns exhibit long-range correlations, supporting the idea that the stock markets in question are not efficient markets and have not reached a mature stage of market development. The results of the paper are of interest to investors looking for opportunities in these stock exchanges and also to policy makers in their endeavour of realizing institutional reforms in order to increase stock market efficiency and to support the sustainable growth of the financial markets.

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The main aim of the study was to explore the integration of CEE’s stock markets (Central, South‐East and Baltic) with those of the developed ones (Germany, USA and the UK). Using daily data from 20 October 2000 up to 20 October 2016, the static analysis indicates a long‐run cointegration relationship between CEE markets and all three counterparts considered. The dynamic analysis indicates several short‐run episodes of cointegration, which are influenced by nondomestic factors. When comparing among the counterparts, one can highlight that the US stock market is less integrated with emerging markets, which could be considered for portfolio diversification. Furthermore, the contagion effect is not rejected, given that the dynamic pairwise correlations are likely to be affected by herding behaviour and significant break dates.

This paper examines if the volatility exhibits a symmetric or an asymmetric response to past shocks, particularly the relevance of structural breaks for Central European (hereinafter referred to as "CEE") stock markets. In addition, it is of great interest to see if the CEE emerging markets are correlated with other emerging ones, as well as to analyse the correlation with the developed markets, for optimizing investment portfolios. Using a CEE group approach (regional index) and daily data from 2002 to 2015, the results suggest that markets react differently to similar negative and positive returns, except for the rapid growth period, when the greed sentiment dominates the markets. Furthermore, the structural break dates affect volatility, the highest asymmetric coefficient being recorded for the pre-crisis period. For the bivariate approach, the emerging markets and developed markets indexes provided by the Morgan Stanley Capital International (hereinafter referred to as "MSCI") have been considered and the results suggest that CEE stock markets are correlated with emerging stock markets rather than developed ones. For both pairs, the correlation is consistently higher for the break dates characterized by an increase in volatility, which is in line with the literature that claims that the co-movements increase when international factors dominate the national ones, and influence stock markets.