No abstract

No abstract

This research presents the majority of classical financial theories and models are based on the assumption of a rational investors' behaviour in the market regarding modern business, focusing on socially responsible activities is determined by general trends, where individuals and business companies realize their responsibility towards all those who are affected by the outcomes of their activities. The conducted research has proved that when making decisions under the uncertainty and risk conditions, people experience the effect of different illusions, emotions, false perception of information and other "irrational" factors. Corporate social responsibility reflects a new role of business in society. Recently, the corporate social responsibility tradition has started to spread quite rapidly in both large international corporations and small and medium-sized enterprises. The spread of socially responsible business ideas has encouraged the need to invest in companies which apply such a business practice.

In the article directions of use of intellectual capital components within a company and its activities are being analyzed. To perform such analysis, we should first go into details of intellectual capital structure. At this time the concept of intellectual capital in clear definition is not used in any international convention, statute or in any common legal document. Very important but intangible part of any company resource (employee knowledge, competence and experience, company image, infrastructure, customer loyalty, etc.) is not recorded in the financial statements. However, very often these resources strongly influence the business expansion, development, competitive advantage and creation of value enhancement. Consequently these resources and factors that are not put into companies' financial statements but can significantly influence the value of a business were combined into a new concept of intellectual capital. It could be a challenge to determine all elements of intellectual capital that give the business it's competitive advantages. Going further in this direction new problems arise, one of them is very contradictory. The indicator showing the presence or absence of intellectual capital can be observed when the market value of the company is higher than the book value. The difference in value results from not being able to put all company's assets involved in creating value into balance sheets (for example, knowledge of leading specialists, know-how of the management, important business contacts of the employees, etc.). These things are considered when a business is being sold or when a buyer is looking to obtain a certain commercial organization. The above mentioned differences between valuations (it could be also called capitalization/book value ratio) often become important factors focusing on the company's non tangible activities. Various methods of valuation of intellectual capital and its components exist. Larger part of these methods allow to determine the size (value) of intellectual capital using various elements and factors. However, according to their results the most interesting are the methods that use human value based ways to determine the cost of intellectual capital.An important factor in raising the value of a business becomes its social responsibility. An organization that is socially responsible takes care of its employees first, it invests into its intellectual capital, into improving of its employees health, ensuring safe working environment, etc.. It also adheres to principals of conservation even while expanding (Smaliukiene, 2007). A business that operates based on such principles can be sure that its competitive advantage will increase. SRB (Socially responsible business) principles are at work at big and small businesses and they are also tied to effective use of resources and variations.Summarizing results of the research, it can be said that exclusion of intangible company assets and intellectual capital is totally unacceptable because the products manufactured by employ...

The identification of the leading indicators that precede economic events and predict the next phase of the economic cycle is undoubtedly an important issue seeking to protect a country against recession or other negative economic events. The literature analysis shows that leading indicators vary across the countries and time. Therefore the aim of this research is to analyse potential leading indicators and identify the best predictors of the economic cycles in Lithuania. Various economic, industrial, financial, real estate market indicators as well as consumer and business expectations are analysed in order to find out which indicators cause the changes in the growth rate of GDP. The analysis is based on Granger causality test and autoregressive distributed lag model. The research shows that economic indicators such as consumption expenditure of households, government debt, compensation of employees, unemployment and others are weak predictors of the growth rate of GDP. Volume index of intermediate goods production is the best predictor in the group of industry data as it holds predictive attributes even three years before the changes in economy. The same conclusion can be made considering two financial indicators, i.e. short-term interest rate and the value of stock market index. Real estate market data such as residential buildings permits and growth rate in house price index can also warn about the changes in the growth rate of GDP two years before. Nevertheless, consumer and business expectations are the most important for the prediction of the changes in the growth rate of GDP.