cover vol. 16 no. 1

Abstracts

Beata Surmacz

City Diplomacy

(article in English)
Diplomacy is one of the oldest mechanisms of managing the international environment. It is traditionally associated with operation of the state. However, in contemporary times the parameters of the international environment have changed considerably. States are no longer the only entities participating in international relations. Along with states, sub-state actors (regions and cities) have emerged, as well as supra-state (the EU) and non-state entities. Sub-state actors go through the process of repositioning in the contemporary international order: from being an object of management to building their own subject status in this respect. In order to achieve this goal, they increasingly use mechanisms and instruments which were the sole domain of the state until recently. Despite substantial attention paid to regional diplomacy, academic discussion has focused less on the increasing role of cities in diplomacy. The paper aims to introduce the concept of city diplomacy. It will be argued that cities have become important actors on the world stage, that they have developed diplomatic apparatus, and that city diplomacy is becoming more and more professional diplomatic activity.

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Keywords: city, diplomacy, paradiplomacy
JEL: K33, R58

Barbara Dańska-Borsiak

Human Capital in the Visegrad Group NUTS 2 Regions.
Convergence or Divergence?

(article in English)
An important objective of the European Union cohesion policy is to remove economic disparities between the various regions. One of the factors capable of stimulating or slowing the development process is human capital. The specialist literature provides many alternative human capital measurement concepts. In quantitative research, various composite measures are most commonly used. Such a measure was also developed in this study. The main aims of the study were: to construct a human capital measure for the Visegrad Group countries’ NUTS 2 regions, to examine whether spatial relationships occur in the distribution of human capital in the studied area and to analyze regional convergence in terms of human capital levels in the years 2001–2015. The study applied the marginal vertical beta-convergence concept, which enables the determination of individual contributions of particular regions to the general convergence process characterizing all the studied objects. Dynamic panel data models were used to study convergence, and Moran’s global and local statistics were used for inference about spatial dependencies. As expected, no spatial autocorrelation was found. In contrast, the hypothesis of convergence was confirmed and regions that contribute to the weakening of its pace were identified.

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Keywords: human capital, convergence, Visegrad Group, NUTS 2 regions, dynamic panel data models
JEL: C23, O15, R12

Andrzej Jakubowski

Convergence or Divergence? Multidimensional Analysis of
Regional Development in the New European Union Member States

(article in English)
The main aim of the paper is the multidimensional analysis of regional development in the new EU Member States in the years 2004–2014 on the background of EU regions and characterisation of the differences in their dynamics with the use of a synthetic index. The article presents an attempt to adopt a method of taxonomic measure of socio-economic development for multidimensional comparative analysis of development processes in a dynamic approach and to develop a synthetic measure reflecting the multifaceted nature of development processes and cohesion policy. The developed indicator (Regional Development Index) was used to determine the directions and paces of processes leading to the reduction of disparities in the level of regional development (beta- and sigma-convergence).

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Keywords: cohesion policy, regional development, convergence, new EU Member States
JEL: O18, R11

Jacek Łaszek, Krzysztof Olszewski

Regional Development of Residential and Commercial Real Estate in Poland
and the Risk of Real Estate Cycles

(article in English)
The property market is local and thus regional factors have a very important impact on its evolution. However, global factors also have an impact. This paper explains that fast economic growth can lead to strong cycles in the market and also cause problems for the stability of the economy. With a case study of the housing market in Warsaw we show that very different economic and regulatory factors can create cycles which look quite similar at first sight. We conclude that one needs to understand the fundamentals of a given cycle to be able to smooth it. The main driver of the cycle in Poland is the significant shortage of housing units, and thus people react very strong to any possibility of improving their living conditions. Rises in income or declines of mortgage costs trigger a demand boom, while the supply side is constrained by regulations and increasing construction costs. The excessive demand leads to quite strong cycles which could be smoothed with a large amount of rental housing.

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Keywords: regional real estate market, real estate cycles, foreign investment
JEL: E22, R30

Janina Kotlińska

Local Development and Sale of Municipal Real Estate

(article in English)
Local development is associated with investments, the implementation of which requires significant financial resources. Revenues are the primary source of these funds, but also own income or non-returnable funds from abroad. Thus, those local self-governments (LGU) will develop, which actively and effectively participate in the real estate market, as well as those that will have the possibility to incur liabilities. The indicated conditions are closely related to the construction of an individual debt limit of LGU. In the study, attention was focused on the effects of changing the LGU debt limitation to the economy of municipal real estate in Poland — probably unintended by the legislature. Its purpose is to indicate that the new approach to LGU debt limitation: (1) encourages local government to sell municipal real estate and forced the analysis of the structure of municipal real estate in the aspect of having real estate, and (2) causes changes in the structure of municipal real estate and ways of using it. The statistical data from 2010–2016 are the background and confirmation of the theses and issues presented in the study. The considerations and figures presented in the study show that: (1) return revenues are primarily the source of financing local development, although in recent years a significant change is visible in this area, (2) the new LGU debt rule forces LGU to undertake actions aimed at selling property, (3) sales of municipal real estate is conditioned both by the potential buyer and the seller, (4) both the pool and the structure of municipal real estate is changing, which gives grounds to believe that in the face of many restrictions, it has a chance to become optimal in given conditions and time, and (5) the optimal structure of municipal real estate from the point of view of territorial self-government missions, the number and type of tasks performed by individual LGU, as well as their situation and financial conditions is different in each LGU, and it is difficult to assign a target status.

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Keywords: limit of liabilities, sale of municipal real estate, optimization of the quantity and structure of local government real estate
JEL: H74, H76, O18, R51, R53

Dagmara Kociuba, Andrzej Matacz

The Real Estate Market in the Context of Municipal Management.
Example of the Lublin Functional Area

(article in English)
The article aims at the determination of relations between the real estate market and water supply and sewage management based on the example of the Lublin Functional Area (LFA). The paper is composed of two parts. The first part focuses on the characteristics of functional urban areas (FUA) both in the context of theoretical assumptions and practical aspects of their implementation under the Cohesion Policy 2014–2020 in Poland, as well as development problems of FUA resulting from the intensity of the process of suburbanization. The second part of the article presents the characteristics of LFA and the analysis of the relations between an increase in dwelling stock and the real estate market in the communes of LFA and their provision in water supply and sewage infrastructure. It also presents problems caused by uncontrolled expansion of built-up areas in the context of conducting sustainable municipal management in areas with high values for agricultural production in spatial, socio-economic, and environmental terms.

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Keywords: functional urban area (FUA), Lublin Functional Area, real estate market, municipal management, suburbanization
JEL: O18, R23, R31, R38, R53

Artur Myna

Residential Real Estate Market in the Context of Local and Regional Development

(article in English)
The aim of the work is to present the relationship between the development of residential real estate markets and local and regional development. It was found that the number of completed dwellings is strongly connected with the value of transactions on residential property markets in cities of over 200 000 inhabitants (confirmation of the theory of the residential real estate market as a “growth machine”). The value of transactions on the residential real estate market in these big cities proved to be strongly correlated with the number of natural persons performing economic activity and the share of persons working in the service sector in voivodships which would indicate regional development. Along with the increase in transactions on the residential real estate market, the demand for construction and renovation of flats and houses increases, as well as for works that cause an increase in the utility value of the property: finishing works, production and assembly of fences, hardening of the area or setting up gardens. The question arises as to whether natural persons performing economic activity do such works mainly in cities with more than 200  000 inhabitants and in suburbanization areas surrounding them (the hypothesis of local development), or the external effects of real estate markets as a “growth machine” have a supralocal range, somehow “leaking” beyond the areas of large cities and suburbanization zones (the hypothesis of regional development). Therefore, in-depth surveys are necessary.

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Keywords: real estate market, local and regional development
JEL: R11, R31

Agnieszka Wójcik

Civic Budget as a Potential Source of Financing of Real Estate

(article in English)
The subject of this article is the role of the civic budget as a potential source of financing of real estate. The topic has been presented both in quantitative terms (the structure of proposals that were submitted for voting, average values, and trends) and in qualitative terms (the types of real estate). The aim of this article is to verify the hypothesis that the participatory budget is treated as a potential source of real estate financing (i.e., for projects with limited usability). For this purpose, 1703 projects, submitted to a vote in the years 2014–2017 have been examined.

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Keywords: real estate, real estate financing, participatory budget, civic budget
JEL: G39, H49, R30, R33

Mieczysław Kowerski, Jarosław Bielak

Self-Selection Models in Determination of Target Dividend Payout Ratio of
Real Estate Domestic Companies Quoted on Warsaw Stock Exchange

(article in English)
Real estate companies listed on the Warsaw Stock Exchange in recent years have changed their policy to pro-dividend and more and more often make decisions to pay increasing dividends. Hence a question arises about the target dividend payout ratio of these companies. In the article the Heckman model was proposed for estimating the target dividend payout ratio. It derives from the self-selection concept, which consists of two equations: probit equation of propensity to pay dividend and Lintner’s partial adjustment equation. The conducted research has shown that Heckman’s self-selection model proved to be a very good tool for analyzing dividend decisions not only because of formal properties ensuring the consistency of the parameters estimator but also because of an accurate description of the decision process, which is of a two-step nature (decision on payment — determining the payout level). This led to the conclusion that more willing to pay dividends for a given year were real estate domestic companies, which paid dividends for the previous year (sticky dividend effect) and were more profitable and that the relation between the market value to book value of assets ratio (Tobin’s q ratio), and the propensity to pay dividends has an inverted U shape. The calculated target dividend payout ratio was 66,7% and the calculated speed of adjustment alpha = 0,626 indicates relatively slow reaching of the target.

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Keywords: real estate domestic companies, Warsaw Stock Exchange, self-selection model, propensity to pay dividends, target dividend payout ratio
JEL: C35, C58, G35, R3

Iwona Foryś

Agricultural Potential of Polish Voivodships in the Context of
Sustainable Development

(article in English)
The paper focuses on the issue of the agricultural potential of Polish voivodships in the context of sustainable development. The overall objective is to measure the potential of individual voivodship markets in 2005 and 2015 and to identify those voivodships where the development potential is the biggest, based on the changes that took place over the decade between 2005 and 2015. The authors examined the agricultural potential of individual voivodships, concentrating not only on the agricultural land resources and quality, but also on the supporting infrastructure and socio-demographic factors in the environment of this property market segment. Detailed analyses covered 7 groups of diagnostic variables: geodesic areas, agricultural land, demographic variables, population incomes, agricultural production, ecology and infrastructure. The data came from the Central Statistical Office of Poland. The authors ranked the voivodships by means of a synthetic measure which took into account the groups of variables that characterized the phenomenon under study.

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Keywords: agriculture potential, sustainable development, market analysis, Polish regions
JEL: R30

Joanna Podgórska

Technical Efficiency of Polish Independent Public Health Care Centres:
Data Envelopment Analysis Approach

(article in English)
In the face of the growing demand for health services, which can be observed in Poland (as well as in many other countries), it is extremely important to make effective allocation decisions in relation to financial resources (at the disposal of health sector decision-makers). The pace of demographic, technological and market changes forces an increase in financial expenditures on health, while at the same time the resources allocated to these objectives are still lacking. The present paper assesses the technical efficiency of 24 independent public health care centers (IPHCCs) in 2010–2014 with the use of the data envelopment analysis method and evaluates changes in the examined efficiency categories using the Malmquist Index. The research has shown that independent public health care institutions in Poland are facing the problem of debt and inefficiency. It has also been established that the level and method of financing health services in Poland contribute to a large extent to the technical inefficiency of IPHCCs, and that the increase in IPHCCs’ revenues leads to an increase in their technical efficiency. The conclusions of this paper provide, on one hand, the basis for in-depth research into the efficiency of public health entities and, on the other, guidance that can be used in the practical management of public health entities and in the shaping of national health care policy.

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Keywords: data envelopment analysis, public health care in Poland, independent public health care centers, efficiency
JEL: I11, I18

Elżbieta Inglot-Brzęk, Anna Lewandowska

Small and Medium Enterprise Investment Activity as a Factor of Development in a Tourist Region

(article in English)
Small and Medium Enterprises (SMEs) participate in the process of transformations occurring in their environment, which is manifested in their ongoing readiness to investment activity. The aim of this article was to identify relations between the SME investment and the development of tourist regions on the example of three spa and tourist communities. The analysis presented in this article is the result of CATI (with the tourist enterprises) and IDI (with leaders of tourism entrepreneurship) research. Data analysis was performed using statistical measures. The problems related to nature, sources, barriers and SME investment activity were analyzed.

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Keywords: SME, entrepreneurship, investment potential, regional development, tourist region
JEL: L26, O12, R11, R58

Piotr Witkowski

Managing Cross-Border Movement of People and Goods in the European Union on the Example of the Road Border Crossing in Lubelskie Voivodship

(article in English)
The external border of the European Union is the subject of integrated management aimed at minimizing the risks associated with the illegal movement of people and goods. A significant section of the EU external border is located in the Lubelskie Voivodship. Its length and size of cross-border movement of people and trading goods and the diversification of border infrastructure is significant. The aim of the article is to discuss issues related to the integrated management of EU external borders and to present and analyse border service systems at road border crossing points, divided into a terminal system (Koroszczyn–Kukuryki) and a so-called “pipe system” (Dorohusk).

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Keywords: the external border of the European Union, border management, road border crossing
JEL: F59

Sławomir Pastuszka

Spatial Differentiation of Demographic Processes in Germany and Poland

(article in English)
The aim of this article is to compare demographic processes in German federal states and Polish voivodships. The analysis covers the period between 2004–2015 and takes into account the data published by Eurostat, the Federal Statistical Office and Poland’s Central Statistical Office. The analysis shows that demographic processes in German Länder are more dependent on their level of development and geographic location than in Polish regions. In Germany, the major demographic problems are seen in the less developed eastern Länder, whereas in Poland, unfavorable demographic changes occur in several voivodships of varying levels of development, located in different parts of the country. According to the author, in the case of demographic processes, unlike economic processes, at present there is no justification for clear-cut division of Eastern Poland, akin to Eastern Germany.

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Keywords: demographic potential, German federal states, Polish voivodships, regional analyses
JEL: J10, J11, J13, J18