European Journal of Economic Studies

4-17

Authors: Hamed Alavi

With emergence of new economies in globalized world issue of international trade is gaining more ground in economic, political and development debates. Economic liberalization as well as removing tariff and non-tariff barriers to trade, has significantly contributed to globalization of production and flow of business. At the same time increasing trade with emerging economies and moving production to low cost countries resulted in increasing trade risk more than before. Among others, payment risk can impose serious amounts of loss on involved parties in international trade while traders try to mitigate it by using different methods of payment like documentary credits. LCs are used to reduce the payment risk of buyer with irrevocable guarantee of issuing bank to pay contractual price to seller against presentation of complying documents by him. However, application of Strict Compliance Principle and reliance of banks on mere documentary nature of presentation rather than trade realities between partners can create different problems. A prominent example of such problem is rejection of payment by bank due to bad processing and noncompliance of presented documents by beneficiary. In fact, non-compliance is a huge risk for beneficiary which can result in his significant financial loss. By focus on potential financial loss due to mismanagement of risk, current paper tries to study most prominent risk management techniques and their applicability to mitigate the risk of documentary discrepancy in LC transaction from the perspective of exporter beneficiary and find answer to the question of which Risk management model can be suitable to reduce such risk in LC operation. Research consists of three parts. First, it will review history and different business risk management philosophies. Second part will discuss to nature of LC transaction and risk of documentary discrepancy while final part will analyses different business risk management techniques and their usefulness in mitigating the risk of documentary discrepancy in international LC transaction.

25-41

Authors: Amassoma Ditimi, Adeniran Oluwagbenga

This study explores external debt and economic growth nexus in Nigeria. Although external borrowing is targeted to put an economy on the pedal of growth cycle, provided such resources obtained are utilized efficiently in a well-directed manner. This has not been the case with Nigeria due to lack of optimally utilizing this contracted loans for its original goal hence making repayment a burden which has culminated a lot of contention among scholars, policy makers, and government agencies to mention a few. This study was carried out to investigate the nexus between external debt and domestic investment via economic growth in Nigeria between the periods 1980 to 2014. The study employed OLS regression method to ascertain the said relationship. The results shows that external debt exerts a negative and significant effect on private in Nigeria, while domestic debt had a positive and significant influence on private investment in Nigeria during the study periods, indicating that external debt impedes private investment in Nigeria. So the study concludes that external debt is inversely related to private investment, meaning that an increase in external debt goes a long way in reducing private investment which slows down economic growth in the country. Owing from the above, the study recommends there is the need for the government to focus more on domestic investment and lessen the concentration on private investment. In addition, the government should enforce appropriate macroeconomic policy that will foster private investment couple with an enabling environment that will attract foreign investors to invest in the country by addressing the security challenges, providing investment friendly environment, by improving regulatory framework, introduction of some legal framework which should be met to apprehend any contractor, agencies, public office holders found to have embezzle funds stipulated for any developmental project; and encourage domestic investment. Future study should be conducted on effective management of resources for achieving the desired economic growth in Nigeria.

56-65

Authors: Gayane Tovmasyan

Tourism as a global phenomenon develops rapidly worldwide. In the Republic of Armenia tourism is announced as the main sector of economy. In the recent years the number of tourists has increased. The main tourism statistics, tourism competitiveness index, tourism assets of Armenia are presented and analyzed in the article. Some suggestions are made for tourism advancement in Armenia which will contribute to the regional economic growth. Obviously, our calculations and analyses indicate tourism sphere significance for our economic development. Tourism development is also very important for regional economic advancement as tourism destinations are also in the regions, and tourism directly or indirectly influences on the development of the other spheres of the economy as well. It is also obvious through the calculation of tourism multiplier effect. So tourism development plans by regions must be processed and implemented.