Contract Theory Research Articles

Effective Contract in the Sphere of Higher Education in the Russian Federation

The relevance of the research topic. The effective contract system is a crucial tool for developing the university’s human capital. An effective contract is a contract that includes a clear system of indicators, the achievement of which will serve as the basis for calculating incentive payments to employees, thereby driving the growth and development of the university’s activities. Moreover, it can reduce the transaction costs that arise when coordinating the interests of stakeholders and improve the efficiency of work processes within the organization. The method of the research is based on the scientific works of domestic and international scholars and practitioners in the fields of institutional and market economics, economic theory, and contract theory. The scientific novelty of the work lies in the author’s proposed definition of transaction costs in the context of higher education, and the attempt to justify the use of an effective contract system to minimize them. Research findings: The author provides a theoretical overview of the definitions of the concept of transaction costs, considering the types and characteristics of such costs in relation to higher education. Practical significance: The article may be beneficial for university administrators in making managerial decisions, as well as for researchers and economists working with transaction costs. The research aims to develop theoretical frameworks in the field of regulating social and labor relations in higher education.

Research on Corporate Innovation and Compensation Incentives

The optimal contract theory believes that the compensation contract can alleviate the agency contradiction between executives and shareholders. By making the interest goals of executives and shareholders converge, it can enhance the innovation willingness of senior executives to a certain extent, increase the innovation investment of enterprises, and then improve the performance of the company. However, the increase of investment in innovation will not necessarily improve the companys performance, and there may be an endogenous relationship between the two factors, which further complicates the issue of compensation incentive. This article sorts out the relevant literature on enterprise innovation and salary incentive, and discusses the relationship between salary incentive and enterprise innovation and its influence on the endogenous relationship between enterprise innovation and company performance. In addition, the possible influence of executive attachment characteristics on compensation incentive is also discussed.

Research on the Relationship between Corporate Social Responsibility, R&D Investment and Financial Performance

In recent years, some social hot issues such as environmental pollution, false donations, food hygiene, employee safety hazards and other social hot issues have pushed CSR to the forefront. The issue of corporate social responsibility has aroused wide concern in the state and the public, and it has become an irreversible trend that enterprises should bear more or even exceed the economic level of social responsibility. On the background of encouraging enterprises to fulfill social responsibility, the paper based on social responsibility theory, resource-based theory, stakeholder theory and social contract theory, using Stata16.0 to conduct empirical analysis on the samples of listed companies in A-share pharmaceutical, computer, communication and equipment manufacturing industry in China from 2018 to 2020. This paper studies the impact of CSR and R&D on financial performance and the moderating role of R&D in the relationship between CSR and financial performance. Research findings: CSR and financial performance is significantly positive correlation; R&D investment has a significant negative correlation with the current financial performance, but has a positive effect in the lagging period. R&D investment plays a positive moderating role in the positive correlation between CSR and financial performance. Based on the results, this paper puts forward targeted policies and practical suggestions for enterprises and the government from different dimensions, so as to promote the sustainable development of our enterprises by making them pay attention to their social responsibility and technological innovation capabilities.

Does force depression resulting from shortening against series elasticity contribute to the activation dependence of optimum length?

The optimum length for force generation (L0) increases as activation is reduced, challenging classic theories of muscle contraction. Although the activation dependence of L0 is seemingly consistent with length-dependent Ca2+ sensitivity, this mechanism can't explain the apparent force dependence of L0, or the effect of series compliance on activation-related shifts in L0. We have tested a theory proposing that the activation dependence of L0 relates to force depression resulting from shortening against series elasticity. This theory predicts that significant series compliance would cause tetanic L0 to be shorter than the length corresponding to optimal filament overlap, thereby increasing the activation dependence of L0. We tested this prediction by determining L0 and maximum tetanic force (P0) with (L0_spring, P0_spring) and without added compliance in bullfrog semitendinosus muscles. The activation dependence of L0 was characterised with the addition of twitch and doublet contractions. Springs attached to muscles gave added fixed-end compliances of 11-39% and induced force depression for tetanic fixed-end contractions (P0_spring < P0). We found strong, negative correlations between spring compliance and both P0_spring (r2 = 0.89-0.91) and L0_spring (r2 = 0.60-0.63; P < 0.001), while the activation dependence of L0 was positively correlated to added compliance (r2 = 0.45, P = 0.011). However, since the compliance-mediated reduction in L0 was modest relative to the activation-related shift reported for the bullfrog plantaris muscle, additional factors must be considered. Our demonstration of force depression under novel conditions adds support to the involvement of a stress-induced inhibition of cross-bridge binding.

Analysis of IFRS 7 requirements for disclosure of information about financial risks in financial statements and analysis of disclosure practices. Part 1

Subject. The article addresses requirements of IFRS 7 and IFRS 9 for disclosure of information about financial risks in financial statements of an organization when market conditions change. Objectives. The aim is to disclose information about the significance of financial instruments to an organization; the nature and extent of risks arising from those financial instruments; and the impact on these risks by financial instruments. Methods. The study rests on the institutional theory of contracts, the Conceptual Framework for Financial Reporting. The latter, for the first time, recognized the need to reflect contractual rights and obligations in reporting, as an object of accounting and analysis, and became the theoretical basis for generating information about reporting of derivatives in financial statements when analyzing risks and minimizing them when using derivatives. Results. We assumed that to sufficiently and adequately meet the requirements of IFRS 7 in terms of disclosure of information about risks inherent in a business, heads of any organization should hold a number of events outlined in the article. Conclusions. The analysis of financial risks, their nature, and the degree of influence on the financial position of the reporting organization can significantly increase the transparency of financial statements for external stakeholders, strengthen their trust in the management of the organization and, as a result, contribute to making more balanced and responsible investment decisions.

Industry or Profession? Applying Social Contract Theory to Financial Planning in Australia

Abstract The Australian financial planning industry has been subject to increasingly rigorous forms of government regulation. This paper applies social contract theory to assess whether financial planning can be considered a profession based on its current form. Social contract theory, which intertwines professional status with the promotion of the public good and delivering altruistic service to society, serves as the theoretical framework for this evaluation. Through an analysis of the financial planning industry’s regulatory environment and its response to public inquiries, this paper concludes that while strides have been made, significant gaps remain that prevent financial planning from being recognised as a full-fledged profession.

Cramping state of a muscular tissue at passive muscle contraction

On the basis of the muscle contraction theory analyses the problem of the "benign cramp» skeletal muscles occurrence is investigated. It is shown, that existing theory of the muscles contraction (the theory of sliding filaments) allows explain occurrence of cramps if to use the standard positions: contraction of a muscle occurs passively, without expenses of adenosine triphosphate (ATP) energy; disconnection of actin-myosin complex in the cellular power mechanism is carried out with use of energy of ATP hydrolysis. The cramp arises with circulatory insufficiency, usually in the lower extremities, which leads to a delay of ATP arrival in area of the actin-myosin complex. This slows down the undocking of myosin bridges from actin filaments. It is noted that the use of magnesium preparations, whose ions partially replace calcium ions with similar chemical properties, reduces the possibility of cramp occurrence.

Tax Justice and Tax Compliance: Empirical Evidence from South West Nigeria

The objective of this study is to investigate the effect of tax justice on tax compliance in South West Nigeria. Social contract theory provides the nexus between morals and political behavior, as tax compliance by individuals and corporate taxpayers helps governments fund budgets and deliver social goods and services to their citizens. Tax compliance in Nigeria is increasingly on the decline, as the level of motivation among taxpayers is quite low possibly due to the prevailing perception of tax injustice, lack of transparency, and absence of optimal utilization of tax revenue in line with social contract theory. The study adopted a survey research design and involved a population of 3,250 eligible taxpayers. The sample size from each of the states in the South West Nigeria was explored. The Taro Yamane formula was used to determine a sample size of 356, while the proportionate sampling technique was used to determine the distribution of the sample size to each state in the study. A structured questionnaire was used to collect data from the respondents, and the response rate was 86%. The validity and reliability of the instrument was based on Kaiser–Meyer–Olkin (KMO) and Bartlett’s tests; the Cronbach’s alpha reliability ranged between 0.89 and 0.96. The results show that tax justice has a significant effect on tax compliance. The study recommends that governments should ensure optimal utilization of tax revenue to increase tax compliance.

On the Possibility of Act Contractualism

ABSTRACT A well-known debate in normative ethics is that between proponents of Act Consequentialism and Rule Consequentialism. Given the structural similarities between Rule Consequentialism and existing forms of Contractualism, one might expect a similar debate to arise among contractualists. However, this is not the case. Some, following T. M. Scanlon, even argue that this question is ‘misconceived’—that there is something deeply mistaken about considering the possibility of an act-based form of contractualism. In this paper, I challenge this claim. I start by showing that the structural similarities between existing contractualist views and Rule Consequentialism suggest that one could formulate an act-based version of Contractualism. This view—Act Contractualism—has received almost no attention so far. Part of the explanation why rests on the thought that justification must involve rules or principles. The idea is that, since justification involves the use of reasons, and since reasons are best expressed through general principles, there is something conceptually mistaken in thinking that a contractualist theory can do without principles. However, I contend that, even if we accept that one cannot talk about reasons without talking about principles, we can meaningfully formulate an act-based contractualist view that takes the role of principles into account. I show that this view is not extensionally equivalent to Rule Contractualism, and that it is better supported by the contractualist rationale. I conclude by calling for more work to be done on Act Contractualism.

Increased destination patronage: can data privacy, safety, and security do the magic?

ABSTRACT The study explores data privacy, assurances, and destination imagery for data protection from the perspectives of destination managers and international tourists. The study utilised concurrent mixed methods to address the first study’s propositions anchored on the social contract theory via interpretative data analysis. The second study was grounded on the optimism and pessimism theory, and the hypotheses were tested using structural equation modelling. The study revealed six assurances and also unearthed destination managers’ understanding of using symbols such as elephant, bird, dog, baby, and jewelry to define the protection of tourists’ data. The results of the hypotheses showed that data privacy, safety, and security are significant predictors of destination patronage from an international tourist’ perspective. The study adds to the data privacy literature by exploring symbols or images to describe data protection within the social contract theory perspective, which is considered a new contribution to hospitality and tourism literature.

The Qualification of Islamic Insurance Contract

The concept of insurance, which emerged in the West in the fourteenth century, was introduced to the Islamic world in the nineteenth century. The religious ruling of insurance, which became widespread in Muslim countries in a short time, started to be discussed among the faqihs. In this process, faqihs, who addressed the issue from the perspective of classical contract theory in fiqh, stated that insurance was not permissible due to prohibited elements such as ignorance, gambling, loss, gharar (uncertainity), and interest. This negative opinion on the validity of insurance induce Muslims with interest-sensibility to seek an alternative to conventional insurance. These efforts paved the way for the emergence of the concept of Islamic insurance. Although Islamic insurance has been used in some academic studies for other types of insurance other than conventional insurance, the term “takaful insurance” is meant by this concept in the finance sector today. In Turkiye, however, the concept of “participation insurance” has recently been widely used instead of takāful. It is remarkable that the Islamic insurance system, which began on a simple cooperative basis, evolved into a mixed structure in the following period. For this reason, Islamic insurance contracts are considered to be in the category of “compound/complex contracts” in modern economics. In this study, the qualificaiton of Islamic insurance contracts will be analyzed based on the typical contracts in the fiqh literature.

Resolving elliptic boundary value problem and integral equation in relational partial metric space

In the present study, a novel version of the contraction theory on a relational partial metric space associated with a binary relation is exhibited. In this process, we observe that numerous relations can be used in many well-known fixed point theorems earlier introduced by multiple authors. We solve an elliptic boundary value problem and an integral equation to make the significance of the main conclusion evident. Exploring a nonlinear system, governed by nonlinear equations, underscores the importance of comprehending fixed points - pivotal states where the dynamics of a system remain unaltered.

Joint value creation: A functional, proactive approach to contract governance

AbstractThe recurrent series of crises demonstrates that supply chains are frequently susceptible to disruption. It is imperative they adapt to evolving economic, ecological, social, and geopolitical circumstances. Economists and management scholars have introduced contract governance models that facilitate adaptation and collaboration; however, these models have been largely ignored in the legal field. This article addresses a significant gap in the existing literature on commercial contracts, which is currently fragmented between legal, economic, and organizational perspectives. The article proposes a functional, proactive contracting framework focused on joint value creation. The framework integrates insights from transaction cost economics, relational contract theory, relational view, functional contracting, proactive contracting, and legal design. It provides an instrument for contracting parties to co‐create contracts that enhance performance, reduce transaction costs, devise contingency plans, and utilize contracts as user‐centric tools to support relational governance practices and sustainability. A case study on Finnish Alliance Model Contract Clauses demonstrates the benefits of this approach in fostering more collaborative and resilient commercial contracts.

Promotion of Service Delivery in Terms of the Social Contract Theory in South Africa's Legal Framework

As is evident in the prevailing water and electricity rationing, South Africa is reeling from a crisis of poor service delivery. Against the background of its apartheid history and liberal constitution, this article examines how South Africa's legal framework promotes efficient service delivery in the context of a social contract theory. Using a literature review and content analysis of legislation, this article argues that basic service delivery is a human right that underlies the core function of the State regarding its social contract with citizens. The article critiques cooperative governance and the demarcation of service delivery duties between the spheres of government in the 1996 Constitution, the Municipal Structures Act, the Municipal Systems Act, and the Traditional Leadership and Governance Framework Act. It demonstrates how the legal framework places a heavy burden on the local government to provide basic amenities. By highlighting how a social contract informs the purpose of the constitutional State, the article demonstrates why service delivery must be taken seriously in a nation desperately in need of socio-economic transformation.

Pacti: Assume-Guarantee Contracts for Efficient Compositional Analysis and Design

Contract-based design is a method to facilitate modular design of systems. While there has been substantial progress on the theory of contracts, there has been less progress on practical algorithms for the algebraic operations in the theory. In this paper, we present 1) principles to implement a contract-based design tool at scale and 2) Pacti, a tool that can efficiently compute these operations. We illustrate the use of Pacti in a variety of case studies.

Reflection on the Philosophical-Historical Roots of the Crisis in Western International Law Thinking

International Law appears to have lost both its possible civilizational foundations — the Greco-Roman/Christian doctrine of natural law and the contract theory, based on the “Humanist” confidence in the creative potential of individual will. In practice International Law — as it continues to exist — consists of either contractual arrangements among two or more States, or unilateral assertions of will by individual States, usually contested by other States. In this sense, International Law has become privatised, a matter of duelling individual perspectives, with no ontologically objective environment within which “warring” individuals can be embedded. This is the context in which the so-called Lauterpacht approach to International Law arises. It claims that the application of private law analogies should be suitable for international legal decision-making. Legal analysis and judgement then becomes a matter of weighing up the force of two or more competing wills. Another problem is that the social contract theory prioritises the striving for security as the central human characteristic. The legal discourse closes itself off from alternatives capable of questioning this idea. For one possibility, the idea that world society is a natural family of Nations is excluded. The new goal of the social contract, after the Great Depression and World War II, was to establish a liberal order wherein human opportunities would be significantly expanded and universal prosperity would be guaranteed. The basic tenet of liberalism is the dismantlement of the State, which is supposed to be the form through which individuals participate in their own governance. As this State retreats, private economic interests, regulated only by private law, if at all, take precedence. So, the long pathway from the 17th century confidence in the humanist construction of the State through the social contract of free and equal individuals ends up at present in a critical breakdown of order, where an antinomian spirit prevails at all levels of society, domestic, transnational and international. This diagnostic exercise offers no solution, although it does indicate obstacles which could, conceivably, be overcome.

Entrepreneurial Psychological Contracts: Shaping the Future of Work in Times of Uncertainty

In the backdrop of a global work environment characterized by uncertainty, fragmentation, and precarization, this paper introduces the ‘entrepreneurial psychological contract’, a concept that reshapes our understanding of employment relations in new venture creation. The paper responds to the need for reimagining employment in an era where standard, stable employment is increasingly an exception. By extending psychological contract theory with insights from incomplete contracting literature, a nuanced perspective is provided on how entrepreneurs navigate the inherent uncertainties of new ventures to establish employment agreements. The paper is conceptual, and it reveals that entrepreneurial psychological contracts are markedly different from traditional bureaucratic contracts, characterized by their procedural, associational, constitutional, and polyarchic nature. This distinction is pivotal in comprehending the adaptive employment strategies in entrepreneurial environments, which mirror the global trends of work fissuring and employee precarization. This paper contributes to the broader discourse on how work and employment should be reorganized in contemporary capitalism. It offers theoretical advancements in entrepreneuring, human resource management, and contracting under uncertainty, and presents practical insights for entrepreneurs in crafting flexible and resilient employment relations. The paper aligns with the call for broadening perspectives on work, promoting sustainable organizational practices, and envisioning new ways of mobilizing workers in the face of global challenges.

Research on Corporate Innovation and Compensation Incentives

The optimal contract theory believes that the compensation contract can alleviate the agency contradiction between executives and shareholders. By making the interest goals of executives and shareholders converge, it can enhance the innovation willingness of senior executives to a certain extent, increase the innovation investment of enterprises, and then improve the performance of the company. However, the increase of investment in innovation will not necessarily improve the companys performance, and there may be an endogenous relationship between the two factors, which further complicates the issue of compensation incentive. This article sorts out the relevant literature on enterprise innovation and salary incentive, and discusses the relationship between salary incentive and enterprise innovation and its influence on the endogenous relationship between enterprise innovation and company performance. In addition, the possible influence of executive attachment characteristics on compensation incentive is also discussed.

Facilitator or figurehead? The impact of academician shareholder on corporate innovation: Evidence from China

Investment by academicians with resource advantages can serve as a vital channel for promoting innovation. In this study, we investigate whether and how academician shareholders who are esteemed fellows or candidates of the Chinese Academy of Sciences and the Chinese Academy of Engineering impact corporate innovation. Using a sample from China, we document a positive association between academician shareholders and corporate innovation. Our channel analysis reveals four potential channels through which academician shareholders promote corporate innovation: innovative human capital, investor protection, top management team attention to innovation and reduction in innovation uncertainty. Moreover, in line with the resource-based view and incomplete contract theory, our findings indicate that the positive association is more pronounced in firms with directors appointed by academician shareholders, without state ownership, and with multiple large shareholders. Finally, our findings indicate that academician shareholders can enhance open innovation, attract government subsidies, shorten the time it takes for corporate patent applications to be granted, and improve firm performance.

Chief executive officers’ compensation: Does gender pay parity exist in the Nigerian context?

The optimal contract theory posits that an effective compensation plan should be based on performance. Globally, legislators are concerned about the gender pay gap due to stereotypes against women in line with congruity theory. Despite the plethora of gender-related studies, empirical evidence on the gender pay gap at the upper-echelon management level is limited, especially in Africa. Hence, the study examines the effect of CEO gender on CEO compensation in the Nigerian deposit money banks using a longitudinal research design. The study employed the ordinary least square (OLS), fixed effect method, and random effect method to analyze the 144 firm-year observations collected from the Nigerian Exchange Group (NGX) factbooks and the financial reports of 12 banks during 2011–2022. The Hausman Test (chi sq = 3.623, P = 0.003) and Redundant Fixed Effect Test (chi sq = 8.159, P = 0.000) indicated that the appropriate method of reporting is the fixed effect method. The association between CEO gender and CEO compensation (coeff = –8.690 and t = –10.31) is statistically negatively related. The study concluded a gender pay gap in favor of men among Nigerian Nigerian deposit money banks’ CEOs. These findings align with the congruity theory. The study recommends a mandatory gender pay parity plan in line with the optimal contract theory to reduce gender pay inequality.