Compliance Costs Research Articles

Assessing the Impact of Regulatory Frameworks on the Success of Green Building Projects in Singapore

This paper examines the influence of regulatory frameworks on the success of green building projects in Singapore. By analyzing the Building and Construction Authority’s (BCA) Green Mark Scheme and other related regulations, the study highlights how these frameworks have shaped the environmental sustainability practices within the construction industry. Through a mix of qualitative interviews with industry professionals and quantitative analysis of building performance data, the research demonstrates that regulatory frameworks not only enhance environmental outcomes but also drive innovation in building technologies and practices. The findings suggest that while these regulations have led to significant improvements in energy efficiency and resource management, challenges such as high compliance costs and the need for continuous professional development remain. The paper concludes with recommendations for evolving these frameworks to better support sustainable development in Singapore’s urban landscape.

Regulatory Changes and Their Impact on Insurance Market Dynamics

Purpose: The general purpose of the study was to examine regulatory changes and their impact on insurance market dynamics.
 Methodology: The study adopted a desktop research methodology. Desk research refers to secondary data or that which can be collected without fieldwork. Desk research is basically involved in collecting data from existing resources hence it is often considered a low cost technique as compared to field research, as the main cost is involved in executive’s time, telephone charges and directories. Thus, the study relied on already published studies, reports and statistics. This secondary data was easily accessed through the online journals and library.
 Findings: The findings reveal that there exists a contextual and methodological gap relating to regulatory changes and their impact on insurance market dynamics. The study concluded that regulatory interventions significantly influenced insurers' strategic decisions and market behavior. It found that compliance with regulatory frameworks enhanced market stability and consumer confidence, but excessive regulatory complexity could stifle innovation. The study emphasized the importance of balancing regulatory objectives with market efficiency and innovation and highlighted the need for adaptive regulatory frameworks to address emerging risks. Overall, the study underscored the critical role of regulatory changes in shaping insurance market dynamics and advocated for collaborative efforts among regulators, industry participants, and stakeholders to promote a competitive, resilient, and inclusive insurance market ecosystem.
 Unique Contribution to Theory, Practice and Policy: The Institutional theory, Agency theory and Resource Dependence theory may be used to anchor future studies on insurance market dynamic. The study suggested enhancing regulatory transparency and communication to reduce compliance costs and promote market confidence. Additionally, it recommended adopting risk-based and proportionate regulation tailored to insurers' risk profiles and business models. Promoting innovation and market competition through regulatory reforms, along with investing in regulatory capacity and expertise, were also highlighted. These recommendations aimed to foster a dynamic, resilient, and consumer-centric insurance market ecosystem.
 Keywords: Regulatory Changes, Insurance Market Dynamics, Solvency II, Affordable Care Act, GDPR Compliance, Microinsurance Regulations, Risk Management Practices, Market Resilience

An Investigation into the Causes of Tax Evasion and Avoidance by Small and Medium Enterprises (SMEs) and Their Effect on the Zambian Economy in Chililabombwe District

This study was purposed to investigate the causes of tax evasion and avoidance and its effect on the Zambian economy in Chililabombwe District of the Copperbelt Province. It had two-fold objectives: to examine the causes of tax evasion and avoidance in Chililabombwe District by SMEs, and to determine the effect of tax evasion and avoidance in Chililabombwe District on the Zambian economy. The study used a mixed method approach combining both qualitative and quantitative paradigms in which 110 sample size was targeted. One Hundred and ten (110) questionnaires were distributed and 79 were returned representing 72%. Purposive and convenient sampling techniques were used. Quantitative data was analysed through the SPSS version 16 while qualitative data was analysed through content analysis focusing on main unfolding themes from the interviews. The study discovered that that there are loopholes in the Zambia Revenue Authority's (ZRA) tax administration system which are due to inefficiencies or inadequate competence of tax collectors, which taxpayers exploit in evading and avoiding tax. The investigation also revealed that on account of the established loopholes, certain revenue collectors collude with taxpayers to commit tax fraud by accepting bribes from them while poor sales, high tax rates, and lack of tax education to SMEs were noted to be among key reasons for tax avoidance. Consequently, the study ascertained with concern that the levels of development in the district, in terms of social amenities, schools, road network, and youth / women empowerment programmes are very low. The study concluded that tax evasion and avoidance were real and rife among the SMEs on account of the factors cited and that mitigative policy measures were required without any further delays. Arising from the results of the study, it was strongly recommended that for tax evasion and avoidance to be mitigated, the revenue authority needs to urgently reform the tax system to make it equitable and fair coupled with rigorous tax education to the traders for sufficient tax knowledge and thereafter digitize tax remittances with ease for the traders to file returns without need for middle persons. Tax morale and ultimately revenue collection can be improved through tax education programs, integrity of tax collectors, and reduction of tax rates chargeable to SMEs. Enhanced training and sensitization to create awareness, reduce compliance cost, and simplify online technology for the overall positive impact on compliance among the SMEs are elements of paramount import for the success of the nation in meeting its socio-economic goals through guaranteed revenue collections by the Revenue House.

Theoretical foundations of voluntary tax compliance: evidence from a developing country

Tax non-compliance is a persistent problem that is becoming increasingly common worldwide. The main objective of this study is to examine the factors that influence voluntary tax compliance among large taxpayers in Ethiopia based on the theoretical foundation of tax compliance. This study used an ordinary logit regression model, a closed-ended questionnaire with 1550 taxpayers, and quantitative data analysis. The regression analysis shows that tax compliance behavior is positively and significantly influenced by government trust, taxpayers’ tax knowledge, tax system fairness, and rewards. However, compliance costs negatively and significantly affect tax compliance. To improve voluntary tax compliance, the government and tax authorities need to be more open and responsible. They must also increase tax awareness among taxpayers through websites, seminars, and the media. Ultimately, they must reduce compliance costs and deliver tangible and intangible benefits to honest taxpayers.

Mechanistic study on the alleviation of postmenopausal osteoporosis by Lactobacillus acidophilus through butyrate-mediated inhibition of osteoclast activity

In China, traditional medications for osteoporosis have significant side effects, low compliance, and high costs, making it urgent to explore new treatment options. Probiotics have demonstrated superiority in the treatment of various chronic diseases, and the reduction of bone mass in postmenopausal osteoporosis (PMOP) is closely related to the degradation and metabolism of intestinal probiotics. It is crucial to explore the role and molecular mechanisms of probiotics in alleviating PMOP through their metabolites, as well as their therapeutic effects. We aim to identify key probiotics and their metabolites that affect bone loss in PMOP through 16srDNA sequencing combined with non-targeted metabolomics sequencing, and explore the impact and possible mechanisms of key probiotics and their metabolites on the progression of PMOP in the context of osteoporosis caused by estrogen deficiency. The sequencing results showed a significant decrease in Lactobacillus acidophilus and butyrate in PMOP patients. In vivo experiments confirmed that the intervention of L. acidophilus and butyrate significantly inhibited osteoclast formation and bone resorption activity, improved intestinal barrier permeability, suppressed B cells, and the production of RANKL on B cells, effectively reduced systemic bone loss induced by oophorectomy, with butyric acid levels regulated by L. acidophilus. Consistently, in vitro experiments have confirmed that butyrate can directly inhibit the formation of osteoclasts and bone resorption activity. The above research results indicate that there are various pathways through which L. acidophilus inhibits osteoclast formation and bone resorption activity through butyrate. Intervention with L. acidophilus may be a safe and promising treatment strategy for osteoclast related bone diseases, such as PMOP.

Blockchain solutions with consensus algorithms and immediate finality: Toward Panopticon-style monitoring to enhance anti-money laundering

Banks can reduce resources spent on anti-money laundering (AML) compliance with blockchain-based transaction infrastructure. We consider AML compliance as a superset of know-your-customer (KYC) and transaction monitoring capabilities. We carried out this research with Danske Bank and Concordium, using internal documents and interviews that served as empirical data. We show how storing digital representations of verified IDs with a blockchain can automate tasks and reduce redundant verification in KYC onboarding. Blockchain transparency also improves identifying counterparties, determining funds sources, and creating alerts in transaction monitoring. These reduce time and labor costs for AML compliance, which may lead to smaller banks. When more banks commit to layer-1 blockchain technology, the benefits of blockchain-based AML will increase. We carried out this theory-based qualitative research and encourage ECRA readers to recognize that the emerging technology innovations we study in this article have not yet been widely adopted and implemented by financial services firms. We also include a theoretical model with study hypotheses to make the main constructs that we investigate easily understood by non-technical ECRA readers. The findings we have developed are consistent with early-stage exploration in our research context and are intended to encourage more well-developed empirical results as the passage of time permits such work to be undertaken.

Environmental taxes, environmental outsourcing, and pollution abatement: Evidence from Chinese industrial sewage discharge enterprises

Polluting enterprises purchase technologies, goods, or services from external enterprises to mitigate pollution, which is called environmental outsourcing. This paper examines the effect of environmental taxes (ETs) on pollution abatement when environmental outsourcing is prevalent. We build a novel enterprise-level panel dataset for 2011–2018 and employ staggered difference-in-differences (DID) estimators to investigate the heterogeneous responses of in-house and outsourced abatement enterprises to the environmental tax increments. Our research demonstrates that imposing environmental taxes for pollution control has a significant positive effect. However, the environmental taxes have failed to successfully transmit their impacts on the changes in compliance costs of polluting enterprises through pollution treatment fees in the end-of-pipe treatment process. It has been demonstrated that environmental outsourcing seriously dilutes and even hinders the efficacy of environmental taxes in reducing water pollution. These findings shed fresh insight on the relationship between environmental policies and outsourcing services and highlight the necessity of incorporating environmental outsourcing into the design of environmental policies.

Judicial improvement, market integration, and export technical complexity-a quasi-natural experiments based on the creation of circuit courts.

Judicial improvement and trade structure optimization are important elements in achieving a high level of openness. This paper develops a theoretical framework on the impact of local protectionism on market integration and export technical complexity, and then empirically analyses the effect of judicial improvement on the technical complexity of urban product exports and its mechanism of action based on a quasi-natural experiment with the establishment of circuit courts. The study finds that the establishment of circuit courts significantly increases the technical complexity of product exports, and the findings remain valid after a series of robustness tests. Further analysis shows that the technology enhancement effect of the establishment of circuit courts is more pronounced in the group of cities with higher administrative levels, better location advantages, and less advanced rule of law. Mechanism Analysis shows that a superior institutional environment can have a two-sided effect on different types of firms. Overall, however, the productivity-enhancing effect of low-productivity firms exiting the market is lower than the productivity-reducing effect of higher-productivity firms' increased compliance costs, which in turn weakens the positive promotional effect of circuit courts. The above theoretical and empirical findings provide policy implications for maximizing the technology enhancement effect of the establishment of circuit courts on product exports, thereby promoting a high level of openness in China.

Vision of Industrial Innovation Guided by Artificial Intelligence

This article proposes that only by prioritizing the formulation of data rights protection and circulation rules that adapt to the development characteristics of the artificial intelligence industry, can the compliance costs of enterprises be reduced, and ultimately, high-quality datasets can be developed and utilized to promote innovation in the artificial intelligence industry and to form a new engine for social progress in the 21st century. The action research includes supporting the development of public clouds, orderly guiding departments, units, and individuals to purchase public cloud computing resources and services, and avoiding duplicate construction of intelligent computing centers. The research project emphasizes the need to guide and support enterprises to increase cloud computing, computing power leasing, algorithm valuation, and arithmetic purchasing through social forces, reduce the cost pressure of user research and application development, deepen industrial integration, and expand application scenarios. This article proposes that data elements should not be limited to addition empowerment, but should focus on multiplier mechanisms. Firstly, we need to accelerate the expansion of artificial intelligence big data open innovation platforms, while encouraging enterprises and research institutions to share high-quality corpus resources. We also need to support professional data annotation and cleaning preprocessing work, ultimately opening up a high-quality data source for building big models.

Environmental governance and regional green development: Evidence from China

This study examined the relationship between government environmental governance (GEG) and regional green development. The findings suggest that GEG boosts green innovation by promoting the "innovation compensation effect" while inhibiting regional green development due to increased environmental costs, supported by the "compliance cost effect". The relationship between GEG and regional green development is moderated by economic development and environmental pollution in an inverted U-shaped pattern. When economic development and environmental pollution are at lesser levels, the positive effect of GEG amplifies as economic growth and environmental pollution ascend. However, if economic growth and environmental pollution continue to escalate, the positive impact of GEG will lose its strength. In low-carbon pilot cities, GEG negatively affects regional green development, whereas the opposite effect is seen in non-pilot cities. Regardless, there is an inverted U-shaped moderating impact of economic development or environmental pollution in both low-carbon pilot and non-pilot cities, yet the inflection point varies across regions. This paper offers an original perspective by creating a theoretical link between green development and environmental governance and emphasizes the significance of a nonlinear viewpoint when examining the relationship between variables in the regional green development process, thereby expanding our understanding of green development phenomena.

Analysis of the Potential Impact of the EU Carbon Border Adjustment Mechanism on China

Excessive carbon dioxide emissions are one of the major causes of global warming. To effectively respond to global climate change, all countries are making efforts and changes in this regard. As one of the largest carbon markets in the world, the European Union (EU), to better respond to the Paris Agreement, introduced the European Green Deal and the EU Carbon Border Adjustment Mechanism (CBAM). The mechanism requires that high-carbon products imported into or exported from the EU pay a corresponding amount of tax or refund the corresponding carbon emission allowances. The implementation of the EU Carbon Border Adjustment Mechanism (CBAM), which is essentially a carbon tariff, has also had a significant impact on the Chinese market. The more carbon-intensive steel industry has been the first to be hit, affecting the competitiveness of the industry's exports in the EU to a certain extent, while also increasing compliance costs for the development of other related industries. Chinese enterprises should strengthen innovation and research, and actively introduce low-carbon technologies. At the same time, China should continue to improve its own voice and accelerate the construction of the national carbon market.

Determinants Influencing the Environmental Impact Assessment Compliance Rate by Industries in Aba City, Southeast, Nigeria

A United Nations (UN) report on the severity of pollution in cities around the world in 2020 rated Aba City, Nigeria, as the most polluted city in the world. This has become a source of worry and embarrassment for environmental policymakers in the country. The matter of whether industries are efficiently managing their wastes came to the fore, and policymakers questioned the compliance of these industries with environmental laws and Environmental Impact Assessment (EIA) guidelines and the reasons behind the seemingly non-compliance of the industries with these guidelines. The study aimed to investigate the determinants that influence compliance with EIA guidelines by industries in Aba. A survey research method was employed in the study. Questionnaires and interviews were also used to elicit data from industrialists and environmentalists in the study area. 384 industries were sampled in the study. Principal Component Analysis was used to test the hypothesis. The study revealed seven factors that influenced the compliance rate of EIA guidelines by industries, and they include weak public participation (65.5%), ignorance (54.5%), an effective legal system and legislation (42.4%), the cost of compliance (40.5%), weak coordination along the line of departments (town planning officers and consultants) (35.5%), delay in approval (30.5%), and limited scope (28.9%). It was recommended that the government strengthen the legal system as it relates to the implementation of EIA; then, there is a need to involve affected stakeholders in the preparation of EIA documents.

Treatment compliance, treatment patterns, and healthcare utilization in epilepsy patients with first add-on antiepileptic drugs: A nationwide cohort study

ObjectiveThis study aimed to assess the treatment compliance, patterns, healthcare resource utilization (HCRU), and costs of anti-epilepsy drugs (AEDs) as the first add-on therapy in patients with epilepsy. MethodsWe conducted a retrospective population-based cohort study using Korean National Health Insurance claims data from 2016 to 2020. Patients with epilepsy who newly received AED add-on therapy were identified and followed for up to 12 months to evaluate persistence, adherence, treatment patterns, HCRU, and costs. ResultsAmong 6,746 patients who initiated AED add-on therapy, 65.5% were persistent on their index AED add-on from the index date until the end of the follow-up period, and the mean persistent time on the index add-on was 307.3 ± 92.3 days. A total of 76.8% patients were adherent, with a medication possession ratio (MPR) ≥80%, and the mean MPR was 88.9 ± 25.4%. Persistence and adherence to the index AED add-on were relatively higher among patients prescribed lamotrigine, levetiracetam, oxcarbazepine, and perampanel than those prescribed carbamazepine, topiramate, or valproate. A total of 41.0% of the patients changed their index AED add-on during the follow-up period. The carbamazepine, topiramate, and valproate groups had higher rates of change than the other AED groups. HCRU and costs tended to be lower in the lamotrigine, levetiracetam, oxcarbazepine, and perampanel groups. Furthermore, perampanel showed the lowest HCRU and costs for all-cause cases as well as the lowest length of stay and outpatient visits for epilepsy-related cases. ConclusionIn this population-based study, the use of lamotrigine, levetiracetam, oxcarbazepine, or perampanel as the first add-on therapy in patients with epilepsy contributed to better treatment compliance and lower HCRU and costs than that of carbamazepine, topiramate, or valproate.

Leveraging the Legal Entity Identifier to mitigate the risk of financial crime and enhance fraud prevention in cross-border payments

While today’s global digital economy promises a new era of commerce, its sheer complexity also presents opportunities for malicious actors to perpetrate money laundering, terrorism financing, and other forms of financial crime. Despite the escalating compliance costs faced by financial institutions needing to meet increasingly rigorous anti-money laundering (AML), counter-terrorist financing (CTF) and sanction screening obligations, the lack of harmonisation within cross-border data flows inhibits the identification of suspicious actors and exposure of criminal networks. This contributes to a cross-border payments ecosystem that can be broadly characterised by limited trust, high costs, low speed and insufficient transparency. This is leading to increasing industry recognition of the need to promote unified, data-driven approaches to combating financial crime globally. In view of this growing consensus, the Legal Entity Identifier (LEI) is emerging as a key enabler. This paper examines the drivers of this consensus by: (1) detailing findings from key industry organisations, such as the Bank for International Settlements (BIS) and Financial Action Task Force (FATF), outlining the need to increase data quality and standardisation of the data identifiers used within cross-border payment messages to counter complex global criminal enterprises; (2) outlining regulatory and industry momentum to leverage the unique benefits of the LEI within cross-border payment messages, to include an analysis of the implications and opportunities of ongoing initiatives to enhance payment market infrastructures; and (3) demonstrating how, by addressing inconsistencies in how legal entities are identified, connecting a greater range of datasets, and capturing entity relationships and ownership structures, the LEI mitigates AML–CFT risks, enhances fraud prevention, and supports more efficient sanction screening in cross-border payments. This is supported by examples of real-world industry initiatives.

The Untimely Demise of the Goods and Services Tax (GST) in Malaysia: A Postmortem and the Way Forward

Abstract We discuss the reasons for the introduction of the Goods and Services Tax (GST) in Malaysia, its subsequent abolition, and the factors to consider if it is to be reinstated. The GST was implemented hastily to rein in mounting government deficits and debt. The lack of preparation to address its impact on the general price level, and incomes of poorer households in an economy already predisposed to inflation, led to widespread public discontent. The high compliance costs borne by smaller firms, delays in providing tax refunds to businesses, and the wasteful use of the additional revenues the tax generated strengthened the anti-GST sentiment. Any attempt to bring back the GST must focus on gaining acceptance rather than the revenue it generates. This is best achieved by timing its reintroduction correctly, keeping the rate low, the base broad, and implementing parallel measures to supplement the incomes of households seriously undermined by the tax on the consumption side. Additionally, addressing leakages, waste, and corruption in the public sector will strengthen public acceptance of the tax and instill confidence in public sector fiscal management.

REGULATORY COMPLIANCE AND ACCESS TO FINANCE: IMPLICATIONS FOR BUSINESS GROWTH IN DEVELOPING ECONOMIES

This paper examines how regulatory compliance requirements and access to suitable financing sources influence business growth potentials, particularly for small and medium enterprises in developing economies. The critical linkages between these factors are established through a review of academic literature and real-world case studies. Strict or disproportionate regulations are shown to impose significant compliance costs that hinder investments and expansionary activity. Lack of access to credit also constrains working capital and innovation expenditures needed to drive competitive advantages. A range of regulatory and financial system reforms are recommended to remove unnecessary bottlenecks while maintaining prudent oversight. Proposed strategies aim to streamline and digitize compliance, build capabilities, tailor support for micro-enterprises, and broaden credit availability. If implemented effectively, these recommendations can optimize developing countries' regulatory environments to maximize the productive contributions of small businesses.

Evaluating Tax Compliance Cost on SME Performance in Vietnam

This study focuses on the burden of tax compliance of Small and Medium Enterprises (SMEs) in Vietnam which is a vital component of Vietnam economy, accounted for 45% GDP and 31% of total State budget revenue, attract more than 5 million employees. Based on a quick survey on the compliance cost and their impact on the performance of Vietnamese SMEs, we try to make a contribution not only for researchers but also for legal and taxation system to improve the transparency of accounting information system, internal control of the firms. The result of our study suggests that among those tax compliance cost in the SMEs: external, internal tax cost, and miscellaneous tax cost, the internal tax cost accounted for the major expenses in tax compliance in Vietnam, after that the miscellaneous tax cost also a significant cost for complying with tax regulation. External costs were evaluated at low percentage compared to the left component of tax procedure cost. With this result, study have shown some tax compliance cost type making burden for SME as well as evaluating issue in tax system in Vietnam.

Self-Assembling Allergen Vaccine Platform Raises Therapeutic Allergen-Specific IgG Responses without Induction of Systemic Allergic Responses.

Allergen immunotherapies are often successful at desensitizing allergic patients but can require life-long dosing and suffer from frequent adverse events including instances of systemic anaphylaxis, leading to poor patient compliance and high cost. Allergen vaccines, in turn, can generate more durable immunological allergen desensitization with far fewer doses. However, like immunotherapies, allergen vaccines are often highly reactogenic in allergic patients, hampering their use in therapeutic settings. In this work, we utilize a peptide-based self-assembling nanofiber platform to design allergen vaccines against allergen B-cell epitopes that do not elicit systemic anaphylaxis when administered subcutaneously to allergic mice. We show that, in contrast to protein vaccines, nanofiber vaccines prevent leakage of allergen material into the vascular compartment, a feature that likely underpins their reduced systemic reactogenicity. Further, we show that our allergen vaccine platform elicits therapeutic IgG antibody responses capable of desensitizing allergic mice to allergen-induced Type I hypersensitivity reactions. Finally, we have demonstrated a proof-of-concept for the therapeutic potential of nanofiber-based peanut allergen vaccines directed against peanut allergen-derived epitopes.

Navigating a climate of administrative burden: the perspectives of young adult undocumented immigrants in applying for COVID-19 disaster relief assistance for immigrants in California.

Undocumented immigrants experienced high levels of economic insecurity during the COVID-19 pandemic while being excluded from government-based relief and unemployment benefits. In April 2020, California became the first state to offer financial aid to undocumented immigrants through the innovative Disaster Relief Assistance for Immigrants (DRAI) program in collaboration with several community-based organizations (CBOs). However, the process of applying for aid was marked by many implementation challenges, such as intake and language access; however, little data exists on the direct experiences of the undocumented community. This qualitative study examines the experiences of undocumented Asian and Latinx young adults living in California in applying for DRAI through framework of administrative burden. Themes distilled from participant experiences highlight how administrative burden via learning, psychological, and compliance costs shape the ways in which undocumented immigrants navigate policies and programs, such as DRAI. These experiences highlight the need for policymakers to address structural and programmatic administrative burdens in policy development; failure to do so result in detrimental impacts that outweigh financial benefits or cause communities to forgo needed resources.

Assets of foreignness in a regulated industry

Purpose Foreign subsidiaries incur substantial institutional conformity costs because they have to respond to host-country institutional pressures (Slangen & Hennart, 2008). The purpose of this paper is to study this type of cost from institutional and regulatory perspectives. The authors argue that these costs decrease when the host country adopts concepts of international regulations that multinationals may be familiar with due to their own home country regulation experience. This prior regulatory experience gives foreign subsidiaries an advantage of foreignness (AoF), which can offset their liability of foreignness (LoF). Design/methodology/approach This study compared the returns on assets of 35 domestic firms with those of foreign subsidiaries in the Brazilian energy industry between 2002 and 2021, using regression dynamic panel data. Findings The existence of a relationship between the international regulatory norm and the Brazilian regulator has transformed the LoF into an advantage of foreignness to compete with local energy firms. The results also suggest that the better the regulatory quality of the subsidiary’s country of origin, the better its performance in Brazil, as it can reduce compliance costs. Finally, the greater the psychic distance between Brazil and the foreign subsidiary’s home country, the worse its performance. Research limitations/implications The research suggests that one of the keys to competitiveness in host countries is local regulatory ties. Prior international regulatory experience gives foreign subsidiaries an asset of foreignness (AoF). This result complements the current institutional and regulatory foreignness studies on emerging economies (Cuervo-Cazurra & Genc, 2008; Mallon et al., 2022) and the institutional asymmetry between home and host country (Mallon & Fainshmidt, 2017). Practical implications This research suggests that one of the keys to competitiveness in host countries is local regulatory ties. Prior international regulatory experience gives foreign subsidiaries an asset of foreignness (AoF). This result complements the current institutional and regulatory foreignness studies on emerging economies (Cuervo-Cazurra & Genc, 2008; Mallon et al., 2022) and the institutional asymmetry between home and host country (Mallon & Fainshmidt, 2017). The practical implication is that the relationship between conformity costs, capital budget calculation and strategic planning for internationalization will be related to the governance quality of the home country of multinationals. The social implication is that a country interested in attracting more direct foreign investment to areas that need foreign technology transfer and resources may consider adopting international regulatory standards. Social implications The social implication is that a country interested in attracting more direct foreign investment to areas that need foreign technology transfer and resources may consider adopting international regulatory standards. Originality/value This research discuss firm and local regulator tie is one of core competitiveness in host countries (Yang and Meyer, 2020). This study also complements the current institutional and regulatory foreignness studies in emerging economy (Cuervo-Cazurra & Genc, 2008; Mallon et al., 2022). Second, prior regulatory experience of multinational enterprise in similar environment can affect its foreign affiliate performance (Perkins, 2014). Third, this study confirms current literature that argues that knowledge and ability to operate in an institutionalized country can be transferred from parent to affiliate. In the end, this study investigates whether AoF persists when host governments improve the governance of their industries.