Cost Theory Research Articles

Strategic Collaborations and Performance of Oil Marketing Firms in Kenya

Purpose: Little attention has been paid to the effect of strategic collaboration on performance of oil marketing firms in Kenya. As a result, it is vital to investigate the effect of strategic collaboration on performance of oil marketing firms in Kenya. The study's particular aim was to investigate the impact of strategic alliances, mergers and acquisitions, franchising, and joint ventures on performance of oil marketing firms in Kenya. Four theoretical reviews are included in this research paper: Resource Based Theory, Transaction Cost Theory, Trust Theory and Dynamic Capability Theory. Methodology: Using descriptive research approaches, this study evaluated the data and offered findings. Over a certain time period, data was collected from oil marketing firms in Kenya. The research relied on primary data gathered via structured questionnaires as well as secondary data. The study's target population was Kenya's oil marketing firms in Kenya. The study also used stratified random sampling. The study's data was collected using Google forms and sent through email. The questionnaire data was sorted, classified, and analyzed using Statistical Packages for Social Sciences (SPSS). Findings: finding demonstrate that savvy partnerships among Kenyan oil marketers improve performance. Businesses appreciate shared storage, cooperative networks, and specialized service sharing for increasing operational efficiency and competitiveness. Statistical analysis reveals that these partnerships influence company performance, accounting for 81.5% of the variance, with a strong correlation coefficient (R = 0.903) and a substantial ANOVA F-value. Unique contribution to theory, Policy and Publication: To obtain additional information and draw meaningful conclusions about the variables of interest, descriptive studies was conducted where survey was used to provide a snapshot of the population. Tables was used to display the data. This study will be useful to academics and researchers in finance and economics.

Is blockchain cost-effective in construction project management? A systematic review from the perspective of transaction cost

PurposeBlockchain technology (BCT) is considered a promising tool to improve the productivity of construction project management. Existing research has studied its potential costs and benefits for the construction industry. However, the potential costs and benefits of BCT failed to be compared as actual costs and benefits of specific applications for stakeholders. To fill this gap, this study seeks to analyze the cost-effectiveness of BCT-based applications in construction project management.Design/methodology/approachThis study is conducted with a customized systematic literature review based on transaction cost theory to enable qualitative comparison. With a deliberately designed structure confining extraneous variables, the costs and benefits of BCT-based applications are identified and compared. The inherent dependent relations of processes and the evolution relations of functions are identified. The cost-effectiveness of blockchain adoption is then analyzed.FindingsSeven functions and six challenges are identified within five processes. The result suggests all identified functions are cost-effective except for manual instruction (coding smart contracts manually). The smart contracts require explicit definition and logic to be effective. However, the construction projects essentially require the institution to be flexible due to unpredictability. The adoption of smart contracts and corresponding additional requirements can increase the transaction cost of bounded rationality.Research limitations/implicationsAs manual instruction is fundamental to realize other functions, and its advanced substitute relies on its broad adoption, its cost-effectiveness must be improved for applications to be acceptable to stakeholders. The establishment of a universal smart contract model and a universal, legitimate and efficient database structure are recommended to minimize the cost and maximize the effect of applications.Originality/valueThis study contributes to the knowledge by providing a comprehensive analysis of BCT adoption’s cost-effectiveness in construction project management. The adopted review structure can be extended to analyze the qualitative benefits and challenges of management automation in the early stages.

Effect of Green Supply Chain Innovation Alliance on Performance of Manufacturing Firms in Nairobi County

Purpose: The general objective of the study was to determine influence of green supply chain innovation alliances on performance of manufacturing firms, in Nairobi County Kenya. Methodology: The study was informed by Social Exchange Theory, Transaction Cost Theory, Resource-Based view and Resource Dependency Theory. The research design for this study was an explanatory survey research design; this is primarily a positivism approach. The population for the study will constitute manufacturing firms in Kenya. Thus, the unit of observation was 516 procurement managements from 516 manufacturing firms. The research employed stratified and simple random to select a sample of 225. This study used structured questionnaires to collect data relevant to the study. Descriptive analysis such as means, standard deviation and variance. Findings: linear regression models showed that green supply chain innovation alliances have a positive and statistically significant influence on firm performance, highlighting their essential role in enhancing success for manufacturing firms. A strong partnership with suppliers and specialized expertise in green supply chain management are crucial for this improvement. Unique Contribution to Theory, Practice and Policy: Therefore, the study recommends that organizations actively strengthen their green supply chain innovation alliances by establishing joint sustainability initiatives and creating regular collaboration forums with suppliers to share best practices and innovative solutions.

Price Setting and Price Stickiness: A Behavioral Foundation of Inaction Bands

Abstract This paper puts forward a behavioral theory of price setting where managers maximize perceived profits following a process of mental accounting. The theory predicts a pricing rule that is similar to—but crucially different from—that of a standard menu cost theory: there is an inaction band, but there are two rather than just one target prices, depending on whether the firm updates its price upwards or downwards. The calibrated model replicates two patterns of price microdata that standard menu cost models have difficulty accounting for: (i) The distribution of price changes has both small and large price changes, and (ii) the hazard function of price changes is downward sloping initially, that is, firms that have just recently changed their price have a higher probability of changing it again, while this probability becomes constant thereafter.

Patent pool and dominant design: An empirical study of patent pool from MPEG-LA

A patent pool is a marketing alliance that licenses technology to manufacturers. We build on previous research on patent pools that have mainly focused on transaction cost theory to explore the impact of patent pools on innovation. Our results show that the pool's influence on the dominant design depends on the technical characteristics of both the patent pool and the licensor. We found an inverted U-shaped relationship between the age of the patent pool and the dominant design. The difficulty of technology development and the number of licensors in the pool actively moderate the relationship between the age of the patent pool and the dominant design. Our research also found that when licensors are vertically integrated, the dominant patent pool design increases as the pool grows.

Internal Corporate Governance Mechanism And Firms Value Of Selected Companies Listed At The Nairobi Securities Exchange, Kenya

Manufacturing, construction, and allied firms at the Nairobi Securities Exchange (NSE) faced significant challenges, as evidenced by a decline in market value over recent years. Despite effective corporate governance beneficial value in instilling the confidence of investors and enhancing the market value, empirical studies specifically focusing on the manufacturing, construction, and allied sector in Kenya were lacking. These sectors were important in the Big Four Agenda, specifically in affordable housing and manufacturing policies, with manufacturing expected to grow to 15% of GDP by 2030. Drawing from recent market data, it was evident that companies such as Unga Limited, Eveready, Mumias Sugar, Bamburi Cement, Crown Paints, and East African Portland experienced stagnation or decline in their firm value, highlighting the need for a comprehensive examination of corporate governance mechanisms within the sector. This study's main objective was to ascertain how internal corporate governance practices affected the selected firm value in the NSE. The specific objectives included examining the effect of board size, ownership structure, and board independence on firm value, determining the mediating effect of profitability and the moderating effect of foreign capital flows on the relationship between internal corporate governance mechanisms and firm value. The study variables were anchored on Agency Theory, Transaction Cost Theory, Stakeholder Theory, Knight's Theory of Profit, and Efficient Market Theory. The research opted for the explanatory design and collated panel data for 14 firms at the NSE covering the years 2014 to 2023. Data collection relied on secondary sources, primarily annual financial reports, to identify trends and patterns. Data analysis encompassed both descriptive and inferential techniques, including means, standard deviations, and panel regression analysis using the STATA software. Diagnostic tests were conducted to validate the model and address potential issues such as multicollinearity, normality, stationarity, heteroscedasticity, and model specification. The study tested various hypotheses and found that board size positively affected firm value (p = 0.001 < 0.05, t = 3.41 > 6, β = 0.075), with the optimal size around nine members. Board independence was positively correlated with firm value (p = 0.006 < 0.05, t = 2.76 > 6, β = 0.008), emphasizing the importance of having independent directors. The study also found that ownership structure, while balanced, did not significantly influence firm value (p = 0.0287 > 0.05, t = 1.12 < 1.96, β = 0.065), indicating other governance mechanisms may be more critical. The mediating variable profitability significantly mediated corporate governance and firm value association with a β =0.344, (p = 0.025 < 0.05). The moderating variable foreign capital inflow was found to be a positive and significant determinant of foreign capital inflow. It explained 10.002% variance of firm value with a Beta of 1.85831. Recommendations for corporate managers include optimizing board size, increasing board independence, and enhancing profitability strategies. Policymakers are advised to promote balanced ownership structures and foreign investment. Stakeholders should advocate for governance practices that align with these findings to ensure sustainable firm value.

An analysis of trust governance mechanism in airline-airport relationship with resource dependence theory and transaction cost theory perspectives

Developments have transformed airport operations into more commercially focused centers in the airport sector. This situation has raised the question of how to execute interdependent airport-airline relationships. In interdependent relationships, trust-based governance is the least costly governance structure and is crucial for fostering cooperation in long-term relationships. Trust-based governance is a management approach where relationships and decisions are guided by mutual trust, transparency, and collaboration between parties. When considering the nature of the relationship, it is observed that environmental uncertainty and asset specificity are high. Transaction cost theory suggests that trust governance mechanisms can be the least costly governance structure under high uncertainty and asset specificity. Similarly, resource dependency theory indicates that in situations with high environmental uncertainty, dependencies can be managed through trust governance mechanisms. Therefore, this study analyzes the trust governance mechanism in airport-airline relationships. Drawing from the perspectives of resource dependency theory and transaction cost theory, this research analyzes the trust governance mechanism in airport-airline relationships using case studies of Turkish Airlines and Istanbul Airport relationship is governed by contract-based trust, while the Pegasus Airlines and Istanbul Sabiha Gokcen Airport relationship is based on goodwill-based trust. It can be argued that the history of the airport-airline relationship and the belief in the continuity of the relationship have a positive impact on trust.

A REVIEW OF STUDIES ON THE THEORY OF COST STICKINESS WITH BIBLIOMETRIC ANALYSIS

Costs, which are of great importance for businesses, are evaluated in two groups as fixed and variable costs. According to the traditional cost theory, both fixed and variable costs increase and decrease symmetrically at the relevant activity level. However, in recent years, as an alternative to this approach of the traditional cost theory, opinions have emerged that costs may not move symmetrically but asymmetrically depending on the increase or decrease of the activity level. In this framework, the aim of this study is to present conceptual information about this view, which is put forward as an alternative to the traditional cost theory, and to conduct a bibliometric analysis of international studies on the subject . In the study, international literature was searched and Web of Science database was used. In addition, the relationships between the data obtained in the study were presented by creating visual network maps through the "VOSviewer" program. According to the results of the analysis, the most studies on cost stickiness were conducted in 2021 with 64 publications. 90% of the studies were published as articles. 15,197 citations were made to 685 publications, a rate of 22.19% per publication. The researchers who published the most on cost stickiness with 8 publications were Banker, Rajiv D. and Naoum V.C. The highest number of publications in Web of Science categories on cost stickiness was in Economics with approximately 44%. Again, the highest number of citations was in Economics with approximately 69% and the highest number of publications in this field was in Corporate Governance with approximately 32.4%. 62% of the publications were in journals indexed in the Social Sciences Citation Index (SSCI). 99% of the studies were conducted in English. Approximately 26% of the studies were published by Emerald Group Publishing. The study is important in terms of determining the studies on cost stickiness theory in accounting science and the relationship between these studies.

Examining the role of virtual teams on project management processes in the Nigerian fintech sector

This study examined the role of virtual teams on project management processes in the Nigerian fintech industry. To achieve this aim, the study sought to examine how communication technology utilisation, trust, and geographical distribution of team members affected the project management processes of virtual team members in the Nigerian fintech industry. Building upon the theoretical frameworks of social presence theory and transaction cost theory, the study adopted a quantitative approach and used a sample of 385 employees of fintech firms in Nigeria. Using an electronic close-ended questionnaire (Google forms), data were collected from 378 participants, indicating a response rate of 98.2%. Purposive sampling technique was used to select the study’s participants. Data were analysed using both descriptive (frequencies and percentages) and inferential statistics (multiple linear regression) via the aid of STATA 17. Findings from the study revealed that communication technology utilization (β = 0.3114694, p < 0.05) and geographical distribution of team members (β =0.7622249, p < 0.05) both had statistically significant effects on project management processes. Trust was found to have an insignificant effect on project management processes (β = -0.0085031, p > 0.798). The study concluded that virtual teams significantly and positively affects project management processes in the Nigerian fintech industry, and recommends that firms in the industry should continue with the use of virtual teams in their given projects. Also, the study recommends that policies regarding work in the virtual environment should be formalised so as to maximise the benefits associated with virtual work.

Current trends in carbon emission trading: Theoretical perspectives, research methods and emerging themes

Since the inception of the EU carbon emissions trading market, it has experienced substantial growth. However, there is a shortage of comprehensive analysis on the policy implications of carbon emissions trading in the context of the low-carbon economy. The article utilizes bibliometric and content analytic methodologies to thoroughly examine the features and content of 116 relevant pieces of literature. Based on this analysis, a research model on the carbon emissions trading schemes is constructed. The study findings indicate a significant surge in the quantity of published material since 2021, with a predominant focus on terms related to the low carbon economy, such as environmental regulation and carbon emission. The research hotspots are related to transformation and upgrading and enterprise performance, etc. The research theory involves compliance cost theory, Porter's hypothesis theory, emissions trading theory and green innovation theory, empirical research is the main method of carbon emissions trading research. Emerging theme analyses are summarized in terms of the economic, environmental, technological and social effects of carbon trading. Finally, there are research conclusions and future research trends.

“Going once, going twice, sold!”: A new look at the auction tilt in public procurement

The paper examines the auction tilt phenomenon in public procurement in terms of the transaction mechanisms of governance. Arguments to develop the discussion on limits of using auctions expediency and consequences of their forced distribution in public sector procurement are proposed. The reasons for maintaining the auction tilt despite the recognition of this practice as vicious in some jurisdictions and its numerous criticisms in the literature are explained. Transaction cost theory tools helped identify the failures of theoretical ideas about the effectiveness of auctions as attempts to bring the governance mechanism closer to the market one. Using heuristic models within the framework of the theory of transaction costs, a mechanism has been demonstrated that promotes the sustainability of the practice of regulated procurement with an auction bias, which is ineffective for a wide class of goods (works, services).

EXPRESS: Monitoring Technologies in Industrial Systems

Monitoring technologies, which are at the heart of the industrial Internet of Things (IOT) ecosystems, promise significant transactional efficiencies by making it easier to track product performance and contract compliance. These efficiencies are particularly compelling in industrial multi-vendor, multi-component systems, where complex component interdependencies often cause disputes around liability in the case of product failures. Drawing on transaction cost theory, fieldwork, and a national survey of industrial original equipment manufacturers we estimate how product performance contracts are specified in these contexts, and how these monitoring technologies can impact ex-post exchanges between OEMs and their suppliers. We find that systems architecture associated with the multi-component systems, as well as the presumed efficiencies of monitoring technologies, drive the contract designs through their potential impact on the disputes, monitoring, and contract writing costs faced by the OEM. However, we also find there are clear limits to the benefits offered by these monitoring technologies. The greater monitoring facilitated by these technologies appears to exacerbate disputes. This counterintuitive finding comports with the view that, when unforeseen interdependent failures occur, detailed data from monitoring may trigger a spate disputes over new and unexpected information, as well as over the appropriateness of existing protocols for failure metrics and remedies.

Accounting outsourcing intensity in Vietnam: Empirical evidence from Vietnamese small and medium-sized enterprises

This study focuses on developing a strategic management tool for small and medium-sized enterprises (SMEs), where outsourcing is seen as an effective method. Outsourcing allows SMEs to concentrate on their core strengths and compete despite limited resources. In Vietnam, SMEs make up over ninety percent of all businesses and play a key role in the economy. However, they face challenges due to limited resources, especially in managing accounting functions. This research examines the factors influencing the level of outsourcing among SMEs in Vietnam based on two key theories: Transaction Cost Theory (TCE) and the Resource-Based View (RBV). A sample of 236 questionnaires was analyzed using SPSS and regression models. The findings revealed positive and significant relationships between outsourcing intensity (OS.Intensity) and four factors: asset specificity (AS), frequency of accounting tasks (FREQ), trust (TRUST), and technology competence (TECH). The study supports the trend of accounting outsourcing for Vietnamese SMEs, allowing them to enhance their internal strengths despite resource constraints. Future research to gain a deeper understanding of accounting outsourcing is also suggested.

Infrastructure as a service adoption model for South African universities using thematic analysis

Background: South African universities are dealing with concerning socio-economic issues and budgetary limits that affect university operations negatively. It is no longer viable for most universities to purchase and maintain information technology (IT) infrastructure systems while also keeping up with the ever-changing technology across the world.Objectives: The aim of this article is to explore the benefits that come with infrastructure as a service (IaaS), as compared to the on-premises model that is currently used by most South African universities.Method: This article adopts both transaction cost theory (TCT) and diffusion of innovation theory (DOI) as the underpinning theories. The interpretivist paradigm was applied to gain a comprehensive understanding of how university management perceives IaaS adoption.Results: The results introduce three new and critical factors that need to be considered by university managers whenever they want to move their on-premises IT model to cloud IaaS: trust, security and attitude.Conclusion: The research finds that IaaS offers advantages in scalability, flexibility, accessibility and on-demand deployment. These findings underscore the importance of addressing barriers to IaaS adoption within the specific context of South African universities.Contribution: The findings of this article add to the cloud computing literature, by presenting a new model that IT decision-makers can utilise when considering moving their on-premises IT infrastructure to IaaS in South African universities. The article recommends that future research could expand the number of universities from which data are collected.

The paradox of aging population and firm digital transformation in China

Although a number researchers have acknowledged that the aging population inhibits firm digital transformation, others find it promoting digital transformation in some firms. As the relevant literature to clarify such paradox is still scare, this paper wants to fill the gap regarding the labor cost theory, the capital-skill complementarity hypothesis, and the human capital externality theory. Based on the empirical tests of Chinese A-share listed companies from 2001 to 2022, this study detected a U-shaped relationship between the aging population and digital transformation. In terms of the institutional environment, higher marketization strengthens the U-shaped relationship by making the slopes on either side of it steeper. However, higher minimum wage levels weaken the U-shaped relationship. In terms of firm strategy, firms with stronger marketing capabilities strengthened the U-shaped relationship. However, firms with higher customer concentration weakened the U-shaped relationship. Overall, we enriched scholarly understanding of the impact of the aging population on digital transformation and demonstrated the dual potential impact of aging populations. Instead of assuming they are detrimental to the economy and society, positive contributions in the form of innovation and progress for companies can be detected.

Accumulation by contamination: Worldwide cost-shifting strategies of capital in waste management

With this article, we propose an analytical and conceptual tool to illuminate connections between capital development and environmental injustices. The research examines how capital-driven industrial policies foster changes in social metabolisms and cause new socio-environmental impacts, leading to ecological distribution conflicts. It also explores why diverse actors mobilise and resist these changes. Building on Kapp’s ecological economics theory of social costs and David Harvey’s concept of accumulation by dispossession, we highlight the role of capital accumulation in environmental injustices through cost-shifting strategies, terming it “Accumulation by Contamination” (AbC). In this context, AbC refers to the process wherein capital socialises the costs of contamination, degrading the means of existence and bodies of human beings who oppose these processes of capital valorisation and engage in environmental conflicts. We make a compelling case for AbC by exploring waste-related conflicts at various industrial developmental stages. Waste, viewed as a ’common bad,’ emerges as a strategic realm for capitalists seeking to expand the scale and scope of accumulation. The intricacies of waste management, its market potential, and guaranteed profitability through subsidies and processes of financialisation attract significant investments globally. Quantitative and qualitative waste management assessments demonstrate that waste policies often favour businesses, leading to cost-shifting of waste management to society (in Naples, Italy; and Delhi, in India) and the dispossession of waste-pickers (in Delhi). More broadly, we emphasise the importance of integrating ecological economics and Marxist critical geography to address environmental challenges. We also analytically study the diverse actors responding to various capital strategies, fostering transformative political actions for a sustainable future. Climate change is arguably the most significant waste disposal conflict due to excessive carbon dioxide production, representing a quintessential example of Accumulation by Contamination (AbC).

The Influencing Factors of the Benefits of Operation Cost Management in Service Industry in Shandong

The business community in the service industry is generally unaware of operation cost management and lacks a technique for managing operation costs. The rising expenses of human resources, materials and equipment, rent, and real estate are among the most significant challenges in the service industry. This paper aimed to study the influencing factors of the benefits of operation cost management in the service industry in Shandong. The objectives of the study were: 1) To examine whether human resource costs affect the benefits of operation cost management in the service industry in Shandong; 2) To examine whether material and equipment costs affect the benefits of operation cost management in the service industry in Shandong; and 3) To examine whether rental costs affect the benefits of operation cost management in the service industry in Shandong. This study adopted the quantitative research method. In this study, a total of 378 questionnaires were distributed, with 325 valid questionnaires, and the validity rate was 85.97%. The population consisted of service industry companies in Shandong Province, including restaurants, retail, healthcare, education, and training businesses. Based on the target cost theory, this paper found that: 1) Human resource costs have a significant positive effect on the benefits of operation cost management in the service industry in Shandong; 2) Material and equipment costs have a significant positive effect on the benefits of operation cost management in the service industry in Shandong; and 3) Rental costs have a significant positive effect on the benefits of operation cost management in the service industry in Shandong. For recommendations, operation cost management in the service industry should focus on the following aspects: 1) Optimizing human resource costs; 2) Rationalizing material and equipment costs; 3) Improving rental costs.

AI-assisted optimal energy conversion for cost-effective and sustainable power production from biomass-fueled SOFC equipped with hydrogen production/injection

This study introduces a novel energy conversion and management framework to reduce carbon emissions in the energy sector and expedite the global shift towards sustainable practices. The system is driven by biomass-based solid oxide fuel cells for efficient power generation. Central to this approach lies the integration of additional hydrogen injection provided by a thermally-driven vanadium chloride cycle, aiming to enhance the quality of the syngas entering the fuel cells. The system is also combined with a super-critical CO2 cycle that generates power by passively enhancing performance through flue gas condensation. The proposed model's feasibility is evaluated in depth, techno-economically, considering thermodynamics and specific cost theories. As part of artificial intelligence, a neural network model is coupled with the genetic algorithm to determine the best operating status while minimizing computation time. According to the results, the suggested new integration results in higher efficiency and lower cost than a similar system without hydrogen injection. The results further show that the triple-objective optimization achieves output power, second-law efficiency, and overall system cost of 3425 kW, 48.5 %, and 2.3 M$/year, respectively. Eventually, the gasifier is the main contributor to the highest level of exergy destruction, and fuel utilization and current density are the most important parameters in modeling.

“Although Burdened, Do We Need to Do More?” Street-Level Bureaucrats’ Organizational Citizenship Behaviors in Poverty Alleviation Policy Implementation

Drawing on attentional resource allocation theory and transaction cost theory, this study links street-level bureaucrats’ problem-solving organizational citizenship behaviors with perceived administrative burden. Based on 28 in-depth interviews and 657 survey responses from street-level bureaucrats involved in China’s Targeted Poverty Alleviation Policy during 2019 and 2020, the study found positive relationships between problem-solving organizational citizenship behaviors, resource deficiency, bureaucratic control, and perceived administrative burden. Policymakers should be cautious when using control tools and avoid exploiting street-level bureaucrats’ commitment and compassion for clients to ensure effectively policy implementation and reduce administrative burdens on dedicated public servants.

The techno-ties that bind: how transaction-specific investment, trust and adaptive collaboration influence performance in e-commerce consortium blockchain

Purpose Blockchains used by e-commerce consortia are a novel form of governance that facilitates coordination and collaboration among the numerous organisations that comprise e-commerce supply chains. Despite the increasing prevalence of consortium blockchain networks for e-commerce, there is a limited understanding of the economic and social dynamics that influence the behaviour of blockchain consortium members. By utilising transaction cost theory and social exchange theory, this research investigates the interplay between blockchain transaction-specific investment (BTSI), trust, adaptive collaboration (ADC) and the overall performance of supply chains in consortium blockchainsDesign/methodology/approach A quantitative research approach was employed to collect data from a representative sample of blockchain organisations affiliated with e-commerce consortium blockchains worldwide. Following this, the data obtained from 361 participants were analysed using descriptive and inferential statistics.Findings The results of our study indicate that BTSI has a substantial impact on trust. Furthermore, trust plays a pivotal role in shaping ADC, and ADC, in turn, acts as a mediator in the relationship between trust and performance outcomes.Originality/value This study underlines these economic and social dynamics in the evolving context of consortium blockchain networks, offering insights into their significance within a technology-driven environment.