Direct Subsidies Research Articles

Psychic Distance and Its Effect on the Degree of Internationalization of Firms in Korea

Purpose International entrepreneurship involves the identification and exploration of the right market. As such, entrepreneurs are faced with challenges which determine their success in a foreign market. In this regard, this study tries to examine firms’ internationalization process from the view of psychic distance through opportunity exploration. Also, this study investigates the influence of government support between exploring overseas opportunities and internationalization. Design/Methodology/Approach To test our model, we used a structural equation model with 230 survey samples collected from venture companies in South Korea. The research model consists of seven constructs with interrelated causal paths which requires the performance of an explanatory factor analysis (EFA) and a confirmatory factor analysis (CFA). This study also uses a multiple group analysis to investigate the influence of government support on the relationship between opportunity exploration and a firm’s degree of internationalization. Findings This study identifies that business distance, language distance and institutional distance have a negative influence on Korean entrepreneurs who intend to explore opportunities in the foreign market. Moreover, the multi-group results show that between opportunity exploration and firm’s degree of internationalization, the level of government support has an important mediating effect. Research Implications The significance of this study lies in improving the body of knowledge about international entrepreneurship. This research contributes to international business studies by revealing how government support helps override the difficulties posed by psychic distance. For example, government support (e.g., tax incentives, direct subsidies and government policies) can assist entrepreneurs in coping with the barriers caused by business distance, language distance and institutional distance. Overall, the importance of the government support program towards entrepreneurship cannot be overemphasized since it shapes the entrepreneurial decision to enter foreign markets.

Endogenous growth under multiple uses of data

We model a dynamic data economy with fully endogenous growth where agents generate data from consumption and share them with innovation and production firms. Different from other productive factors such as labor or capital, data are nonrival not only among firms but also in their uses across sectors, which affect both the level and growth of economic outputs. Despite the vertical nonrivalry, the innovation sector dominates the production sector in data usage and contribution to growth because (i) innovations are cumulative and benefit from data that are durable and dynamically nonrival; and (ii) innovations “desensitize” raw data into knowledge when entering production, which allays consumers’ privacy concerns. Data uses in both sectors interact in generating allocative distortions and an apparent substitutability due to labor’s rival usage across sectors and complementarity with data. Consequently, growth rates diverge under a social planner and a decentralized equilibrium, which is novel in the literature and has policy implications. Specifically, consumers’ failure to fully internalize knowledge spillover while bearing privacy costs, combined with firms’ market power, leads to an underpricing of data and inefficient data supply, causing underemployment in the innovation sector and suboptimal long-run growth. Improving data usage efficiency is ineffective in mitigating the underutilization of data, but interventions in the data market and direct subsidies hold promises.

BS index: incorporating R&D subsidies into B index

Motivation: The B index is a measure of the generosity of R&D tax incentives proposed by Warda in 2001 and is now widely used by the OECD. The author of this index already in 2001 indicated that developing it with measures of the availability of direct subsidies would improve the B index as a comprehensive measure of the attractiveness of R&D policies.
 Aim: Extension of the B index, used by the OECD to measure the impact of tax incentives on the conditions of investing in R&D, to include direct funding, i.e. subsidies and grants.
 Results: The study proposes several methods of including direct funding in the B index calculation. They depend on specific rules on which it is possible to combine the benefits of using tax incentives and direct subsidies in different countries: mutually exclusive in their use, grant funding reduces base of R&D tax credit/allowance, grant funding is part of taxable income, ceiling on total support (direct and tax), complementary in their use. The share of subsidies and direct grants in BERD in each country, broken down into SMEs and large enterprises, was adopted as the measure representing direct funding. The results show an increase in the expected subsidy rate in most of the surveyed countries in 2017. Increase is on average higher in the case of SMEs than in the case of large enterprises. The developed methods can be used for comprehensive in-depth analyzes and comparisons of R&D support policies applied in different countries. And after extending the calculations to historical data, they can be used as an important source material in modeling the impact of R&D support policies on R&D inputs and outputs.

Regional Impacts of Direct Payments on Farm Productivity and Efficiency in the European Union

This paper analyses the regional impacts of direct payments on the labour and land productivity of European farms. The basic assumption of the research is that direct CAP subsidies have a positive effect on productivity and efficiency. This was tested by quantitative regression-analysis models, which were based on NUTS2-level regional data from 2008-2018. The results show that direct subsidies have a negative effect on labour and productivity in agriculture, a finding that can be attributed to a number of underlying factors. The direction and magnitude of these productivity effects differ markedly between old and new Member States.

TV Networks for College Sports: Implications for Institutional Subsidies.

University athletics because of its reporting structure, regulation by the NCAA, and relationship to the academic enterprise of institutions, provides a unique look into postsecondary institutional behavior. Using a difference-in-difference design, this study tests the introduction of new television networks dedicated to college sports on institutional subsidy levels for athletics. Overall, our findings show that institutions are responsive to the introduction of new college-sports-dedicated television networks. When considering institutions in the Power Five athletic conferences, we find an average decline in subsidy levels of approximately $1.2 million. When considering different types of subsidies, we find significant declines in direct subsidies and student fees, but no significant change for indirect subsidies.

Assessing the economy-wide impacts of public R&D support options based on a computable general equilibrium model: focusing on types of fiscal incentives and beneficiaries

ABSTRACT This study conducted quantitative comparisons of various public R&D support options using a CGE model. The analysis considered four different options by varying the types of fiscal incentives and the scope of beneficiaries concerning the firm size. The findings indicate that direct subsidy is more effective in spurring private R&D investments than indirect tax incentives. In addition, selective R&D support toward small and medium enterprises is found to induce balanced growth among industries. In summary, the simulation results suggest that R&D support under the direct subsidy scheme aimed at SMEs has the potential to achieve a higher equilibrium state within the Korean economy. This study confirms that the government should carefully design the R&D promotion policy by ensuring that direct R&D inducement effects are transmitted to industrial output growth with a diversified industrial structure and higher knowledge spillover effects.

Territorial agri-environmental measures and inequality: some insights from the French case

Given the challenge of prejudging whether contracting a MAEt - a territorial agri-environmental policy in France - constitutes an environmental effort on the part of the farmers, this study addresses questions of fairness raised by MAEt. Although the policy is focused on improving environment quality, there are consequences in terms of equity of access and the level of compensation obtained. The study employed statistics over the period of 2007-2013 to identify farms with access to MAEt and the associated inequalities. Contracting farmers are similar to those receiving other direct subsidies; thus, the same equity issues are addressed. However, monetary compensation does not appear to worsen income inequality between farmers. Finally, a focus on MAEt implementation in three regions highlights the key role of contrasted but persistent logics in the definition of priority areas, a hint at a possible lack of realignment of the MAEt scheme after 2013.

Стимулирование спроса на электромобили в мире и российский контекст

The article evaluates global and Russian experience of government stimulation of demand for electric vehicles among the population. All measures can be divided into financial (direct and indirect) and non-financial (related to the benefits of operating an electric car). Foreign experience shows that at the initial stages of market development, direct financial measures prove to be the most effective. Non-financial measures are the most impactful in combination with the direct support. Countries-car producers are cautious about the measures aimed at restrictions for traditional cars with internal combustion engines. In Russia the electric vehicles market is at the initial stage of development. The government started to provide incentives in a pilot mode, with the focus on indirect financial measures, and only for purchase of localized and domestic electric vehicles. A test survey conducted among potential buyers of electric cars in Russia has revealed that only about one-fifth of respondents is considering the purchase of electric vehicles and about a half of the respondents doubted the advisability of buying an electric car. There are a number of preconceptions about the effectiveness of the new technology. This perception hampers the demand. For potential buyers the introduction of direct subsidies would be the most important factor for making decision about purchasing an electric car. Quite a variety of indirect measures is also in demand because for potential buyers of electric vehicles the major drivers are the price of a car and the cost of electric vehicle performance. Non-financial measures are important only for about 15% of respondents. This is an indicator of low interest in decarbonization goals among population.

CO2-to-Fuel – Business and Institutional Aspects of Implementation Dynamics

Abstract Valorization of CO2 captured from industrial processes is an important task for reaching climate and energy targets. The presented study addresses the use of CO2 for the production of ethanol, which can be used as a transport fuel. Hydrogen, produced by renewable energy technologies, is combined with CO2 to produce the synthetic fuel, thus making this approach attractive from a climate perspective. Aim of the study was to simulate the dynamics of the development of CO2-to-fuel solution, taking Latvia as the case. System dynamics modelling was used as the method for analysis. The model reflects several important feedbacks, such as relation between the captured CO2 emissions and the share of avoided CO2 emissions in transport due to fuel substitution, as well as investment in new production capacity of the ethanol. Use of avoided CO2 emission costs for funding of research and development (R&D) of the technology and direct subsidies for ethanol production is the analysed institutional aspect. The results show that if 15 % of the industrial CO2 emissions are used for ethanol production then circa 12 % of the transport CO2 emissions can be avoided. The share of avoided transport CO2 emissions are the most sensitive to unit costs of hydrogen production.

Is the Government's Direct Subsidy to Covid-19 Effective?

Is the Government's Direct Subsidy to Covid-19 Effective?

Impact of Direct Subsidies on Budgets of Agricultural Farms

The article investigates the impact of direct subsidies on the budget of agricultural farms and the level of investment in the farms. A questionnaire survey was made among clients of a company which provides services in farming in Nidzicki District (powiat nidzicki). The respondents were farmers who benefit from direct subsidies to agricultural production. The research confirmed the research working hypotheses, in which the direct subsidies constitute 1/3 of the profit generated by agricultural farms and have a significant influence on the level of investment. The research aimed to determine the impact of direct subsidies on the budget of agricultural farms and their investment in fixed assets.

Food Insecurity and Mental Health Outcomes among Low Income, Minority Cohorts during the COVID-19 Pandemic

Objective: 
 To examine the impact of the COVID-19 shutdowns on food insecurity and mental health outcomes among low income, minority communities in Northwest Indiana. 
 
 Methods: 
 Surveys were distributed to 160 households during the Northwest Indiana food bank distribution hours to assess food security mental health status. The survey assessed participant food security through questions adapted from the USDA food security survey module. Participant anxiety, depression, and stress scores were aggregated from questions adapted from the PHQ-4. A multiple logit regression model was utilized to estimate the risk associated with food security status and the surveyed variables. Anecdotal evidence was also collected to understand pandemic specific factors impacting participant food security. 
 
 Results: 
 Food insecurity was linked to significantly increased risk of anxiety, depression and stress. Those who identify to be food insecure have an 811 % increased risk of anxiety, 411% increased risk of depression, and 535% increased risk of stress compared to those who are food secure. In addition, a significant correlation exists between median household income and poor mental health. Anecdotal evidence identifies poor job security, food distributions, and support networks as exacerbating factors towards participant’s declining mental health. 
 
 Conclusions: 
 Our findings highlights the exacerbated impact the pandemic has had on the food security and mental health of vulnerable populations. In the light of these results and anecdotal feedback, public health measures must focus on getting increased funding towards local food banks to increase the frequency of mobile distribution markets coupled with direct subsidies to allow for food purchases, especially for those households with children. Given its impact on mental health, food insecurity status should regularly be screened by physicians access to the right resources must be provided for those screening as high risk. 

What Is the Relationship between Higher Education and Neoliberalism in the United States?

What Is the Relationship between Higher Education and Neoliberalism in the United States?

Legal Issues on Subsidies of The Agricultural Products on WTO Frame Work

The WTO was founded with the main objective of building a fair and market-oriented trading system. Fair trade means free and no intervention from anywhere to regulate the market. This applies to all sectors of the economy but especially concerns the agricultural sector which is the basis of a country's defense. Various efforts have been made by the WTO in terms of making trade regulations in the agricultural sector which of course aims to realize this goal. It is well known that in order to stabilize food prices, ensure abundant food production, guarantee farmers' basic income, and in general strengthen the agricultural segment of the national economy, the government has implemented various assistance in the form of assistance to agricultural product producers in the country. This assistance is called a subsidy which can take various forms, namely in the form of tariff barriers, non-tariff barriers, tax levies, positive regulations and direct subsidies to both agricultural producers and exporters. In this study, the authors examine the legal issues regarding subsidies for agricultural products within the WTO framework. The main issue in this legal research is how the legal issues regarding subsidies for agricultural products within the WTO framework. The main objective of this legal research is to find out the legal issues regarding subsidies for agricultural products within the WTO framework. This legal research is a normative legal research in which legal sources are collected through literature study. A relatively detailed review of the content of legal issues regarding subsidies for agricultural products in the WTO framework is discussed in this paper. The results of this study indicate that agriculture is one of the important trade negotiations in the WTO through the rules contained in the AoA. Agreements to implement commitments from disciplines in the AoA, from WTO member countries, are expected to be reached by both developing and developed countries

Bringing Health Care to Appalachia: The Long-Run Impact of a Rural Health Care System

The U.S. government has supported rural hospitals through direct subsidies and staff recruitment programs. However, little is known about the long-run impact of large-scale changes to rural health care. The authors explore the long-run trajectory of Appalachian counties where a coal mining union introduced a pioneering rural health care program in the 1950s, anchored by a chain of high-quality hospitals. Hospital beds per capita in counties where the union built its hospitals are persistently high through 2006, even when compared to similar counties and accounting for a variety of supply- and demand-side factors. In particular, union counties defied a national hospital consolidation trend starting in the 1980s. Results are consistent with a supply-side explanation where the scale and/or innovation of the union's investment allowed hospital markets to thrive and attract patients from a broad geography.

Research on the Improvement of Food Support Policy Evaluation System under the Background of Food Security Strategy

Under the background of social transformation and upgrading, China has put forward higher requirements for the safety and efficiency of food production. Because the current grain production is faced with imperfect infrastructure, less investment in science and technology, high demand for talents, backward grain structure and other conditions, through the establishment of food security strategy, China has provided food support through direct subsidies, subsidies for superior varieties, minimum purchase price policies and other means, which has guaranteed farmers' grain cultivation and mapped out the way for the transformation of grain production.

Behavioral Pattern of Rent Distribution of Subsidized Fertilizer)

The subsidized fertilizer policy is the government's effort to increase agricultural production and productivity in general. However, in the distribution process, there are still various distribution problems that lead to rent-seeking behavior. The purpose of this research is to describe the behavior of rent-seekers in the distribution of subsidized fertilizers. The research method used is focus group discussion (FGD) involving various stakeholders including (1) government, (2) academics, (3) associations, (4) farmer groups, (5) government-owned enterprises, and fertilizer distributors. The results showed that there had been a pattern of rent-seekers distributing subsidized fertilizers to farmers. The behavior of these rent-seekers includes fertilizer prices exceeding the Highest Economic Price (HET), transaction costs, fertilizer distribution that is not on target until there is a shortage of fertilizer. The government needs to develop a new strategy to optimize the distribution of subsidized fertilizers to farmers. The strategy is to change the subsidy policy to a direct subsidy to farmers. Furthermore, the government needs to optimize investment in the agricultural sector in the form of technology, human resources, electricity, and road infrastructure.

A multi-level optimization model of infrastructure-dependent technology adoption: Overcoming the chicken-and-egg problem

Policymakers seeking to promote the diffusion of infrastructure-dependent technologies are often confronted with the “chicken-and-egg” problem: consumers are reluctant to adopt the technology without adequate infrastructure available, and firms are reluctant to invest in infrastructure without a sufficient number of adopters. This chicken-and-egg problem can hinder the diffusion of new technologies and prolong the timeframe over which existing technological systems remain locked-in. In this paper, we formulate a stylized model of technology policy decision-making from the perspective of a policymaker who seeks to stimulate the market penetration of an infrastructure-dependent technology. Our model is a multi-level optimization problem in which a policymaker (first level) maximizes net social benefits by setting the levels of two incentives: a subsidy for a profit-maximizing firm (in equilibrium with two other firms, the second level) to invest in infrastructure that raises the benefit of adoption to consumers, and a direct subsidy for consumers to adopt the technology (third level). Under certain assumptions about functional forms, we solve the full multi-level problem analytically through backward induction and derive closed-form expressions for the policymaker’s optimal subsidy levels. Then, we present a case study on policies to promote battery electric vehicle (BEV) diffusion. Our results reveal three main insights: (1) the optimal policy portfolio often subsidizes charging infrastructure more than BEV purchases, (2) infrastructure and adoption subsidies tend to be substitutes rather than complements, and (3) an increase in the marginal social benefit of BEV adoption shifts the optimal policy away from infrastructure subsidies and toward BEV subsidies.

Identifying and Evaluating the Mechanisms and Modes of Governance of Ecosystem Services – The Case of Bulgarian Agriculture

This article presents the results of a large-scale study on the mechanisms and modes of governance of diverse ecosystem services in Bulgarian agriculture. Firstly, it identifies the type, amount, and importance of various ecosystem services maintained and “produced” by the Bulgarian farms. The study has found out that country’s farms provide a great number of essential ecosystem services among which provisioning food and feed, and conservation of elements of the natural environment prevail. Secondly, it identifies and assesses the efficiency and complementarities of specific modes and mechanisms of governance of ecosystem services used by agricultural holdings. The study had found out that a great variety of private, market, collective, public and hybrid modes of governance of farm activity related to agroecosystem services are applied. There is significant differentiation of employed managerial forms depending on the type of ecosystem services and the specialization of agricultural farms. Furthermore, the management of agroecosystem services is associated with a considerable increase in the production and transaction costs of participating farms as well as big socio-economic and environmental effects for agricultural holdings and other parties. The factors that mostly stimulate the activity of agricultural producers in Bulgaria for protection of (agro)ecosystems services are participation in public support programs, access to farmers’ advice, professional training, available information, and innovation, received direct subsidies from EU and national government, personal conviction and satisfaction, positive experience of others, long-term and immediate benefits for the farm, and integration with suppliers, buyers, and processors.

Age-friendly regeneration of urban settlements in China: Game and incentives of stakeholders in decision-making

The age-friendly regeneration of urban settlements has been promoted in China to meet older people's demand for "aging in place". However, there are some contradictions among stakeholders in the decision making, hindering the regeneration process. Therefore, after identifying the stakeholders and their contradictions and clarifying their benefits and strategies, this paper established an evolutionary game model of the local government, investors and residents and then explored the stable strategy set of the evolutionary game of stakeholders. A case simulation method was used to test the theoretical results. This paper found the incentive measures that improve the efficiency of the decision making regarding the age-friendly regeneration of urban settlements. This paper also found that under limited conditions, the only stable strategy set of the stakeholder game was the local government, investors and residents implementing active intervention, coordinating opinions and agreeing on benefits strategies, respectively. The evolutionary sequence of the stable strategy set is "local government → investors → residents", which was very important to the application of incentive measures and the proposal of policy implications and suggestions. The effective incentive measures to improve the age-friendly regeneration decision-making efficiency included the following: direct subsidies, indirect subsidies and direct punishment for investors and passive compensation and sharing coefficient optimization for residents. Some policy implications and suggestions for improving decision-making efficiency and promoting the age-friendly regeneration of urban settlements in China are proposed in this paper. The local government can appropriately increase direct and indirect incentives and apply moderate punishment. It is very important that the local government pays attention to the design and operating principles of incentive measures. Otherwise, the wrong design and operation might lead to the failure of incentive measures. The higher-level government should supervise the local government carefully and propose relevant policies and regulations to clearly punish the negative attitudes of the local government. Investors can share more incremental income with residents to promote the development of corporations and the recognition of the local government and residents. Residents should make a good balance of advantages and disadvantages in the decision-making of age-friendly regeneration.