Economic Theory Research Articles

Looking Backward, Looking Forward

This essay discusses three themes of my scholarly life from my student days up to today. They involve technological change, environmental accounting, and energy-climate-economic analysis. These themes have common analytical roots in the economic theory of public goods and encounter thorny issues of governance because of the Westphalian roots of international law and practice. Many of the issues, such as devising measures of natural capital and the need for strengthened international institutions, are just as pressing today as they were during my student days in the 1960s. In writing this, the enduring insight is that hindsight is the best foresight.

A brief discussion on the coupling principle of positive and negative feedback in the economic system

This study clarifies the concepts of “feedback”, “positive feedback”, and “negative feedback” and explains the philosophy of the coupling principle of positive and negative feedback. The evolution process of the system is the organic coupling of positive and negative feedback, and only the reciprocating cycle of positive and negative feedback can ensure the occurrence and existence of heterogeneous new things. In the economic system, the law of increasing returns corresponds to the positive feedback mechanism, whereas the law of diminishing returns corresponds to the negative feedback mechanism. This study briefly expounds on the differences in understanding between the law of increasing returns and diminishing returns, and the equilibrium and disequilibrium of economic operation in the economics circle, based on the histories of economic thoughts and social and economic forms. This study emphasizes that instead of dividing and opposing each other, the idea of static partial equilibrium and dynamic general nonequilibrium in epistemology can be united to solve this difference. Finally, this paper explains the essential relationship and compatibility between the law of diminishing returns and increasing returns from the characteristics, nature, and proportional changes of tangible and intangible factors of production. Applying the positive and negative feedback coupling principle can clarify the essential relationship between the law of diminishing returns and increasing returns. From the philosophical level and epistemological significance, it can bridge the fundamental differences between equilibrium and nonequilibrium theories, which in turn, can help realize the creative synthesis of economic theory.

A Phenomenological Study of Street Vending in Downtown Area, Tacloban City

This study investigates street vendors' lived experiences in downtown Tacloban City, Philippines, focusing on their economic contributions, challenges, and coping mechanisms in the informal sector. Street vendors play an important role in urban economies by making goods and services more accessible and affordable, as well as providing livelihood opportunities for people with few job options. Despite their economic importance, street vendors frequently face legal and social challenges, such as harassment and a lack of recognition from the government. Using a phenomenological approach, the study seeks to fill a gap in the literature on the financial practices and capital management techniques of street vendors in Tacloban City. The study looks into the factors that influence the prevalence of street vending, its impact on vendors' livelihoods and well-being, and the strategies vendors use to overcome daily operational challenges. The findings are expected to guide policy interventions aimed at improving the quality of life and economic resilience of street vendors. Amartya Sen's Human Agency Theory, Deci and Ryan's Self-Determination Theory, and Hernando de Soto's Informal Economy Theory all serve as foundations for the analysis. These frameworks provide a thorough understanding of the agency, motivation, and economic dynamics of street vendors. The study's findings are intended to benefit street vendors, policymakers, community initiatives, and future research by fostering a more inclusive and supportive environment for urban informal economies.

The modern methodological conceptions and the development of anglo-american economics in the 20th century

Purpose: The aim of this article is to reconstruct the basic methodological assumptions that are relevant to contemporary conceptions of the science of economics developing in English and American literature during the 20th century. Methodology/approach: The paper aims to outline the logical structure of scientific theories in economics, which determines the objectivity of this science. Theoretical testing of hypotheses is performed by referring to more general and higher theoretical knowledge. Findings: The prevalence of utilitarian attitudes described in the article, which limit economic cognition to cost and profit calculations and economic processes to activities around profit maximisation, promotes the instrumentalisation of the norms and principles of this science, and indirectly indicates the absence of other autonomous values besides profit. Practical implications: Making the starting point in this article expressed in the work of British and American classics writing in the twentieth century demonstrates that they were moderate and flexible thinkers, as the structure of their theories reflects the changes that occurred in the leading methodological currents of the time. Originality/value: In every epoch of the development of the science of economics, there are concepts that consciously need to be guarded against variability (e.g. the concept of truth) and to strive to ensure that methodological concepts form as coherent a scientific belief system as possible.

Examining the evolution trajectory of construction and demolition waste in China: An empirical analysis based on spatial metrology and the environmental Kuznets curve

Curbing the increasing construction and demolition waste (C&DW) is critical for achieving China's goals of cleaner production and environmental sustainability. This paper based on the Environmental Kuznets Curve (EKC) and combining spatial econometrics with the GM (1,1) model, predicts key time points that will change the growth trend of C&DW and explores measures to reduce production. The results indicate that: (1)As of 2022, more than 87% of China's regional C&DW is unevenly distributed and agglomeration exists. More than 50% of the regions exhibit “high-high” agglomeration, which can lead to an inevitable inter-regional transfer of C&DW, but the central region has formed a “segregation zone”. (2) The evolution trajectory of C&DW shows a “growth-decline-regrowth” pattern, with points of change for regrowth occurring when GDP per capita reaches 142,914.24. Construction enterprises and consumption levels contribute significantly to C&DW, while the opposite is true for education, market competition, and transportation. (3) More than 95% of regions will experience C&DW regrowth during 2036–2040. Economic development is no longer considered to play a leading role in C&DW reduction measures. Even if the economic growth rate is increased by 10%, 30%, or even 50%, C&DW will enter the era of full-scale regrowth only three years earlier on average. This paper aims to shift the current focus of C&DW forecasting from solely on model innovation to accurately calculating the timing of future C&DW regrowth by verifying the EKC hypothesis application. This approach fills the gap in the quantitative analysis of long-term C&DW forecasting and provides new empirical cases for the theory of environmental economics. Furthermore, it addresses potential obstacles for decision-makers in achieving “zero waste cities”, thereby promoting global cleaner production and environmental sustainability.

Deciphering the non-linear nexus between government size and inflation in MENA countries: an application of dynamic-panel threshold model

Contradictory to conventional economic theory, which foresees any increase in the size of government as inflationary, this article provides evidence that the reaction of price levels to changes in the size of government is nonlinear. The price levels do not necessarily increase in response to a rise in the size of the government but only up to a certain threshold or optimal level. Accordingly, this paper utilizes the dynamic panel threshold model to examine the threshold effects of government size (measured as government final consumption expenditure as a proportion of GDP) on inflation using a sample of 10 selected MENA countries from 1980 to 2019. The findings of this study stand out in several ways. First, the results support the nonlinear relationship between government size and inflation in the study area. Second, the government size’s estimated threshold level is equivalent to 12.46%. Third, government size negatively impacts inflation in the regime of small governments up to the threshold level. The impact turns positive once the government size goes beyond the threshold level in a regime of large size of government. These findings have ramifications for the conduct of fiscal policy. Policymakers in the MENA region can increase the size of government till it reaches the threshold level without exerting any upward pressure on price levels.

Risk Attitudes and Sources of Finance: Evidence from Non-Farm Household Enterprises in Ghana

ABSTRACT Several theories in economics and finance suggest that risk attitudes play a vital role in economic choices, including being an entrepreneur and the choice of finance for businesses. However, there are limited empirical tests of these theories in the African context, where majority of firms are small and medium-scale enterprises. Using the 7th round of the Ghana Living Standards Survey (GLSS 7), this study estimates the effect of risk attitudes on the decision to own a household enterprise and the choice of finance by owners of household enterprises. The study finds no significant impact of risk aversion on household enterprise ownership. We find risk aversion to significantly influence the use of self-financing as start-up capital; however, after controlling for access to finance, this effect reduces. We also did not find a significant relationship between risk aversion and the use of loan financing as working capital. The findings from this study shed light on the risk management strategy of household enterprise owners and suggest that access to finance is an important determinant of sources of financing. Hence, to spur growth of these critical household enterprises, the essential role of access to finance should be addressed by policymakers.

Theoretical Mediation of Drivers and Practices to Enhance Circular Economy Capabilities in SMES: Overcoming Economic, Technological, Cultural, and Social Barriers

Objective: This study aims to use the theoretical mediation of drivers and practices to support SMEs in developing capabilities related to the circular economy (CE). Through this, it seeks to overcome economic, technological, cultural, and social barriers, generating environmental and financial benefits. Theoretical Framework: Circular economy (CE) theory highlights the need for multidisciplinary approaches to address barriers. These barriers, including economic, technological, social, and cultural challenges, hinder CE adoption, particularly in SMEs. Overcoming such obstacles requires innovative solutions, collaboration with green suppliers, and advanced recycling technologies. Practices like circular design, eco-efficiency, and education are critical in driving CE capability. Moreover, mediating variables, such as drivers in circularity and sustainability-focused education, facilitate the transition to CE, creating economic opportunities and fostering sustainable development across different industries. Design/Methodology/Approach: The methodology combines qualitative and quantitative research using PLS-SEM. An analysis of six hypotheses was conducted with questionnaires applied to 280 companies, obtaining 124 responses. This innovative approach demonstrates the impact of theoretical mediation between barriers and circular economy capability (CEC), validating five of the six hypotheses. Results: The key role of mediation in overcoming barriers to the CE is highlighted. Although the direct relationship between cultural and social barriers and the CEC was not validated, the intervention of the mediator construct allowed validation. Additionally, the predictive model is strengthened with indicators such as Q2 and VAF (Variance Accounted For), showing that SMEs can improve their CE capability by overcoming key barriers. Research Limitations/Implications: In Mexico, SMEs lack a detailed analysis of their economic impact and face obstacles to adopting CE. The described methodology can be replicated in other contexts to facilitate the transition to a circular economy. Originality/Value: The novel methodology offers a way to overcome barriers to the circular economy and promote a sustainable organizational culture in SMEs. It can be said that the strategy of this study was to achieve circular economy capability (CEC), with the mediating effect serving as the key tactic.

The impact of technological cooperation on Russian-Chinese relations: prospects and challenges

The study of technological cooperation between Russia and China is an in-depth analysis of the interrelationships that have developed between the two countries in the field of science and technology. The focus is on ongoing projects and initiatives, such as joint research, which play a key role in the development of both States. The influence of the international situation on these relations is considered as global changes and economic sanctions against Russia can affect the dynamics of cooperation with China. The study also analyzes the challenges that may arise in the development of these ties, including issues of intellectual property and competitiveness in the international arena. An important place is occupied by studying the role of technological exchange in strengthening the strategic partnership between the two countries, as well as its possible geopolitical consequences, such as strengthening the positions of both countries on the world stage, reducing dependence on Western technologies and influencing global supply chains. The study highlights the importance of technology cooperation as a tool to achieve a sustainable and secure future for Russia and China in a changing world order. The article uses methods of qualitative analysis based on data from scientific publications and reports. An important place is given to the interdisciplinary approach, which includes elements of system analysis, economic theory, international relations and political science. The methods used help to investigate the influence of technological factors on the dynamics of Russian-Chinese relations and assess their long-term prospects. Technological cooperation between Russia and China demonstrates great significant potential, despite the existing challenges. The study highlights the impact of political, economic and technological factors, as well as risks such as political instability and cyber threats. Deepening high-tech collaboration opens up new horizons for both countries, allowing knowledge sharing in strategically important sectors such as artificial intelligence and 5G. This study makes an innovative contribution, emphasizing the need to integrate technology and policy solutions. Technological cooperation also contributes to strengthening geopolitical cooperation in the face of sanctions pressure and instability. To achieve long-term success, it is important to develop stable cooperation mechanisms, minimize risks and ensure stability based on trust and joint strategies.

Economic Theory and Machine Learning Integration in Asset Pricing and Portfolio Optimization: A Bibliometric Analysis and Conceptual Framework

Economic Theory and Machine Learning Integration in Asset Pricing and Portfolio Optimization: A Bibliometric Analysis and Conceptual Framework

How Does The Transition From Conventional Marketing To Online Marketing Align With Economic Theories On Market Efficiency And Resource Allocation?"

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Does prior success influence risk‐taking in foreign location decisions? A prospect theory perspective

AbstractResearch SummaryResearch suggests that foreign direct investment decisions can be biased and deviate from economic theory. This study deploys prospect theory to analyze the impact of the success of previous investments on risk‐taking in subsequent investment decisions. Our theorizing suggests that prior success influences foreign investors' decisions to take host‐country risk, and that this moderating influence on the risk‐investment relation is specific to the type of risk. The results of an event‐history study of 1259 location decisions support the notion that the success of previous investments encourages investors to enter host countries with high negative or positive risk, whereas it discourages them from entering locations with high mixed risk. The effects are stronger for investment locations that are similar than for those that are dissimilar.Managerial SummaryRegarding the varying risks that investors face in foreign countries, investment decisions may sometimes appear rather confident and sometimes rather cautious. Our study relates these decisions to the success that investors had with similar investments in the past, since research suggests that experiencing gains or losses can influence decision behavior. The results suggest that prior success affects risk‐taking in foreign direct investment decisions and comes in contrary forms, depending on the type of risk: prior success leads to overconfident investment decisions in the case of negative and positive risk, whereas it induces overcautious investment decisions in the case of mixed risk. Being aware of these behavioral tendencies can prevent managers from making biased investment decisions.

How does government R&D subsidies affect enterprises’ viability? An investigation on inverted U-shaped relationship

Based on the theory of New Structural Economics, this study investigates the non-linear relationship between government R&D subsidies (RDS) and enterprises’ viability (VIA) in China, utilizing data from A-share listed advanced manufacturing enterprises. The findings reveal an inverted U-shaped relationship, where VIA initially increases and subsequently decreases as RDS intensifies. Furthermore, we examine the impact of technological convergence between the digital and real economy industries (TCG) on this relationship and find that TCG strengthens the curvilinear relationship. This study provides valuable insights for formulating advanced manufacturing policies that address structural needs, thereby fostering high-quality development of the real economy.

Психологическая компетентность юриста как средство совершенствования взаимодействия участников правоотношений

The article is devoted to the topic of developing the psychological competence of a lawyer as a professionally important personal characteristic in the context of considering his professional success from the point of view of economic theory. The analysis of economic risks in the field of legal practice in the specific area of bankruptcy of individuals is carried out, the factors of professional success of a lawyer in the process of interaction with debtor citizens are revealed. A practical study conducted among practicing lawyers is presented, which identifies the main indicators of their psychological competence, and proves its role as a means of improving the interaction of participants in legal relationships in the process of bankruptcy of individuals. Based on the results of the diagnostic study, the conditions and opportunities for the development of psychological competence of lawyers were determined through a special psychological training program developed taking into account the current requests of lawyers practicing in the field of bankruptcy of citizens. The importance of the psychological competence of a lawyer practicing in the field of bankruptcy of citizens as a professionally important personal education is substantiated. The need for a lawyer to have highly developed competencies in the psychological field in order to build effective interaction at different levels and the presence of diverse social contacts in the performance of professional tasks is proved.

Cognitive Biases in Sports: Examining Their Influence on Athletic Decision-Making

Traditional economic theory has long relied on the notion of rationality, which assumes that individuals will always make decisions leading to the optimal level of benefit or utility for themselves. However, behavioural economics, a subfield of economics, proposes that decision-making is not always rational, as emotions and cognitive biases influence it. In line with this, the dual processing system highlights how decisions may be made via one of two systems: the first characterised by relatively fast and nonconscious decision-making and the latter by slower and more conscious thinking. This research paper extends the literature on behavioural economics into the realm of sports, as it is a context where time is of the essence, and decisions need to be made on the spot. Primary research was conducted among a group of amateur athletes. The findings suggest that cognitive biases, including availability heuristic, anchoring bias, sunk cost fallacy, and framing bias, among others, influence the decisions made by athletes. The paper also proposes methods to overcome these biases.

Local Income Inequality and the Value of Corporate Tax Responsibility

ABSTRACT Corporate tax responsibility, or the obligation of companies to pay their “fair share” of taxes, is increasingly perceived as a component of firms’ social responsibility. Considering tax payments through the redistributive function, we examine how the association between corporate tax responsibility and firm value varies based on the presence of a salient social issue—local income inequality. Firms headquartered in areas of average income inequality have a negative relation between effective tax rate (ETR) and firm value, consistent with traditional economic theory and prior research. However, as local income inequality rises above average, the relation between ETR and firm value becomes more favorable (i.e., less negative). We interpret these findings as evidence that the relation depends on the salience of tax payments as a social issue. Further, the results are substantiated by firms whose socially responsible tax payments are consistent with their reputation as good corporate citizens. Data Availability: Data are available from the public sources cited in the text. JEL Classifications: D22; H23; H25; H32.

Нужна ли современным теориям экономики методологическая культура политико-экономического исследования?

In conditions when the main meaningful meaning of the choice of the Russian way forward is formed, the problem of the formation of economic theory, adequate to the modern stage of development of national and world economies, whose economic systems are in a state of deep transformation, is actualized more than ever. Economic science in the “new reality” is faced with such phenomena as the socialization of the economic life of modern society, the economization and financialization of politics and the politicization of the economy in the context of the globalization process, again highlighting the question of the place and directions of the development of political economy in economic science. Therefore, there is a serious question about the paradigm of modern economic theory, which would absorb the reflection of these new processes. For this reason, this material is a kind of attempt to integrate into the ongoing discussion about the place and development of political economy, about expanding the subject of economic theory [1; 2; 3; 4; 5; 6; 7; 8], offering an author’s methodological perspective on the principal issues of discussion. Participation in the discussion is also important from the point of view of the position of research teachers leading disciplines included in one capacity or another in economic theory. And this means - developing the criterion-value socio-economic worldview of future specialists, their methodological culture of research.

Методологические проблемы отечественной экономической науки

The article is devoted to the study of methodological problems of domestic economic science. Modern economic science in Russia is going through a difficult stage of its transformation. The rejection of Western mentoring and the transition to sovereign thinking caused the renewal of theoretical views and practical approaches to solving economic problems. This could not but cause a close interest in the methodological foundations on which the science of economy is based. At the same time, many economists are still at a loss as to where to look for the necessary methodology: in philosophy, in history, in conceivable economic-theoretical constructions, or in something else. It should be kept in mind that the methodology of economic research belongs to the basic foundations of economic science and is the meta-theoretical level of economic knowledge. It is at this level that the trajectory of economic development and reflection on the practice of modernity are synthesised, from which, in turn, the principles, conclusions and proofs of many economic statements, theorems and theories are derived. The authors believe that dialectical-materialist methodology has not exhausted all its resources and possibilities and as a method of research of modern transformations occurring in the sphere of domestic economy, it may well serve as a guide to the creation of national economic theory.

THE MUTLISTAKEHOLDER INITIATIVE APPROACH TO EUROPEAN CRISIS MANAGEMENT. CIVILIAN CSDP AND ENGAGEMENT WITH LOCAL NONSTATE ACTORS

: The Common Security and Defence Policy (CSDP) missions are deployed in complex operational environments, where a plethora of national, regional and international actors are present. These present circumstances enable the existence of an - either direct or indirect - but inexorable engagement between all stakeholders involved in similar activities. While the vast majority of current debates and research focus solely on the cooperative dimension of the CSDP in the framework of multilateralism and regionalism, the topic of the EU's engagement with local stakeholders is scarcely explored. Therefore, drawing on the multistakeholder initiative approach (MSI) in economic theory, this paper assesses the engagement of CSDP missions with civil societies and private sector entities in theatres of operations. Employing a single case study approach of inquiry, consisting of the EUCAP Somalia mission this paper aims at answering the research questions: how does EUCAP Somalia engage with local non-state actors, what are the opportunities associated with this engagement and to what extent can a MSI approach be implemented by EUCAP Somalia?By deploying a qualitative research design, this paper uses document analysis within a single case study approach of inquiry. The results of this approach show two distinct tendencies. While EUCAP Somalia informally engages with local non-state actors, this engagement is rather insufficient. Results of this research further show that CSDP missions represent an important tool of EU diplomacy and their engagement with local non-state actors positively impacts the implementation of two of their core principles: local ownership and human security.

Институциональный подход к определению структуры национального богатства

In economic theory, there are various approaches to determining the structure of a country’s national wealth, many of which are based solely on quantitative indicators. At the same time, traditional economic models do not take into account new factors in the development of national wealth, such as environmental services and digital assets. It seems that despite methodological limitations, the structure of national wealth should include the value of intangible assets, such as intellectual property, human and social capital. Due to the need to take into account multiple aspects and intangible benefits when forming the structure of a country’s national wealth, the authors proposed an institutional approach to determining the structure of national wealth, which is based on an assessment of the institutions and institutional environment that form the self-sufficiency of the national economy. The article discusses the main problems of modern society, which require investment in their elimination and, as a result of a decrease in the share of the country’s national wealth, the problem of measuring the country’s national wealth, due to the undeveloped methods for measuring modern conditions, which are mostly associated with the digitalization of economic, social and political processes, the structure of the country’s national wealth in the digital economy is proposed, an institutional approach to determining the structure of national wealth, based on the principle of self-sufficiency of the country’s economy, is proposed and justified.