Economies Of Scope Research Articles

Public-private cooperation and agricultural development in Sub-Saharan Africa: a review of Nigerian growth enhancement scheme and e-voucher program

The Growth Enhancement Scheme and e-voucher program, rolled out across Nigeria in 2011 by the federal government, provided the institutional basis for private agro-dealers to engage in the distribution of subsidized fertilizer, improved seeds and extension services to farmers. However, the impact of this policy on different modes of extension service delivery is still missing in literature. We apply an Ordinary Least Squared and Difference-in-Difference methodology on the (2010 and 2012) Living Standard Measurement Study of the World Bank. The results suggest that extension visitations as well as public extension services positively influence farm revenue. Furthermore, a substantial increase in fertilizer expenditure by farmers was observed, due to the e-voucher program, which could have contributed to the improved agricultural output witnessed in Nigeria post-Growth Enhancement Scheme era. Governments across Sub-Saharan Africa should implement policies that harness the economy of scale and scope of the private sector as well as information and communication technologies in delivering on time and adequate agricultural inputs to farmers.

Bank Performance and the Relationship between Lending and Fee-based Activities in an Emerging Market

New banking reforms in Vietnam highlight requirements for banks to diversify into the non-lending business lines. In this study, we analyse the reciprocal relationship between bank lending and fee-based activities and examine the comparative effects of two segments on bank performance in the Vietnamese market from 2007 to 2018. Employing the system of equations with the three-stage least squares (3SLS) estimator and different sets of variables, we find an inverse reciprocal relationship between bank lending ratio and fee-based income share and thereby contribute to the “loss leaders” hypothesis. For bank performance analyses, we apply a rich set of alternative measures for bank profitability, risk-adjusted profits and bank risk, estimated by the generalized method of moments (GMM) estimator for the dynamic panel framework. The results indicate benefits of economies of scope and differences in the risk-return mechanism of lending and fee-based activities. More precisely, we find fee income to positively affect returns on assets/equity and risk-adjusted profits. In sharp contrast, increased lending boosts net interest margins but contains more risks as shown by higher loss provision levels. The essential discrepancy between the two categories of activities hascreated an interesting risk-return trade-off pattern.

A Few Implications of the COVID‐19 Pandemic for International Business Strategy Research

A Few Implications of the COVID‐19 Pandemic for International Business Strategy Research

Anti-Competitive Mergers in Two-Sided Digital Platform Markets: The Case of Uber-Grab

Digital Platforms pose a number of challenges to regulators around the world. In particular, markets where Digital Platforms operate tend towards monopolies due to strong network effects, large economies of scale and scope, close to zero marginal costs and increasing returns to the use of data. On the other hand, ostensibly anti-competitive conduct by traditional businesses may in fact be innocuous or even welfare-enhancing when initiated by digital platforms due to their “two-sided” nature. In this Article, I critically evaluate the recent infringement decision of the Competition and Consumer Commission of Singapore regarding Uber's sale of its SEA business to Grab pursuant to the contemporary Law and Economics literature on two-sided digital platforms. Unfortunately, “one-sided” competition analysis continues to be erroneously applied to digital platforms with a “two-sided” nature. I provide some proposals on how merger control should be reformed in light of these deficiencies.

Economic evaluation and health systems strengthening: a review of the literature.

Health systems strengthening (HSS) is firmly on the global health and development agenda. While a growing evidence base seeks to understand the effectiveness of HSS, there is limited evidence regarding cost and cost-effectiveness. Without such evidence, it is hard to argue that HSS represents value for money and the level of investment needed cannot be quantified. This paper seeks to review the literature regarding the economic evaluation of HSS from low- and middle-income country (LMIC) settings, and to contribute towards the development of methods for the economic evaluation of HSS. A systematic search for literature was conducted in PubMed, Scopus and the Health Systems Evidence database. MeSH terms related to economic evaluation were combined with key words related to the concept of HSS. Of the 204 records retrieved, 52 were retained for full text review and 33 were included. Of these, 67% were published between January 2015 and June 2019. While many HSS interventions have system wide impacts, most studies (71%) investigated these impacts using a disease-specific lens (e.g. the impact of quality of care improvements on uptake of facility deliveries). HSS investments were categorized, with the majority being investments in platform efficiency (e.g. quality of care), followed by simultaneous investment in platform efficiency and platform capacity (e.g. quality of care and task shifting). This review identified a growing body of work seeking to undertake and/or conceptualize the economic evaluation of HSS in low- and middle-income countries. The majority assess HSS interventions using a disease-specific or programmatic lens, treating HSS in a similar manner to the economic evaluation of medicines and diagnostics. While this approach misses potential economies of scope from HSS investments, it allows for a preliminary understanding of relative value for money. Future research is needed to complement the emerging evidence base.

Motivations of the Female Entrepreneurs to Start Online Businesses in the United Arab Emirates

The global dissemination of internet technology and advances in it are facilitating female entrepreneurs to participate in online entrepreneurial activities by utilizing new business frameworks to achieve economies of scope and scale as they start to compete with the traditional entrepreneurs in the market. This research draws on two fields of scholarly research; “online businesses” and “female entrepreneurship” and, to the best of our knowledge, this is the first study that endeavors to provide an overview of female entrepreneurship in online businesses in the UAE. This study, which is based on a qualitative survey of 20 online businesses, owned and smanaged by females’ in the UAE, investigates why females start their online businesses. The obvious picture emerging from this study is that with control over the number of hours they put in their online businesses and do not face the type of work to family conflict encountered by the female who own and manage traditional businesses outside of their homes. More precisely, the results of this study give indicative and exciting comprehensions into the challenges and impediments of female entrepreneurs in this fast-growing sector of the UAE economy. Of critical interest to researchers and policy makers, we investigate the challenges and impediments to success and the ways that female entrepreneurs in the UAE are successfully starting and expanding their online businesses.

Inter‑Municipal Cooperation in Education as a Possible Remedy for Current Difficulties of Local Government in Poland

The purpose of this article is to fill the existing gap and contribute to the literature in two ways: firstly, by investigating problems that caused the emergence of cooperation between two municipalities despite the administrative border at the county level, and secondly, by analysing the effects of joint provision of public education based on a case study from Poland. The case study is preceded by the use of the literature review method. The problem of possible enhancement of inter‑municipal cooperation (IMC) in Poland is proposed as a potential remedy for current difficulties that Polish local governments face after the reform of the education system and the COVID–19 pandemic, as well as due to demographic decline and budgetary challenges. Studies suggest that net benefits of cooperating are higher if IMC partners are smaller and more homogenous with respect to the quality and level of public services. The theory of exploiting economies of scale and scope was studied based on the case study of a Polish inter‑municipal union created only to provide education in two municipalities. The cooperation resulted in little positive financial effects reflected in the lower spending per pupil only in the case of primary school. However, the union caused nonfinancial benefits not only for pupils but also for parents and teachers, who are voters as well. The article concludes that inter‑municipal unions could be used especially by small and rural municipalities that struggle with the previously mentioned problems.

The 'polluter Pays' Principle as a Basis for Sustainable Competition Policy

The climate crisis has become an emergency. To have a chance of keeping global warming to 1.5 degrees, carbon neutrality by 2050 is not enough. We need negative greenhouse gas (“GHG”) emissions to compensate for ongoing emissions from human activities, as well as for methane from melting arctic tundras, and carbon emissions from wildfires and drying and dying forests. Market forces, regulation and innovation may not save us, in view of market failures, Government failures, and the uncertainty that we will timely develop adequate carbon capture and sequestration technology. We need a coherent and consistent program of regulation, innovation, taxation, education, reforestation, and private cooperation. In markets where consumers’ willingness to pay for sustainability is enough to cover at least the “true price” of goods, we may not need special rules to enable private cooperation beyond environmental standards and labeling, and arrangement to create a minimum efficient scale. Where willingness to pay is inadequate, cooperation may be needed to counter market failures, create economies of scale and scope, and to implement the polluter pays principle. The article describes a model for a “polluter pays” agreement between suppliers, that could be a template. It analyses this model under the “ancillary restraints” principles underpinning EU case law in Wouters and Albany, and under Article 101(3) TFEU. Consumers need not be fully compensated by in-market countervailing benefits – they profit even if they benefit from better access to non-market goods or out-of-market goods, and enjoy “a fair share” even if they are not fully compensated with in-market countervailing benefits, so long as the arrangements eliminate costs imposed on others (negative externalities) in accordance with the “polluter pays” principle, or otherwise reduce environmental or climate change harm to all consumers. The current EU Guidelines are too restrictive taking into account the wording of the Treaties and the case law of the CJEU.

Strategies for transit fleet design considering peak and off-peak periods using the single-line model

Transit demand and traffic conditions present relevant differences between peak and off-peak periods - e.g. flows, trip lengths, congestion - raising a relevant strategic design choice regarding the potential use of vehicles with different sizes. Here we first revisit the optimal design using a single-line, single-fleet model, showing that buses should always run full at the peak but not always at the off-peak. Then we develop a two-fleet strategy (with different vehicle sizes) where one fleet operates the whole day and the other during the peak period only. This strategy includes holding during the peak (in order to avoid bunching) by imposing equal cycle times for both fleets. The two-fleet operation has slightly lower total costs than one-fleet, but exhibits very different effects on users’ and on operators’ costs across periods. A sensitivity analysis reveals the role played by various elements and shows that results are robust. Optimal one and two-fleet designs are both better than optimizing each period independently, revealing economies of time scope.

Estimating Cost Functions for Resource Allocation Using Transmission Models: A Case Study of Tuberculosis Case Finding in South Africa

Cost functions linked to transmission dynamic models are commonly used to estimate the resources required for infectious disease policies. We present a conceptual and empirical approach for estimating these functions, allowing for nonconstant marginal costs. We aim to expand on the current approach which commonly assumes linearity of cost over scale. We propose a theoretical framework adapted from the field of transport economics. We specify joint functions of production of services within a disease-specific program. We expand these functions to include qualitative insights of program expansion patterns. We present the difference in incremental total costs between an approach assuming constant unit costs and alternative approaches that assume economies of scale, scope and homogeneous or heterogeneous facility recruitment into the programme during scale-up. We illustrate the framework's application in tuberculosis, using secondary data from the literature and routine reporting systems in South Africa. Economies of capacity and scope substantially change cost estimates over time. Cost data requirements for the proposed approach included standardized and disaggregated unit costs (for a limited number of outputs) and information on the facilities network available to the program. The defined functional form will determine the magnitude and shape of costs when outputs and coverage are increasing. This in turn will impact resource allocation decisions. Infectious diseases modelers and economists should use transparent and empirically based cost models for analyses that inform resource allocation decisions. This framework describes a general approach for developing these models.

COST LEADERSHIP STRATEGY, COMPETITIVE ADVANTAGE, AND PERFORMANCE: A CROSS-SECTIONAL STUDY IN THE CONTEXT OF MILK PROCESSING FIRMS IN KENYA

Purpose of the study: Cost leadership strategy is driven by economies of scale, economies of scope, and operational efficiency is a remedy to a performance where firms are facing high costs. This study sought to investigate the influence of cost leadership strategy on the performance of milk processing firms in Kenya through the lens of competitive advantage as a mediator.
 Methodology: The study adopted descriptive and explanatory non-experimental research designs. It was a census of all 29 milk processing firms registered with Kenya Dairy Board as of June 2019. Sampling was done using proportionate stratified random sampling technique and data was collected using self-administered semi-structured questionnaires. The analysis was done using means, standard deviations, and regression.
 Main Findings: The findings showed that a cost leadership strategy had a positive and significant effect on the performance of milk processing firms in Kenya with a competitive advantage partially mediating the relationship. The constituent measures of cost leadership strategy namely economies of scale, economies of scope, and operational efficiency accounted for 40.1% of the variation in firm performance.
 Applications of this study: This study provides suggestions for firms to manage costs and therefore improve performance. This is by increasing the size of operations, expanding into related business areas, and improving operational processes.
 Novelty/originality of this study: The study examines the influence of cost leadership strategy in a new context of milk processing firms in Kenya. It also incorporates a competitive advantage as a significant variable affecting the relationship between costs and performance.

The effects of interoperable information technology networks on patient safety: a realist synthesis

Background Interoperable networks connect information technology systems of different organisations, allowing professionals in one organisation to access patient data held in another one. Health policy-makers in many countries believe that they will improve the co-ordination of services and, hence, the quality of services and patient safety. To the best of our knowledge, there have not been any previous systematic reviews of the effects of these networks on patient safety. Objectives The aim of the study was to establish how, why and in what circumstances interoperable information technology networks improved patient safety, failed to do so or increased safety risks. The objectives of the study were to (1) identify programme theories and prioritise theories to review; (2) search systematically for evidence to test the theories; (3) undertake quality appraisal, and use included texts to support, refine or reject programme theories; (4) synthesise the findings; and (5) disseminate the findings to a range of audiences. Design Realist synthesis, including consultation with stakeholders in nominal groups and semistructured interviews. Settings and participants Following a stakeholder prioritisation process, several domains were reviewed: older people living at home requiring co-ordinated care, at-risk children living at home and medicines reconciliation services for any patients living at home. The effects of networks on services in health economies were also investigated. Intervention An interoperable network that linked at least two organisations, including a maximum of one hospital, in a city or region. Outcomes Increase, reduction or no change in patients’ risks, such as a change in the risk of taking an inappropriate medication. Results We did not find any detailed accounts of the ways in which interoperable networks are intended to work and improve patient safety. Theory fragments were identified and used to develop programme and mid-range theories. There is good evidence that there are problems with the co-ordination of services in each of the domains studied. The implicit hypothesis about interoperable networks is that they help to solve co-ordination problems, but evidence across the domains showed that professionals found interoperable networks difficult to use. There is insufficient evidence about the effectiveness of interoperable networks to allow us to establish how and why they affect patient safety. Limitations The lack of evidence about patient-specific measures of effectiveness meant that we were not able to determine ‘what works’, nor any variations in what works, when interoperable networks are deployed and used by health and social care professionals. Conclusions There is a dearth of evidence about the effects of interoperable networks on patient safety. It is not clear if the networks are associated with safer treatment and care, have no effects or increase clinical risks. Future work Possible future research includes primary studies of the effectiveness of interoperable networks, of economies of scope and scale and, more generally, on the value of information infrastructures. Study registration This study is registered as PROSPERO CRD42017073004. Funding This project was funded by the National Institute for Health Research (NIHR) Health Services and Delivery Research programme and will be published in full in Health Services and Delivery Research; Vol. 8, No. 40. See the NIHR Journals Library website for further project information.

Estimating unit cost of public university education in Vietnam

This paper is motivated by the ongoing debate on university reform in Vietnam. In particular, there is a need to quantify the level of governmental support for public universities and examine whether or not such a support is adequate. To this end, the present paper estimates training costs per student in different disciplines within the Vietnamese public university education system in 2010. The various estimates of unit costs are based on the definitional approach which defines unit cost as the ratio of total costs over output. In measuring total costs, private costs incurred by university students (apart from formal tuition fees) are excluded. Further, the opportunity cost method employed emphasizes implicit costs such as imputed land rent. The total output is based on weighted student numbers. Unit costs are then estimated using a variety of primary (from survey) and secondary data sources. The results obtained suggest that the unit costs of public university education in Vietnam vary considerably between disciplines. The results also support the presence of economies of scale and scope in higher education and a negative relationship between unit costs and teaching quality proxies. The overall unit cost of public universities in Vietnam is very low in absolute terms when comparing with other countries. However, unit cost relative to GDP per capita in Vietnam is more comparable with those of neighboring countries. Nevertheless, the findings of the paper imply that more resources need to be allocated to the public university sector as part of an urgently needed university reform in Vietnam.

Adoption of multiple electronic marketplaces: Antecedents from a grounded theory study

To achieve economies of scope, most motor carriers combine long‐term contracts with shippers and brokers with periodic spot assignments found on electronic marketplaces (EMs). While previous research has addressed how carriers adopt an EM, we know little about factors that influence carriers to adopt multiple EMs. Given the rise of the platform economy of the trucking industry, we chose to address this gap and generate mid‐range theory on adopting multiple EMs in a logistics context. To do this, we applied grounded theory and conducted 23 interviews with motor carriers and EM experts in North America and Europe until we reached theoretical saturation. Our findings reveal that many motor carriers adopt a portfolio of different EMs, and that their awareness of platforms, expected and realized benefits, attitude, and vigilance determine how they configure their EM portfolios. The implication for existing theory is that, while previous studies depicted EM adoption from a single‐system perspective, we found that it is actually a continuous selection process that follows a portfolio perspective. Our paper also has implications for practice in that it illuminates the rationales behind EM portfolio development and identifies actionable factors that can help managers configure stronger portfolios.

Economies of Scope for Electricity Storage and Variable Renewables

In this paper, we investigate whether and under which conditions jointly owning a variable renewable source of electricity (VRES) and an electricity storage generates economies of scope in competitive electricity markets. Using a simple stochastic optimization model that assumes frictionless markets, we analytically show that no economic benefit arises from combining the two assets. This finding is in contradiction to large parts of the literature, which claim that it is in the economic interest of owners of VRES to additionally own electricity storage. We also identify circumstances where our argument does not hold and the combination of storage and VRES could theoretically make economic sense on the level of individual agents. In the last part of the paper, we demonstrate in a numerical case study of the German market that even in cases where our theoretical results do not hold, tying together storage and VRES may produce suboptimal results.

Nexus between Cost Leadership Strategy and Performance: Fact or Fallacy in Milk Processing Firms in Kenya

Milk processing firms as a constituent of the food processing sector play a crucial function both economically and nutritionally. However, performance in the industry continues to be impended by high costs leading to low profitability margins, decline in output and collapse of some firms while others show stunted growth. It is hypothesized that this situation can be remedied by pursuing cost leadership strategy through economies of scale, economies of scope and operational efficiency. Extant literature however is scanty on how this strategy is employed by milk processing firms in Kenya with studies done failing to focus on how the firms manage costs as a driver for better performance. This has made it difficult to determine whether the hypothesized effect is a fact or fallacy. This study thus was an investigation of the effect of cost leadership strategy on performance of milk processing firms in Kenya. It was anchored on the balanced scorecard model complemented by the resource based view and capability based view theories. The study empirically examined the relationship using data from milk processing firms in Kenya obtained from a sample of 168 key respondents. The findings showed that cost leadership strategy had a positive and significant effect on performance of milk processing firms in Kenya. The study recommends that milk processors improve their performance by cutting costs through measures to increase their scale of operations, expand into related business areas and improve operational processes. The government and other the regulatory bodies should implement corresponding supportive policies and reforms.

The Reuse of Sediments Dredged from Artificial Reservoirs for Beach Nourishment: Technical and Economic Feasibility

Sedimentation has significant impacts on the useful capacity of an artificial reservoir, a resource to preserve. Interventions of dredging are therefore often unavoidable, even because decommissioning of dams is often impossible in many contexts and entails high costs. Dredging generates an undesired accumulation of materials that represent an environmental cost, but that could be used as intermediate products in other processes, such as beach nourishment. The study develops a method for the evaluation of the feasibility of an investment aimed at coastal nourishment with sediments dredged from artificial reservoirs. The method considers the set of technical conditions that make such use possible. The presence of economies of scope, with environmental diseconomies utilized as joint product, modifies the evaluation approach. The results of the approach show a possible environmental and economic sustainability of the proposed investment even in the presence of highly unfavorable scenarios. The study applies the feasibility appraisal to the case of the Guardialfiera reservoir in Molise, Italy.

The Complex Interplay of Firm Innovation, Internationalization, and Learning Capability

This study presents a holistic perspective on how the complex interplay of different facets of innovation, internationalization, and learning capability is associated to firm performance. Academics have traditionally tested one-way cause-effect of one of these key strategic activities on the other, thus employing traditional multivariate methods which are less appropriate to capture the interconnectedness of factors as complex systems. We use a configurational approach, more specifically a qualitative comparative analysis over a sample of 2,844 manufacturing firms over the period 2008–2014, a suitable method to obtain new insights into complexity issues. The results point to a general complementarity between high process innovation, export breadth, and high organizational learning capability, and a substitutability between R&D and employee training as sources of learning capability. The analyses by firm size suggest that, contrary to SMEs, large firms do not require high export breadth to render their innovations profitable, likely because they enjoy adequate economies of scale and scope through their strong domestic presence and multiple business units. The results bring new insights to the importance of temporal concepts in the internationalization literature, and have relevant implications for scholars, managers, and policymakers.

Implications of economies of scale and scope for round-trip shipping canvassing with empty container repositioning

Empty containers need to be repositioned from a surplus area to a shortage area, and the resulting economies of scope mean that the canvassing (i.e., the sale of transportation service) of two routes back and forth is no longer isolated. To study the liner company’s canvassing strategy for round-trip routes, this paper considers a benchmark situation where one forwarder is responsible for two directions and three canvassing sequences with one direction one freight forwarder responsibility. The results indicate that the liner company should focus canvassing on fewer forwarders, and the forwarder should expand service scope. Under one direction one freight forwarder responsibility, it is not necessarily optimal for the liner company that the direction with low potential market demand canvasses first. Examining the preferences of the liner company and two forwarders in terms of canvassing strategy, we find that a triple-win situation can not be formed, but only a win-win situation can be formed between the two of the three participants. Although the canvassing strategy where the direction with high potential market demand canvasses first has the worst effect on balancing cargo flow, it is possible to increase the market share while improving the profit of the liner company.

Antitrust and Platform Monopoly

Contrary to common belief, large digital platforms that deal directly with consumers, such as Amazon, Apple, Facebook, and Google, are not “winner-take-all” firms. They must compete on the merits or otherwise rely on exclusionary practices to attain or maintain dominance, and this gives antitrust policy a role. While regulation may be appropriate in a few areas such as for consumer privacy, antitrust’s firm-specific approach is more adept at addressing most threats to platform competition. When platforms exert market power over other firms, liability may be apt, but remedy presents another puzzle. For the several pending antitrust complaints against Google and Face-book, for instance, what should be the remedy if there is a violation? Breaking up large firms that benefit from extensive economies of scale and scope will injure consumers and most input suppliers, including the employees who supply labor. For many situations a better approach would be to restructure management, rather than assets, which would leave the platform intact as a production entity but make decision making more competitive. A second, better option to breaking up firms would be to require interoperability—and in the information context, mandate the pooling of valuable information. These measures could promote competition and simultaneously increase the value of positive network effects. Finally, this Article examines another aspect of platforms—their acquisitions. For the most salient category of platform acquisitions of nascent firms, the greatest threat to competition comes from platforms’ acquisitions of complements or differentiated technologies. Current merger-enforcement tools are ill suited to analyze this new variation on competitive harm. New approaches are required.