Incentives For Countries Research Articles

Does energy innovation heterogeneously affect renewable energy production?

Achieving long-term sustainable development is a critical global imperative, and the adoption of renewable energy sources plays a pivotal role in this endeavor, aided by the advancements of the Fourth Industrial Revolution. As a result, energy innovation has emerged as a crucial factor in realizing sustainable development goals. This study utilizes panel quantile regression analysis to investigate the relationship between energy innovation and renewable energy production in the Middle East and North Africa (MENA) region from 1985 to 2019. The findings suggest that energy innovation can effectively enhance renewable energy production, particularly in countries with higher proportions of renewable energy generation, such as Egypt, Morocco, and Tunisia. However, countries like Saudi Arabia, which have lower ratios of renewable energy production, may not experience a significant impact from energy innovation. Consequently, the study recommends implementing systematic and integrated measures that focus on raising awareness and improving conditions for the adoption of renewable energy. These measures can drive the transition towards a more sustainable energy landscape in the MENA region. Policymakers should prioritize research and development investment and incentives in countries with higher levels of renewable energy generation, while simultaneously addressing barriers and fostering knowledge sharing between countries with differing levels of renewable energy production.

«Green» logistics in the business of logistics transportation: prospects and features of the development of «green» logistics in business for Ukraine

The urgency of researching the directions of logistics transformation determines the growth of the social responsibility of business. This article examines the goals, tasks, and principles of ecological logistics and the factors of the concept of responsibility during the implementation of logistics operations. Now, significant results of applying new technologies and strategies in the activities of Ukrainian entrepreneurs, state institutions, and commercial and non-commercial organizations are being monitored. Today, logistics technologies reach a new level of organization and management, and innovative solutions, technologies, and strategies are used. This determines the high level of environmental protection. The business implements modern trends to preserve the environment. For example, factories and transport companies create their environmental plans. The majority of customers and companies prefer rail transport for international transportation. Thanks to this, the achievement of quantitative and qualitative goals of logistics activity is created. Through the cooperation of economic, social, and environmental components. This forms the image of «green logistics». The article considers the goals, tasks, and principles of «green» logistics, factors that contribute to the formation of the concept of general responsibility during logistics operations, and conditions of its implementation. It was determined that the possibility of achieving quantitative and qualitative goals of logistics activity is provided by synthesizing economic, social, and ecological components that form the outline of «green logistics»; the unity of the interaction of these components provides resource-saving technologies. The cooperation of these components creates conditions for the development of resource-saving technologies. Logistics has a significant impact on most components of the environment. For example, atmospheric air and water pollution, ozone layer destruction, etc. It has been studied that the impact of various vehicles on the environment has become an incentive for countries' governments to develop «green» technologies. It is important to note that state support is a significant factor in implementing ecological strategies and innovations for implementing approaches and methods of managing material, technical, production-economic, and transport-distribution operations. Keywords: logistics, «green» logistics, environment, logistics processes, «green» technologies.

Official Visits and Democracy

This paper examines whether the number of official visits to and from the U.S. allows the country to adopt a more democratic system of governance. To achieve its objective, the paper develops a model that derives the conditions under which a host invites a guest to persuade or pressure for democratic improvement, and the conditions under which the guest accepts an invitation to visit and decides to improve the quality of democratic governance after the visit. To test our hypothesis, we introduce novel variables that indicate the number of leader’s trips to the U.S., and the number of visits of U.S. Presidents and Secretaries of State to the country, from 1960 to 2015. The estimation results show that the official visits have a statistically significant positive effect on democracy. These results are robust. The paper also uses 3SLS to deal with potential endogeneity. The estimation confirms our previous findings that the official visits have a statistically significant positive effect on democracy. Finally, we explore the channels of transmission and find that American administrations use bilateral trade flows and U.S. aid as an incentive for countries to democratize. This supports our model predictions.

Does regulating executive compensation impact insider trading?

We examine whether equity incentive regulations help to reduce managerial incentives for manipulating earnings to gain trading advantages over shareholders. Using a sample of trading records for Chinese listed firms between 2006 and 2016, we find evidence that equity incentives reduce the positive association between insider trading and earnings management. In addition, we find that the impact of equity incentives on this association is more pronounced in state-owned enterprises (SOEs). Furthermore, we find that China's regulatory ban on the granting of equity to insiders with large shareholdings reduces the positive relation between insider selling and earnings management. Our additional tests provide strong evidence that regulatory requirements concerning the vesting conditions are negatively associated with managerial opportunistic behavior. Altogether, our results provide strong support for amendments to strengthen regulations on equity incentives in countries where overall corporate governance is weaker.

Carrot or stick: CSR disclosures by Southeast Asian companies

PurposeMotivated by legitimacy theory, this paper aims to examine comprehensively corporate social responsibility (CSR) disclosure in Southeast Asian (Association of Southeast Asian Nations [ASEAN]) countries with the aim of disentangling whether such disclosures are the result of a proactive stance or a reaction to regulations.Design/methodology/approachAfter a content analysis of CSR stand-alone reports that relies on the Global Reporting Initiative as the basis for comparison, a multivariate analysis is carried out while controlling for firm-specific incentives and industry, country and year fixed effects.FindingsThe paper finds that CSR disclosure increased across the entire ASEAN. Although this increase cannot be directly ascribed to the introduction of regulations in Indonesia and Malaysia, the latter may have impacted choices of disclosure media. In countries where reporting requirements have become mandated, mandatory reporters show low levels, and voluntary reporters high levels, of CSR disclosure. The paper also finds that the attainment of CSR awards is related to disclosure. Additional analyses reveal a substitution effect between voluntary and mandatory incentives in countries with high levels of law enforcement.Practical implicationsThe evidence suggests that the introduction of regulations can be effective in improving the level and breadth of CSR reporting only in the presence of institutions that ensure the enforcement of the disclosure regulations.Social implicationsThe evidence suggests that organizations are reluctant to report on issues such as child labor, human rights and corruption. Organizations opportunistically employ related disclosure strategies that deviate from the underlying CSR performance.Originality/valueThe paper analyzes not only the level and breadth of CSR disclosure but also the motivation for its use across the still under-investigated ASEAN area, thus allowing an examination of the influence of institutional incentives above and beyond the firm-specific factors that drive CSR activities.

The Risky Business of Ring-Fencing

This working paper examines the impact of imposing multiple ring-fencing regimes on bank safety, including a ‘prisoner’s dilemma’ effect that can arise from host country incentives. It discusses these issues first on a qualitative basis to establish intuition, and then quantifies the risk of different structures via a Merton-style option model. The results suggest that there is a material advantage (i.e. reduced probability of local failure) for a jurisdiction that ring-fences its subsidiary if other jurisdictions do not match that decision. This host jurisdiction benefits from both (i) local capital and (ii) the ability to tap a large central reserve. However, if other jurisdictions adopt similar ring-fencing policies, then the benefit of a pooled ‘central reserve’ capital is voided and all jurisdictions become worse off. Under our model, we find that failure risk increases by a large multiple if ring-fencing becomes pervasive. In some cases, the increase in risk is 5x or more, compared to a structure where internal capital is fully mobile. This is caused by ‘misallocation risk’ – the risk that a bank has enough capital resources overall, but cannot get those resources to the right subsidiary in time to avoid a local failure. The paper concludes with suggestions on possible policy alternatives that could mitigate these issues. We consider a few hybrid cases, which suggest that a ‘partly ring-fenced bank’ can mitigate a substantial amount of misallocation risk if the central reserve is significant and not committed too early. We then explore alternatives which build on the Financial Stability Board’s post-crisis bank resolution architecture. Large amounts of ‘bail-in’ capital are now being issued by the biggest global banks, and these resources can fund an alternative to the hard legal entity bankruptcies (or emergency bail-outs) seen in the 2008 crisis – events that appear to motivate many of the recent ring-fencing initiatives. We conclude with a ‘straw man’ proposal that aims to produce a more resilient overall outcome for the group while addressing legitimate host concerns. We believe the paper is relevant for the ongoing policy debates on bank structure, capital allocation and resolution.

중국 진출 한국중소기업의 철수결정요인: 본국 정부의 인센티브정책을 중심으로

중국 진출 한국중소기업의 철수결정요인: 본국 정부의 인센티브정책을 중심으로

REDD+ and tenure: a case study of Thailand

SUMMARY Against a backdrop of growing concerns over REDD+ implications for tenure of forest-dependent communities, very few scientific studies have attempted to assess the linkages between the two. This paper offers empirical evidences for impacts of REDD+ intervention based on a case study of Thailand, where de jure state property and de facto tenure apparently co-exist. In contrast to the existing literature proposing positive tenure impacts, the findings suggest that REDD+ would not be sufficient to incentivize the government to embark on tenure reforms or any improvement of customary tenure and challenge REDD+ about its incentives for countries to accelerate tenure reforms. The findings also reveal that risks associated with tenure insecurity discouraged REDD+ investment leading to the withdrawal of the fund altogether. The findings enrich the on-going debates on the tenure impacts, tenure reform and competing agendas and provide insights to support the development of future national strategies and fr...

Can Climate Change Negotiations Succeed?

More than two decades of climate change negotiations have produced a series of global climate agreements, such as the Kyoto Protocol and the Copenhagen Accords, but have nevertheless made very limited progress in curbing global emissions of greenhouse gases. This paper considers whether negotiations can succeed in reaching an agreement that effectively addresses the climate change problem. To be effective, a climate agreement must cause substantial emissions reductions either directly (in the agreement's own lifetime) or indirectly (by paving the way for a future agreement that causes substantial emissions reductions directly). To reduce global emissions substantially, an agreement must satisfy three conditions. Firstly, participation must be both comprehensive and stable. Secondly, participating countries must accept deep commitments. Finally, the agreement must obtain high compliance rates. We argue that three types of enforcement will be crucial to fulfilling these three conditions: (1) incentives for countries to ratify with deep commitments, (2) incentives for countries that have ratified with deep commitments to abstain from withdrawal, and (3) incentives for countries having ratified with deep commitments to comply with them. Based on assessing the constraints that characterize the climate change negotiations, we contend that adopting such three-fold potent enforcement will likely be politically infeasible, not only within the United Nations Framework Convention on Climate Change, but also in the framework of a more gradual approach. Therefore, one should not expect climate change negotiations to succeed in producing an effective future agreement—either directly or indirectly.

ENVIRONMENTAL MANAGEMENT POLICY UNDER INTERNATIONAL CARBON LEAKAGE

This article studies environmental management policy when two fossil‐fuel‐consuming countries noncooperatively regulate greenhouse‐gas emissions through emission taxes or quotas. The presence of carbon leakage caused by fuel‐price changes affects the tax‐quota equivalence. We explore each country's incentive to choose a policy instrument in a two‐stage policy choice game and find subgame‐perfect Nash equilibria. This sheds new light on the questions of which policy instrument is more stringent and of why adopted instruments could be different among countries. In particular, our result suggests a reason why developing countries tend to employ emission taxes whereas developed countries tend to adopt quotas.

POLICY MATTERS: TAX INCENTIVES FOR BUSINESS INVESTMENT

The purpose of this paper is to analyze the effects of the use of tax incentives on business investment performance in developing and transitional countries based in best international practices and some empirical evidence. The reasons are overviewed and, the costs and benefits of introduction of tax incentives are examined. The empirical evidence of effectiveness of tax investment incentives is studied in countries such as China, India, Russia, Uzbekistan. The conclusions are drawn, and recommendations are given on further implication of tax investment incentives in countries with transition economy.

Spoiler and Enabler

INTRODUCTIONThe topic of nuclear disarmament has made an impressive comeback since the four elder statesmen Shultz, Perry, Kissinger, and Nunn raised the issue in their 2007 op-ed piece in The Wall Street Journal.1 Embraced by its advocates as the only safeguard against the use of nuclear weapons and rejected by its opponents as a dangerous idealism, global nuclear zero has been debated thoroughly in academic and policy-making circles.As scholars and policy-makers consider the desirability and feasibility of a world without nuclear weapons, a number of them have addressed the question of what role ballistic-missile defence (BMD)2 will play in the process of nuclear disarmament? This question is highly relevant to the debate over nuclear disarmament, because ballistic missiles are the backbone of global nuclear arsenals, given their unique characteristics: they are able to deliver nuclear payloads over large distances in short time, they are a lot harder to intercept than airplanes, and, once launched, they cannot be called back. Given the centrality of missiles in nuclear deterrence, scholars and policymakers have debated the impact of missile defences on nuclear deterrence and arms dynamics since the late 1960s. The debate has been led over the technological feasibility of BMD and whether it would be compatible with limitations and reductions of offensive weaponry, or rather an incentive for countries to maintain or even increase their arsenals. Likewise, authors who have recently discussed the role of BMD in nuclear abolition have identified missile defence either as a remedy or as an obstacle.3This article takes a middle ground and adds two dimensions to the debate over the role of missile defence in nuclear abolition. First, the article broadens the focus and investigates the impact of BMD in the regional settings of the Middle East, East and South Asia, and Europe. In view of the upcoming Middle East WMD-Free Zone Conference (to take place in Helsinki in December 2012) this focus on the role of missile defence in regional settings is timely and relevant. It will be argued that the impact of BMD on the feasibility of nuclear zero at regional levels will be ambivalent. While the deployment of missile defence systems will contribute to the containment of nuclear ambitions of US allies in volatile regions, it will also add further momentum to existing arms dynamics. In Europe, BMD will most likely not materialize as a substitute for nuclear burden sharing within NATO because of intra- European disagreements over the role for missile defence and, in particular, constraints on public expenditure.Second, the article investigates options for making BMD compatible with nuclear zero at the great power level and extends the analysis to confidence building and arms control as largely neglected options.4 In this context, this article argues that BMD-cooperation will not succeed in creating trust among the great powers and will thus fail to remove missile defence as an obstacle to nuclear abolition. Given the unlikely prospect of BMD-cooperation, stepwise confidence-bunding and eventual arms control will be alternative and more viable options for aligning BMD with global zero, although movement in this direction is currently stalled.The article proceeds in three steps, starting with the analysis of mis sue defence at the regional level. It then moves on to the great-power level and traces the possibilities and limits of BMD-cooperation. Finally, it focuses on confidence building and arms control as a further option for aligning BMD with the goal of global zero.MISSILE DEFENCE ON THE REGIONAL LEVEL- ENABLER AND SPOILER'Ine feasibility of a world without nuclear weapons depends on how security dynamics develop at and between great-power and regional levels. As far as the regional level is concerned, Washington has promoted the idea that mis sue defence could improve regional stability in view of Iranian and North Korean nuclear weapons programs and aggressive rhetoric. …

Incentives to lead, follow, or compete: comparative national choices of international copyright

I study the desirability and incentives for countries to lead or follow in international copyright policy making by analyzing a lead-follow model of international copyright and comparing it with a competitive model. The analyses suggest that the lead-follow model is globally preferable except when the information products have short economic life in the leading country. In this exceptional case, the incentives of individual countries are compatible with global welfare as they also prefer the globally preferable competitive model. However, in the cases where the lead-follow model is globally preferable, individual countries do not always have the incentive to lead or follow. For example, a small country may prefer competition over leading or following, as competition may allow it to free-ride on the copyright protection provided by the larger country. This suggests that ‘extraordinary’ incentive is sometimes needed to induce individual countries to adopt the lead-follow model of international copyright when it is globally desirable.

Bank Competition and Stability: Cross-Country Heterogeneity

This paper documents a large cross-country variation in the relationship between bank competition and stability and explores market, regulatory and institutional features that can explain this heterogeneity. Combining insights from the competition-stability and regulation-stability literatures, we develop a unied framework to assess how regulation, supervision and other institutional factors may make it more likely that the data favor the charter-value paradigm or the risk-shifting paradigm. We show that an increase in competition will have a larger impact on banks’ risk taking incentives in countries with stricter activity restrictions, more homogenous market structures, more generous deposit insurance and more effective systems of credit information sharing.

Bank Competition and Stability: Reconciling Conflicting Empirical Evidence

Theoretical models and empirical results over conflicting evidence on the relationship between bank competition and bank stability. This paper aims to reconcile the seemingly contrasting evidence on the bank competition-bank soundness relationship. We develop a uni ed framework to assess how regulation, supervision and other institutional factors may make it more likely that the data favor one theory over the other (charter value paradigm versus risk-shifting paradigm). Cross-country heterogeneity in these factors allows us to test the assumptions and predictions of various theoretical models. We show that an increase in competition will have a larger impact on banks' risk taking incentives in countries with stricter activity restrictions, more herding in revenue structure, unconcentrated banking markets and more generous deposit insurance.

Currency Areas and Monetary Coordination

In this paper we integrate the recent development in monetary theory with international finance, in order to examine the coordination between two currency areas in setting long-run inflation. The model determines the value of each currency and the size of each currency area without requiring buyers to use a particular currency to buy a country's goods. We show that the two countries inflate above the Friedman rule in a non-cooperative game. Coordination between the two areas reduces inflation to the Friedman rule, increases consumption, and improves welfare of both countries. This gain from coordination increases as the two areas become more integrated in trade. These results arise from the new features of the model, such as the deviations from the law of one price and the extensive margin of trade. To illustrate these new features, we show that introducing a direct tax on foreign holdings of a currency does not eliminate a country's incentive to inflate, while it does in traditional models.

Canada's implementation of the Paragraph 6 Decision: is it sustainable public policy?

BackgroundFollowing the Implementation of Paragraph 6 of the Doha Declaration on TRIPS and Public Health, Canada was among the first countries globally to amend its patent law, which resulted in Canada's Access to Medicines Regime (CAMR). CAMR allows the production and export of generic drugs to developing countries without the requisite manufacturing capacity to undertake a domestic compulsory license. CAMR has been the subject of much criticism lodged at its inability to ensure fast access to urgent medicines for least developing and developing countries in need. Only recently did the Canadian government grant Apotex the compulsory licenses required under CAMR to produce and export antiretroviral therapy to Rwanda's population.MethodsThe objective of this research is to investigate whether the CAMR can feasibly achieve its humanitarian objectives given the political interests embedded in the crafting of the legislation. We used a political economy framework to analyze the effect of varied institutions, political processes, and economic interests on public policy outcomes. In-depth, semi-structured interviews were conducted with nineteen key stakeholders from government, civil society and industry. Qualitative data analysis was performed using open-coding for themes, analyzing by stakeholder group.ResultsCAMR is removed from the realities of developing countries and the pharmaceutical market. The legislation needs to include commercial incentives to galvanize the generic drug industry to make use of this legislation. CAMR assumes that developing country governments have the requisite knowledge and human resource capacity to make use of the regime, which is not the case. The legislation does not offer sufficient incentives for countries to turn to Canada when needed drugs may be procured cheaply from countries such as India. In the long term, developing and least developing countries seek sustainable solutions to meet the health needs of their population, including developing their own capacity and local industries.ConclusionCAMR is symbolically meaningful but in practice, limited. The Rwanda case will be noteworthy in terms of the future of the legislation. To meet its intended international health objectives, this legislation needs to be better informed of developing country needs and global pharmaceutical market imperatives. Finally, we contend that serious public policy change cannot strike a balance between all vested interests. Above all, any feasible policy that aims to facilitate compulsory licensing must prioritize public health over trade or economic interests.

Market discipline, disclosure and moral hazard in banking

This paper examines empirically the hypothesis that market discipline is effective in providing incentives for banks to limit their risk of default, by holding capital buffers against adverse outcomes in portfolio risk. We have constructed a large cross-country panel data set consisting of observations on 729 individual banks from 32 different countries over the years 1993 to 2000. Theory implies that the strength of market discipline ought to be related to the extent of the government safety net, the observability of bank risk choices and to the proportion of uninsured liabilities in the bank's balance sheet. Using panel data techniques, we test whether these factors provide incentives for banks to hold larger capital buffers against adverse outcomes in portfolio risk. Our results suggest that government safety nets result in lower capital buffers and that stronger market discipline resulting from uninsured liabilities and disclosure results in larger capital buffers, all else equal. While our results therefore point to the effectiveness of market discipline mechanisms in general, we also find that the effect of disclosure and uninsured funding is reduced when banks enjoy a high degree of government support. Our results finally suggest that while competition leads to greater risk taking incentives, market discipline is more effective in curbing these incentives in countries where competition among banks is strong.

Tariff Discrimination versus MFN under Incomplete Information

Does the presence of incomplete information affect a country's incentive to discriminate across exporters with different costs? If so, how? From a global perspective, does the presence of incomplete information weaken or strengthen the case for MFN? We examine these questions in a model of imperfect competition with two asymmetric exporters and a single importing country who is imperfectly informed about exporters' costs. Despite the lack of complete information, the importing country prefers discrimination to MFN. However, equilibrium tariff dispersion is lower under incomplete information. As a result, the global welfare gain from MFN, while still positive, is smaller under incomplete information relative to the case of complete information.

Self-Enforcing Agreements and International Trade in Greenhouse Gas Emission Rights

The success of any international climate change agreement depends on abatement targets and the incentives for countries to participate. We demonstrate that international emission trading is effective in making headway on both issues despite the assumption that countries choose their permit endowments non-cooperatively. Developing countries are lured into a trading system by the prospective rents from permit sales. Developed countries benefit from the reduced cost of emission abatement. Using a calibrated representation of the global economy in seven sectors and six regions, we find that the most effective permit-trading agreements are sub-global and yield abatement at approximately twice the level achieved in a world without permit trading.