Institutional Economics Perspective Research Articles

Looking behind the Continuum: An Institutional Economics Perspective on Schilke and Lumineau’s “How Organizational Is Interorganizational Trust?”

Looking behind the Continuum: An Institutional Economics Perspective on Schilke and Lumineau’s “How Organizational Is Interorganizational Trust?”

The Transformation and Innovation of China's Discipline Inspection and Supervision System from the Perspective of New Institutional Economics

The Transformation and Innovation of China's Discipline Inspection and Supervision System from the Perspective of New Institutional Economics

Institutional differences and threats to international tourists from the perspective of new institutional economics

The main aim of this article is to demonstrate theoretical connections in the context of institutional differences for the international tourist, which may constitute a source of threats due to institutional differences between countries. The article highlights theoretical threats stemming from institutional differences for international tourists from the perspective of new institutional economics, the research methods of which provide the analytical framework for this analysis. The post-pandemic period could transform preferences among international tourists, who are increasingly drawn to countries with significant cultural diversity. This creates dangers arising from institutional differences that may affect their sense of security and, consequently, have implications for social costs significant to the industry, as demonstrated during the COVID-19 pandemic, underscoring its crucial role in global economic development.

Identifying production costs of cut roses: An institutional economics perspective

In institutional economic theory, transaction costs are one of the main focuses of discussion. Transaction costs create inefficiencies in production. Roses are one of the main commodities produced by Batu City. This research aims to identify transaction costs that are borne by cut rose farmers in Batu City. Transaction costs result in higher production costs, thereby reducing farmers’ profits. This study uses a descriptive qualitative approach. Research data was obtained through interview techniques with cut rose farmers. The research results show that there are six types of transaction costs that are borne by farmers. Based on the calculation results, farmer transaction costs for 1 planting season are around IDR 7,040,433.00. These transaction costs result in decreased farmer’s profit of cut rose selling because the production cost raise.

Cultural tightness and financial reporting behavior around the world

This study examines the effect of cultural tightness on earnings management globally through an institutional economics perspective. We find that managers are less (more) likely to use accrual-based (real) earnings management in countries with tight cultures, consistent with the notion that managers switch to real earnings management when accrual-based earnings management is constrained in tight cultures. Our findings are robust to several endogeneity and sensitivity tests. Additionally, our results show that the strength of investor protection attenuates the effect of cultural tightness on earnings management, suggesting a substitutive relationship between this effect and the legal regime. The results also show that transactions with other countries (i.e., more imports and exports or foreign sales) weaken the effect of cultural tightness. Thus, by focusing on norm-based cultural tightness rather than Hofstede’s value-based cultural dimensions, this study advances the understanding of how culture affects corporate reporting practices.

The Role Of Macroeconomics In The Post-Collapse Status Quo Between Leadership Periods In Indonesia Has Significant Implications, Especially From The Perspective Of Institutional Economics.

The economic crisis is one of the triggers for economic crises in various countries from over time. It's not just the economic crisis, apart from that the more important thing is the collapse of the structure of society, the direction of the economy and politics in the future, in the status quo situation after the collapse between leadership periods in Indonesia, where government product regulations, including external institutions, cause uncontrolled public reactions to the transition situation. This article discusses the situation in Indonesia from era to era, from a macro-economic, political and institutional perspective. So economics and politics are a forum for leaders to decide on strategic policies in leading the government during the transition period.

Long-term orientation, family-intensive governance arrangements, and firm performance: an institutional economics perspective

Long-term orientation, family-intensive governance arrangements, and firm performance: an institutional economics perspective

The Value of News: Aligning Economic and Social Value From an Institutional Perspective

Journalism is considered essential to a functioning democracy. However, the continued viability of commercial news production is uncertain. News producers continue to lose advertising revenue to platform businesses dominating digital advertising markets, and alternate consumer direct revenue streams are not yet meeting the financial shortfall. This has led to questions of who should pay for news, the role of governments in maintaining news production viability, and whether digital platforms have social or economic responsibilities to pay news publishers. In this article, we seek to make explicit what is often implicit in such debates, which is the value of news. This is hard to know in advance as news is an experience good whose value and quality are only known after consuming it, and a credence good, whose perceived qualities may not be observable even after it is consumed. As such, preparedness to pay for news can be hard to ascertain, accentuated by the large amount of free news available online. This article seeks to use a value perspective to consider the relationship between individual consumer choices and questions of news’s value to society. Applying a new institutional economic perspective, it is observed that the value of news as a consumer product needs to be examined in relation to its value as a social good in democratic societies as both a media product and part of the institutional environment in which other social actors operate. We consider news’s social and economic value within a context of platformed news distribution and declining advertising revenues that appear to be structural and not cyclical.

An Evaluation of Regulations in the 19th Century Ottoman Legal System from the Perspective of Institutional Economics: An Application on New Court Records

An Evaluation of Regulations in the 19th Century Ottoman Legal System from the Perspective of Institutional Economics: An Application on New Court Records

From Petrodollar to Energy-Yuan: Currency Internationalization in the Light of Original Institutional Economics

The present article relies on an original institutional economics perspective of the international monetary system to argue that contrary to what is generally maintained in international relations literature, China’s effort to internationalize the renminbi has not stalled after its inclusion in the International Monetary Fund’s (IMF) Special Drawing Rights in 2015. This argument rests upon on the evaluation of the global petroleum market as a possible reinforcement of China’s establishment of the renminbi as an international unit of account and means of payment through its participation in both fossil and renewable energy markets. To that end, we analyze China’s energy-yuan strategy aimed at both fostering renminbi internationalization and securing energy provision.

The impact of public policies on China’s new energy vehicles from the perspective of institutional economics

With the development of the economy and the enhancement of environmental awareness, new energy vehicles have become a new choice for many consumers. As one of the most developed countries in new energy vehicles, China cannot do without government financial support. In order to promote the development of China’s new energy vehicle industry, the government has introduced a series of support policies, including financial subsidies. This article conducts an empirical analysis of the development of new energy vehicles in China from the perspective of the impact of institutional economics on public policy. It is concluded that this article uses a time series model to analyze the relationship between the amount of state subsidies and sales, the number of patent applications, and the number of charging piles from 2011 to 2021. The research results show that state subsidies have a significant impact on the number of new energy vehicle patent applications. Positive promotion effect. The impact of state subsidies on sales is not significant.

Unlocking the Power of Entrepreneurship Activity in Vietnam’s Regions: The Role of Formal Institution

While entrepreneurship has been extensively studied worldwide, scant empirical research evidence has been found in Vietnam. Building upon the institutional economics perspective, this study empirically investigates the tripartite relationship between formal institutions, entrepreneurial activity, and socio-economic outcomes. A fixed effects model is employed to test the proposed hypotheses using a 5-year strong balanced panel data. The findings indicate that provinces are heterogeneous along multiple dimensions of institutional quality, leading to different entrepreneurial rates. Concurrently, it highlights the vital role of entrepreneurial activity in explaining the differences in economic performance, unemployment rate, and living standards across Vietnam’s regions. The results also confirm that the entrepreneurial rate exerts a mediating effect on the relationship between institutional quality and socio-economic outcomes. This study contributes to the entrepreneurial literature in Vietnam and provides practical implications for Vietnamese policymakers.

Analysis of Unlicensed Operation Supervision from the Perspective of New Institutional Economics

Analysis of Unlicensed Operation Supervision from the Perspective of New Institutional Economics

Rationality of the Tax System and Taxation Principles in the Context of Contemporary Fiscal Crisis (Analysis from the Perspective of the New Institutional Economics)

Abstract The paper presents, in the synthetic way, the issue of the rationality of the tax system and taxation principles in relation to the clearly visible fiscal crisis in the 21st century caused by, among others, COVID-19 pandemic. The analysis which is theoretical (descriptive, comparative) was carried out by using tools indicated in the area of New Institutional Economics (NIE). Attention was devoted primarily to the importance of specific institutional arrangements, broadly understood as the “rules of the game” applicable in the political and economic spheres, and related to the problems of public finances. Research has shown that the appropriate design of tax rules may contribute, to some extent, to limiting the fiscal crisis. Tax policy, and even more broadly, fiscal policy, may determine the formula in which the economic achievements regarding compliance with tax principles and fiscal rules can be implemented. What is primarily important is the legal framework (one of the most important formal institutions) within which state policy in the field of public finances should be implemented.

ZAKAT GOVERNANCE IN PANGKALPINANG CITY INSTITUTIONAL ECONOMIC PERSPECTIVE

This research aims to find out the governance of zakat from the perspective of institutional economics in Pangkalpinang City. This research uses qualitative-descriptive method. Data collection methods through interviews, documentation and observation. The results of this study are the management of zakat in BAZNAS Pangkalpinang City every year continues to increase, although there is still a lack of public awareness in Pangkalpinang City in paying zakat. In its journey in the third year of BAZNAS leadership, the progress has been seen where public trust in BAZNAS began to emerge. BAZNAS Pangkalpinang City has made many programs covering education, humanitarian and poor people's programs to provide welfare to the community with professional and trustworthy zakat management.

The Political Economy of Nigeria’s Oil Dependency and Its Implication on Economic Diversification

Nigeria is the largest economy in Africa, but it suffers from resource curse or Dutch disease where she is unable to leverage on her resource endowments to diversify into many other sectors of the economy. Her industrial capacity is very low due to infrastructure shortage. But the foregoing are motivated by rent-seeking and vested political power holders who rather will support implementing import-dependent policies. Consequently, it is difficult to adopt the latest technology and liberalize the economy for inclusive participation of the citizenry. Utilizing the New Institutional Economic (NIE) perspective, secondary sources of information and content analysis, the paper ascertained that protectionist policies of protecting nascent industries have not worked for Nigeria. For instance, closing the borders to protect local rice producers rather caused rice price volatility and inflation among others. Hence recommends a radical revolutionary change in the political economy will necessitate the needed reforms. All emerging economies in Asia passed through this stage of development.

Community-government, and private partnership (CGPP): revisiting the concept of community-based forest management

The Community-Based Forest Management (CBFM) model has been seen as a potential solution to solve various problems related to forest degradation and the creation of inclusive forest governance. However, in practice, CBFM does not always implement smoothly, with some studies highlighting the weaknesses of CBFM in term of accountability, transparency, efficiency, effectiveness, empowerment, monitoring, law enforcement, and dependency on external actors. Accordingly, this paper revisits the concept of CBFM from the perspective of New Institutional Economics and the proper governance concept. The data collection process was conducted through literature studies using the Preferred Reporting Items for Systematic Reviews and Meta-analysis (PRISMA) methodology. It may be argued that the implementation of CBFM has weaknesses in terms of, amongst other things, business and organizational activities, inclusivity, community empowerment, community income, and sustainability. In reference to the various flaws encountered in the implementation of CBFM, and to put in place proper governance in forest business activities, this paper proposes a new model – the so-called Community-Government and Private Partnership model (CGPP). This developed model has positioned the cooperative as "core institutions" whose role is to orchestrate five main governance functions, namely: organizational, business activities, human resource development, and corporate and environmental sustainability. This CGPP model is expected to contribute to the existing literature of institutional analysis and forest management with a different approach, as well providing concrete recommendations for the implementation of the CGPP model in CBFM.

Economic Freedom and Environmental, Social, Governance Practices: An Analysis of the Financial Sector in the Americas

Through the theory of legitimacy and the theoretical perspective of New Institutional Economics, the purpose of this paper is to analyze the effect of economic freedom over the relationship between Environmental, Social, Governance (ESG) practices and profitability. The sample was finance companies located in the Americas, between 2017 and 2020, using the Refinitiv Eikon® database. The analysis used data modeling in a hierarchical panel. Results demonstrate that ESG practices have a positive and significant impact on profitability. Individually, only the social variable showed a positive and significant relationship over profitability. As for the moderating effect of economic freedom, it was shown that economic freedom enhances the relationship between an ESG index and profitability, and only enhances the relationship between corporate governance and profitability when analyzed individually. Furthermore, findings imply that a country’s institutional quality has an important influence on ESG practices and profitability.

A Study on the Impact of Fiscal Decentralization on Regional Green Development: A Perspective Based on the Emphasis on Sports

From the perspective of institutional economics, we investigate the impact of fiscal decentralization on regional green development in China and its transmission mechanism through influencing sports fiscal expenditures on regional green development. Based on panel data of Chinese provincial regions from 2006 to 2017 in China, we use fixed effects models, two-stage least squares, and mediating effects models to find that fiscal decentralization accelerates regional green sustainability. Fiscal decentralization can enhance the government’s emphasis on sports and promote the smart and intelligent development of the sports and health industry, thus contributing to the improvement of green and sustainable development. There is regional heterogeneity in the effect of the governmental emphasis on sports, and the mediating effect of the degree of emphasis on sports is more obvious in the eastern region. We verify the possibility that the government can accelerate economic green sustainability by raising the importance of the sports and health industry development and promoting the intelligent infrastructure of sports and enrich the theoretical study of the ecological effect of fiscal decentralization from the perspective of sports economic development.

Looming market failure in cloud computing: a new institutional economics perspective

PurposeIn recent times, high demand for cloud-based services has led to substantial focus in extant literature from technological and business perspectives. However, the prevailing market imperfections have not drawn much interest. This study aims to emphasize on potential sources of market imperfections from new institutional economics (NIE) perspective and attempts to bring forth the importance of public policy in cloud computing ecosystem.Design/methodology/approachThis study takes a review-based deductive approach to present a set of propositions which highlight potential causes leading to suboptimal performance of cloud-based services.FindingsLack of clarity around ownership and property rights, high asset specificity, existence of information asymmetry and bounded rationality of the provider and consumer, lead to higher transaction cost for providers and consumers, discouraging participation. This would lead to moral hazard and adverse selection and create market imperfections. Appropriate contractual guidelines, standards, legal framework and policy measures will reduce the risk of such imperfections.Research limitations/implicationsAs the focus of the study is to forward the propositions and not to empirically test them, future researchers can adopt data-driven studies to validate those propositions.Practical implicationsTo ensure equity in the cloud-market, government and industry bodies should work towards enabling both the small and large players to use cloud-based services efficiently and effectively. Appropriate public policy measures can help remove potential market imperfections, encourage better participation and adoption of cloud-based services.Originality/valueThis study identifies potential market imperfections in cloud computing ecosystem through the lens of the theoretical frameworks of NIE.