Institutional Framework Research Articles

Analyzing AI adoption in European SMEs: A study of digital capabilities, innovation, and external environment

This study investigates the effects of digital capabilities, innovation capabilities, and business environmental support on the adoption of Artificial Intelligence (AI) in Small and Medium-sized Enterprises (SMEs). Utilizing dynamic capabilities and resource dependency theories, we provide a comprehensive and integral analysis of the drivers that facilitate AI adoption in SMEs. We conducted an empirical study encompassing 12,108 SMEs, based on survey data of the Flash Eurobarometer database from the European Union. Our analysis employed a combination of classical regression methods and advanced machine learning techniques, including artificial neural networks and tree regression. Our findings highlight the importance of digital capabilities in driving AI adoption, where complementing innovation capabilities exhibit synergistic effects. Contrary to prevailing literature, business environmental support alone demonstrates limited impact, emphasizing its contingent effectiveness within a well-elaborated institutional framework. Furthermore, the synergy between business environmental support and digital and innovation capabilities has a significant impact on AI adoption in SMEs. However, internal capabilities exert a greater influence on AI adoption in SMEs compared to business environmental support. This study contributes to dynamic capabilities theory by elucidating the interplay of digital and innovation capabilities, offering a nuanced understanding of their combined influence on AI adoption. It also enriches resource dependency theory by highlighting the dynamic nature of business environmental support. For practitioners, our results underscore the need for a balanced investment in digital and innovation capabilities. Policymakers should consider these insights when designing support structures for SMEs, emphasizing a comprehensive approach to foster internal capabilities alongside creating an enabling external environment.

Государственная политика в сфере развития креативной экономики Российской Федерации

The article analyzes the main directions of state policy in the field of development of the creative economy of the Russian Federation. The institutional framework for the legal regulation of politics, key concepts and their definitions are given, the principles of implementation of the policy under consideration are systematized and supplemented, the main groups of existing support measures are formed.

Unpacking Province Creation in The Philippines

To enhance service delivery and local democracy, legislators have tinkered with size or status of local governments in the Philippines. This elasticity in local borders has been more evident at the province level, the highest local government tier. Since 1987, a new province is birthed roughly every three years. As the determinants and mechanisms of contemporary province fragmentation are under-examined, this article investigates, at several policymaking levels and dimensions, attempts to redraw borders of Philippine provinces. Framed by an institutional framework and a case-study approach, and employing a veto-player analysis, heuristic cases of two provinces (Quezon and Zamboanga del Sur) were unpacked and compared. Findings reveal that there is a large and fragmented veto-player group in the area of territorial rescaling of provinces. Congruence of preferences among veto players was observed to be influenced by territorial leveraging, pivot on networks and reciprocity norm, and mirroring of preferences. The tenacity and strategic actions of reform agent or policy entrepreneur (usually the congressman), sometimes assisted by social movement, is likewise found crucial in the pathways leading to reform outcomes. In a simple cross-case analysis of recent reform attempts, findings also suggest that the provinces’ core-periphery location pattern, and proposed type of spatio-jurisdictional partition are associated with reform outcomes.

OVERLAPPING MARITIME SECURITY: CHALLENGES AND OPPORTUNITIES FOR INVESTMENT IN INDONESIA'S EXCLUSIVE ECONOMIC ZONE

This study examines the state's responsibility in ensuring investment security within Indonesia's Exclusive Economic Zone (EEZ), analyzing the roles of law enforcement officials and security institutions. The research highlights the importance of a stable regulatory framework and effective maritime security measures to foster a conducive environment for both domestic and foreign investors. It identifies the challenges posed by overlapping authorities among various agencies, which can lead to inconsistent law enforcement and uncertainties that discourage investment. By reviewing relevant laws, regulations, and institutional frameworks, the study emphasizes the need for improved coordination among maritime security agencies, enhanced surveillance technologies, and a comprehensive legal framework. The findings suggest that addressing these challenges will not only protect national interests but also promote investor confidence, unlocking the economic potential of Indonesia's EEZ in sectors such as fisheries, energy, and maritime transportation. Ultimately, this research contributes to a deeper understanding of the intersection between maritime security and investment opportunities, providing valuable insights for policymakers and stakeholders involved in Indonesia's maritime governance.

Conceptual model for strengthening international commercial arbitration in promoting cross-border trade and investment in developing economies

International commercial arbitration plays a crucial role in promoting cross-border trade and investment, particularly in developing economies where legal and institutional frameworks may be underdeveloped. This paper proposes a conceptual model aimed at strengthening international commercial arbitration to enhance its effectiveness in supporting cross-border trade and investment in these regions. The model addresses the unique challenges faced by developing economies, such as inadequate legal infrastructure, limited access to expertise, and the reluctance of foreign investors due to perceived risks. It emphasizes the need for capacity building, the harmonization of arbitration laws with international standards, and the creation of supportive legal environments that foster investor confidence. The model proposes the establishment of regional arbitration centers with a focus on developing economies, staffed by experts familiar with local contexts and international best practices. Additionally, it suggests the integration of digital technologies to streamline arbitration processes, reduce costs, and enhance accessibility. Collaboration between international arbitration bodies, governments, and private sectors is also highlighted as a critical component for the success of this model. Furthermore, the model advocates for the development of specialized training programs to build local expertise in arbitration and dispute resolution. By fostering a robust arbitration culture, developing economies can attract and retain foreign investment, thereby contributing to sustainable economic growth. This conceptual model seeks to bridge the gap between global arbitration standards and the specific needs of developing economies. By doing so, it aims to create a more conducive environment for cross-border trade and investment, ultimately contributing to the economic development of these regions. The paper concludes by outlining the potential impact of the model on improving investor confidence, reducing trade barriers, and enhancing the overall attractiveness of developing economies as investment destinations.

Evaluation of Coastal Management in the Municipality of Paulista/PE in the Light of the Decalogue

Brazil adopts Integrated Coastal Management as a way of protecting coastal environments through sustainable use and through the National Coastal Management Plan – PNGC structures actions directed at coastal areas, guaranteeing municipalities a prominent position in the integrative process. The structuring of the legal and institutional framework does not remove the picture of degradation borne by coastal cities, which have problems with sanitation, erosion and reduction of biodiversity. The general objective of this article is to analyze the Coastal Management process adopted by the municipality of Paulista, Pernambuco, in order to provide subsidies for institutionalization and sustainable governance. The methodology was structured in two parts. The first part used the Land Use and Land Cover (LULC) dataset available free of charge MapBiomas collection 6. The second part used the methodology proposed by Barragán in the “Decalogue for the Management of Coastal Areas”, where the 10 indicators are analyzed fundamental to evaluate actions related to coastal management. The methodology was adapted to include the mapping of the use and occupation of the municipality's coastal area over a period of 36 (thirty-six) years. The results of the analysis of land use and occupancy indicate a steady growth in anthropized areas from 1986 until the end of the 1990s, stabilizing with few changes. After an increase, there was a new stabilization between 2006 and 2012, followed by a notable growth in 2013–2014 and a subsequent period with less pronounced increments until the year 2021. Regarding the matrix analysis, there is a greater advancement in aspects related to Knowledge and Information, Normative and Competencies, whereas items such as Training and Capacity Building, Resources, and Public Policies require better strategic definitions by the municipality. As for the results of the matrix analysis, they reveal the need for the implementation of impact mitigation measures, the strengthening of oversight and monitoring, the development of strategies for climate change adaptation, the promotion of environmental education, and the fostering of scientific research in coastal areas. Finally, there is a suggestion for the continuous evaluation and correction of actions related to coastal and marine areas of the municipality, as well as the use of scientific evidence in decision-making.

CRITICAL FACTORS AFFECTING THE SUCCESS OF SHARI‘AH GOVERNANCE: INSIGHTS FROM ISLAMIC FINANCIAL INSTITUTIONS

This study examines the critical role of Shariah governance, particularly the impact of Shariah supervisory boards (SBBs) within the corporate governance framework of Islamic financial institutions (IFIs). SSBs, as critical components of Shariah governance mechanisms, significantly influence Shariah compliance processes within IFIs. This study explores the unique systemic risks inherent in the Islamic financial environment, focusing on the complexities and elements defining SSB legitimacy. The IFSB recommends four essential components for Shariah governance systems, emphasizing the importance of SSBs. However, SSBs face challenges balancing SharÊ‘ah adherence and market dynamics, highlighting a conflict between business objectives and Shariah rules. This study acknowledges the limited strength of Shariah governance, advocating for universally adopted standards to address issues such as conflicts of interest within SSBs and the need for diversified skill sets. This paper assesses the effectiveness of Shariah governance and SSBs in IFIs. For this purpose, a survey was conducted among middle and senior-level managers and employees employed in IFIs or associated regulatory entities across diverse nations. The results highlight the critical role of SSB members, specific standards for board nominations, and the moderate influence of stakeholders' interests on Shariah governance success. Shareholders’ and customers’ interests show no significant correlation with Shariah governance success.

Medical ethics and physician motivations

This paper provides an institutional economics framework for analyzing medical ethics. An ethical policy partitions the set of physician actions into (un)ethical subsets, with unethical actions then unavailable. Individual physicians’ preferences over policies combined with a political process determine equilibrium constraints. I show that physicians’ concern for colleagues’ patients uniquely motivates their support for ethics which restrict behavior under strong assumptions. Without these assumptions, even identical physicians might ban actions they would otherwise select for reasons varying from protecting patients to differences in the costs of maintaining ethical policies. Interestingly, heightened altruism for colleagues’ patients makes the former reasoning less credible. Novel applications for ‘Provide Free Care to Physicians’ and ‘Duty to Treat in a Pandemic’ demonstrate: (i) rising physician income can explain long-run weakening of both formal ethics in the United States; and (ii) the duty to treat can deteriorate as fewer physicians are required to improve pandemic outcomes.

An anti-money laundering authority for the European Union: a new center of gravity in AML enforcement

AbstractThe establishment of an Anti-Money Laundering Authority (AMLA) heralds a milestone in the European Union’s (EU) institutional framework for the enforcement of anti-money laundering and countering the financing of terrorism (AML/CFT) rules. This contribution explores the competence and powers of the new AML/CFT supervisor. While AMLA is a true enforcement actor with investigative and sanctioning powers to address breaches of AML/CFT requirements, the scope of AMLA’s enforcement powers will be limited. AMLA will nevertheless have an important regulatory impact and it will enhance the fight against cross-border financial crime by supporting the work of other bodies and agencies in the field.

Anti-Money Laundering in the Digital Economy: Institutional, Financial, and Educational Channels

This paper aims to address the practical challenge of enhancing the effectiveness of anti-money laundering systems within the context of the digital economy. Specifically, it examines how institutional, financial, and educational channels can be optimised to combat illicit financial activities. This research responds to the growing need for a comprehensive anti-money laundering framework that can adapt to the evolving dynamics of the digital economy, where financial crimes are becoming increasingly sophisticated. A methodological framework is proposed to assess and forecast the effectiveness of these channels, employing the principal component method and Saaty hierarchy analysis. The study incorporates both linear and nonlinear regression models to provide medium-term forecasts for the channels' characteristics and their contribution to anti-money laundering effectiveness. An integral indicator is developed to quantify the impact of these channels in combating illicit financial activities. Historical data are utilised to project trends up to 2025, revealing the expected influence of institutional, financial (investment), and educational channels on the anti-money laundering system. The results indicate that, without targeted interventions, the effectiveness of institutional and financial channels gradually decreases, whereas the educational channel maintains a positive trajectory. This analysis underscores the importance of strengthening institutional frameworks and financial oversight to ensure the sustainability of anti-money laundering measures in the digital economy.

Evaluating the Role of Institutional Quality in the Relationship Between Education Expenditure and Manufacturing Growth: Insights from Quantile Regression Models

This study aims to provide empirical insight into the role of institutional quality and its impact on the relationship between expenditure on education and the growth of manufacturing in Malaysia. The study employed time series data from 1984 to 2020, using a quantile regression model for three quantiles: 25%, 50%, and 75%. The results showed that government spending on education (GXE) had a negative and statistically significant effect on manufacturing sector growth (MSG) on all quantiles in both interaction and non-interaction models. This may indicate a lack of quality, allocation, and efficiency in government expenditure and its targeting. However, the interaction effect between government spending on education and institutional quality (INTC GXE&IQI) on manufacturing sector growth (MSG) provided a consistently positive effect across all quantiles. This positive interaction means that the effect of education spending on manufacturing sector growth is conditional on the quality of institutions. The positive coefficients indicate that when government spending aligns with robust institutional frameworks, it effectively stimulates growth within the manufacturing sector. This phenomenon may be attributed to effective institutions amplifying the impact of government expenditure by ensuring efficient fund utilization for intended purposes. Policies aimed at strengthening institutions' quality —such as improving bureaucracy, enhancing transparency, and combating corruption—can enhance the efficacy of education expenditure, which supports the long-term and sustainable growth of the manufacturing sector.

Determinants of foreign direct investment in SADC region: Case of financial development, institutions and openness

Background: Countries in the Southern African Development Community (SADC) region have experienced low growth coupled with high levels of poverty and inequality. Economic growth has been touted as one of the major factors to deal with these problems. However, the lack of financial resources has hampered the efforts to achieve high levels of growth. This has therefore resulted in the countries putting much effort on attracting foreign capital.Aim: The study aims to investigate the extent to which financial development (FSD), financial openness, and institutional quality determine the inflow of foreign direct investment (FDI) in the SADC region.Setting: The study focuses on 15 countries in the SADC region from 2008 to 2022.Method: The study employs the Generalised Method of Moments (GMM) technique given the problem of endogeneity between the variables of interest.Results: The findings from the study indicate that FSD and financial openness are important factors determining the flow of FDI to the SADC region. On the other hand, the effect of institutions was found to be significant when taking into account the state of FSD and financial openness.Conclusion: Policymakers are encouraged to focus on enhancing institutional frameworks, promoting FSD, and increasing financial openness to optimise capital inflows.Contribution: The study contributes to the available studies by incorporating the role that is played by institutional quality and financial openness to the modelling. This becomes important as the region aims at attracting more foreign capital so as to improve growth as domestic capital supply falls short of domestic capital demand.

Economic Development and the Development of the Securities Market: A Study of China's CSI 300 Index

The Chinese securities market has experienced over two decades of development and has emerged as a significant global investment market. However, compared to other developed securities markets, it still faces issues such as an inadequate institutional framework, irrational investor behavior, and imperfect mechanisms. To explore the relationship between China's economic development and its securities market, this paper employs Eviews time series analysis and VAR modeling for empirical research, aiming to uncover the relationship and operational mechanisms between the two. The findings indicate a certain correlation between economic development and securities market development in China. The variance decomposition reveals that the contribution of economic development to the securities market is relatively low, highlighting a major issue within the Chinese securities market. Consequently, this paper proposes reform suggestions from various perspectives, including institutional, investor, and listed company aspects, to guide the healthy growth of the Chinese securities market and create a favorable environment for economic development.

Board Gender Diversity and Workplace Safety: Evidence From Quasi‐Natural Experiments

ABSTRACTResearch Questions/IssueThis paper examines the impact of board gender diversity on workplace safety in an international setting from 2002 to 2019. Utilizing gender quotas on corporate boards as a quasi‐natural experiment, we explore the causal effects of gender diversity on workplace safety, highlighting the significant influence of corporate board gender quotas on corporate policies.Research Findings/ResultsUsing a sample of 13,124 firm‐year observations from 48 countries, our findings reveal that gender quotas on corporate boards are linked to higher rates of work‐related injuries. The association is particularly strong in financially constrained firms, as well as in those with high workloads and low investments in workplace safety. In contrast, this effect is mitigated in firms located in countries with strong institutional frameworks and high union representation. The results hold across various regression specifications and remain robust when considering different measures of workplace injuries, board gender diversity, and additional control variables.Theoretical ImplicationsOur study draws on gender behavior theory, social role theory, and gender socialization theory, with findings particularly aligning with gender behavior theory. It advances understanding of how changes in corporate governance structures related to board diversity influence workplace safety. This research underscores the importance of further empirical work to expand this area of study, suggesting valuable directions for future research through cross‐sectional and longitudinal analyses.Practical ImplicationsThe findings provide critical insights for policymakers considering the implementation of gender quotas in boardrooms. Additionally, this research highlights the need for further exploration of unexamined aspects within governance studies, which will significantly influence future policy debates, legislative processes, and corporate practices in promoting gender diversity and enhancing workplace safety.

Assessment of water-use efficiency for enhancing urban wastewater reuse – a case of Bhopal, India

ABSTRACT Wastewater reuse, a known alternative, lacks strong policy and institutional framework in India. There are various non-potable uses in urban areas that can be supplemented with treated wastewater for reducing the pressure on freshwater resources. The current policies in India promote use of treated wastewater for agricultural irrigation and industrial use, but they suggest no measures for reuse of the same in urban areas. The research aims to identify whether the water available in an urban area is used sufficiently and fulfils the needs of the city residents in a sustainable manner and advocates wastewater reuse as a possible option for improving its use efficiency. The study reviews the water-use efficiency of Bhopal city using performance indicators. The results suggest that Bhopal city receives enough supply for its needs; however, it is majorly dependent on its external resources. It is thus imperative that the city reuses its water efficiently and looks for wastewater as an alternative source. The research suggests a measurability framework for the local administration to set and identify targeted water use and reuse options within its periphery. The study also identifies certain shortcomings in existing policies and suggests measures to promote judicious reuse of wastewater in urban areas.

Liberal Intergovernmentalism Under Revision: The EEAS and the Creation of a Supra-State Diplomatic Body

Summary Why do Member States agree to create supra-state institutions? Do institutional frameworks affect outcomes? This study employs theory-testing process tracing to contribute to liberal intergovernmentalism by examining the configuration process of the European External Action Service, negotiated within two innovative institutional settings: the Convention and the Quadrilogue. The study concludes that liberal intergovernmentalism needs to be nuanced, as institutional settings are crucial in building supra-state institutions by shaping actors’ behaviour through available choices and conclusions. The bargaining was supra-state rather than intergovernmental. Preference formation was domestic but not liberal, as no interest group, other than the diplomatic corps, was involved. The European External Action Service was agreed upon as a package deal based on benefits to Member States and EU institutional actors, along with control mechanisms. Evidence comes from sixty in-depth elite interviews with EU officials and member state representatives directly involved in the negotiations.

THE REVIVAL OF SERBIAN NATIONALISM IN THE FORMER YUGOSLAVIA

With the establishment of Yugoslavia as a state that consisted of several nations such as Croats, Slovenes, Bosnians, Albanians, Macedonians and Serbs, there will constantly be attempts to dominate other nations. For Serbia, the Yugoslav state will only be a tool for Serbian domination, which, in turn, stimulated Croatian national opposition. Nationalism will come to the fore mostly from the years 1844 with the infamous "Nacertania" program until the end of the Second World War. Serbian nationalism will also be emphasized during Tito's leadership, with the program of the Serbian Academy of Sciences and Arts in 1986 and its implementation by Slobodan Milosevic. The Serbs never stopped these forms of war even with the ethnic Albanians of Kosovo and the Albanians who lived in other territories in the former Yugoslavia, but they managed to adapt them, depending on the political currents in the world, and continued the ethnocide that can be taken as an example flagrant application of silent fascism that acted in the institutional framework, without any serious reaction from the outside.

Identifying Regulatory Barriers in the Management of Ecological Corridors in an Increasingly Congested Space

Ecological corridors are essential in facilitating the movement and dispersal of flora and fauna between separate and often isolated habitat patches. In recent years, Israel has confronted significant challenges due to the rapid pace of construction, driven in part by exceptional population growth that sets it apart on the global demographic stage. This accelerated development creates an unprecedented long-term impact on ecosystems. A key obstacle to maintaining ecological corridors is the Israeli government’s decision to construct thousands of housing units using expedited plans that circumvent standard planning processes. Such projects significantly impact these corridors, given that approximately 16% of their designated areas overlap with ecological corridors. This raises two pressing questions: Can the existing ecological corridors endure these changes and remain functional, or does the role of ecological corridors need to be redefined due to increasing urban development? What are the necessary institutional frameworks required to effectively manage these corridors in an environment that is becoming progressively denser? The research focuses on two case studies in the densely populated Central District in Israel, encompassing both local and regional ecological corridors. The regulatory assessment will point out key stakeholders, identify potential threats to the corridors, and explore existing regulatory mechanisms for planning and managing these corridors.

Neo-institutionalism perspective on local governance in Lombok: Reinstitutionalisation of Tuan Guru in the Indonesian decentralization era

This article delves into an examination and analysis of leadership models within local government institutions in Indonesia, employing the conceptual framework of new institutionalism. We contend that informal local institutions within communities not only influence the behavior and identity of leaders as actors but, within the context of decentralization, have also undergone a process of reinstitutionalization regarding roles and functions, employing distinct patterns of appropriation. Employing an interpretive approach, this article focuses on phenomena within the management of local governance in the West Nusa Tenggara province. Data were collected through in-depth interviews, literature studies on local history, and online news searches. Through a case study of local governance in West Nusa Tenggara province, particularly Lombok, the article reveals that the Tuan Guru, an informal local institution in Lombok society, has experienced reinstitutionalization through vertical and horizontal appropriation. The conclusion drawn is that decentralization has created opportunities for informal institutions to re-establish their roles within formal governance through appropriation patterns.

Assessing the Impact of Sustainable Independent Oil Palm Cultivation on Rural Development: A Case Study of Angkola Sangkunur Sub-District, South Tapanuli Regency

This study evaluates the impact of sustainable independent oil palm cultivation on rural development in the Angkola Sangkunur sub-district, South Tapanuli Regency, Indonesia. The research focuses on five key aspects: legal, technical cultivation, environmental management, labor, and institutional factors. Data was collected through a combination of primary and secondary sources, with primary data obtained via questionnaires distributed to a probability-based sample of 165 respondents. The analysis employed multiple linear regression to assess the influence of each aspect on regional development, with hypotheses tested using both F-tests and t-tests. The results reveal that the technical cultivation and institutional aspects exert a significant positive influence on rural development, underscoring the critical role of advanced agricultural practices and strong governance structures. While legal and environmental management aspects also have positive effects, their impact was not statistically significant, indicating that these factors may require further development or longer timeframes to manifest significant outcomes. Conversely, the labor aspect showed a negative but statistically insignificant effect, suggesting that the costs associated with implementing sustainable labor practices may pose challenges for smallholder farmers. This study concludes that enhancing technical capabilities and institutional frameworks offers the most immediate and substantial benefits for rural development in the region. However, a holistic approach that also addresses legal, environmental, and labor issues is essential for achieving long-term sustainability. The findings provide valuable insights for policymakers, stakeholders, and researchers focused on sustainable agriculture and rural development.