Market-based Strategies Research Articles

Proposal for a capital market-based guaranty scheme for the financial industry

In this paper, we introduce a capital market-based financial guaranty system as an alternative to current insurance guaranty funds and deposit insurance systems. The guaranty system secures clients’ claims for the event of default by the financial company using a special purpose vehicle which issues bonds to investors. The proposed system, analogous to a credit-linked note, consists of one guaranty vehicle for each financial company. In a first step, we present equations in order to derive the two main input parameters of the special purpose vehicle: the premium and the principal. Subsequently, we analyze the impact of different investment actions taken by the financial companies protected by the guaranty vehicle on various shortfall measures. We find that it will be necessary to restrict the investment volume of investors from the financial industry in order to avoid systematic risk within the proposed guaranty scheme. By deriving practical implications, we show that the capital market-based solution has some key benefits compared to current deposit insurance and insurance guaranty schemes.

Application of Fuzzy Control with Market-Based Control Strategy to Structures

The market-based control as a control strategy is developed based on an analogy between the control force-energy source in the structural area and the supply demand in the free market. The optimal problem of control force from an actuator is transformed to that of the allocation resource in the market. Since the supply-demand relation model and iteration procedure for the optimal price solution are necessary and relatively hard to understand and perform for civil engineers, the fuzzy logical method is proposed in the framework of the market-based control to acquire an equivalent system corresponding to the market-based control method. An equivalent fuzzy logical rule is established through analyzing a single-degree-of-freedom system with the controller using the MBC strategy under earthquakes. The results show that the fuzzy logical method is able to also reduce the displacement and acceleration responses effectively similar to the MBC method, and the consumed computational time for the fuzzy logical method is obviously saved.

Why International Catch Shares Won't Save Ocean Biodiversity

Skepticism about the efficacy and efficiency of regulatory approaches has produced a wave of enthusiasm for market-based strategies for dealing with environmental conflicts. In the fisheries context, the most prominent of these strategies is the use of “catch shares,” which assign specific proportions of the total allowable catch to individuals who are then free to trade them with others. Catch shares are now in wide use domestically within many nations, and there are increasing calls for implementation of internationally tradable catch shares. Based on a review of theory, empirical evidence, and two contexts in which catch shares have been proposed, this Article explains why international catch shares are not likely to arrest the decline of ocean biodiversity. Catch shares were developed to promote greater economic efficiency and profitability in the fishing industry. They have proven capable of doing so at the domestic level, although their effects on wealth distribution have frequently been controversial. Theoretical and empirical support for the proposition that catch shares promote conservation, especially of non-target resources, is thinner. Furthermore, in the international context catch shares face special challenges. Catch shares cannot resolve the value differences that underlie the most intractable disagreements about international fisheries management. They are less likely to reduce conflicts over total allowable catch in the international than in the domestic context, because distrust of managers and competitors runs deeper. Finally, catch share strategies require effective enforcement, which is both institutionally and practically difficult to provide for many international fisheries. In general, catch shares are not a promising route to improving international fisheries management, and pursuing them could distract the international community from more important steps toward improving conservation of global ocean resources.

Do Formal Political and Business Ties Help Prevent New Venture Crises in Transitional Economies

How the interaction of social relation-based strategies and market-based strategies affect firm performance is an intriguing but neglected subject in the literature. In this paper, we examine how new ventures¡¯ political and business ties embedded in formal organizations affect the likelihood of crisis evoked by adverse environment changes, and how this relationship is moderated by new ventures¡¯ innovation and internationalization strategies. It is found the relationship between formal political ties and crisis level is U-shaped, suggesting that a moderate level of political embeddedness is most helpful when new ventures confront serious external challenges. In addition, the relationship between formal political ties and external crises becomes weaker when the degree of internationalization is high. However, it is inconclusive whether formal business ties are less valuable for crisis prevention than formal political ties, and whether there is a curvilinear relationship between formal business ties and likelihood of crises when the external environment turns austere.

Seven Ways to Deal with a Financial Crisis: Cross‐Country Experience and Policy Implications1

This article presents a taxonomy of financial restructuring strategies that have been used by national policy makers to manage financial crises in the past. The goals of financial restructuring are to preserve or, if necessary, restore the debtor‐creditor relationships on which the economy depends for efficient allocation of capital, and to do so at minimal cost. Costs include not only the direct costs to taxpayers of financial assistance, but also—and likely more important—the indirect costs to the economy that stem from misallocations of capital and incentive problems resulting from the restructuring.Countries typically apply a combination of tools, including decentralized, market‐based mechanisms as well as government‐managed programs. Market‐based strategies generally aim to strengthen the capital base of financial institutions and borrowers using some mix of debt forgiveness and capital infusions. Government‐led restructuring strategies include the establishment of entities to which non‐performing loans are transferred as well as government‐assisted sales of domestic financial institutions, often to foreign entrants.Market‐based mechanisms can provide low‐cost ways of resolving the coordination problems faced by countries in the wake of massive debtor and creditor insolvency, particularly when those mechanisms are effective in achieving the desirable objective of selectivity—that is, devoting taxpayer resources only to those borrowers and banks that, with temporary assistance, will be capable of sustaining themselves in the future.But limiting their range of application mainly to developed economies, such market‐based mechanisms also depend on an efficient judicial system, a credible supervisory framework and authority with sufficient enforcement capacity, and lack of corruption in implementation. Although government‐managed programs may not seem to depend as heavily on well‐functioning legal and regulatory institutions, such approaches—especially the transfer of assets to government‐owned asset management companies—also rely to some extent on such institutions. Asset management companies are less likely to achieve their goal of resolving the overhang of debt at reasonable cost when legal and political institutions are weak and ownership of domestic creditors and debtors is highly concentrated. Especially in such cases, complexity and failure to consider incentive problems when designing specific rules governing financial assistance can aggravate moral hazard problems, unnecessarily raising the costs of resolution. Resolution mechanisms tend to be most successful when—like across‐the‐board debt forgiveness programs implemented through redenominations of debt—they are simple in design and afford quick resolution of outstanding debts, offering little discretion to governments while providing incentives for the private sector to work down the remaining debt overhang.

Between Priceless and Worthless: Challenges in Using Market Mechanisms for Conserving Biodiversity

AbstractThere is growing interest in the use of market mechanisms, such as offsetting and payments for ecosystem services, to further the conservation of biodiversity. The specific needs of biodiversity mean that this approach faces significant challenges in terms of defining the units that can be the subject of the economic or market devices, of ensuring that such mechanisms do deliver conservation gains and of establishing appropriate governance arrangements. There are also ethical concerns that a market approach entails a commodification of nature which sacrifices some of the very elements which make nature valuable to us. The market-based schemes currently being operated and devised should be studied carefully to see how successfully these challenges can be met.

Rural Women, Anti-Poverty Strategies, and Black Feminist Thought

Rural U.S. poverty rates have been persistently high. Market-based anti-poverty strategies, specifically microenterprise programs, have gained currency as a feasible avenue for moving women out of poverty. While rural women may share some commonality, homogeneity among rural women is often assumed in poverty scholarship. It is imperative that poverty scholars contribute to closing the gap between theoretical explanations and the actually experiences of poverty among individuals occupying different social locations. As researchers address this gap, this article argues for the value of integrating two important components consistent with black feminist epistemology: (1) an intersectionality perspective, and (2) the voices of the local actors/stakeholders. This article concludes that without a purposeful examination of individuals located at the intersection of race/ethnicity, gender, and/or class; even carefully formulated policy can inadvertently discriminate against or benefit some women more than others.

Nature in the Market-World: Ecosystem services and inequality

Programmes to address global warming and promote green development, such as Payments for Ecosystem Services and Reduced Emissions from Deforestation and [forest] Degradation financed by carbon-offset trading, are framed by a world-as-market paradigm that subsumes social goals within a project of globalized eco-economic management. Because market-based strategies reinforce existing property claims and power relations, Kathleen McAfee argues that they are likely to worsen inequality without yielding net, global environmental benefits. A better approach would build upon positive synergies between climate mitigation, agriculture, and rural livelihoods.

The limited influence of global civil society: international environmental non-governmental organisations and the Methyl Bromide Controversy in the Montreal Protocol

Governance scholars have demonstrated that the agendas, discourses, and actions of global civil society groups are affected by powerful states. In neoliberal globalisation, powerful states push for market-based schemes to resolve global environmental problems, and civil society groups often contribute to that agenda. Through the lens of governmentality, scholars have shown how civil society acts in ways that relegitimise and sustain state power/influence at the global scale. This study illustrates how international environmental non-governmental organisations operating in the Montreal Protocol contribute to the neoliberalisation of ozone governance, in some cases changing tactics to fit the neoliberal discourse of the treaty. Consequently, some international environmental non-governmental organisations have recently abandoned discourses of global environmental health, global security, and general welfare to address neoliberal concerns of individualism, competition, and transparency in ozone politics.

Intelligent Agents for Trading of Electricity in the Microgrid

One of the key advantages of the smart grid is its capability to manage the electricity trading automatically between homes and electricity grids to cope with the inherent real-time dynamic in electricity demand and supply. In this context, this paper presents some advantages and capabilities offered by intelligent agents for trading of electricity in the microgrid. A market-based mechanism and agent trading strategy are developed and studied. Based on the Continuous Double Auction model, the proposed mechanism can deal with unforeseen demand or increased supply capacity in real time. A new trading strategy that can achieve higher market efficiency than previously published well known strategy is also illustrated. The importance of intelligent agents for the distributed control and autonomous operation for the smart grid is demonstrated.

Estimating the cost of protecting groundcover on privately managed properties in the Australian rangelands: the case of the West 2000 Plus Enterprise-Based Conservation scheme

A significant quantity of native vegetation and biodiversity remains on privately managed rangeland properties. Due to a lack of appropriate incentives, landholders do not always conserve these resources at a level that society desires. Regulations to conserve native vegetation can impose substantial costs on landholders. Market-Based Instruments have therefore been developed to provide market incentives aimed at achieving conservation at lower costs. We review the application of a Market-Based Instrument scheme, the West 2000 Plus Enterprise-Based Conservation program, which was designed for the Western Division of New South Wales. We estimate the private and social costs of increasing groundcover on privately managed properties, with and without the scheme. The costs are estimated under actual market and climatic conditions, and simulated under a wider range of conditions. The results indicate that costs vary widely across different conservation areas, depending on the location and previous management strategies of the property. The Enterprise-Based Conservation scheme has increased conservation in the region, and the implications from its application are reviewed to assist the further development of Market-Based Instruments.

Why are inaccurate tuberculosis serological tests widely used in the Indian private healthcare sector? A root-cause analysis

Serological tests for tuberculosis are inaccurate and WHO has recommended against their use. Although not used by the Revised National TB Control Programme (RNTCP), serodiagnostics are widely used in the private sector in India. A root-cause analysis was undertaken to determine why serological tests are so popular, and seven root causes were identified that can be grouped into three categories: technical/medical, economic, and regulatory. Technical/medical: RNTCP’s current low budget does not allow scale-up of the newer, WHO-endorsed technologies. Thus, under the RNTCP, most patients have access to only smear microscopy, a test that is insensitive and underused in the private sector. Because there is no accurate, validated, point-of-care test for TB, serological tests meet a perceived need among doctors and patients. Economic: While imported molecular or liquid culture tests are too expensive, there are no affordable Indian versions on the market, leaving serological tests as the main alternative. Although serological tests are inaccurate, various players along the value chain profit from their use, and this sustains a market for these tests. Regulatory: TB tests are poorly regulated and a large number of serological kits are on the market. Private healthcare in general is poorly regulated, and doctors in the private sector are outside the scope of RNTCP and do not necessarily follow standard guidelines. A clear understanding of these realities should facilitate market-based strategies that can help replace serological tests with accurate, validated tools.

Conservation and conflict: the intensification of property rights disputes under market-based conservation in Chiapas, México

This article examines the implementation of the Global Environment Facility’s (GEF) MexicoMesoamerican Biological Corridor in the Lacandón Jungle of Chiapas, México. As an Integrated Conservation and Development Project, the Corridor is rooted in the GEF’s "universal blueprint", a program of biodiversity marketization as a simultaneous conservation and poverty reduction strategy. It is argued that the blueprint, whose framework both assumes and demands clearly delineated property rights as the vehicle for determining payments for the preservation of ecosystem services, denied the existence of Chiapas' historic conflict over land, thereby adding a new layer to it. The increasing ubiquity of marketbased conservation strategies such as the Corridor may lead to or exacerbate conflicts over land and resources. Outcomes tend to favour more powerfully-situated local actors. Such projects, rather than solving poverty and inequality, may lead to new forms of marginalization, while undermining conservation goals.Keywords: Global Environment Facility, Mexico-Mesoamerican Biological Corridor, market-based conservation, land tenure conflict.

Examining the influence of insurance and moral hazard on the utilisation of practitioner-based complementary and alternative medicine

Moral hazard (excess consumption of clinical services) is representative of consumer behaviour associated with the utilisation of services reimbursed from third-party payers. Within the USA, CAM is supported by numerous commercial and public insurance programmes. The objective of this article is to assess the utilisation of CAM when paid for by third-party payers. Data from the 2007 US National Health Interview Survey were examined to measure the relationship between insurance coverage and the utilisation of practitioner-based alternative medicine. Participant use of chiropractic, osteopathic manipulation and acupuncture was compared with health insurance coverage. The analysis applied standard epidemiological risk ratios to the data in order to calculate the effect of insurance coverage on CAM and moral hazard. The presence of health insurance was a strong facilitator of utilisation, with up to a 40% increase in utilisation when reimbursement mechanisms were introduced. The finding suggests that market-based strategies for dealing with moral hazard have little influence when applied to practitioner-based CAM, while insurance coverage plays a significant role in its delivery. Consequently, factors related to behavioural economics and agency modelling may undermine efficient utilisation and payment for CAM services.

Mainstreaming Information Literacy Skills Into a Social Enterprise Environment

The need for the integration of information literacy (IL) into the world of social enterprise (organizations that apply market-based strategies to achieve a social purpose) is critical for like organizations providing workforce development services to disabled populations. The skill set associated with IL is vital to the success of this population to achieve economic self sufficiency. Disability Program Navigators trained in information sciences and placed into community-based One Stop Career Centers can serve as the gatekeepers for, and trainers on, the multiple resources available to support this goal. This article examines an exciting new program model that charts the course for expanding collaborative IL and social enterprise pilots nationwide.

Adaptive implementation of information technology for real-time, basin-scale salinity management in the San Joaquin Basin, USA and Hunter River Basin, Australia

Abstract Pollutant trading schemes are market-based strategies that can provide cost-effective and flexible environmental compliance in large river basins. The aim of this paper is to contrast two innovative adaptive strategies for salinity management have been developed in the Hunter River Basin, New South Wales, Australia and in the San Joaquin River Basin, California, USA, respectively. In both instances web-based stakeholder information dissemination has been a key to achieving a high level of stakeholder involvement and the formulation of effective decision support tools for salinity management. A common element to implementation of salinity management strategies in both the Hunter River and San Joaquin River basins has been the concept of river assimilative capacity as a guide for controlling export salt loading and the establishment of a framework for trading of the right to discharge salt load to the Hunter River and San Joaquin River respectively. Both rivers provide basin drainage and the means of exporting salt load to the ocean. The paper compares the opportunities and constraints governing salinity management in the two basins as well as the use of monitoring, modeling and information technology to achieve environmental compliance and sustain irrigated agriculture in an equitable, socially and politically acceptable manner. The paper concludes by placing into broader context some of the issues raised by the comparison of the two approaches to basin salinity management.

CREATING MARKETS UNDER INSTITUTIONAL VOIDS: THE CASE OF SMALL-SCALE RENEWABLES IN TAJIKISTAN

This paper explores the process of new market creation under conditions of institutional voids, or when market supporting structures are lacking. Market-based strategies are increasingly used for poverty alleviation strategies in developing countries, where institutional voids are often present. Drawing upon the case of Tajikistan, a developing post-Soviet country in Central Asia, and the market for of small-scale renewable energy technologies, this analysis investigates why some actors in a nascent market escape the effects of institutional voids, while others fail. Adopting a field perspective of markets, in my analysis of qualitative data from interviews with organizations from the entire field, I find that institutional voids are a source of ambiguity in the creation of new markets in Tajikistan. The results suggest that organizations that employ strategies lying in the same domain as the institutional voids are less likely to succeed in overcoming institutional voids. Meanwhile, the incorporation of ...

The Relevance of Different Open Innovation Strategies for R&D Performers

The Open Innovation (OI) paradigm has emphasized the role of external knowledge in aiding internal R&D efforts. While most research based on this model has focused on high-tech sectors, this paper attempts to extend it to more mature industries. The study also analyzes a wide range of OI strategies and their relationships with different innovation outcomes. The empirical results, based on a large sample of Spanish manufacturing firms, show that OI strategies are highly effective tools for making internal R&D efforts more successful, both in high- and low-tech sectors. In addition, the study finds evidence that marketbased strategies are positively correlated to achieving process innovations, while partnering strategies have a similar relationship with product innovations. More formalized OI strategies, such as joint ventures, show positive relations with the achievement of patent results.

Segmentasi Pasar Penyedia Jasa Logistik (Third Party Logistics) di Indonesia

Market segmentation is fundamental in marketing strategy and the first step of market-based strategy preparation, to strengthen its marketing efficiency, and creating opportunities for sales growth and profits. This also applies to market segmentation logistics service providers (TPL - Third Party Logistics), the market is highly developed in the last decade, so that the logistics service providers has to develop marketing strategies properly. The purpose of this research is to gain a better understanding of different industries that exist today and map the needs of the logistics services of TPL customers. Based on exploration research conducted, it can be found in conformities relating to the logistics industry from several companies, ie appropriateness to the complexity of logistics activities of some companies and degree of investment of TPL services company in conducting the activity. Logistics service provider market segmentation can be based on variable complexity of logistics activities, whether it is high, medium or low and variable degrees of investment in the company whether minor, major, or integrated/total. Companies in different industries can have the same logistic service requirements and companies in the same industry can have different logistic service requirements. Client companies for logistics service providers which product handling are classified as semi-complex is the most attractive customer segments for being penetrated. The industries are classified into this segment is automotive, food and beverage, animal food, ceramic, and plantation.

Binary Economics - An Overview

Based on economic principles, this paper asserts that one widely overlooked way to empower economically poor and working people in market economy is to universalize the right to acquire capital with the earnings of capital. This right is presently largely concentrated, as a practical matter, in less than 5 % of the population. The concentration of the right to acquire capital with the earnings of capital helps to explain how people either remain poor or end up poor no matter how hard they work or are willing to work. Binary Economics offers a conception of economics that is foundationally distinct from the economic theories presently employed by government, private enterprise, charitable institutions, and individuals to formulate and evaluate economic policy. Because it is foundationally distinct from classical, neoclassical, Keynesian, monetarist, and socialist economics, economics specifically offers a distinct explanation for the persistence of poverty, unutilized capacity, and suboptimal growth. First advanced by Louis Kelso, economics holds that (1) labor and capital are equally fundamental or binary factors of production, (2) technology makes capital much more productive than labor, (3) the more broadly capital is acquired with the earnings of capital the faster the economy will grow. Most economists conclude that universal, individual participation in the right to acquire capital with the earnings of capital (the property right) is a necessary condition for sustainable growth, distributive justice, and a true democracy. Binary economic analssis reveals a voluntary market-based strategy for producing much greater and more broadly shared abundance without redistribution. Based on objective standards of (1) reasonable, workable assumptions, (2) internal consistency, and (3) plausible descriptions, predictions and prescriptions, economics should be taught wherever other economic approaches to growth, sustainability, development, investment, poverty, and economic justice are taught.