Non-market Mechanisms Research Articles

Теоретическое осмысление феномена ESG устойчивости предпринимательской среды

The article reviews the main trends in modern publications in highly rated foreign journals on the issues of sustainability of the business environment focused on ESG transformation. The relevance of this topic for the Russian scientific and business community is due to the fact that Russian business perceives and promotes the ESG agenda with less enthusiasm than their foreign colleagues. The importance of this topic is significantly related to the need for Russia to achieve the Sustainable Development Goals established by the UN. In order to understand which market institutions and elements of market and non-market mechanisms of interaction between business and the state and other stakeholders can work to promote the ESG agenda, or, conversely, what prevents it, it is important to consider the experience of those who have succeeded in this. The article examines the results of research on sustainable development with a view to identifying the conditions under which socially responsible behavior contributes to or, conversely, hinders the achievement of favorable economic results. The article highlights several research clusters: (1) theories of sustainability of competitive advantages due to the possession of resources – the drivers of ESG transformation are considered the conditions of access to credit resources, risk reduction and the resulting trust of stakeholders, which ultimately leads to a reduction in transaction costs and an increase efficiency; (2) theories of the firm’s embeddedness in the social structure of society, which explain mutual trust and the resulting legitimacy of firms pursuing socially responsible and environmentally sustainable policies; (3) theories of subordination to government regulations, which demonstrate the benefits of information openness and management responsibility to stakeholders regarding the implementation of policies that contribute to ESG transformation; (4) theories that explain the role of ESGcompliant capital allocation show how the allocation of scarce capital resources among market participants depends on companies’ commitment to ESG principles. This review focuses on a set of unsolved problems and the ambiguity of many results obtained in research on sustainable development.

Disabilities, markets and rights: The limits of a marketised national disability insurance scheme

This article considers the compatibility of Australia’s marketised National Disability Insurance Scheme and the United Nations Convention on the Rights of Persons with Disabilities. The author recognises that market-based disability support is largely compatible with Australia’s human rights commitments but resists the idea that it is capable of serving the interests of all Australians with disabilities. Markets can and do fail, and market stewardship, the government’s proposed antidote, is only a partial solution. As such, we should embrace a pluralist disability support system that sees non-market mechanisms – like block funding – as playing an important role in disability support systems.

The evolution of commercial finance in Ming-Qing China: 16th to Early-20th Centuries

Objective/Context: This article surveys the evolution of commercial finance in Ming-Qing China and responds to the debates about the role of finance in the “Great Divergence” between China and Europe. Methodology: Based on new historical materials, especially commercial documents, we study the evolution of financial organizations at different levels as delineated by Fernand Braudel. We also analyze the long-run trends of commercial interest rates in the Ming-Qing eras based on a novel historical database of interest rates in China. Originality: This article explores capital market developments since the 16th century and their relationship with the state —a topic that has been almost entirely neglected in the existing literature. We also find improvements in market integration in China before the late 19th century when Western financial institutions began to enter China, and the prime commercial interest rate in the capital market was much lower than the dominant accounts in the “Great Divergence” debate. Conclusions: While current comparative studies either emphasize the financial stagnation of Ming-Qing China relative to the West or emphasize its special development through non-market mechanisms, e.g., clans, this article shows that the capital market played a similar key role in the evolution of finance in Ming-Qing China as it did in advanced parts of Europe. Thus, we suggest that the difference in financial development between China and the West lies in the organizational structure of the financial sector and the relationship between finance and the state.

Organization of effective management of the stock market on the basis of researching the processes of formation of the value of shares of the issuer companies

The global economic crisis and the socio-economic consequences of the COVID-19 pandemic have a significant impact on the increase in volatility and risks of manipulation of stock asset quotes. The subject of the study is the organization of management of the investment fund process, taking into account non-market mechanisms for manipulating the value of shares of issuing companies. The purpose of the article is to improve the efficiency of managing the stock process based on the stock market model and procedures for fuzzy valuation of the value of shares of issuing companies within this model. The research methodology is based on the application of methods for analyzing economic phenomena and processes, a systematic approach to studying the development of issuing companies and stock markets. Modeling of fund processes is based on fuzzy logic theory and efficiency theory. The principles of stock market idealization and the principles of stock market management in a manipulated information environment are formulated. A model of the stock market is presented, which includes: an ideal model of the stock market, a model of fundamental disturbing factors and a model of stock market manipulation. Within the framework of the stock market model, an economic and mathematical model for estimating the value of shares of issuing companies has been developed, in which the uncertainty of parameters is described by fuzzy numbers. The novelty of the research lies in the formulated concept of factor psychodynamics (including a list of factors, functions of factors, the strength of factors and inertia of factors), which serves as the basis for the stock market model; as well as in the developed methodology for fuzzy valuation of shares of issuing companies. Participants of the stock market, potential investors, owners and acquirers of companies on the basis of the presented model of the stock market have the opportunity to obtain additional information about ongoing stock processes. Fuzzy procedures for estimating the value of shares of issuer companies make it possible to calculate the value of their shares in accordance with various forecast scenarios for the development of companies.

Does the government procurement market favor corporate social responsibility in a weak institution? Evidence from China

This study investigates, in the context of a weak institution, the single and interactive effects of firms’ nonmarket strategies in China’s government procurement market. Based on transaction cost and signal theory, using data pertaining to Chinese government procurement contracts from 2016 to 2018, this study also provides evidence that superior corporate social responsibility (CSR) performance enables firms to obtain more government procurement contracts. However, the effect is only significant in non-state-owned enterprises. Considering the interaction effect of corporate political activity (CPA) and CSR in business to government (B2G) markets, this study finds that CPA, characterized by the political attributes of executives, enhances the signal effect of CSR in B2G markets. Further heterogeneity analysis indicates that CSR’s signal effect diminishes over time and is enhanced with high industry competition. Our findings provide new insights on nonmarket mechanisms (such as CSR), through which firms competing in China’s B2G market can compensate for the weak institution.

The interindustry wage differentials by sector in China: What is the role of union density?

Although how union density affects interindustry wage differentials has long been discussed, there is a paucity of empirical research relevant to China. The trade-union system in China has been criticized for a long time because the Chinese Communist Party can influence union density and indirectly affect interindustry wage differentials through non-market mechanisms, such as administrative monopolies. This study explores the impact of union density on interindustry wage differentials in the context of administrative monopolies. The research takes a two-stage estimation approach after scrupulously integrating and conforming more than 40,000 individual data from the Urban Household Survey and various yearbooks from years 2004, 2008, and 2013. In the first stage, the individual wages are regressed with industry-sector dummies to obtain the wage-differential coefficients. Furthermore, union density is considered as a core variable to create regressions to the interindustry wage differential coefficients obtained in the first stage using administrative monopolies and labor safeguards as instrumental variables. It is found that although the union density was expected to increase wage differentials in industries, its influence diminished in 3 years under study. Administrative monopolies can indirectly affect wage differentials through union density. The support to grassroots unions in non-administrative monopolies industries and the opening up of industry to the private sector will help to overcome this dilemma.

Non-market mechanisms under article 6.8 of the Paris Agreement: a transnational perspective

ABSTRACT Article 6.8 was included in the Paris Agreement in the last minutes of COP15 after years of advocacy for non-market approaches (NMAs), predominately from Bolivia. Between 2015 - 2021, however, the development of NMAs remained largely stagnant and was hindered by ideological and financial disagreements during negotiations. Despite challenges, the operationalisation of NMAs under Article 6.8 has recently started to take shape. Driving this are the development and maturing of relevant pilot projects, such as the Adaptation Benefits Mechanism (ABM) and the Local Climate Adaptive Living Facility (LoCAL), as well as the finalisation of the Paris Agreement Rulebook at COP26. Accordingly, this paper uses a transnational framing to explore these developments and the potential impacts of NMAs under Article 6.8, with particular attention towards financial and ideological considerations.

The economic system question revisited

AbstractThe core argument of this paper is that thinking of modern economies, like that of the United States, the UK, Germany, and Japan, as “market” economies—a view presented in most of the standard economic texts that provide populations with their economic education—greatly oversimplifies the complex and varied ways that these economies actually use to organize and govern provision of the great variety of goods and services that serve their multiple needs and wants. These economies certainly do make extensive use of for-profit firms selling their wares on markets. However, even in sectors where market mechanisms are central, there almost always are important non-market mechanisms involved as well. And for many of the most important goods and services these economies provide and use, non-market institutions are central and market mechanisms secondary. It is important to recognize the oversimplification. It makes dealing with the problems in sectors whose performance is widely judged to be unsatisfactory much more difficult to resolve adequately.

Corporate social responsibility, organisational reputation and liability of foreignness

Purpose: This study aimed to test the impact of corporate social responsibility (CSR) and its subdivision dimensions on the liability of foreignness (LOF), as well as the mediating effect of organisational reputation.Methodology: A total of 301 observations from 43 branches and subsidiaries of China’s four major banks in 23 host countries from 2012 to 2018 were selected as samples to examine the impact of CSR and its segmented dimensions on the LOF. The mediating role of the parent company’s organisational reputation in the relationship between CSR and LOF was also examined. After controlling for the possible influence of firm age, firm size, economic distance, regulatory distance, and cultural distance on the model, three regression models were built.Findings: Liability of foreignness can be reduced by increasing CSR; and increasing technical CSR is especially effective in this regard. Organisational reputation plays a mediating role in the relationship between CSR and LOF.Practical Implications: Fulfilling CSR can help reduce the LOF.Originality: This research comprehensively explains the different views of current scholars on CSR and enriches the existing research on overcoming the LOF from the perspective of non-market mechanisms. It also provides new insight into the mediating effect of organisational reputation on CSR and its indirect effect on the LOF.

Состояние и тенденции развития теневого академического предпринимательства

The concept of academic capitalism appeared in the international sociological discourse in the 1990s. However, Russian academic capitalism has taken unconventional forms as it develops in the shadow informal environment of the academic labor market. It covers a wide range of academic activities, e.g. tutorship, extra classes, ghost-writing of essays, theses and graduation papers, etc. Quite often, federal universities and research centers order grant reports, state assignments papers, and manuscripts for top peer-reviewed journals from provincial academics. The Russian market of shadow academic entrepreneurship is closed, secretive, tough, and highly competitive. The COVID-19 pandemic gave it a new rise: it increased three times in 2020–2021. New forms of digital employment and shadow academic capitalism lead to new social trends, e.g. new priorities appear in the subject of scientific research as academic institutions lose their profile in favor of their shadow academic employers. New flexible informal academic structures demonstrate faceted over-connectivity, non-market mechanisms of academic competition, and new forms of digital and traditional academic exploitation. Other trends include shadow branding of universities, proletarization and feudalization of academic labor, conflict of interests in science and education, formation of demand for low-quality higher education, monopolization in the academic market, etc. As a result, the academic community in Russia is transforming into a closed estate with its digital academic elite, middle class of academic entrepreneurs, and digital academic proletarians.

Strategic Orientation, Digital Capabilities, and New Product Development in Emerging Market Firms: The Moderating Role of Corporate Social Responsibility

Strategic orientation represents an important antecedent condition for new product development (NPD) performance, which can help firms create competitive advantage and promote sustainable growth. This study aims to explore the role of strategic orientation (i.e., technology orientation, customer orientation) in promoting firms’ digital capabilities and NPD performance in the context of digital transformation. Using a resource-based view and its extended dynamic capabilities as a theoretical foundation, we provide a comprehensive framework by developing a set of hypotheses. In addition, we examine the moderating effect of corporate social responsibility (CSR) on the relationship between strategic orientation and NPD performance. Using data from a sample of 174 Chinese manufacturing firms, we perform structural equation modelling to empirically test our arguments. Our findings show that technology orientation and customer orientation play a critical role in driving firms’ digital capabilities. Moreover, we find that the two dimensions of strategic orientation tend to exert different effects on NPD performance, with technology orientation playing a more significant role than customer orientation in contributing to NPD performance. Finally, our findings strongly suggest that a firm’s CSR engagement moderates the relationship between its customer orientation and NPD performance, such that the higher the firm’s engagement in CSR, the greater the contribution of customer orientation to the firm’s NPD performance. Our findings provide new insights into non-market mechanisms such as CSR through which firms can compensate for their strategically oriented practices in the NPD process.

Directions and Prospects for the Development of the Electric Car Market in Selected ASEAN Countries

The purpose of this article is to present the current situation and evaluate the opportunities for the development of the electric car market in selected Southeast Asian countries in the context of the current situation in the rest of the world. Currently, the electric car market is at an advanced stage of development in regions such as Western Europe, the USA, and China. It should be noted, however, that the number of electric cars in a given country results not only from market demand and access to vehicle charging networks but also from nonmarket mechanisms such as subsidies and tax or administrative solutions. It turns out that these are important elements that influence the final shape of a country’s market. This article analyses the current situation on the electric car market taking into account the legal, administrative, and tax conditions that affect the final number of vehicles and the infrastructure necessary for the operation and use of electric cars in selected Asian countries.

Induced Agricultural Production Organizations under the Transition of Rural Land Market: Evidence from China

This paper focuses on the impact of a new rural land reform, the Separation of Three Rights Reform, on changes in China’s agricultural production organizations. We illustrate the impact of market and nonmarket mechanisms on allocating agricultural production factors under the new rural land market transition through a land system and factor allocation model. Based on the expansion paths of different types of factors in the model, we classify the development of Chinese agricultural production entities into “extensional expansion,” “labor-intensive expansion,” “land-intensive expansion,” and “exit of agricultural production.” These agricultural production paths correspond to agricultural enterprises, family farms, agricultural cooperatives, and small farmers’ exit. Further, empirical and economic geography analysis results show that the interaction of market and nonmarket mechanisms is the main drive that induces the current diversified organizations in rural China. Thus, this paper provides a comprehensive explanation of changing patterns of an agricultural production organization under the transition of the rural land market.

Doing good by combating bad in the digital world: Institutional pressures, anti-corruption practices, and competitive implications of MNE foreign subsidiaries

This study extends nascent research on international corporate social responsibility (CSR) by positing that foreign subsidiaries of multinational enterprises (MNEs) can overcome legitimation challenges they face when operating abroad. By integrating an institutional view, research from international business, and CSR literature, we examine how host-country institutional pressures may motivate subsidiaries to respond to such pressures by avoiding corrupt acts. We analyze how strategic responses to anti-corruption can improve firm reputation and innovativeness in a rapidly digitalized world. Using a survey sample of 216 subsidiaries operating in China, we investigate our hypotheses and find supportive evidence that foreign subsidiaries are likely to engage in anti-corruption practices (ACPs) when they face strong institutional pressure. We also provide evidence that engagement in such ACPs is positively associated with enhanced firm reputation and innovativeness. The contribution of this non-market mechanism to innovativeness is strong when the digitization capability of the subsidiaries is high.

Convergence of City Relational Network, Production Sector Structure, and Regional Development

There is a strong correlation between government intervention and urban production structure in China. Particularly, the outputs of the cities partly come from the economic rent of city relational network (CRN), which is a unique regional policy and administrative hierarchy. In order to analyze the gravity flows of CRN under the nonmarket mechanism, we attempt to build a new gravity model that adopts the production sector. The new gravity produces relational data with direction, which makes it possible to use social network analysis (SNA) and overcome the endogeneity of the linear model. The empirical results show that (1) modified new gravity model can effectively capture the distribution of CRN gravity flows and the convergence of regional development in China, (2) the CRN, which especially stems from the government financial intervention, increases the share of nontradable sectors in cities, and (3) adjustment of the production sector leads to the difference of CRN gravity flows, so asymmetric flows distribution leads to the heterogeneity of regional economic performance. Cities with higher share of nontradables have relatively slower productivity growth in long-term.

Market and Regulatory Coefficients for Determining the Rent for Public Land in Regions

As opposed to international studies, Russian scientists apply multifactorial models with specific coefficients to determine the rent for public lands. This research analyses and summarises the existing theoretical and normative approaches to coefficient calculation covered by domestic literature. We examine two types of coefficients: permitted use of land (K) and categories of land users (K 1 ). Based on the property valuation theory (income and comparative approaches), we demonstrated problems and disadvantages of the methods currently used to determine K and K 1 coefficients. Then, using the economic contract theory, we identified market and non-market (hybrid and hierarchical) regulation mechanisms and distinguished K and K 1 coefficients. Institutional differences of these indicators were theoretically substantiated. As a result, we developed economic algorithms for calculating market (K) and regulatory (K 1 ) coefficients that take into account both types of permitted use of land (for K) and categories of land users (for K 1 ) by considering preferences and restrictions in the field. The elaborated methodology was tested by performing complex calculations, which allowed us to obtain the values of K and K 1 coefficients for 18 local councils located in Pervomaysky District of Altai Krai for 112 types of permitted use of land. Proposed methodological recommendations can be applied for developing municipal programmes in Russia and abroad to increase the effectiveness and transparency of public land rent.

Economizing the Uneconomic: Markets for Reliable, Sustainable, and Price Efficient Electricity

Current electricity markets do not efficiently achieve policy targets i.e., sustainability, reliability, and price efficiency. Thus, there are debates on how to achieve these targets by using either market mechanisms e.g., carbon and capacity markets, or non-market mechanisms such as offer-caps, price-caps, and market-monitoring. At the same time, major industry changes including demand response management technologies and large scale batteries bring more elasticity to demand; such changes will impact the methodology needed to achieve the above mentioned targets. This work provides market solutions that capture all three policy targets simultaneously and take into account the above-mentioned industry changes. The proposed solutions are based on: (i) a model of electricity markets that captures all the above mentioned electricity policy targets; (ii) mechanism design and the development of a framework for design of efficient auctions with constraints (individual, joint homogeneous, and joint non-homogeneous). The results show that, within the context of the proposed model, all policy targets can be achieved efficiently by separate capacity and carbon markets in addition to efficient spot markets. The results also highlight that all three policy targets can be achieved without any offer-cap, price-cap, or market monitoring. Thus, within the context of the proposed model, they provide clear answers to the above-mentioned policy debates.

Managing drugs in the prisoner society: heroin and social order in Kyrgyzstan's prisons.

Through the case study of Kyrgyzstan this paper argues that a rapidly increasing availability of drugs in prison is not necessarily deleterious to solidarity and inmate codes. Instead, the fragmentary effect of drugs depends on the forms of prisoner control over drug sale and use. In Kyrgyzstan, prisoners co-opted heroin and reorganized its distribution and consumption through non-market mechanisms. State provision of opioid maintenance therapy incentivized powerful prisoners to move to distributing heroin through a mutual aid fund and according to need. Collectivist prison accommodation, high levels of prisoner mobility and monitoring within and across prisons enabled prisoners to enforce informal bans on drug dealing and on gang formation outside of traditional hierarchies. We argue that in these conditions prisoners organized as consumption-oriented budgetary units rather than profit-driven gangs.

O6 Association of Food Security and Access to Traditional Foods Among American Indians and Alaska Natives

Background One in 4 American Indians or Alaska Natives (AIAN) are estimated to experience food insecurity. Access to traditional food sources may, in part, explain the high prevalence of food insecurity. Traditional foods were primary sources of nutrition and could often be acquired through non-market mechanisms prior to colonization. Whether and how access relates to food insecurity is unknown. Objective To assess whether access and consumption of traditional native foods is associated with food insecurity among AIAN. Study Design, Setting, Participants Cross-sectional pilot study using a paper-and-pencil questionnaire administered at a National Powwow in October 2019. Adults that self-identified as AIAN were recruited in-person. Measurable Outcome/Analysis Food insecurity was assessed with 2 items to capture the dimensions of adequate quality and sufficient quantity of foods. Native foods security was assessed with 1 validated item on a 4-point Likert scale for perceived sufficiency of native food access ranging from ‘never’ to ‘always’. Hunting, fishing, and gathering practices were also reported. Chi-squared tests were used to assess the relationship of food insecurity with native foods access and use. Results The mean age of 39 respondents was 43.5 (±13.7) years and 56.4% identified as female. Food insecurity was high, with 31% reporting insufficient quantity or compromised quality. Native foods insecurity (rated as ‘never’ or ‘rarely’) was also high, reported by 74% of respondents. Native foods insecurity was common, regardless of food insecurity status (P > .05). Fishing to access native foods was more common among those also reporting insufficient quantity (P Conclusion Though limited by sample size, this pilot study provides support for future hypotheses and investigations related to native foods and food insecurity. Future work should use mixed methods to better understand food insecurity, access to native foods, and the potential relationship with diet. Funding None.

Redistributive Allocation Mechanisms

Many scarce public resources are allocated at below-market-clearing prices, and sometimes for free. Such mechanisms necessarily sacrifice some surplus, yet they can potentially improve equity. In this paper, we develop a model of mechanism design with redistributive concerns. Agents are characterized by a privately observed social welfare weight and willingness to pay for quality, as well as a publicly observed label. A market designer controls allocation and pricing of a set of objects of heterogeneous quality, and maximizes the expectation of a welfare function defined by the social welfare weights. We derive structural insights about the form of the optimal mechanism, leading to a framework for determining how and when to use non-market mechanisms. The key determinant is the strength of the statistical correlation of the unobserved social welfare weights with the label and the willingness to pay that the designer can, respectively, directly observe or elicit through the mechanism.