Non-economic Considerations Research Articles

Exploring the effect of family control on debt financing within large firms: a transnational study in emerging markets

PurposeThis paper aims to analyze the effect of family control and influence dimension of the socioemotional wealth (SEW) on capital structure of large listed firms in the North African region.Design/methodology/approachThe study uses panel data of the top 98 largest listed firms in the North African capital markets over the period from 2018 to 2022. The analysis is conducted employing random effects models.FindingsFindings suggest that large listed firms in North African region rely on more use of equity rather than debt financing. Further, results show that family control and influence dimension of the SEW, has no significant impact on the capital structure of North African large listed firms. This implies that the financing behavior of large firms listed in the North African countries is driven by financial and rationale factors rather than non-economic considerations. Indeed, findings support assumptions of the pecking order theory.Originality/valueThis transnational study provides new insights into relevancy of socioemotional theory in explaining capital structure decisions within large family businesses in emerging markets. Findings have the potential to enhance analysts', investors' and practitioners' understanding of financing decisions by large listed firms in this region. This, in turn, can aid in conceiving adapted financing solutions.

Features of the functioning of the goods’ free movement in the European Union

The paper is devoted to the study of the EU internal market. It was determined that the main goals of creating an internal market were to stimulate economic growth in the region, improve the quality and availability of goods and services, and reduce prices. The free movement of goods is one of the key freedoms of the EU's internal market and is seen as the basis of EU policy, as it offers producers access to member states' markets and consumers a wide range of goods. The main historical moments of the formation of the free movement of goods are considered, namely the reduction of customs barriers between countries and the establishment of a unified customs policy for third countries through the European Customs Union; abolition of customs duties between member states since 1968; harmonization of national legislation. It has been established that today the free movement of goods means that EU countries do not have to charge customs duties on goods produced in the EU when they cross the border, or on goods produced in third countries when they enter the EU. In addition, charges having an equivalent effect on trade or quantitative restrictions on imports are also prohibited. At the same time, it is determined that the provisions of Art. 36 of the Treaty on the Functioning of the EU allows member states to take measures that have an effect equivalent to quantitative restrictions if they are justified by general, non-economic considerations. However, the arguments used by member states to justify import or export barriers were interpreted by the EU court quite strictly, using the proportionality criterion. It is well-founded that one of the problems faced by EU member states is that belonging to the single market means that a single country does not have the right to refuse the sale of products produced in other countries of the Union, which is considered acceptable. The use of restrictive measures provided for in Art. 36, which may impede the free movement of goods, require a scientific analysis to demonstrate the existence of a risk.

Optimal Patent Protection Length for Vital Pharmaceuticals in the Age of COVID-19

The highly unequal access to COVID-19 vaccines observed at a critical moment of the pandemic coupled with the considerable profits cashed by the main vaccine producers have brought the debates on patent protection back into sharp focus. The trade-off between the need to encourage innovation through patent protection and the right of populations across the world to access life-saving pharmaceutical products raises important concerns that go beyond innovation stimulation. This paper leans on the inclusion of non-economic considerations based on social identity theory in optimization strategies to analyze the arguments underlying the patent length in the pharmaceutical industry and questions the measurement of social benefits of innovation in the Nordhaus’s model in its applicability to the case of vital pharmaceuticals. It proposes some new considerations akin to extra welfarism in the microeconomic analysis of the social welfare underlying traditional arguments in support of long patent protection periods. Simplified comparative statics are employed to show that, from the social welfare point of view, an incentive system in which a reward equivalent to the discounted profits is remitted to the innovator yields higher social welfare than monopoly protection without diminishing the incentive to innovate. These results suggest that in the case of vital medicines such as vaccines and antiretroviral drugs for HIV/AIDS treatment, social welfare is maximized by imposing compulsory licensing and making treatment accessible to all (potentially) infected citizens.

Creative industries as interest groups in services export promotion policy-making in Chile

The objective of this article is to identify Chilean interest groups related to the export promotion in creative services industries, and understand their perception on their participation in policymaking. This analysis aims to identify and analyze the mechanisms in which these groups influence the design of export promotion policies in Chile. This understanding will allow the strengthening of institution-building and transparency associated with it, thus improving the process by which public policies are generated in Chile, and contributing to the development of the national export sector. The working hypothesis is that creative industries’ interest groups perceive that they have been able to position their interests through joint action between related businesses, professionals and governmental organizations (productive subsectors), supporting their positions in non-economic considerations to strengthen creative industries interests.

Is There Opportunity Without Stakeholders? A Stakeholder Theory Critique and Development of Opportunity-Actualization

How can stakeholder theory contribute to opportunity theory? We suggest that stakeholder theory affords appropriate theoretical lenses for grounding the opportunity-actualization perspective more firmly within the real-world constraints of business venturing. Actualization departs from a strong focus on entrepreneurial agency to conceptualize how pre-existing environmental conditions determine what entrepreneurial action can achieve. We explain that stakeholder theory can strengthen the outward-looking orientation of actualization by (1) bringing the entirety of stakeholders centre-stage, beyond a narrow focus on market stakeholders, and (2) stressing the importance of noneconomic considerations for the actualization of economic opportunities. Our theorization culminates in the concept of ‘strategic opportunity thinking’ (SOT). We conceptualize SOT as a way of protecting entrepreneurs from the blind-to-stakeholders mindset that either sleepwalks them into the territory of non-opportunity or prevents them from the actualization of real yet difficult-to-actualize opportunities in the absence of stakeholder-centric thinking.

الأحکام الفقهیة والاقتصادیة للتسعیر

الأحکام الفقهية والاقتصادية للتسعير عبدالرحمن سعد محمد السند . قسم الشريعة الإسلامية ، وزارة التربية ، دولة الکويت . البريد الإلکتروني : alsanadkw@gmail.com الملخص: يعد التسعير الجبري -کنوع من أنواع التسعير-، هو الصورة التقليدية التاريخية من صور السوق السوداء، وهى المعنى الضيق لمفهوم السوق السوداء. حيث تعرف السوق السوداء بأنها سوق خفية، تباع فيها السلعة، بسعر أعلى من السعر القانوني، المحدد لها بواسطة السلطة الحکومية، وتنشأ بسبب تدخل الحکومة في سياسات التسعير. کما تنشأ السوق السوداء نتيجة الالتفاف حول الاعتبارات غير الاقتصادية. وتهدف السوق السوداء إلى منع تأثير فائض الطلب على السعر. وبتعبير آخر، فإن السوق السوداء تنشأ نتيجة الاختلال بميکانيکية الأسعار، وهي مظهر لحتمية تفاعل قوي السوق. الکلمات المفتاحية : التسعير ، الضوابط الاقتصادية ، الأزمات التجارية ، التدابير ، المحتکرين ، المستهلکين. Jurisprudence and economic provisions of pricing AbdulrahmanSaad Muhammad Al-Sanad Department of Islamic Law, Ministry of Education , State of Kuwait. E-mail: alsanadkw@gmail.com Abstract: Forced pricing - a type of pricing - is the historical traditional image of the black market, which is the narrow meaning of the black market concept. Where the black market is defined as a hidden market, in which the commodity is sold at a price higher than the legal price specified for it by the government authority, and it arises due to government interference in pricing policies. The black market also arises as a result of a convolution around non-economic considerations. The black market aims to prevent the effect of excess demand on the price. In other words, the black market arises from an imbalance in price mechanics, which is a manifestation of the inevitability of market forces interacting Keywords: Pricing , Economic Controls , Trade Crises , Measures , Monopolists , Consumers.

Why is it so hard to push Chinese railway projects in Southeast Asia? The role of domestic politics in Malaysia and Indonesia

• Implementation of large Chinese projects overseas is uneven, with the dynamic more complex than often portrayed. • Projects are rolled out more expeditiously in host states with a highly centralized political structure and vice versa. • Malaysia’s power concentration has facilitated elite consensus and quickened the East Coast Rail Link’s rollout. • Indonesia’s implementation of the Jakarta-Bandung High Speed Rail has been checked by multiple influential stakeholders. • This paper’s findings have important implications for future South-South cooperation in railway development. This paper focuses on two of the most prominent Chinese railway projects in Southeast Asia since the 2013 inception of the Belt and Road Initiative (BRI) – Malaysia’s East Coast Rail Link (ECRL) and Indonesia’s Jakarta-Bandung High Speed Rail (HSR). Adding non-economic considerations and political contestation between central state organs into Sinha’s (2005) framework on central-state/province interactions and their impact on economic development, it argues that the implementation of large, capital-intensive BRI projects is more complex than often portrayed. The ECRL is implemented considerably faster than the HSR primarily because, relative to Indonesia, Malaysia possesses a more centralized political structure. Malaysia’s power concentration at two levels – between central and subnational players and amongst central players – has facilitated elite consensus and accelerated the ECRL’s rollout. In contrast, Indonesia’s decentralization exercise since the late 1990s, both at the spatial level and within the executive arm of the central government, has encouraged plurality of opinions and complicated project implementation. Despite President Joko Widodo’s clear intentions to expedite the Jakarta-Bandung HSR, he has been checked by multiple influential stakeholders, resulting in delays. The Indonesians, relative to the Malaysians, appear to have negotiated a somewhat better deal from the Chinese railway consortium. However, these tentative gains are offset by the HSR’s slow implementation, which in turn is undergirded by Indonesia’s fragmented institutional arrangement.

Climate Change and Migration: A Case Study of Coastal Household in Delta Mahakam – Kalimantan

Migration in response to climate change should not be seen as a failure to adapt, but as a strategy undertaken to maintains households resilience. Objective: This research aims to explain the migration decision-making process of Delta Mahakam household. In detail, this research will consider the impact of climate change in the migration decision-making process of household who emigrated from their village. The increasing number of household migrating from their village suggests the importance of understanding the reason underline their movements. Methods: The data collected included qualitative data from in-depth interviews. An interview guide was formulated to facilitate in-depth interviews and generate a better understanding of migration behavior. Expectation: Migration is one of the strategies undertaken to maintain the economic resilience of coastal households. Result: Rising seas is one of those climate change impacts in Delta Mahakam. The impact of climate change forces the household to abandon their hometown. Migration decisions of coastal household in Delta Mahakam are complex, involving both economic and non-economic considerations. These results provide an understanding of how climate change will reshape future population distributions. Keywords: environmental migration, household, coastal, decision-making process, climate change, sea-level rise

Community Empowerment and Their Support for Tourism Development: An Inquiry Based on Resident Empowerment Through Tourism Scale

Sustaining residents’ support is critical for successful destinations. Though empowerment is decisive in attitude, quantitative researches show a dearth. This study uses resident empowerment through tourism scale to model empowerment’s role in sustaining residents support for tourism in the light of Social Exchange Theory (SET) and Weber’s theory of Formal and Substantive Rationality (WFSR) , aiming at identifying the impacts of residence community empowerment as a pivot in advocating residents’ support for tourism development. Kalpitiya, a fast developing tourist destination in the Island was found a fertile ground to test the proposed model. A random sample of 619 was used to collect primary data through a self-administered questionnaire. Data were analyzed using Structural Equation Model approach in SmartPLS3. Findings show that residents are influenced by personal economic benefits and pride, self-esteem heightened by psychological empowerment. Political empowerment influenced on positive impacts leading to residents’ support for tourism development. The paper argues that SET merely insufficient to explain residents’ behavior towards tourism while WFSR appears as a broader approach. Tourism practitioners need the attention towards non-economic considerations such as values, believes and morals in advocating residents’ support for tourism since economic gains can’t assure it alone.

Activity-based hospital payments: a qualitative evaluation by Israeli managers and physicians

Abstract Background Israel has expanded procedure-related group (PRG) payments instead of per-diem payments for hospitals. There is scarce literature that documents the process of adoption of DRGs and its entailed economic incentives according to hospital workers’ perspectives. Important issues remain underexplored such as how managers transmit the incentives and considerations to caregivers, how physicians embrace (or not) these new rules of the game. Methods We used qualitative, grounded-theory analysis based on 35 semi-structured in-depth interviews with managers, financial directors, surgical ward heads and physicians in 5 hospitals, sampled by maximum variation according to hospital characteristics. Results We found two main themes: incentives for change and barriers to change. The most significant change was the creation of a common professional language, which facilitates measurement and supervision of activities, outcomes, and profitability. Measurement enhances transparency and is essential for resource management. Respondents also reported barriers inhibiting their responsiveness to the economic incentives of PRGs: a complicated coding system; inappropriate pricing; dependency on numerous production factors; lack of transparency; lack of coordinated goals among players; and other medical or moral considerations that outweigh or co-exist with financial considerations. Conclusions The adoption of PRGs led to changes in managers’ and physicians’ actions and considerations, particularly in situations where it was possible to reprioritize elective procedures without harming patient health or quality of care. However, on a broader level, the impact was modest, leading mainly to a fairer redistribution of resources and the rearrangement of work, such as shifting patients to after-hours. It would be appropriate to allow hospitals and physicians to operate in a less restricted market where regulation allows suppliers some degree of discretion so they can react to the PRG reform. Key messages Provider payment reforms change economic incentives, behavior and decision-making. However, structural barriers and other non-economic considerations may lead to unintended consequences of such reforms.

Community Empowerment and their Support for Tourism Development: an Inquiry based on Resident Empowerment through Tourism Scale

Sustaining residents’ support is critical for successful destinations. Though empowerment is decisive in attitude, quantitative researches show a dearth. This study uses resident empowerment through tourism scale to model empowerment’s role in sustaining residents support for tourism in the light of Social Exchange Theory (SET) and Weber’s theory of Formal and Substantive Rationality (WFSR) , aiming at identifying the impacts of residence community empowerment as a pivot in advocating residents’ support for tourism development. Kalpitiya, a fast developing tourist destination in the Island was found a fertile ground to test the proposed model. A random sample of 619 was used to collect primary data through a self-administered questionnaire. Data were analyzed using Structural Equation Model approach in SmartPLS3. Findings show that residents are influenced by personal economic benefits and pride, self-esteem heightened by psychological empowerment. Political empowerment influenced on positive impacts leading to residents’ support for tourism development. The paper argues that SET merely insufficient to explain residents’ behavior towards tourism while WFSR appears as a broader approach. Tourism practitioners need the attention towards non-economic considerations such as values, believes and morals in advocating residents’ support for tourism since economic gains can’t assure it alone.

Indonesian Traditional Market Flexibility Amidst State Promoted Market Competition

The penetration of modern supermarkets is believed to be the cause of the declining role of traditional markets and street vendors in Indonesia. Nevertheless, the competition between state-promoted markets and traditional markets is rarely discussed, both adaptation of market institution and strategy of market actors. This research outlined a theoretical understanding of the dynamics of traditional markets, along the concepts of market flexibility as an adaptation strategy and coordination problems as market actor strategies. The researchers empirically reflect the strategies of four traditional vegetable markets that still survive from tight competition—both the market itself as a social institution, and the strategies of actors involved in market transactions. The traditional market builds flexibility by: (1) Specifying commodities, (2) segmenting customers, (3) changing market operating hour, (4) modifying transportation to operate more efficiently, and (5) low cost market management. At the actor level, competition problems are resolved by utilizing an emotional sentiment of friendship social relations; the formation of prices is determined by developing effective networks of information; and the cooperation problem is dealt with by building a system of punishment and reward based on informal mechanisms. This finding verifies the thesis stating that market competitiveness is determined by institutional flexibility against competition and the ability of market actors to build effective social interactions to maintain market sustainability. Based on the above explanation, further research needs to be focused on calculating how much efficiency is built due to market flexibility, both the transaction cost and the production cost in a quantitative manner. At the actor level, it is necessary to delineate the strategies being built, whether based on pure rational or economic and moral or non-economic considerations in solving coordination problems in the market.

What Kinds of Trade Liberalization Agreements Do People in Developing Countries Want?

ABSTRACTOne of the most striking developments in the global economy in the past decades is the rapid proliferation of preferential trade agreements (PTAs), with many of them concluded among or with participation of developing countries. On the presumption that current popular debates on trade policy are not so much about whether citizens want free trade but rather what kinds of trade liberalization they want, we examine individual trade policy preferences with regard to PTAs that can vary in content along several dimensions. To that end we carried out conjoint choice experiments embedded in representative surveys in three developing countries that differ strongly in income levels, political system, and trade liberalization history: Costa Rica, Nicaragua, and Vietnam. We conceptualize trade policy preferences as preferences over the scale and scope of trade liberalization, environmental and labor standards, and labor market access (migration). Two main findings emerge. First, non-economic considerations, such as sympathy/antipathy toward particular countries and environmental and labor rights concerns influence citizens’ preferences at least as much as factors based on standard economic logic. Second, preferences over particular facets (attributes) of trade liberalization, that is PTA content, are surprisingly consistent across countries, despite strong differences in macro-economic and political context.

Multilateral Development Banks and Sustainable Development: On Emulation, Fragmentation and a Common Law of Sustainable Development

AbstractMultilateral Development Banks (hereinafter MDBs) have evolved from avoiding non-economic considerations, as required in most of their charters, to officially supporting sustainable development. This transformation is due not only to international law, civil society pressure or internal adjustments, but in part to the emulation phenomenon between the international effort for sustainable development made by international conferences and commissions and the sustainable development effort by MDBs. The paper first examines this emulation phenomenon and its strong impact on MDB creation of substantive instruments – the environmental and social safeguards – and of procedural instruments – the accountability mechanisms – for the integration of sustainable development. Following this discussion, the second part points out that MDBs’ environmental and social safeguards still differ substantially, revealing a fragmentation in MDBs’ normative understanding of sustainable development. After presenting the arguments supporting this fragmentation, the last part of the paper argues in favor of the harmonization of MDBs’ environmental and social safeguards, resulting in the creation of a common law of sustainable development, the promotion of international law and the facilitation of investments.

A playful shift: Field-based experimental games offer insight into capacity reduction in small-scale fisheries

Understanding how to effectively and efficiently reduce fishing effort is a marine conservation imperative, given falling catches, degrading coastal systems and burgeoning human populations. Globally, studies into understanding who may leave a fishery, and why, have tended to be survey based, offering important but limited insights into exit behavior. At the same time attempts to introduce alternative livelihoods to fishing communities in developing countries often fail, and fishers are hostile to efforts to implement regulatory restrictions on their fishing activities. This paper argues exploring shifting behaviors through quasi-experimental field games offers inroads to this dilemma. Firstly, such games can triangulate with both observational and survey-based data to deepen understanding of how and why fishers may exit the fishery. Secondly, face-to-face interaction and stakeholder participation are important for improving natural resource management, and are facilitated by games. I illustrate these points using the example of ReefGame, played in multi-stakeholder workshops with small-scale fishers across the Philippines. Characterizing players as ‘shifters’, ‘intermittent shifters’ and ‘non-shifters’ highlights how non-economic considerations, meso-economic contexts and desires for the next generation to have ‘a better life’ can inform more responsive and effective fisheries management. At the same time, the game offers structured opportunities for scientists, managers and fishers to interact, building trust and understanding between them.

Agricultural policy in Australia: deregulation, bipartisanship and agrarian sentiment

ABSTRACTThis paper provides an overview of the development of agricultural policy in Australia from a complex web of government intervention in the sector in the first half of the 20th century to the deregulation of the past 40 years. It highlights the close interrelationship between agricultural policy and manufacturing policy as well as the areas in which agricultural policy has been distinctive, namely the largely bipartisan nature of agricultural policy development and the strong cultural attachment across the community to farmers in general and family farming in particular. Recent policy debates suggest that agricultural policy will remain a sector apart in terms of the broadly bipartisan nature of policy and the ongoing influence of non-economic considerations. Australia will retain its comparative advantage in agricultural exports into the future and policymakers will need to continue to balance policies that support the economic performance of the sector with those that reflect community expectations of support for the farming community more broadly.

‘I want this firm to be in good hands’: Emotional pricing of resigning entrepreneurs

Given the importance of non-economic considerations throughout the entrepreneurial life cycle, I aim to investigate the drivers of owner-managers’ ‘emotional pricing’ when they wish to sell their firms to successors. Emotional pricing thereby denotes those elements of the owner-managers’ price expectations that cannot be traced to economic considerations. Building on arguments from behavioral finance, I hypothesize that ‘emotional pricing’, which in this study reflects owner-managers’ willingness to sell the firm at a discount, is driven by the reluctance to lose access to information about the firm and to lose influence on the firm, and by an aversion to putting the firm’s future at risk. In particular, I argue that a long-term relationship between an owner-manager and a firm, a familiar relationship between an owner-manager and a successor, and situational contingencies – especially unsatisfactory firm performance – increase the owner-manager’s emotional-pricing component. I test the hypotheses using a sample of 1354 owner-managers of Swiss small and medium-sized enterprises (SMEs), who provided their views on their exit intentions. I subsequently compare those results to 455 actual ownership transfers involving Swiss SMEs.

Forests, fuelwood and livelihoods—energy transition patterns in eastern Indonesia

The central thesis of the energy ladder model is a unidirectional transition from primitive to advance fuel with increased affluence of households. Although now largely discredited, this assumption remains a foundation of laissez-faire policies that anticipate energy transition resulting spontaneous forest recovery with economic development. Our results suggest that such policies can undermine broader policy objectives and actually worsen forest conditions in rural Indonesia. Based on a case study of forest margin communities in eastern Indonesia, we demonstrate that fuel subsidy reform did little to reduce rural household demand for fuelwood, while dramatically increasing fuelwood demand for processing agricultural products. Our results show how household decisions related to fuel sources are affected by non-economic considerations and external factors, such as opportunities to sell fuelwood. We argue that policy interventions that encourage energy transition of households do not necessarily improve forest conditions, as household fuelwood use may be a symptom, rather than a driver of deforestation and forest degradation. Thus policies to improve forest conditions should focus more on addressing the market environment of forest-margin communities, providing energy alternatives to small industries that are often the larger consumers of fuelwood.

Sovereign Wealth Funds: What (Really) Drives Them? An Econometric Analysis

Sovereign Wealth Funds have been subject to ever-increasing concerns and little scientific analysis. As a consequence of their recent gain in prominence, significant worries have been expressed as Sovereign Wealth Funds, being large state-owned institutional investors, may eventually take investment decisions driven more by political and/or other objectives than by pure economic considerations. We investigate their investment decision drivers and rationale to invest and we provide a data-supported analysis of what really drives their investments. The study is based on a widely-recognized and proven econometric model, adapted where necessary in order to take into account Sovereign Wealth Funds' peculiarities and some accepted critics. The sample analyzed covers more than 300 companies invested in the last 30 years and domiciled in 29 countries. The model allows us to extract the drivers which lie behind targets' public equity returns. The drivers have been defined in terms of either economic justifiable or other-than-economic news. Based on the ex-post results, we infer what is likely to drive sovereign investments. Results are twofold: when just economic considerations are allowed to lead Sovereign Wealth Funds' investments, data strongly indicate sovereign investors mostly seek for companies with very high future cash-flow generation capabilities and/or characterized by great fundamentals rather than undervalued and/or market depressed companies. Removing the hypothesis of funds purely rational, economic-optimizers, we found other than economic motivations played a role in leading targets' equity returns. Nonetheless, data only allude to non-economic considerations that matter greatly in sovereign funds' decision processes with respect to economic ones.

Nonprice Competition in “Substitute” Drugs: The FTC's Blind Spot

As the recent case of United States v. Lundbeck illustrates, the Federal Trade Commission's lack of knowledge in medical and pharmacological sciences affects its evaluation of transactions between medical and pharmaceutical companies that involve transfers of rights to manufacture or sell drugs, causing the agency to object to such transactions without solid basis for doing so. This article argues that in order to properly define a pharmaceutical market, one must not just consider the condition that competing drugs are meant to treat, but also take into account whether there are “off-label” drugs that are used to treat a relevant condition, whether drugs actually compete with each other on price or whether they are selected based on their side-effects (or lack thereof), mechanism of action, physician knowledge, and other noneconomic considerations, and finally whether the drugs in question enjoy any patent or nonpatent-based exclusivity that prevents generic manufacturers from entering the market.