Non-economic Objectives Research Articles

Local party committee and labor cost asymmetry

AbstractChinese state-owned enterprises (SOEs) operate under seemingly incompatible logics of economic and noneconomic objectives and thus within a setting of institutional complexity. This complexity manifests in the coexistence of the modern enterprise system and a firm-level Local Party Committee (LPC). LPCs check proposals from a political standpoint before executives decide on economic feasibility. We provide evidence that SOEs with more LPC participation exhibit greater labor stickiness, and this association is more pronounced after the enactment of the Labor Contract Law in 2008, when LPCs became more focused on noneconomic objectives. Additional analyses reveal that regional differences in market-based institutional quality moderate the association between LPC participation and labor cost asymmetry. Our results are relevant for emerging market investors who attempt to incorporate cost asymmetry into their profitability forecasts and for other stakeholders who strive to understand and anticipate the impact of the complex Chinese institutional setting on cost behavior.

Nurturing family business resilience through strategic supply chain management

PurposeThe study aspires to enhance comprehension of the intricate interplay between supply chain management (SCM) and resilience in family businesses, thereby offering valuable insights to managers and policymakers endeavouring to foster resilience in uncertain environments.Design/methodology/approachCommencing from the premise that family businesses (FBs) prioritize the preservation of socio-emotional wealth (SEW) when formulating strategic decisions, this study endeavours to advance understanding of supply chain practices adopted by FBs and their direct impact on resilience during crisis situations or economically challenging periods. Through an exploratory case study of nine FBs, the present research reveals four pivotal strategies in SCM that contribute to their resilience: (i) reorganization of inventory management; (ii) cultivating close relationships with suppliers; (iii) emphasizing product quality and customer retention; and (iv) implementing cost reduction measures to bolster resilience. The aim of the study is to provide an in-depth understanding of the intricate interplay between SCM and resilience in FBs, thereby offering valuable insights to managers and policymakers endeavouring to foster resilience in uncertain environments.FindingsOur approach offers a theoretical framework for SCM aligned with prior research on the interplay between characteristics of family businesses and resilience strategies. Furthermore, this paper illustrates how factors such as the emphasis on high-quality products and services by family businesses contribute to achieving non-economic objectives that owners adopt to reconcile family and business needs, creating intrinsic added value for the company. It reveals various challenges in SCM, including inventory organization changes, supplier closures and the significance of customer retention. Family businesses are implementing product and technology enhancements and leveraging digitization to enhance supply chain processes.Originality/valueThis paper contributes significantly to the field of FBs by highlighting the crucial role of SCM in enhancing business resilience during crises. It empirically examines how the SEW characteristics of FBs influence the reconfiguration of their supply chains to enhance resilience, presenting a theoretical model for this context. Our theoretical framework employs an SEW perspective to elucidate how FBs respond to the challenges posed by the COVID-19 pandemic by adapting their SCM processes to safeguard their social and emotional legitimacy, organizational visibility and reputation. These adaptations gain particular relevance during crises or turbulent conditions, potentially leading to alterations in how FBs formulate their supply chain strategies and manage supply chain-related processes.

非经济目标与家族企业的退出行为——组合创业的调节作用

非经济目标与家族企业的退出行为——组合创业的调节作用

ПРОДУКТОВАЯ СТРАТЕГИЯ В МОДЕЛИ СОГЛАСОВАНИЯ СТРАТЕГИЙ ФУНКЦИОНИРОВАНИЯ И РАЗВИТИЯ ПРОМЫШЛЕННЫХ ПРЕДПРИЯТИЙ

The trend of implementing ESG principles into the corporate strategies of industrial enterprises in the context of recent years' realities determines the research focus on finding the effective instruments for their sustainable operation, capable of achieving the actualized priorities of sustainable development. Specifically, the emphasis is on reaching a consensus through aligning the operation and development strategies of industrial enterprises. As a result, the research proposes a model for building the sustainable development strategy for industrial enterprises, where the strategic process is based on the hierarchy of strategies and the matrix nature of strategy formation contributes to their convergence and subordination to the general corporate strategy. Thus, supporting strategies that specify the corporate strategy in terms of the enterprise's resources and capabilities are divided into two groups – operation and development. The alignment of these strategies leads to the product strategy, organized as business-projects. The authors' proposed consensual approach to sustainable development strategic planning is based on the idea of making long-term decisions on the nomenclature, assortment, production volumes and sales of innovative products, and implies the analysis of the discrete-continuous dynamics of the innovative products/technologies’ life cycles in order to synchronize them and generate sustainable positive cash flows, capable of realizing non-economic objectives of sustainable development.

Trade and Sustainable Development: Non-Economic Objectives in the Theory of Economic Policy

AbstractWhile the theory of economic policy offers a potential framework for thinking about the joint pursuit of economic objectives (EOs) and non-economic objectives (NEOs), over time the theory of economic policy was formalized in a way that considers NEOs as constraints that are given, rather than as goals that may themselves be endogenous alongside EOs. We examine the analytical treatment of NEOs as co-determined with EOs, revisiting some of the ground broken by Alan Winters in his analysis of NEOs. We review the place of NEOs in the theory of economic policy, discuss current practice in the representation of such objectives as exogenous constraints, and develop an argument for representation of NEOs as objectives in themselves.

Is Using Trade Policy for Foreign Policy a ‘SNO Job’? On Linkage, Friend-Shoring, and the Challenges for Multilateralism

AbstractUsing trade policy to achieve foreign policy objectives, such as stable international relations, has a long history, from Kant to the founders of the GATT. Punishing enemies and rewarding ‘friends’ by granting or withholding market access is also not new, and sanctions or blockades are a venerable form of trade policy used as foreign policy. A more recent form is influencing the domestic policy of another country with non-commercial provisions in trade agreements. All these tools are based on linkage, on the assumption that a desired outcome can be achieved by interventions that would increase or decrease trade. The latest instance is so-called ‘friend-shoring’, which would in principle isolate enemies, although it will be difficult in practice and risks undermining multilateralism. The cost of these interventions is susceptible to economic analysis, even if the conclusion is that it is worth paying. Influenced by Alan Winters who referred to national security as a motivation for agriculture protection as a ‘so-called non-economic objective’ or SNO, I argue that using a trade policy tool for a foreign policy purpose as if there is no cost is a SNO job, an attempt to justify an intervention aimed at one objective by framing it as being valuable for another.

Noneconomic Objectives, Global Value Chains and International Cooperation

Systemic conflicts increasingly affect the global value chains (GVCs) underpinning globalization by creating policy uncertainty and politicizing trade and investment decisions. Unilateral policies to attain competitiveness and noneconomic objectives (NEOs), including national security, create incentives for international cooperation to attenuate policy spillovers. Recent initiatives seeking to do so are organized around supply chain governance and need not be anchored in trade agreements. Whether such cooperation is feasible and can be designed to be effective in realizing NEOs is unclear. Plurilateral GVC-centered cooperation offers a potential path for states to pursue NEOs and reduce policy uncertainty for international business. Research offers little guidance to policymakers on the design of such cooperation. A key open question is to determine whether explicit market access commitments are necessary to sustain cooperation. Creating mechanisms for the epistemic communities that are concerned with a specific NEO or policy area to interact with stakeholders and lead firms operating international production networks can help inform the design of cooperation to attain NEOs more efficiently.

Route 66: Mutations of the internal market explored through the prism of citation networks

Abstract The article rethinks the mutation of the internal market, charting its metamorphosis from a free trade area to a maze of common policies. It examines the case law of the European Court of Justice from a novel, structural perspective which uses community detection techniques to shed new light on this amply theorized process. The analysis reveals an irreversible shift in the method of integration, from a de-regulatory removal of national rules obstructing free movement (liberalization) to a re-regulatory adoption of common rules and standards promoting free movement (harmonization). The shift, which occurred between 2007 and 2010, signals a new rationale of integration and a reprioritization of the European Union’s economic and non-economic objectives. Finally, the article questions whether said shift calls for a new authorization of Europe to regulate.

Chicago, Harvard, Freiburg, or considerations for Single Market integration? Analysis of theoretical and ideational insights underpinning the European Commission’s merger control with exponential random graph models

ABSTRACT The European Commission has central authority over the European Union’s merger control. It is therefore responsible for making important merger decisions that are bound to affect vast markets and EU and non-EU market players, with significant implications for wider economic, political, and societal segments. These decisions are often informed by theoretical and ideational insights from various schools of competition analysis and economic theories, or they are guided by non-economic objectives. This article analyzes merger cases cleared under the current European Union Merger Regulation (EUMR) in an attempt to reveal whether the following insights underpin the Commission’s merger control: the Chicago School, Harvard School, Freiburg School, and considerations for Single Market integration. The analysis is conducted by employing an exponential random graph model (ERGM) approach.

The Great Recession of 2008 from the Subjective Well-being Perspective: Implication for Policy-making in the EU Countries

Abstract Literature review implies that despite the Great Recession of 2008 the economic policy paradigm continues to prevail in assessing and measuring the well-being in the EU countries. This means that the institutional goals and the follow-up policies also tend to favor economic over non-economic objectives. This paper examines to what extent the Great Recession has increased or decreased the influence of economic factors on subjective well-being and the implications for policy-making. Regression analysis of subjective well-being data from 2006, 2011, and 2016 from 16 countries from the European Union shows that the influence of economic factors on subjective well-being is stronger than before the Great Recession in the majority of the analyzed countries. It has also revealed that satisfaction with one’s standard of living is a much stronger predictor of subjective well-being than the overall economic situation.

Is Latin America Missing the Links Between Procurement, Sustainability and Human Rights?

Public procurement is a process whereby the public sector buys from private suppliers the goods, services and works it needs to accomplish its functions. It aims to obtain the best ‘value for money’, ‘in a timely, economical and efficient manner’.1 This traditional procurement’s goal was re-defined by scholars and policymakers to give space to non-economic objectives through the so-called sustainable public procurement (SPP).2 SPP pursues economic, environmental and social objectives within the purchasing process.3 Therefore, ‘social’ is one of the three dimensions that makes sustainability possible, and human rights are the backbone of social sustainability.

Trade and Sustainable Development: Non-Economic Objectives in the Theory of Economic Policy

Trade and Sustainable Development: Non-Economic Objectives in the Theory of Economic Policy

The Internationalization of Chinese State-owned Enterprises under Multiple Institutional Complexity

An important emerging phenomenon is that a large number of state-owned enterprises begin to expand globally. Because SOEs have particular nature in that they do not obey the profit-maximizing logic but seek non-economic objectives, so the interesting question is that what different result will appear when SOEs internationalize? Will the state ownership have positive impact because of government-related advantages? Or will the impact be negative due to liability of stateness? In this paper we take Chinese listed firms as the sample in which SOEs occupy a considerable share to study the influence on internationalization by ownership. More important, the typical institutional complexity in China make it possible to further investigate its interactive effects with another two levels of institutional complexities besides the organization-level institutional complexity as profit-maximizing logic and non-economic motives conflict brought by state ownership: One is the field-level institutional complexity--the regional market of the headquarter as liberal market or coordinated market; Another is the individual-level institutional complexity--the governance attribute as the top management with particular overseas background or not. By these we enter a thicker institutional context with vertical nestedness, study the overlapped interplay by the triple institutional complexities (organization* field*individual), and obtain the following valuable conclusions: The degree of internationalization of SOEs is significantly lower than that of POEs (private-owned enterprises). Moreover, no matter the liberal market environment or the manager’s overseas background both promote POE’s internationalization more if they act respectively. However, their joint promotion to the SOE’s internationalization is larger than to the POE’s. This indicates that the vertical nestedness and complicated interaction by multiple institutional complexities will produce a totally different configurational effect from the thin institutional context. As for the deeply institutionalized organizations such as SOEs which have immense strategic inertia, their behavior can be effectively changed only under the functioning of multiple institutions combined as a system. Our paper contributes to the research of SOE’s internationalization, to the theory of institutional complexity, especially for the configurational effect by the vertical nestedness of multiple institutional complexity.

A multi-objective robust optimization model for upstream hydrocarbon supply chain

The hydrocarbon supply chain (HCSC) is a significant part of the world's energy sector. The energy market has experienced erratic behavior over the last few years results in financial risks such as exceeding certain limits of the budget or not achieving the desired levels of cash in-flow, i.e., revenue. In this work, robust optimization and multi-objective mathematical programming are used to develop a model that eliminates or at least mitigates the impact of uncertain market behavior. Robust optimization provides tactical plans that are feasible and robust over market scenarios. The model assesses the trade-offs between alternatives and guides the decision-maker towards the effective management of the HCSC. The economic objectives are to minimize total cost and maximize revenue, while the non-economic objective is to minimize the depletion rate. The model considers the environmental aspect by limiting the emission of CO2 and the sustainability aspect by reducing the depletion rate of natural resources. Uncertain behavior of the oil market is modeled on scenario representation. A case study based on real data from Saudi Arabia HCSC is provided to demonstrate the model's practicality, and a sensitivity analysis is conducted to provide some managerial insights. The results indicate that Saudi Arabia can cover its entire expenditure, break-even-point, by producing oil at 7.18 MMbbld and gas at 3,543.48 MMcftd. Besides, the robust approach provides a preferred plan with the highest cash inflow and the lowest sustainability over other approaches, e.g., deterministic, stochastic, and risk-based. The differences show that the robust model increases oil production to compensate for the variability of the scenario.

Indonesia’s Export Ban on Nickel Ore: Does It Violate the World Trade Organization (WTO) Rules?

Many countries have imposed export restrictions based on economic and non-economic objectives. In 2020, Indonesia has followed this trend by imposing an export ban on nickel ore. The European Union reacted by launching a complaint at the WTO, claiming Indonesia’s export ban has unfairly limited its producers’ access to nickel. This article explores the way in which Indonesia could justify banning export on nickel ore, by looking at the current WTO rules and its judicial decisions. This article claims that Indonesia has no justification to impose this ban. Although it will most likely be temporarily applied, and be designed to prevent a critical shortage, nickel is not essential in Indonesia based on its domestic demand, ongoing plans, economic contribution, and the current mining law. Also, the ban will most likely not be justified based on general exception provisions under Article XX of the 1994. Export Bans, Export Restrictions, General Exception, Article XI GATT, Article XX GATT, Indonesia, Nickel Ore, the European Union, WTO Rules, WTO Dispute Settlement

Do family firms invest more in pollution prevention strategy than non-family firms? An integration of agency and institutional theories

Family firms often face trade-offs between economic and non-economic objectives when making decisions on the pollution prevention strategy, one type of proactive environmental strategy. Existing evidence from developed economies has largely shown a positive relationship between family firms and pollution prevention strategy, but little research has investigated whether there is a positive relationship in emerging economies as well. This research adopts agency and institutional theories to examine the impact of family firms on pollution prevention strategy in the context of China. We analyzed a sample of 2348 Chinese firms using ordinal least squares regression. Empirical results show that family firms underinvest in pollution prevention strategy relative to non-family firms, particularly when the Chief Executive Officer (CEO) is not the firm’s founder. Moreover, different types of institutional factors alter the effect in different ways. Regulatory pressure weakens the negative effect of family ownership on pollution prevention strategy, whereas institutional support strengthens this main effect. These findings enrich the understanding of why and under what conditions family firms perform pollution prevention strategy.

Feasibility analysis of wind and solar powered desalination plants: An application to islands

Economic surveillance for securing water projects driven by non-conventional energy sources is a challenge. The carrying out of these initiatives in economies based on liberalized markets faces governments against the need for guaranteed profits. As water availability has become a relevant global problem, and desalination an energy-intensive demand solution, it is common to combine both kinds of technologies, renewable energy systems and desalination plants. This research investigates the influence of grants, investment rates, and energy and water sales on the commercialization of two desalination technologies. A performance analysis has been carried out taking into account different scenarios. Following this approach, a simulated reverse osmosis desalination plant has been compared with respect to an already granted novel pilot plant. Results show a better fulfilment of the non-economic objectives, and economically profitable not only under certain conditions of conceded grants, and investor's expected benefits but also of sales of water-energy, that highlighted as a limiting factor. The Levelized Cost of Energy might be similar than the Spanish generation means, depending on the cost escalation rate of the loans, and conceded grants. It was found a reduction of 11 euro cents under the average price that could be achieved, for the standard scenario.

Industry choice for an airport economic zone by multi-objective optimization

Airport Economic Zone (AEZ) is a suburban area whose infrastructure, land-use, and economy are centered on an airport. More than 100 AEZs are under planning and development in China. Industry choice is the critical issue for all the AEZs. To ensure that all the industries located in AEZs are closely related to airports and air transport, first, we create a pool of optional industries for AEZs based on the industrial input-output model. Second, we construct a multi-objective combinatorial optimization model subject to the constraints of land area of an AEZ, targeting the maximum number of employees, the largest GDP, the highest degree of aviation correlation, the fullest utilization of basic resources, and the greatest policy support. Third, to verify the feasibility of this model in practice, we choose the Zhengzhou Airport Economic Comprehensive Experimental Zone for case study. We divide these five objectives into two categories: economic objectives and non-economic objectives, and put different weights on them to describe different political preferences, and then discuss the calculation results in three scenarios. Finally, we come to the conclusion that comprehensive consideration of every characteristic of each industry can reasonably determine the scale of industrial land use and increase industrial economic benefit in AEZs. Our research provides a new quantitative and reliable method for industry choice and land use planning of an AEZ.

SDG 8 and Elimination of Child Labour in the Cocoa Industry in Ghana: Can WTO Law and Private Sector Responsible Business Initiatives Help?

The issue of child labour in the cocoa industries of producer countries like Ghana has come to the forefront of the discourse on trade related problems in international trade and how the World Trade Organisation (WTO) rules can be used to address them. Though the WTO rules are fundamentally aimed at non-discrimination and liberalisation of international trade, they also provide for exceptions that allow member states to impose restrictions or total bans on imports of products that are not in consonance with non-economic objectives like public morals, public health and the conservation of natural resources. This paper conducts analysis of some exceptions to the WTO rules on non-discrimination and trade liberalisation. Using the problem of child labour in the cocoa industry in Ghana as an example, the paper discusses how these exceptions in the WTO rules could be used by an importing country to influence action against the use of child labour in cocoa exporting countries like Ghana. Where either the WTO rules or state action cannot or does not address the problem of child labour adequately, the paper analysis the viability of private sector responsible business initiatives inspired by the United Nations Sustainable Development Goals (SDG) as substitutes or complements to the WTO rules and state action.

From Global North-South Divide to Sustainability: Shifting Policy Frameworks for International Development and Education

Education policies are becoming increasingly oriented towards employability (economic returns) and subjected to measurements especially post-2015. Despite resistance from different stakeholders, employability has become a global norm and funds for programmes with non-economic objectives, especially in low and middle-income countries have been cut tremendously (Singh & Ehlers, 2020). Is this a short term crisis, a faulty and confused policy decision, or a part of a long term policy agenda aimed at bigger changes with deeper policy linkages? Who is promoting it with what intentions? How should the actors in the education sector deal with it? This paper answers these questions by mapping and analysing the shift in policy framework for International Development from Global North-South Divide (1970s-2015) to Sustainability (2015 onwards) and its impact on the policy of education for development. It shows how International Organisations (IOs) used knowledge, information and policy linkages to gain control over states and UN created a narrative about sustainability rooted in environment to facilitate an obscure OECD agenda for sustainable economic growth, backed by World Bank and the IMF’s measurement and control tactics. It further explains how and why the development policies (reflected in education) of low, middle and high income countries converged post-2015.