Presence Of Subsidies Research Articles

Forward–reverse blockchain traceability: promoting electric vehicles with battery recycling in the presence of subsidy

AbstractElectric vehicles (EVs) and their battery recycling have recently garnered heightened attention from both firms and consumers, primarily driven by concerns related to environmental sustainability. However, consumers often grapple with uncertainties regarding the green valuation of EVs. Integrating blockchain traceability technology presents a promising solution to mitigate these ambiguities by providing traceable, immutable, and precise information. Within this context, this research, grounded in a game-theoretical framework, delves into the strategies involving blockchain traceability in the pre-purchase and post-purchase stages of EVs. Specifically, the paper analytically studies the influence of three distinct strategies, namely, non-blockchain traceability, forward blockchain traceability, and Forward–reverse blockchain traceability, on the willingness of EV manufacturers to adopt blockchain technology. In addition, the study incorporates two prevalent government subsidies to scrutinize and contrast their implications on optimal outcomes. The findings of this study uncover the nuanced relationship between adopting blockchain traceability and its impact on EV sales. Notably, the research shows that the positive impact on consumers’ surplus from blockchain adoption depends on the cost coefficient of green low-carbon levels not exceeding a particular threshold. Moreover, regarding the use of government subsidies to enhance overall social welfare, it is shown that the forward blockchain traceability strategy should align with consumer-oriented subsidies and the Forward–reverse blockchain traceability strategy with EV maker-oriented subsidies.

Envy-free house allocation with minimum subsidy

House allocation refers to the problem where m houses are to be allocated to n agents so that each agent receives one house. Since an envy-free house allocation does not always exist, we consider finding such an allocation in the presence of subsidy. We show that computing an envy-free allocation with minimum subsidy is NP-hard in general, but can be done efficiently if m differs from n by an additive constant or if the agents have identical utilities.

Board gender diversity, government subsidies, and green vehicles sales: Evidence from China

AbstractThis article investigates whether increased female representation on a board improves firm performance in terms of electric vehicle (EV) sales in China when government subsidies are available. The increase in EV sales in China is a direct result of the sustainability efforts spearheaded by the various levels of local and state governments. This area is of importance due to the rising Chinese footprint in global EV sales, the increasing role of subsidies, and a transformation from State‐Owned Enterprises (SOEs) to market‐driven firms that are more likely to pay attention to corporate governance issues such as board diversity. Using the instrumental variable (IV) approach, we estimate a two‐stage least squares (2SLS) regression to control for more women representation on EV boards using firm‐level data. The results indicate that board gender diversity (BGD) positively impacts firm performance in terms of EV sales. Furthermore, the effect amplifies in the presence of government subsidies. The insights provide valuable contributions to bridge the critical literature gap on how board diversity impacts firm performance in the presence of subsidies and offer valuable insights into corporate governance and policymaking.

Critical pathways to renewable energy transitions in remote Alaska communities: A comparative analysis

The transition from fossil-fuel based power generation to renewable energy is well underway; however, this transition is highly uneven and not all regions and communities are engaging equally. The circumpolar north is one region where disparities in the uptake of community renewable energy (CRE) projects is evident. Many Northern, remote communities are not connected to national electricity grids and as a result, rely heavily on imported and expensive fuels for power generation. However, within this context, there are places in the US state of Alaska that have forged a leading path toward CRE. This paper investigates why some remote communities develop renewable energy projects while others do not. Using Qualitative Comparative Analysis (QCA), we compare 24 remote communities in Alaska to identify the combination of explanatory factors that can lead to CRE. We first identified 37 potential conditions, from which we drew three primary explanatory factors: community capacity, electricity subsidies, and pooled resources. Results show the absence of large electricity subsidies is a necessary condition to the development of CRE. It also shows that the presence of subsidies (above a state-wide program) stymies transitions. We also found that particular combinations of the absence of large subsidies, community capacity, and working collaboratively to pool resources across communities, were found to be key explanatory variables in the establishment of CRE. These findings may have implications for other communities both in the Circumpolar North and elsewhere, clarifying the conditions that support CRE development.

Do subsidies increase firm productivity? Evidence from Chinese manufacturing enterprises

This paper examines the effect of government subsidies on firm-level productivity. The subsidy-promoting policies are oftentimes justified on the ground that subsidies increase the recipient firms’ innovation and productivity. We develop a novel (semiparametric) method to structurally identify the firm-level productivity in the presence of subsidies. Unlike previous studies, we assume that subsidies are endogenous. To correct for the endogeneity problem, we use a switching regression in our semiparametric production function. Our method provides an improved framework for estimating the production function with endogenous and/or censored variables. We apply our method to study the effect of subsidies on firm-level productivity in the Chinese machinery industry, using panel data from 1998 to 2007. We find strong empirical evidence that subsidies have a positive effect on firms’ persistent productivity. Subsidies may allow firms to invest more on research and development (R&D) and thus improve productivity. Using the available R&D data, we find evidence to support this explanation that more subsidies are associated with higher R&D investment. We also carry out a decomposition analysis to separately examine the subsidy effect on output via the input channel and the persistent productivity channel. Opposite effects are found from the two channels and overall subsidies have a positive effect on a firm’s output.

Rents, Experiments, and the Perpetual Presence of Concessionary Weather Insurance

Geographers have interpreted the rise of weather insurance for small agricultural producers as emblematic of financialization’s inexorable march to capitalize the countryside. Yet this market has proved far less successful than advocates hoped or critics feared. Rather than a speculative tool for surplus extraction from smallholders or a mechanism for their financial subjectification, this article reinterprets weather insurance as an infrastructure of concessionary transfers from the development sector to make market-mediated mechanisms work. These transfers are emblematic of the new distributional terms struck between donors, states, and insurance capital as financial risk transfer is articulated with the extension of fragmentary safety nets. Economic field experiments with insurance have proliferated as venues in which the value of insurance is tested by both economists and experimenting subjects. Just as data from these trials have suggested some positive welfare impacts, they have also indicated target clients are unwilling or unable to pay full market price, thus performing a new justification for the perpetual presence of subsidies. Such transfers present opportunities for reinsurers to command rents through their control of large pools of capital and their interpretive authority over techniques for pricing risk under uncertainty. In a changing climate, reinsurers are poised to collect larger rents from donors’ and governments’ premium subsidies meant to decrease insurance costs for the vulnerable. These dynamics of rent cycling underscore the urgency of building more equitable, systematic risk-sharing infrastructures to replace the current fragmentary archipelagos of weather insurance.

Effect of Optimal Subsidy Rate and Strategic Behaviour of Supply Chain Members under Competition on Green Product Retailing

This paper investigates the impact of the subsidy and horizontal strategic cooperation on a green supply chain where two competing manufacturers distribute substitutable green products through exclusive retailers. Models are formulated in three-stage game structures in five different scenarios, where the government organization determines optimal subsidy by pursuing social welfare maximization. Both manufacturers invest in improving green quality levels of products. The study aims to explore the advantage of vertical integration and strategic collusion from the perspective of green supply chain practice in the presence of subsidy. The key contributions from the present study indicate that under competition, members of both supply chains are able to receive higher profits through horizontal collusion, but green quality levels of the product remain suboptimal. If upstream manufacturers cooperate, government subsidy does not necessarily improve product quality level, and the amount of government expenditure increased substantially. By comparing outcomes where members are vertically integrated with scenarios where members make strategic collusion, we found that the former might outperform by later. Cross-price sensitivity appears as a significant parameter affecting supply chain members’ performance and the amount of government expenditure. Cooperation between members at the horizontal level is a more robust strategic measure than vertical integration if consumers are highly price-sensitive.

Modelling the effect of resource subsidy on a two-species predator-prey system under the influence of environmental noises

Our ecosystem is full of various types of food chain systems. Most of the species have more than one food source with various kinds of possible interactions. In this work, we have studied a predator-prey-subsidy model in a rapidly fluctuating environment. As per our consideration predator exploits both a prey population and an allochthonous resource which is provided as a subsidy to the system exogenously, with Holling Type II response functions. Furthermore, we have introduced Gaussian white noise to the main parameters subject to coupling of a prey-predator pair with its environment. We have examined the existence of unique global positive solutions for both the deterministic and stochastic systems. Boundedness, uniform continuity, global attractiveness in mean of solutions of the stochastic system are proved. Conditions for extinction of prey and predator population are derived and the importance of environmental noise as well as subsidy for extinction is discussed through mathematical results and numerical findings. We have derived conditions for persistence of the proposed stochastic system. The results of persistence and extinction have been justified by numerical simulations. Numerically we have found that presence of subsidy can be the cause of survival of predator even there is no prey available for consumption which fact is different from the studies of those systems where additional food is provided for predator. We have also observed that very high input of subsidy can be a cause for extinction of prey population.

How to improve the adoption of soil conservation practices? Suggestions from farmers' perception in western Sicily

The knowledge of farmers' perception about the value of natural resources in agricultural management should have a central role in the orientation of decision-making processes in the rural policy. The final goal of such knowledge is to involve the population in the management of the territory with a bottom-up approach for a sustainable use of natural resources. Taking as case study the agricultural district of Western Sicily (Italy), which is one of the most important agricultural areas of Europe and is affected by soil degradation processes, our study pursued the following objectives: 1) to measure the adoption of the soil conservation practices (SCP) promoted by the Region inside the Rural Development Programs, with respect to some personal and farm features; 2) to find out the relationship between the personal and farm characteristics and the perceived environmental, aesthetic, productive, and management advantages, deriving from the adoption of SCP. The analysis was carried out using a ‘multiple choice’ answer questionnaire, administered to 125 farmers. Univariate statistics, Multiple Correspondence Analysis (MCA), and Chi-square test were used. Minimum tillage resulted the most adopted among the SCP not included inside Rural Development Program at the study time, while organic manuring the most adopted among SCP included inside Rural Development Program. The interviewed farmers revealed an inclination to perceive the production benefits (increased yield, and crop quality) and management benefits (production costs reduction, and working time reduction), stronger than the environmental and aesthetic ones. Farmers perceiving management advantages also perceived production benefits. Similarly, farmers perceiving environmental advantages also perceived aesthetic benefits. Effective profitability resulted the main efficient stimulus to the adoption of SCP, much larger than farmers' ecological attitudes, or the presence of subsidies. MCA and Chi-square test indicated that the farm size had the strongest influence on the choice of the SCP, and on the type of perceived advantages. Farmers asked to the Regional Authorities an improvement in technical advice services on the implementation of SCP, in order to make them profitable.

Paying for Hemodialysis in Kerala, India: A Description of Household Financial Hardship in the Context of Medical Subsidy

IntroductionMany low- and middle-income countries are implementing strategies to increase dialysis availability as growing numbers of people reach end-stage renal disease. Despite efforts to subsidize care, the economic sustainability of chronic dialysis in these settings remains uncertain. We evaluated the association of medical subsidy with household financial hardship related to hemodialysis in Kerala, India, a state with high penetrance of procedure-based subsidies for patients on dialysis.MethodsPatients on maintenance hemodialysis at 15 facilities in Kerala were administered a questionnaire that ascertained demographics, dialysis details, and household finances. We estimated direct and indirect costs of hemodialysis, and described the use of medical subsidy. We evaluated whether presence of subsidy (private, charity, or government-sponsored) was associated with lower catastrophic health expenditure (defined as ≥40% of nonsubsistence expenditure spent on dialysis) or distress financing.ResultsOf the 835 patients surveyed, 759 (91%) reported their households experienced catastrophic health expenditure, and 644 (77%) engaged in distress financing. Median dialysis-related expenditure was 80% (25th–75th percentile: 60%–90%) of household nonsubsistence expenditure. Government subsidies were used by 238 (29%) of households, 139 (58%) of which were in the lowest income category. Catastrophic health expenditure was present in 215 (90%) of households receiving government subsidy and 332 (93%) without subsidy.ConclusionsProvision of medical subsidy in Kerala, India was not associated with lower rates of household financial hardship related to long-term hemodialysis therapy. Transparent counseling on impending costs and innovative strategies to mitigate household financial distress are necessary for persons with end-stage renal disease in resource-limited settings.

The Economic Feasibility of Residential Energy Storage Combined with PV Panels: The Role of Subsidies in Italy

A solar photovoltaic system produces electricity by converting energy from the sun. By the end of 2016, the global installed solar photovoltaic capacity reached 305 GW. Its growth is impressive in the last years; in fact, it was only equal to 41 GW in 2010. However, Europe has installed only 6.9 GW in 2016 (−1.7 GW in comparison to previous year) and this annual power installed is equal to 9% of global one in according to data released by Solar Power Europe. The profitability of PV systems in mature markets depends on the harmonization between demanded energy and produced one residential energy storage when combined with photovoltaic panels is able to increase the share of self-consumption. This work proposes a mathematical model, in which a Discounted Cash Flow analysis is conducted to evaluate the financial feasibility of photovoltaic-integrated lead acid battery systems in Italy. The indicator used is Net Present Value. Furthermore, a break-even point analysis, in terms of an increase of self-consumption, is conducted. The residential sector is investigated and energy storage system investment is incentivized by fiscal deduction and regional subsidies. The analysis provides several case studies, determined by combinations of the following variables: photovoltaic plant size, battery capacity, the increase of the share of self-consumption, and the useful lifetime of energy storage system. The same case studies are proposed also in four alternative scenarios, where is the modified the structure of subsidies. Results confirm that the profitability can be reached in presence of subsidies.

Stima dell’andamento della redditività delle piantagioni di pioppo alla luce delle politiche di settore

Abstract: Estimating the profitability trends of poplar plantations under current sectorial public policies. Investments in poplar plantations in the Po valley (Northern Italy), the most important segment of timber production for the Italian forest-based sector, are undergoing a decline since more than two decades. The investment level is influenced by both economic variables directly related to the production, such as timber prices, management costs, and land costs, as well as external variables indirectly related to it, such as the opportunity cost of competitive agricultural productions, environmental restrictions, and the presence of subsidies. This paper presents the results of an analysis of trends in timber investment returns from poplar plantations in the Po Valley. In specific, we estimated how these returns have changed in the last 15 years (2001-2015) as a result of the evolution of the key variables of cost and timber price, and assuming a representative plantation management regime. The results show that, in the considered period, poplar timber investments have had a significant decline, with estimated Internal Rate of Returns dropped of 22.1%-44.2% from 2001 to 2015. In specific, the Internal Rates of Returns, when defined and in the base case scenario, ranged from values between 7.1% and 14.0% (2001) to 4.4%-11.0% (2015). Poplar plantations are offering interesting income opportunities only when average timber prices are high, while in all the other cases the investments are at the threshold of economic viability or even negative. The decreased profitability, together with the high variability of potential financial returns, are negatively influencing the attitude towards the investments in poplar plantations. These results are discussed in the light of the recent sectorial public policies. In particular, we focused on the Measures to support plantations of the regional Rural Development Plans, which often proved to be decisive for establishing new plantations and crucial in (de)stabilizing the sector. The lack of a strategic coordination among the northern Italian Regions and the discontinuity of subsidies schemes have contributed to the destabilization of the market.

Horizontal product differentiation and policy adjustment in the presence of abatement subsidies and emission taxes

There are important examples of countries which have implemented policies to promote pollution abatement activities in sectors characterised by some degree of product differentiation. This paper examines the role of product differentiation on optimal policy and industry emissions in a Cournot oligopoly model in the presence of abatement technology, abatement subsidies and emission taxes. The analysis indicates that as products become more differentiated the government can afford a tax increase due to the presence of subsidies and abatement technology. Additionally, highly differentiated industries may experience a rapid increase in emissions and so policies such as research and development (R&D) may be needed to tackle higher emissions. The government adjusts optimal policy as industries become more or less pollution-intensive, and the extent of the adjustment varies across industries characterised by different degrees of product differentiation. The analysis is potentially relevant to industries where firms are taking steps to differentiate their products in order to capture particular market niches, and lower production and abatement costs.

Self-financed efficiency incentives: case study of Mexico

Numerous countries use public funds to subsidize residential electricity for a variety of socioeconomic objectives. These subsidies lower the value of energy efficiency to the consumer while raising it for the government. Further, while it would be especially helpful to have stringent Minimum Energy Performance Standards (MEPS) for end uses in this environment, they are hard to strengthen without imposing a cost on ratepayers. In this second-best world, where the presence of subsidies limits the government’s ability to strengthen standards, we find that efficiency-induced savings in subsidy payments can be a significant source of financing for energy efficiency incentive programs. Here, we introduce the Lawrence Berkeley National Laboratory (LBNL) Energy Efficiency Revenue Analysis (LEERA) model to estimate the greatest appliance efficiency improvements that can be achieved in Mexico by the revenue neutral financing of incentive programs from savings in subsidy payments yielded by the same efficiency improvements. We analyze Mexico’s tariff structures and the long-run marginal cost of supply to calculate the marginal savings for the government from appliance efficiency. We find that these avoided subsidy payments alone can provide enough revenue to cover the full incremental manufacturing cost of refrigerators that are 29 % more efficient and televisions that are 36 % more efficient than baseline models. For room air conditioners (ACs), the same source of financing can contribute up to one third of the incremental manufacturing cost of a model that is 10 % more efficient than baseline. We analyze the sensitivity of our results to the most important parameters and find our main conclusion that efficiency-induced avoided subsidy payments will contribute significantly to financing efficiency incentive programs in Mexico to be significant and robust.

Microfinance institution costs: effects of gender, subsidies and technology

PurposeThe purpose of this paper is to present a statistical examination of the factors affecting the performance of microfinance institutions (MFIs) operating in Eastern Europe and Central Asia.Design/methodology/approachData on MFIs operating in Eastern Europe and Central Asia during the period 1999‐2004 were used in this study. A statistical analysis of the performance of these MFIs was conducted utilizing a cost function approach, which was estimated using seemingly unrelated regressions.FindingsDuring the study time period, MFIs involved in the provision of group loans and with a higher percentage of loans to women had lower costs. The presence of subsidies is also found to be associated with higher MFI costs.Social implicationsProviding financial services to women, and use of group loans was associated with lower costs in Eastern Europe and central Asian microfinance institutions in the early 2000s.Originality/valueThis study focuses exclusively on efficiency of MFIs operating in Eastern Europe and Central Asia, and the first to explicitly measure outreach efficiency when output is measured by number of active clients, rather than the value of the overall MFI lending portfolio.

Do Non‐profit Organizations Manage Earnings toward Zero Profit and Does Governmental Financing Play a Role?

AbstractPrior research has documented earnings management in for‐profit settings. Non‐profit organizations are thought to pay less attention to the bottom line and earnings management research has therefore focused on the manipulation of expenses in order to improve efficiency ratios or taxable income, not reported earnings per se. Considering an institutional setting characterized by the absence of such ratios and the presence of important subsidies, management of the actual bottom line is analyzed in light of these subsidies. The results suggest that organizations drive their results toward zero profit, which is intensified by increased governmental funding when unmanaged results are positive. The relation between downward earnings management and the presence of subsidies is particularly evident for organizations whose accumulated reserves are high. Copyright © 2012 ASAC. Published by John Wiley & Sons, Ltd.

The labor supply effects of child care costs and wages in the presence of subsidies and the earned income tax credit

This paper uses CPS and SIPP data between 1990 and 2004 to examine the effects of child care expenditures and wages on the employment of single mothers. It adds to the literature in this area by incorporating explicit controls for child care subsidies and the EITC into the estimation. Doing so provides an opportunity to examine mothers’ sensitivity to prices and wages net of policies that influence these amounts. Results suggest that lower child care expenditures, higher wages, and more generous subsidy and EITC benefits increase the likelihood of employment. Allowing the impact of child care subsidies and the EITC to vary with expenditures and wages reveals substantial heterogeneity. In particular, the largest labor supply effects of child care subsidies are generated for mothers with higher child care costs, while the largest labor supply effects of the EITC are found for mothers with lower wages.

Third-Degree Price Discrimination in the Presence of Subsidies

Abstract According to a classical result, a move from uniform pricing to third-degree price discrimination only improves welfare if total output increases. In this paper I show that the classical result fails in the presence of subsidies. This finding appears to be relevant for the pharmaceutical sector where a consumer pays a fraction of the actual drug price due to health insurance coverage.

The Cost Structure of Microfinance Institutions in Eastern Europe and Central Asia

Microfinance institutions are important, particularly in developing countries, because they expand the frontier of financial intermediation by providing loans to those traditionally excluded from formal financial markets. This paper presents the first systematic statistical examination of the performance of MFIs operating in Eastern Europe and Central Asia. A cost function is estimated for MFIs in the region from 1999-2004. First, the presence of subsidies is found to be associated with higher MFI costs. When output is measured as the number of loans made, we find that MFIs become more efficient over time and that MFIs involved in the provision of group loans and loans to women have lower costs. However, when output is measured as volume of loans rather than their number, this last finding is reversed. This may be due to the fact that such loans are smaller in size; thus for a given volume more loans must be made.