Market Failure Research Articles

Fair Competition Review System and cross-regional capital flow: Evidence from China

Breaking local protectionism and market segmentation to promote the free flow of production factors between regions is crucial for building a unified national market in China. Introduced in 2016, the Fair Competition Review System (FCRS) restricts local governments’ abuse of administrative power to limit competition. The system corrects market failures and weakens regional barriers, establishing market competition by evaluating policies and regulations for anti-competitive practices. This study investigated the impact of the FCRS on cross-regional capital flow through subsidiaries in different regions. Using data from Chinese-listed companies between 2011 and 2022, this empirical study found that capital flow significantly increased after the system's implementation. Cross-regional flow was stronger in areas with higher reduced administrative barriers, lower tax burdens, and lower capacity utilization rates. This suggests that the primary mechanisms driving capital flow were expansion and cost-efficiency improvements. Heterogeneity tests indicate that the system exhibited a stronger impact on promoting cross-regional capital flow for private enterprises and those with low investment efficiency and weaker profitability. These findings suggest that the FCRS effectively regulates administrative monopolies, reduces regional barriers, and facilitates freer capital flow between regions, contributing to a unified national market in China.

Government Expenditure On Manufacturing, Infrastructure, Agriculture Components, And The Level Of Economic Growth In Kenya 1985-2021

There is often contention and discussion regarding the optimal way to allocate public funds to different expenditure components and how they promote economic growth. Government spending has several importance; it raises aggregate demand, and increases employment levels. This eventually spurs a country's economic growth. Public expenditure also helps provide public goods due to market failures and economic exploitation. Public goods such as infrastructure (roads, bridges, airports), education, healthcare, and security are essential for economic growth. Public expenditure also improves the macroeconomy supply side, enhancing economic growth. In addition, the government can offer subsidies to sectors that might require financial assistance for their operations or expansion, which stimulates investment, promotes innovation, increases capital expenditure, and then job creation, which leads to economic growth. It also helps to redistribute income and promote social welfare. The study's main objective was to establish the effect of various public expenditure components on Kenya's economic growth. The specific objectives were to scrutinize the effect of the manufacturing component of government spending on Kenyan economic growth, assess the effect of the infrastructure component of government spending on Kenyan economic growth, and scrutinize the effect of the agricultural component of government spending on Kenyan economic growth. The study adopted a nonexperimental longitudinal research design. Secondary time series data between 1985 and 2021 from Economic Surveys, Statistical Abstracts, Economic reports, and public expenditure reports of the government of Kenya was sed. The study conducted the stationary test, cointegration, and causality test on the data and employed the Vector Error Correction Model in data analysis. The results showed that public expenditure's manufacturing and agricultural components had a positive impact on Kenyan economic growth, while infrastructure had a negative impact in the long run. Manufacturing drives industrialization, which leads to economies of scale, technological advancements, and more efficient production methods. This conforms to endogenous growth theory. Agricultural investment helps sustain economic growth by supporting rural development, reducing poverty, and improving food security. The structural transformation theory suggests that as agricultural productivity improves, resources (e.g., labor and capital) are freed up to be employed in other, more productive sectors. The results of infrastructure negatively impacting economic growth align with fiscal sustainability theory, which states that infrastructure spending may eventually become unsustainable if it leads to persistent fiscal deficits. Governments might need to increase taxes or cut spending in other productive areas (e.g., social services and education), which could dampen economic growth in the long term. Overall, the outcome showed that government spending and potential Kenyan economic expansion are correlated through a sustained relationship. This is evidenced by the R squared, which is at 0.8975. This implies that public expenditure explains 89.75% of the variations in GDP. The study recommends that the government choose the critical area of infrastructure component to invest in. In the long run, the findings showed that infrastructure spending negatively impacts economic growth, which could suggest inefficiencies or corruption in the allocation or execution of infrastructure projects. However, poor infrastructure planning, corruption, cost overruns, or investments in non-productive or underutilized projects could explain the negative long-term impact. The Kenyan government should invest more in the manufacturing sector in areas like agro-processing, the textile industry, pharmaceuticals, healthcare products, automotive assembly, and parts manufacturing, which helps to reduce imports that tend to be high in Kenya. With the agricultural component having a positive effect on Kenyan economic expansion, the state could invest in agriculture sector's areas like Irrigation and Water Management, Sustainable Agriculture, Climate Resilience crops, Agricultural Research and Extension Services, High-Value Crops, agro-processing, and Value Addition

Lost in Transition? Market Failure in the Implementation of the Circular Economy. A Comparative Analysis of the Netherlands and Poland

It is necessary for economies to transition to a circular economy (CE). What particularly inhibits the implementation of the CE in linear economies is market failures, whose theoretical principles are embedded in modern welfare economics and neoclassical economics. Market failures shape the functioning of different areas of the markets, including the allocation of and access to resources, competition, and cooperation, among others. Due to their presence in the market, opportunities for industrial symbiosis based on intersectoral cooperation and the creation of resource-efficient production systems are limited. It is crucial because the functioning of local actors within an industrial symbiosis significantly favours the promotion and development of a CE. The aim of the paper is to identify market failures that limit the implementation of CEs in traditional linear economies. The article is based on focus group interviews (FGI) conducted with four groups of stakeholders in the Netherlands and Poland: academia, society, business and the government. The main findings show that one of the greatest barriers in Poland is stakeholders’ low awareness of the CE, which influences their possibilities of cooperating and networking. Existing laws additionally limit opportunities to develop the CE. In contrast, in the Netherlands, where awareness is deeply embedded in the culture, education system and upbringing, the level of market failure is lower.

사상의 자유시장 이론과 플랫폼 거버넌스

The concept of ‘marketplace of ideas’ has been employed as a conventional argument to justify freedom of expression. The Constitutional Court of Korea has also been significantly influenced by this concept, presenting it as a rationale to protect freedom of expression and asserting that “the Internet is the medium most closely approximating the ‘marketplace of ideas’”. However, the proliferation of disinformation, hate speech, and the development of artificial intelligence have urged a re-evaluation of the validity of the ‘marketplace of ideas’, which posits that truth can prevail over falsehoods through unrestricted competition. ‘Marketplace of ideas’, which is advocated from a laissez-faire perspective, also encounters challenges related to market failure when examined from an economic perspective. This phenomenon occurs because market failure is not limited to the market for goods but extends to the market for ideas as well. In the context of freedom of expression, market failure can result in impediments to information distribution, insufficient dissemination of high-quality information, and democratic representation. To address market failure in the realm of free expression, it is imperative to focus on platform governance. In the United States, self-regulation by individual companies or industries, and in Europe, co-regulation by governments, have been proposed as potential solutions to market failure. The divergence between the US and European approaches to platform governance stems from the distinct constitutional traditions of freedom of expression. While platform governance mechanisms, such as self-regulation and co-regulation, offer advantages including flexibility, expedience, and professionalism, they may also generate tensions with the rule of law and potentially result in private censorship when limiting fundamental rights. To ensure the democratic legitimacy of self-regulation, limitations on freedom of expression must be implemented in a manner consistent with the rule of law. Furthermore, to prevent co-regulation from devolving into private censorship, considerable caution must be exercised to ensure that government intervention does not transform into censorship by administrative authority.

The Hungarian Retail Sales Tax in the Changing EU Context

In the last twenty years, Hungary has had three periods of special taxes (introduced as a result of the crises), but before and after 2010, and after the recession following the COVID-19 epidemic and the Russian-Ukrainian war, there were different legal policy reasons behind special taxes (including the retail sales tax). This raises questions as to whether the regulatory solutions implemented to address market failures during the first period are playing the same role today as they did in the past, and how their role has changed over the years. The introduced taxes often remain part of the general tax system, i.e. they are applied on a permanent basis (rather than on a temporary basis, as is usual with special taxes), and in 2023 they already accounted for almost 14% of total tax revenue (a higher proportion than, for example, corporate tax), which puts their role in the tax system in a different light. The Court of Justice of the European Union (CJEU) has repeatedly examined the EU framework, but it appears that the control has been weakened, mainly due to the impact of the current crises. At the same time, the Hungarian Constitutional Court is bound by the limits of the debt brake when examining the constitutional framework. The study explores the regulation of the Hungarian retail sales tax and its EU context, in particular with regard to the changes triggered by the crises. The introduced taxes often remain part of the general tax system, i.e. they are not applied on a temporary basis, and in 2023 they already accounted for almost 14% of total tax revenue (a higher rate than, for example, corporate tax), which puts their place in the tax system in a different light. The Court of Justice of the European Union (CJEU) has repeatedly examined the EU framework, but it appears that the control has been weakened, mainly due to the impact of the current crises, while the Hungarian Constitutional Court is bound by the limits of the debt brake when examining the constitutional framework.The study deals with the regulation of the Hungarian retail sales tax and its EU context, in particular with regard to the changes induced by the crises.

Exploring the Role of Environmental Ethical Consideration in Advancing Green Growth: Perspectives from India

Aims: The current study explores the intricate nexus between environmental ethical considerations and green growth in the context of India, a country grappling with dual challenges of rapid industrialization and environmental sustainability. As India seeks to balance rigorous economic growth, ecological preservation and integration of ethical principles into environmentally friendly policy design it is necessary to understand the meaning of ethical consideration and green growth relationship. Theoretical Framework: The research aims to understand the interrelationship and implication of the of environmental ethical consideration into driving green growth, by exploring the challenges and prospects in context of India- a rapidly developing economy. This paper is structured in the form of exploration of available literature and through providing a vast perspective and strategic framework in regards of Indian policy makers and scenario in context of countries socio-economic and cultural structure. Methodology: The study explores the available literature in the field and synthesizes the challenges available in the path of green growth management. Analysis of barriers to green growth in developing country framework is done by identifying chances of market failure, underinvestment in green technologies, and the lack of clear ethical guidelines present in the Indian developmental structure. Results: The findings of this paper suggest the possibility of enhancing current scenarios to achieve what is needed to follow the path of green growth in economic context and coming future challenges. The findings are supported by rational policymaking and strategic investment, which can significantly advance India’s green economy, ensuring long term benefits and environmental well-being.

Does non-farm employment influence a farmer’s decision to adopt hybrid rice seeds or improved variety?

Purpose. The study aims to examine the effect of non-farm employment decisions on the adoption decision of rice hybrid seeds or improved variety in Vietnam. Methodology / approach. This study uses panel data from the Vietnam Access to Resources Household Survey (VARHS) 2008–2016 dataset. The study uses the correlated random effect Probit model with the Mundlak approach to control unobserved heterogeneity of panel data and the endogenous switching Probit model (ESPM) to solve the endogeneity problem and self-selection of the non-farm participation variable. Results. There has been increasing interest that the development of rural non-farm employment has effects on agricultural production as well as agricultural growth. However, still relatively poor understanding of how non-farm participation affects the farmers’ decision to adopt modern technologies in the face of market failure. Our findings indicate that non-farm employment has a positive effect on the adoption of rice hybrid seeds or improved varieties in Vietnam. The value ATT is predicted from the endogenous switching Probit model, which implies that farm households who engage in non-farm employment had a 35.1 % of probability of modern varieties adoption, vs. 19.0 % in the sample overall. Originality / scientific novelty. This study adds evidence from a developing country (using the example of Vietnam) to the broader literature on the role of non-farm employment participation on farmers’ adoption behaviour under market imperfections. In addition, the research addresses the limitations of unobserved heterogeneity of an unbalanced panel by applying the Mundlak approach and contributes to the literature by controlling the endogenous problem and self-selection problem of non-farm participation by using the endogenous switching Probit model. Practical value / implications. Based on the empirical results of this paper, some policy implications are provided to develop the rural non-farm sector and to diffuse modern technologies among rural farmers.

Market Failure, Information Asymmetries, and Monopoly Profits: The Barranquilla Railway and Pier Company in Colombia, 1888–1933

Market Failure, Information Asymmetries, and Monopoly Profits: The Barranquilla Railway and Pier Company in Colombia, 1888–1933

On the economic growth and environmental quality nexus in India

ABSTRACT This study extends prior research and takes a robust account of the effects of economic growth on environmental quality in India, using several single-equation and system estimators and considering multiple structural breaks over ‘long’ as well as ‘short’ time periods. The long-run model is estimated on annual data for the period 1951–52 to 2015–2016. The results provide robust support for the positive and significant effects of gross domestic product and financial development and for the negative effects of trade openness and domestic investment on carbon dioxide emissions. The presence of structural breaks challenges the validity of smooth and continuous relationship between income and emissions postulated in previous research. Policy intervention, in terms of the imposition of Pigouvian tax, allocation of carbon quotas and promotion of carbon ‘cap-and-tax’ and/or ‘cap-and-trade’ systems, is needed to correct market failure, to cover the external cost of pollution and to curtail the emission of carbon. It is worth subsidizing alternative sources of energy, adopting carbon-efficient technologies and switching to carbon-neutral substitutes.

Analyzing the impact of tax-based vs. rent-based funding on the effectiveness of environmental protection policies

The necessity of government intervention, particularly through public spending, to address market failure in providing public goods like environmental quality is widely recognized. However, the effectiveness of fiscal environmental policies in improving the environment remains unclear. This paper aims to explore the impact of funding sources for government expenditures on environmental quality. Using a Ramsey growth model, we investigate the consequences of two alternative funding sources for environmental protection: Taxes and natural resources rents. The model highlights that along the balanced growth path, financing environmental spending through taxes enhances environmental quality, while funding from natural resources rents leads to its deterioration. Furthermore, the model emphasizes the crucial role of socio-political institutions governing the economy in understanding the link between environmental protection expenditures and environmental outcomes. To test the model's propositions, we utilize a panel dataset of 76 countries spanning from 1995 to 2018. Our empirical findings corroborate the notion that the funding sources of environmental protection expenditures significantly impact environmental outcomes. Additionally, the results indicate that higher institutional quality, such as greater state capacity, enhances the effectiveness of the government's environmental spending in improving environmental quality. Our findings offer valuable insights for policymakers and researchers seeking to design effective strategies for environmental preservation and sustainable growth.

Iterative coupling of a fundamental electricity market model and an agent-based simulation model to reduce the efficiency gap

Fundamental optimization models can determine normative cost-optimal systems following theoretical assumptions of markets with perfect competition and perfect foresight. However, in real markets, deviations from ideal assumptions need to be considered for designing efficient policies: they may lead to higher costs than theoretically expected and contribute to the so-called “efficiency gap”. Agent-based simulation models can consider market inefficiencies but are not ideally suited for determining normative systems. This work aims to reduce the efficiency gap between theoretically cost-optimal system configurations and their implementations in non-perfect markets by coupling a fundamental electricity market model and an agent-based model. A fully automated iterative coupling is demonstrated, and its convergence behavior is investigated for two coupling parameters. Fast convergence is observed when integrating peak capacity usage from the previous agent-based simulation into the fundamental model. However, the efficiency gap is reduced only to limited extent as no information on hourly dispatch is transferred between the models. Conversely, when using hourly storage dispatch as coupling parameter, it takes longer to achieve convergence. In return, the efficiency gap is reduced to larger extent. The proposed iterative coupling thus allows the identification of realizable cost-optimal systems, which means that they are achievable under non-perfect market conditions.

KNOWLEDGE EXTERNALITIES AS COMMONS FOR INNOVATION: A CRITICAL ANALYSIS OF PUBLIC EXPENDITURE ON EDUCATION

Objective: This paper analyzes how knowledge externalities function as common resources that foster innovation. Theoretical framework: The existing studies often frame the problem of knowledge externalities as a problem of knowledge market failures and recommend public intervention, such as public expenditure on education which is a simple solution. However, the experience from OECD countries shows that there is an inherent trade-off between public and private expenditures at every level of the education system which indicates the commonality of these resources. Method: This paper uses a semi-systematic literature review and quantitative analysis of public and private expenditures on education and their impact on patents generated across OECD countries. Results and discussion: This article argues that: first, knowledge externalities are complex common resources that require collective action, facilitated by public policy to address associated social dilemmas. This means, the commonality of the knowledge externality is in fact that no one is excluded to benefit from knowledge externalities except those who lack capabilities, however, due to lack of funding, these resources can be depleted; secondly, Public expenditure on education must not only account for the positive externalities generated but also recognize education as a component of the complex commons. The complexity of these resources justify why government intervention is required; third and finally, knowledge externalities contribute to social learning society which is an imperative to innovation processes. Research implications: This recognition can foster peer production and a learning society, both of which are essential for driving innovation. Originality/value: This paper assesses and synthesizes the literature on knowledge externalities and their policy such as public expenditure on education in a way that enables to understand knowledge externalities as common resources that enable holistic social learning which boost innovation.

Competition Dynamics of Market Share for Assets in the Banking Industry Using the Lotka-Volterra Model Approach

Research Originality: Competition in the banking sector is unavoidable. Such competition is present among state-owned banks in Indonesia. In contrast to the previous studies that did not include the competition type and its stability, this study includes the competition type and its stability in the estimation.Research Objectives: This study aims to discover the competition type and its stability, and to forecast the market share among the four state-owned banks.Research Methods: Using market share data of assets published annually by each of the banks from 2010 to 2023, the study employs the Lotka-Volterra model approach to analyze the competition type and its stability that occur among the four state-owned banks.Empirical Results: The study discovers that the competition types of the four state-owned banks vary. There have been three competition types among the four state-owned banks: mutualism, predator-prey and pure competition. Besides, the stability property of the four state-owned banks tended to be unstable. By looking at the gains of market share for assets, only Mandiri’s market share gains will increase in the 2024-2028 period. As a result, the total market share gains for the four state-owned banks declined sequentially.Implications:This research holds significance for four state-owned banks in Indonesia as it provides valuable insights into considering the three competition types (mutualism, pure competition and predator-prey) as the primary key to achieving a significant market share value.JEL Classification: C61, D41, E17, G21How to Cite:Jamal, S. W., Suparno., Rashid, U. K., & Fauziah, F. (2024). Competition Dynamics of Market Share for Assets in the Banking Industry Using the Lotka-Volterra Model Approach. Etikonomi, 23(2), 299 – 316. https://doi.org/10.15408/etk.v23i2.32226

Transformative Impact of the EU AI Act on Maritime Autonomous Surface Ships

The International Maritime Organization collaborates with member states to develop the Maritime Autonomous Surface Ships (MASS) Code to establish an international agreement framework. In December 2023, an agreement was reached on the European Union (EU) Artificial Intelligence (AI) Act within the MASS Code. It was officially finalized and implemented on 1 August 2024. While the Act’s full application is set for two years later, certain provisions regarding safety against AI risks will take effect sooner. This study utilized a multiple-streams analysis method to examine how the EU AI Act impacted shipyards and shipping companies, focusing on ethical AI use and user safety. The findings indicate that technical completeness, safety enhancement, and AI system regulation through risk classification influence autonomous ship innovation. The challenges of reviewing the commercialization of new technologies for autonomous ships may result in market failures or decreased industry competitiveness. The study emphasizes the need to balance AI safety and ethical responsibility with autonomous ship development innovations. To ensure the sustainable application of AI technology, innovators must adapt to the EU AI Directive. Hence, this study confirms that the ethical and legal regulation of AI technology is crucial in technological innovation and development related to autonomous ships.

The evolution of two‐stage production and order equilibrium in a random yield supply chain with demand information updating

AbstractThe mismatch between production, order, and demand seriously affects supply chain performance. However, most research focus on the mismatch between the retailer's order and customer's demand, which ignores the influence of the supplier's random yield on supply chain members' decision‐making. This paper investigates a two‐stage optimization problem within a two‐echelon supply chain, featuring a supplier with random yield and a retailer updating demand information in real‐time. Faced with a long production lead time, the retailer can either place advance orders at the production season's onset (first‐stage advance order) or opt for instant orders at the beginning of the sales season (second‐stage instant order). To ensure timely order fulfillment, the supplier initially employs a cost‐effective regular production mode with random yield during the production season. If yields are insufficient during sales, a pricier emergency production mode with guaranteed output becomes available. Utilizing a dynamic programming approach, we formulate the two‐stage optimization problem to derive optimal production and order decisions. Our analysis uncovers how realized random yield and stochastic market signals influence emergency production and instant order quantities in the second stage. We compare expected profits in scenarios with perfect and imperfect market signals, probing the members' preferences regarding order strategies. An intriguing finding emerges: as instant wholesale prices rising, the supplier's preferred order strategy diverges from the retailer. By strategic adjustments to the instant wholesale price, we demonstrate the potential for unanimous agreement on preferred order strategies among supply chain members — a quality enhancing the chain's flexibility and performance. Moreover, we extend the model to hybrid order strategies and identify conditions for unanimous preference among the three strategies. To bolster our theoretical findings, we provide numerical examples, lending practical support to our study.

The role of behavioral decision-making in panic buying events during COVID-19: From the perspective of an evolutionary game based on prospect theory

Sudden public health crises such as the COVID-19 pandemic have triggered widespread panic buying incidents globally, causing disruptions in commodity markets characterized by imbalances between supply and demand. This has posed a serious threat to social stability. During sudden public health events, panic buying typically complicates epidemic prevention and control efforts, leading to adverse consequences such as resource wastage, supply-demand imbalances, and market failures, which pose a threat to social stability and economic development. The progression of panic buying is significantly influenced by the actions and choices of both the public and local authorities. Therefore, studying the impact of the behavioral decisions made by the public and local governments plays a pivotal role in the evolution of such events. Building upon this premise, this paper studies the role of behavioral decisions in the COVID-19 panic buying event from the perspective of an evolutionary game. First, the public’s attitude toward the development of the event is divided into two categories: those with a negative attitude and those with a positive attitude. At the same time, the concepts of mental benefits and mental costs are introduced and quantified, serving as key factors in public decision-making. Second, prospect theory is used to elucidate the risk preferences and loss aversion of decision-makers. An evolutionary game model is constructed with the public and local governments as the main entities based on prospect theory. The replication dynamic equation is constructed using the benefit perception matrix, and the equilibrium point and stability conditions of the model are deduced. Third, the impact of participants' behavioral decisions during the panic buying event on the event’s evolution process is discussed through numerical simulation analysis. The results show that (1) in the context of sudden public health emergencies, material demand is the primary cause of public panic buying behavior. Postpanic buying events, such behavior is influenced primarily by the proportion of individuals with negative attitudes within the population. Local governments should release positive information regarding supplies in a timely manner during the nascent stage of panic buying events and actively monitor the proportion of individuals with negative attitudes. (2) There is a positive correlation between risk preference and public panic buying behavior, whereas loss aversion has the opposite effect. The spiritual benefits perceived by the public from engaging in panic buying increase with higher risk preference, whereas perceived costs related to health issues increase with deeper levels of loss aversion. (3) When response costs exceed what local governments are willing to bear, reputation gains and losses play a crucial role in their decision-making. The probability of local governments adopting responsive strategies increases with their emphasis on reputation and aversion to reputation losses. Higher-level governments should enhance the dissemination of positive and negative examples of government handling, enhancing local governments' sense of responsibility and honor to improve their perception of reputation gains and losses, thereby encouraging proactive management of panic buying events.

The United States veterinary workforce dilemma: are we asking the right questions?

This article explores the ongoing debate about whether there is a workforce shortage in veterinary medicine. Despite numerous discussions, no consensus has been reached on whether the demand for veterinarians and their teams exceeds supply. The authors argue that current public discussions fail to address the core issues. The article explores the workforce issue from an economic perspective and provides a perspective on the way forward. Key aspects covered include recognizing the distinction between needs and wants, collecting better data, employing rigorous empirical analysis, differentiating market failures from high prices, and fostering cooperation.

Corporate spin-offs and stock performance: a comparative study of pure and composite schemes

PurposeSeveral studies have examined the relationship between spin-off announcements and stock performance. However, a comparison of the announcement effect of different schemes of spin-offs remains relatively underexplored in the literature. This study aims to find the differential impact of pure scheme and composite schemes of spin-offs on parent company stock performance. A pure scheme includes only the separation of business into independent companies, while a composite scheme includes a simultaneous merger of one of the companies with another company along with separation.Design/methodology/approachA total of 109 pure and 51 composite spin-off announcements made by Indian listed companies from 2010 to 2023 are examined using event study methodology. The cross-sectional t-test is used to measure the significance of abnormal returns. The t-test for two sample means (right-tailed) is incorporated to test the significance of variations in the stock returns of pure and composite schemes of spin-off announcements. Cross-sectional regression is also done to evaluate the impact of the type of scheme on the spin-off return.FindingsThe study found a cumulative average abnormal return of −1.06% for the pure spin-off and 8.27% for the composite spin-off over a 41-day event window. The univariate analysis revealed that the composite scheme generates a significantly higher cumulative average abnormal return than the pure scheme. Regression analysis also confirmed that the composite scheme significantly positively impacts the stock return. It can be concluded that investors favour the composite scheme, expecting that it will deliver a better strategic fit and generate synergy.Originality/valueThis paper makes a valuable contribution to the existing literature on corporate spin-offs. The study by analysing and comparing how the spin-off and merger combination differently affects the stock performance, helps the investor who wants to capitalize on the market imperfections and the managers to make complex business decisions.

Directional nature of technological progress in the petrochemical industry prompting energy marginal substitution

Technological progress does not uniformly benefit all industries or factors' productivity levels. The energy productivity and labour employment situation in the Chinese petrochemical industry have not witnessed substantial improvements in the last decade. The literature has overlooked the importance of recognizing the directional nature of technological progress, which could enable a more strategic approach to economic development, resource allocation, and policy formulation. This study, guided by the core principles of endogenous economic growth theory, aims to uncover the influencing mechanisms and effects of technological progress bias on energy and employment by extending a theoretical model to account for energy, capital, and labour factors. The results reveal: (1) From 2000 to 2021, the relationship between labour, capital, and energy factors in the Chinese petrochemical industry has been predominantly complementary, with technological progress favouring labour-augmenting that is increasing labour productivity; (2) The gross complementarity of production factors leads to labour-augmenting technological progress, ultimately biased towards energy and capital factors; (3) Energy-capital-biased technological progress encourages producers to invest more energy and capital to substitute for labour factors, leading to a limited improvement in energy productivity and a consistent decline in labour employment since 2011. This study further corroborates that without government intervention, it would lead to improper factor allocation in the industry, resulting in market failure. Finally, corresponding policy recommendations are proposed.

Why Tata Nano Failed? From Ascent to Ashes: Unraveling the Tata Nano Saga – A Chronicle of Triumph, Tragedy, and Missteps

The Tata Nano launched in 2008 was initially marketed as the world's cheapest car, designed to provide an affordable transportation solution for the masses in India. It was a revolutionary concept that aimed to bring mobility to a wider segment of the population. Ratan Tata, the former Chairman of Tata Sons, envisioned the Nano as a symbol of innovation and social impact. Under his leadership, Tata Motors endeavored to create a compact, economical car that could transform the way people in India commuted. The global ambition of the Nano was to showcase India's engineering capabilities and demonstrate how a low-cost, frugal design approach could result in a groundbreaking product. Ratan Tata's vision extended beyond the domestic market, aiming to position the Nano as a viable option for consumers worldwide. However, despite the initial hype and anticipation surrounding the Nano, various factors contributed to its failure in the Indian market. Issues such as quality concerns, safety perceptions, marketing challenges, and changing consumer preferences played a significant role in the Nano's inability to meet sales expectations and establish a sustainable presence in the automotive industry. Ratan Tata made a roapmap to sell Minimum of 3 lacs of Tata Nano car in the first Years, but the reality is Tata Nano couldn’t cross the selling of 3 lacs units even after 8 years, before its get retired. Keywords: Anticipation, Envisioned, Groundbreaking, Innovation, Revolutionary