Reduce Transaction Costs Research Articles

IP Law and Policy for the Data Economy in the EU

Abstract The current policy vision for Europe’s digital future centres around facilitating the availability of data by means of data access, sharing, and portability rights. In the existing legal framework, such rights are already foreseen in different legal instruments. In actual practice, however, (horizontal) data sharing is governed in the first place by contracts. Currently, well-established business practices and non-mandatory model contract terms are lacking. To reduce transaction costs and chilling effects in the sector, the main task would therefore be to provide a set of non-mandatory default rules or soft-law model contracts. The database maker’s sui generis right or trade secrets protection, mainstays of this area, have the potential to aggravate access problems and hamper efficient access and portability regimes. While the Trade Secrets Directive as a very modern and necessarily flexible instrument, on principle, is rather well-equipped for achieving balanced results, the Database Directive is in imminent need of reform, in particular as even the Data Act Proposal leaves many issues of the database sui generis right unsolved.

Rights of investors in the context of algorithmic Artificial Intelligence technologies and automatization

This study explores the profound impact of digital technologies on economic processes, particularly in the realm of investments. Financial organizations are leveraging digital platforms and algorithmic artificial intelligence (AI) to provide enhanced services to consumers. AI-powered algorithms surpass humans in processing vast amounts of information, leading to improved price discovery and reduced transaction costs. Robo-advisors, empowered by AI, have become pivotal players in financial markets, offering personalized investment portfolios based on risk profiles and objectives. While algorithmic AI technologies eliminate human errors and streamline decision-making, they also introduce new risks. Flaws in algorithm construction, intentional errors, cybersecurity vulnerabilities, and the regulatory challenges of supervising self-learning algorithms are concerns. Additionally, the rise of blockchain platforms has transformed cryptocurrencies and digital tokens into new tradable assets with their own protection challenges. Researchers emphasize that the wealth of data and correlations facilitated by AI can have unintended consequences, and the development of proper supervision and control mechanisms is vital. As the financial landscape continues to evolve, it becomes crucial for investors and regulators to navigate the complexities of digital technologies and address the emerging Global Technology Risk (GTR).

Diversified or specialised: firms’ patent portfolio strategies under heterogeneous technology standards

ABSTRACT Research has highlighted the role of patent portfolio strategy on firms’ innovation without elaborating on how to layout the diversity of patent portfolios to improve innovation quality. Drawing on the resource-based view and institutional theory, this research attempts to extend patent portfolio–innovation debate by examining the moderating effects of policy or specifically, technology standard on the patenting–innovation relationship. We argue that the leverage of technology standard could help firms optimise patent portfolios by accessing information, reducing transaction costs, and promoting complementary innovation, and therefore leads to higher innovation quality. Moreover, considering heterogeneous technology standards, in the context of relatively complex and rapidly updated technology standards, specialised patent portfolios are more significant for firms to enhance substantive innovation. Our analysis of data from 729 Chinese manufacturing listed companies provides supports for both the moderating role of technology standard on the patent portfolio–innovation relationship. This paper contributes to patent management literature by elaborating upon the mechanisms of how technology standard can be leveraged to capture value from firms’ patent portfolios.

Infrastructure Investment and Economic Development

Purpose: The aim of the study was to investigate Infrastructure Investment and Economic Development.
 Methodology: This study adopted a desk methodology. A desk study research design is commonly known as secondary data collection. This is basically collecting data from existing resources preferably because of its low cost advantage as compared to a field research. Our current study looked into already published studies and reports as the data was easily accessed through online journals and libraries.
 Findings: The study revealed Research on infrastructure investment and economic development highlights the vital role of robust infrastructure in driving economic growth and improving living standards. Adequate infrastructure enhances productivity, reduces transaction costs, and promotes economic activity. Well-developed transportation, energy, and communication systems boost trade competitiveness, attracting foreign investments and fostering global integration. Access to basic infrastructure services aids poverty reduction and inclusive growth by providing employment opportunities and market access, particularly in rural areas. Although infrastructure investments offer multiplier effects, challenges such as funding constraints and regulatory hurdles must be addressed for sustainable and impactful development.
 Unique Contribution to Theory, Practice and Policy: Infrastructure-led Growth Theory, New Economic Geography and Infrastructure as a Constraint to Growth Theory may be used to anchor future studies on Infrastructure Investment and Economic Development. Evaluate projects on their potential to generate direct and indirect economic benefits. Streamline permitting processes, establish clear property rights, and ensure fair competition to foster a competitive market for infrastructure projects.

Развитие и модернизация российских предприятий добывающих и обрабатывающих отраслей с применением цифровых технологий в условиях трансформирующегося мира: инвестиционный аспект

The changes that have taken place in the world order in recent years are reflected in scientific concepts de-scribing transformation processes. In the eighties of the XX century, the SPOD-world was replaced by the VUCA-world, and total digitalization, the coronavirus pandemic and geopolitical conflicts gave rise to the BANI-world, the transition to which from the VUCA-world, according to many researchers, is not yet complete. The era of change is affecting businesses that need to plan for and invest in their future. In a highly uncertain environ-ment, forecasting is difficult but necessary. Moreover, this should be done taking into account the peculiarities inherent in the present period of time – the high level of riskiness of investments, the innovative nature of the digital technologies used, and so on. Enterprises in the extractive and manufacturing industries are of key im-portance for the Russian economy. Their development and modernization are identified by the President of the Russian Federation V.V. Putin as a priority direction of the state policy. Putin has identified their development and modernization as a priority direction of state policy. Companies in Russia’s extractive and manufacturing industries have a high degree of wear and tear on machinery and equipment and need to upgrade them. In modern conditions, it is advisable to do it on an innovative basis, using digital technologies that allow to reduce transaction costs, level the influence of the human factor on some processes, increase the speed of product development and creation, etc. Currently, some Russian extractive and manufacturing companies are imple-menting various digital solutions, but in order to meet the Government’s objectives of import substitution, tech-nological sovereignty and digital transformation, the number of such companies must increase significantly. However, there are limitations to the incorporation of digital technologies in the activities of enterprises due to uncertainty and the risks it generates, the significant amount of investment required to implement projects for the development and modernization of enterprises using digital technologies, and the need not to increase the level of social tension in society. State support measures are aimed at overcoming these obstacles, the use of which, according to the authors of the article, will allow to solve not only the problems of enterprises using them, but also to transfer the developed technologies to other enterprises and other industries.

Transaction governance structure, institutional voids and transaction efficiency: An analysis of small and medium‐sized enterprises in emerging markets

AbstractIn an emerging market and developing economies, transaction governance structure (TGS) plays a crucial role in determining transaction costs (TC) and transaction efficiency (TE) for small and medium‐sized enterprises (SMEs). The presence of institutional voids (IVs) further complicates the situation by adding uncertainty and complexity to the transactions. Therefore, understanding the interplay between TGS, TC, TE, and IVs is essential for SMEs to thrive and contribute to the overall economic growth of the country. This study investigates the impact of transaction governance structure on transaction efficiency with the moderating effect of institutional voids on small and medium‐sized IT and software firms in Bangladesh. A sample of 131 SMEs was selected using nonprobability convenience and snowball sampling techniques. Data were collected using a self‐administered structured questionnaire with a 5‐point Likert scale and analysed using the PLS‐SEM approach. The study findings reveal that TGS significantly and positively impacts TE, and IV moderates the relationship between TGS and TE positively. The results of the study reveal that TGS plays a crucial role in reducing transaction costs and enhancing transaction efficiency for small and medium‐sized firms in Bangladesh, thus presenting opportunities for inclusive growth and development in the country's software and IT sector. This study provided valuable insights for policymakers and practitioners on the importance of TGS and IV in enhancing transaction efficiency. Additionally, the study acknowledges the significance of meeting social and environmental needs by leveraging corporate assets and expertise, strengthening a company's competitive strategy, and developing new business opportunities.

Digitalization and outward foreign direct investment of Chinese listed firms

AbstractDigital transformation has given firms new development capability. This paper portrays the overall digital transformation intensity of China's listed firms in 2007–20, and empirically examines the impact of digital transformation on outward foreign direct investment (OFDI) and its transmission mechanisms for the first time. It is found that digital transformation significantly enhances OFDI with two transmission mechanisms: (1) reduced transaction costs and (2) improved production and operation efficiency [Correction added on 25 Aug 2023, after first online publication: The number of transmission mechanisms have been corrected from ‘three’ to ‘two’ in this version.] The impact is more pronounced in the host countries whose economies are more digitalized, in private enterprises, and in the service industries than in their respective counterparts.

Informational nudges in conservation auctions: A field experiment with U.S. farmers

In the U.S., the fifth largest “crop” is vegetation dedicated to environmental conservation. Over 22 million acres of perennial covers are planted on environmentally sensitive land enrolled in U.S. Department of Agriculture’s Conservation Reserve Program (CRP), one of the largest agricultural conservation programs in the world. About half of CRP lands are enrolled through a complex reverse auction called the General Signup. The communication of program options to participants could have an important behavioral impact. Psychologists have found that information presentation in complex decision environments can interact with the bounded rationality and cognitive biases of decision makers. We tested two changes in the status quo CRP decision environment using an incentivized, lab-in-the-field experiment with 701 prior General Signup participants. First, program participants typically make an active choice over which cover practice to plant and how much of a discount to offer, where the discount is a reduction in their annual program payment. Changing that default to an opt-out, high-scoring offer resulted in a 13 percentage point increase in selection of the best practice and a 48 percent increase in the average discount. In the actual CRP, that increase in discounting would reduce total program costs by about $30 million per signup. Second, shifting to real-time updating of offer scores modestly reduced the frequency with which participants revised their offers, suggesting a reduction in transaction costs. From a policy perspective, these results suggest that small changes in conservation auctions could both improve the quality of conservation practices and reduce program costs.

Platform information sharing and selling contract strategies with blockchain adoption

The recent rapid development of blockchain technology has drawn considerable attention. To examine the impact of blockchain on platform supply chains, we construct a supply chain consisting of two suppliers and an e-commerce platform. Each supplier may use either a reselling or an agency selling contract; therefore, three scenarios are possible: pure agency selling, pure reselling, or hybrid contracts. Considering blockchain’s role in eliminating transaction costs and achieving demand information transparency, we apply a game theory model to study each player’s pricing strategy and profits when blockchain and selling contract strategies vary. We find that the platform’s optimal selling contract and blockchain strategies strongly depend on commission rates, competition intensity, and transaction costs. Suppliers are willing to join the blockchain to gain demand information and reduce transaction costs. With low transaction costs and high competition intensity, the platform may ally itself with the agency supplier and authorize him to join the blockchain to maximize profits, which may ruin social welfare. From a social welfare perspective, we find that a pure agency contract is optimal, whereas the optimal blockchain strategy varies. Specifically, blockchain adoption may not benefit social welfare even when its operations costs are negligible. We further explore a scenario in which two suppliers can choose their selling contracts to derive insights into suppliers’ contract choices and government subsidy policies. Moreover, we explore the impact of marginal production costs on the optimal strategy for platforms.

Đánh giá tác động của dịch vụ tiền di động đến sự phát triển của tài chính toàn diện tại Việt Nam và một số khuyến nghị

Today, mobile money has become an extremely useful tool, facilitating the access to financial services of disadvantaged or financially excluded groups in developing countries. However, there has not been much research on the relationship between mobile money services and financial inclusion development in Vietnam. Based on research overview and survey results of 10,248 people in some areas in Vietnam during the period from 2022- 2023, this article builds a quantitative model to evaluate the impact of mobile money services on financial inclusion (FI) in Vietnam in three criteria: (i) Financial Service Access, (ii) Financial Service Using Frequency, (iii) Financial Service Using Value. Research results show that the widespread adoption of mobile money helps to reduce transaction costs, stimulate consumption, reduce risks for users, especially contributing to promoting financial inclusion. From there, the article provides valuable insights and recommendations for policy makers and researchers to use mobile money for socio-economic growth in the context of global integration

The Delineation of Rights and China’s Vast Transformation

Abstract The transformation of China can be understood as a process of interaction between economic growth and national governance. Given that scientific technology and transaction costs are dominant factors affecting wealth accumulation, the control of transaction costs was the focus of China’s national governance in the premodern history of an agrarian-dominated economy with slow technological progress. China was the world’s most prosperous country thanks to the reduction of transaction costs through a family-based economy lacking property rights, a political structure of the family state, and an ethics-based social governance without law and jurisprudence. However, breakthroughs and progress in science and technology from Western countries brought subversive changes to the comprehensive strength of China. China was forced to transform. To take advantage of advances in science and technology and rapidly accumulate wealth, China moved from delineating human rights to delineating property rights as the main competition-restricting mechanism. The former hierarchical system and its ethics were replaced by a legal system that treated all people fundamentally equally. The revolution accelerated this change by abolishing inelastic customs and ethics that hindered modernization. Paradoxically, the Chinese Communist Party, as the main group that led the revolution, created a functioning system with a human rights structure of horizontal equality and vertical hierarchy for organization and mobilization that has allowed contemporary China to balance reform, development and stability.

Dilemmas and theoretical exploration of China’s rural land property rights system reform

IntroductionThe property rights system, as the core component of the land system, is related to the long-term stability of the country, the well-being of farmers and the realization of the value of ecological products. The reform of China’s rural land property rights system has long been controversial. This paper compares the main historical lines of the reform of the rural land property rights system since the founding of New China, notes its dilemmas, and theoretically explores its development.MethodsThis article adopted literature analysis method(LAT), Sorted out the historical mainline of rural land property rights system reform since the establishment of the People’s Republic of China, proposed its reform path.ResultsThe paper finds that the two main difficulties of the reform are the weakening of collective property rights, leading to the disintegration of rural public services, and the refinement of farmers’ property rights, leading to an increase in agricultural operation costs. These issues lead to extremely high transaction costs in the process of agricultural production and operation, making agricultural production a worthless business activity.DiscussionThis paper argues that a complete market structure is a “unified” market structure that includes the government and the market, in which the government plays the role of defining property rights and reducing transaction costs.

Transformation of the Digital Payment Ecosystem in India: A Case Study of Paytm

Paytm is a payment app in India providing e‐wallet services; it is also the most prominent mobile e‐commerce app in the world’s third‐largest economy. This article uses Paytm as a case study to better understand the global platform economy and its implications for social and economic inequities. We contextualize the emergence of Paytm by drawing attention to its relationship with India’s developing digital infrastructure and marginalized populations—many of whom are part of the platform’s user base. We use a political economy lens to investigate Paytm’s market structure, stakeholders, innovations, and beneficiaries. Our research is guided by the question: What resources, infrastructures, and policies have given rise to India’s digital payment ecosystem, and how have these contributed to economic and social inequities? Accordingly, we audited the international and Indian business press and Paytm’s corporate communications from 2016 to 2020. Our analysis points to the tensions between private and public interests in the larger platform ecosystem, dispelling notions of platforms as neutral arbiters of market transactions. We argue that Paytm is socially beneficial to the extent that it reduces transaction costs and makes digital payments more accessible for marginalized populations; it is detrimental to the time that it jeopardizes user data and privacy while suppressing competition in the platform economy.

Novelty and the demand for private regulation: Evidence from data privacy governance

AbstractPrivate regulations are often presented as low-cost and flexible institutions that can act as policy incubators. In this article, I question under which conditions they go beyond legal compliance and experiment with new rules. Based on a content analysis of 126 data privacy regulations adopted between 1995 and 2016 in the European Union and the United States and thirty-five semistructured interviews, I show that most private regulations include no regulatory novelties. By disaggregating the temporal and spatial distribution of the few novelties, I add nuance to this overall finding and show that private regulations adopted in the United States before 2000 experimented more than others. I argue that this variation reflects the different demands for private regulation in the two jurisdictions and their evolution over time. In the European Union, the early adoption of privacy laws led public regulators and businesses to look for private regulations to reduce transaction costs and thus limited their interest in experimenting with new requirements. In the United States, businesses hoped to gain a first-mover advantage by including new data privacy rules in their private regulations. However, the growing use of private regulations to ease transnational data flows also led to their use as tools to reduce transaction costs.

Enhancing Auction Systems with Blockchain Technology

This research paper examines the use of blockchain technology in auction systems. Traditional auction systems face issues related to trust, transparency, and security. Blockchain offers a decentralized and immutable solution that can enhance the efficiency, security, and transparency of auctions. The paper provides an overview of blockchain technology and identifies the challenges in traditional auctions that blockchain can address. It explores existing blockchain-based auction systems and evaluates their effectiveness in mitigating issues such as bid manipulation and fraud. The impact of blockchain on auction participants is also discussed, including benefits like increased trust and reduced transaction costs, as well as challenges related to adoption and scalability. The paper considers both theoretical and practical aspects, analyzing case studies and implementation challenges. It concludes by summarizing the key findings and suggesting future research directions to advance the application of blockchain in auction systems. The auction contract allows users to place bids and determine the highest bidder within a specified time period. The contract also provides functionality for canceling the auction and finalizing it by transferring the funds to the appropriate recipients.

Digital Economy in a Global Context: World Experience

The processes related to digitalizing all branches of the world economy are irreversible components of the evolutionary development of the modern global economy. In current realities, the overriding priority in the economic sphere is the development of innovations and digital technologies using all their advantages regarding expanding the information component of enterprises’ activities, creating information assets, minimizing risks, the possibility of remote cooperation and the reduction of transaction costs, the ability to quickly respond to existing security, competitive, and other types of challenges. The purpose of the academic paper is to highlight the principal directions and trends of the world experience in developing the economic sphere’s digital component. System-structural, comparative, logical-linguistic methods, analysis, synthesis, induction, and deduction in the processing scientific information, abstraction, and idealization for studying and processing of statistical and analytical data were used during the research. Based on the research results, the concepts and components of the digitalization of the economic sphere, the main prerequisites, patterns and directions of developing digital economy in recent years were studied from the perspective of evaluating the global experience of this process.

BLOCKCHAIN TECHNOLOGY AND APPLICATION – SMEs ASPECT

<em>This review article is designed for SME owners and directors to understand better what blockchains are and how they work and to support them to start an entirely new blockchain or fork an existing one and create a new token. The article presents technology bases and how blockchains can serve SMEs and foreseeable challenges that could jeopardize the achieved results. Particular attention the authors paid to blockchain applications, transaction cost reduction, and sensitive business information security. <em>Even more attention the authors gave to the challenges</em> connected with digital infrastructures and business practices, investments, lack of interoperability, lack of skills, and legal aspects. <em>Chapter four discusses the creation of blockchains for SMEs </em>from the aspects of choosing a type of blockchain, choosing of consensus mechanism, a platform selection, nodes design, operating systems, instances design, application programming interfaces, and user interfaces, and the blockchain finalizing. In chapter five, Conclusions, the authors draw conclusions based on the work presented in the article.</em>

The bigger, the better? Optimal NGO size of human resources and governance quality of entrepreneurship in circular economy

PurposeThe paper sets out to understand the key issues that the various functions and optimal allocation of NGOs (non-governmental organizations) in the circular economy that provide public services depend not only on external quantities or densities but also on their internal size of human resources.Design/methodology/approachThe paper uses different data samples and models to study the influence mechanism of optimal NGO size of human resources and its differentiated effects on governance quality of entrepreneurship.FindingsThe authors find that a reduction in transaction costs and an increase in the aggregation degree of public demand lead to increased human capital and lower financial capital intensity. In addition, the authors find that NGO size of human resources has a relationship that is approximately U-shaped (or inverse U-shaped) with the governance quality of entrepreneurship.Practical implicationsThe paper discusses the implications for programs that encourage NGOs to optimally determine their internal size of human resources and further improve the governance quality of entrepreneurship in the circular economy.Originality/valueThe paper reveals the significant nonmonotonic relationship between local governance quality and NGO financial size, even after controlling for other NGO, city and provincial characteristics.

Mobile Payment Adoption: An Empirical Investigation of Alipay

The rapid growth in the adoption of mobile payments has already begun to reshape bank payment practices. Utilizing a unique data set from a leading bank in Asia that records credit card transactions of its customers before and after the launch of Alipay mobile payment, the largest mobile payment platform in the world, this study aims to understand the impact of mobile payment adoption on bank customer credit card activities and the change of this impact after the mobile payment expansion. To do so, we employ the difference-in-differences method coupled with matching to estimate the effects. We find that mobile payment adoption not only increases customer credit card activities at the focal bank through both off-line and online channels, but also enhances customer loyalty to the bank by reducing churn. Specifically, the total credit card transaction amount and frequency of our focal bank increased by 9.4% and 10.7%, respectively. Moreover, we examine the change in the treatment effect after the mobile payment expansion and find an increase in adopters’ credit card activities and a reduction in their churn after the expansion. Next, we discuss the underlying mechanisms and show that mobile payment acts as a substitute for physical card payment in the off-line channel, and this supports the key underlying mechanism of the reduced transaction cost. However, a certain complementary effect exists between personal computer and mobile payments, likely driven by the coadoption of the two. Finally, we provide empirical evidence on conditions that facilitate the use of mobile payments, following the unified theory of acceptance and use of technology. History: Yong Tan, Senior Editor; Tianshu Sun, Associate Editor. Funding: This work was supported by National Natural Science Foundation of China [Grants U1811462, 72071102]. Supplemental Material: The online appendix is available at https://doi.org/10.1287/isre.2021.0156 .

The impact of a scholarship programme on social capital formation among university students: An economic experiment at the University of Pretoria, South Africa

This study uses an online laboratory experiment and a post-experimental survey to test whether the Mastercard Foundation (MCF) scholarship programme causally influences the creation of cognitive social capital among University of Pretoria recipients. Cognitive social capital, which is based on commonly shared norms among subjects, leads to honest and cooperative behaviour. It is necessary for ease of information flow, a reduction in transaction costs, and allowing communities to deal with social dilemmas like common-pool resource management. The study used incentivised economic experiments on randomly selected subjects drawn from a control group (non-MCF students) and a treated group (MCF students). The experimental results from the two groups were compared to check the differences in terms of levels of trust, reciprocity, altruism, cooperation, in-group favouritism and out-group discrimination. Our results show that the scholarship programme has a significant impact only on levels of in-group favouritism and out-group discrimination. The post-experimental survey showed that MCF and non-MCF subjects were similar in terms of stated pro-social behaviour perceptions and in-group social capital creation.