Subsidy Dependence Research Articles

Реформирование пенсионной системы для плательщиков налога на профессиональный доход: региональная платформа

The difficulties that arose after the entry into force of the Federal Law “On conducting an experiment to estab-lish a special tax regime “Tax on professional income”” dated November 27, 2018 No. 422-FZ require a com-prehensive study and modification of the legislative framework. Many citizens who pay tax on professional in-come do not make contributions to the pension insurance system, which is one of the reasons for the high sub-sidy dependence of the Social Fund of Russia on the federal budget. According to the authors, it is necessary to develop a way to attract citizens to participate in the pension insurance program. The article considers an ex-ample of a possible solution to this issue: the introduction of tax deduction for taxpayers of tax on professional income in part of the tax paid, and assesses its impact on the regional budgets of the constituent entities of the Russian Federation.

The Logic of Change in China’s New Energy Vehicle Fiscal Subsidy Policy

The vigorous development of new energy vehicles as a representative of emerging industries is inseparable from government financial subsidies. In recent years, with the continuous expansion of the new energy vehicle industry and the transformation of the national economy into an innovation-driven one, the centralized financial subsidy policy for new energy vehicles has undergone tremendous adjustments marked by the withdrawal of the "national subsidy". Using the historical institutionalism analysis framework, we systematically review the history of China's new energy vehicle subsidy policy, and divide it into four stages: the creation of the pilot stage, rapid expansion, comprehensive promotion, and adjustment and change. From the structural viewpoint, factors such as national economic development, global industrial competition, and changes in the concept of development have, to varying degrees, contributed to the change in the financial subsidy policy for new energy vehicles. From the historical point of view, the financial subsidy policy has been continuously self-reinforcing under the learning effect, coordination effect and adaptive expectation, but also due to the negative incentives for market players to take malicious subsidy fraud to make the contradictions gather and explode, which constitutes a key node of policy change. The current new energy vehicle subsidy policy is in the stage of adjustment and change, the future should be strengthened technology research and development incentives to regulate at the same time to avoid the formation of subsidy dependence of enterprises, and strengthen the subsidy of infrastructure facilities.

The Three Poisons of Post-Covid State Aid Control:

Even though the economic situation remains precarious, the Covid-19 economic shock has subsided enough to allow us to take stock of the European Union (EU) responses to the pandemic and appraise them in the context of emerging trends. The author argues that there are early precursors of such trends – referred to as the ‘Three Poisons’ – observable in interpretive and legislative approaches to Member States’ aid measures. These are: the easier justification of extended lifelines without adequately recognising the need for adaptation to new market conditions, and moral hazard associated with subsidy dependence; the blurring of lines between what is theoretically rational and what is obtainable under crisis market conditions thereby distorting the results of the Market Economy Operator Test; the increasing reliance on ad hoc frameworks, and highly situation-specific interpretations potentially eroding the pre-existing acquis. In this context, the purpose of this article is to identify post-Covid trends which negatively affect or might affect the long-term effectiveness of the EU State aid control system. Based on this, to assess whether these ‘poisons’ can and should be opposed. This analysis will conclude with de lege lata and de lege ferenda recommendations. Keywords: COVID-19; market economy operator test; MEOP; moral hazard; ad hoc regulation; common assessment criteria

Integrated pricing mechanism of China Railway Express whole-process logistics based on the Stackelberg game

China-Railway Express(CRE), an important product to promote the “Belt and Road”, has a far-reaching significance for the economic and trade cooperation of countries along the route. However, in the early stage, it relies on subsidies to attract supplies, resulting in higher freight rates in some sections. Also, there are many transportation participants and complex transaction entities, resulting in an improved trade cost. These issues have affected the strategic CRE pricing decisions. Integrated decision-making is important to reduce transaction costs, and improve decision-making efficiency. This thesis adopts game theory to research the whole-process integrated pricing mechanism of CRE with multi-agent interaction. Considering transaction costs and pricing dominance, a distributed, horizontal, and vertical integration Stackelberg pricing game model for CRE is established and it compares the Nash equilibrium solutions of 9 pricing models. By discussing the form of the equilibrium solution, it is concluded that the larger the number of participants in the alliance and the longer the coverage mileage, the higher profit the alliance will be obtained. At the same time, numerical experiments and sensitivity analysis of key parameters are carried out by taking the China Railway Express (CY) as an example. Results show that the gross profit of CRE is the lowest under the decentralized decision-making mode, and it is the highest under the vertical integration alliance decision-making mode. If the price cap is abolished, carriers with shorter segment mileage will raise prices, leading to higher costs for CRE, while forcing carriers with longer segment mileage to cut down prices, so overall profits will suffer. This research promotes establishing a more reasonable pricing mechanism for CRE and achieving global Pareto optimality. It helps CRE get rid of subsidy dependence and achieve sustainable development.

Defining Household Typologies Based on Cropland Use Behaviors for Rural Human-Environment Systems Simulation Research: A Case Study in Southwest China.

The dynamics of rural human-environment systems in developing countries have increasingly been attracting attention. Agent-based modeling (ABM) is a valuable simulation tool for detecting complex feedback loops in rural human-environment systems with a ‘bottom-up’ approach. However, such models require the prerequisite analysis of household typology to simulate households’ decision-making process, where a gap exists between having accurate classification criteria and a simplified modeling framework. This study aimed to develop a household typology for two selected counties in southwest China based on multivariate analysis techniques and the classification tree method. Four categories of socioeconomic variables, including labor conditions, resource endowments, economic status, and social connections, were screened as possible factors impacting agriculture practice decisions. The results showed that household diversification in the study area was mainly determined by diversified livelihood strategies of off-farm work, livestock breeding, subsidy dependence, and traditional planting. Five distinct household types were identified: non-farm households, part-time households, livestock breed households, subsidized households, and traditional planting households. The household types were associated with specific cropland use behaviors, and their decision-making behaviors were verified with bounded rationality theory (where the maximization of profits is the primary goal). The quantitative classification criteria obtained in this study were clear and could be easily identified and used by ABMs. Our study provides a basis for further simulation of the complicated rural human-environment systems in southwest China.

Regional budget heavy-subsidization determinants: Evidence from Russia

Subject. This article deals with the issues of identifying determinants that contribute to Russian depressed regions' overexposure to State aid. Objectives. The article aims to identify the basic determinants of increasing the level of high subsidy dependence of depressed regions of Russia. Methods. For the study, I used the methods of econometric stochastic analysis, time series, coefficients, and logical generalization. Results. The article reveals the key role of socio-economic component determinants, such as the standard of living, unemployment, fertility, in the formation and strengthening of subsidy dependence of depressed regions of Russia. Conclusions. The current development status of heavily subsidized regional budgets of Russia depends on the dynamics of transfer support directly. The standard of living of the population of the regions, tension in the labor market, and investment activity have a major impact on it. The solution of socio-economic problems can contribute to a gradual and systematic exit from the state of heavy subsidy dependence of the Russian depressed regions.

Methodology for assessment of total stability of regional high-yield budgets of Russia

The stability of the budget system allows the national economy to ensure overall stability not only in the fiscal aspect, but also in many other areas of public activity. Risks of instability in one segment of the budget structure can cause a cascade of problematic aspects and negatively affect the overall balance of the country's budget system. Fiscal policy in Russia is still unable to solve the problem of increasing the financial autonomy of a certain category of regional budgets that have a high degree of subsidy dependence. Stable maintenance of the number of high-yield budgets of the country's constituent entities causes additional risks of the fiscal policy instability. In this regard, the research of the formation and state of regional budgets with a high subsidy dependence is quite relevant, especially in the context of increased external challenges. This article is aimed at multi-dimensional identification of problematic aspects of the stability level of the regional high-yield budgets of Russia in terms of their balance, stability and debt burden, which will determine their current state in current conditions. Analysis of the dynamics of revenues and expenditures of a regional high-yield budgets group with the determination of the level of their balance over the past three years is carried out. Methodology for a comprehensive assessment of the overall level of regional budgets' stability has been developed, including 5 main groups that reflect the quantitative and qualitative characteristics of regional finance. Analysis of the budget stability of high-yield regions of Russia is carried out. The main positive and negative aspects that characterize the state of the regional high-yield budgets of the country are identified.

Differences in consumers’ product attribute preferences and willingness to pay for new energy vehicles: A comparison between the license plate- and non-license plate-restricted cities in China

After dividing China’s new energy vehicle (NEV) pilot promotion cities into license plate- and non-license plate-restricted cities, the choice of experiment and latent class model were used in this study to classify the consumers in the two kinds of cities from the technical, economical, and convenience dimensions. Then the differences in consumers’ product attribute preferences and willingness to pay (WTP) for NEVs in different cities and different types were compared and the impact of consumers’ socioeconomic features was analyzed. The results showed that the traffic preference type is the major consumer class in Chinese license plate-restricted cities with the highest overall WTP, followed by the subsidy dependence consumers with the lowest overall WTP and finally the mileage preference consumers with the overall WTP in the middle. In the non-license plate-restricted cities, mileage preference type is the largest consumer class with the highest overall WTP. Similarly, the subsequent type is the subsidy dependence consumers with the lowest overall WTP. And finally the smallest type is the infrastructure preference consumers with the overall WTP in the middle. Further analysis revealed that in the license plate-restricted cities, consumers’ WTP for the product attributes of NEVs in the convenience and technical dimensions goes far beyond than that in the non-license plate-restricted cities, with higher WTP for road use rights and driving range attributes, while consumers in the non-license plate-restricted cities prefer attributes in the economic dimensions with higher WTP for subsidy intensity attribute.

Government Subsidy Dependence and Stock Price Crash Risk

This paper shows that stock price crash risk is induced by government subsidy dependence as our primary rationale. Using a sample of Chinese non-financial listed firms, our results expose that stock price crash risk is affected by non-tax-based government subsidy dependence, specifically in zombie firms. We identify that our primary rationale is salient in SOEs, low monitoring firms, and politically connected firms. To capture the endogeneity issue, we report that our primary rationale is salient in the Chinse regions of high marketization level. Further, we find that valuation uncertainty is a significant mediating factor between stock price crash risk and government subsidy dependence. To validate our baseline results, we perform a battery of robustness checks such as identification issues using a matched sample, alternative variable, and model measurements, excluding crisis years and including industry fixed effects. Our findings highlight the negative consequences of government subsidy dependence on firms' financial risk and implications for regulatory agencies and investors.

The local budget subsidy dependence: Identification and classification

Subject. This article tends the approaches to identifying the category of subsidized budget in the Russian Federation and classifying the regions by level of their subsidy dependence. Objectives. The article aims to explore approaches to the interpretation of the category of subsidized budget, propose criteria for categorizing the regional budgets as the subsidy dependent ones, offer an original definition of the local budget subsidy dependence, and on this basis, classify the regions of Russia by level of subsidy dependence. Methods. For the study, I used the methods of comparative, logical, and statistical analyses, and grouping. Results. The article proposes an original definition of budget subsidy dependence and a classification of regions by subsidy dependence level. It also highlights the main problems of Russia's heavily subsidized regions. Conclusions and Relevance. The proposed identification and classification of subsidized regional budgets and analysis of their current state helped reveal the increasing financial dependence of regional budgets on Federal center grants. The results of the study can be used to further explore the area of modification of regulation of inter-budgetary relations based on the type of subsidization of Russia's regions.

Sportcivilek-ellenőrzés, beszámolási sajátosságok

Az ellenőrzés, mint vezetési funkció nem mondható egy, a vezetési szakirodalmakban különösen preferált vizsgálati témának, hasonlóan igaz ez a civil szervezetek témakörére is. Magyarországon a rendszerváltást követően intenzívvé váló nonprofit, azon belül pedig a civil szféra lényegesen meghatározóvá vált. 2017-ben a 61 151 nonprofit szervezet 15,2%-a sport cél szerinti tevékenységű, az 53 613 klasszikus civil szervezet (egyesületek és alapítványok) esetében ez az arány magasabb, 16,2%. Ezeknek a szervezeteknek különös sajátossága a támogatásokkal kapcsolatos különös összefüggés, mely a KSH aktuális adatai szerint mára támogatásfüggőséggé vált (a bevételek közel 2/3-a támogatás). Ezért válhat érzékennyé a téma, amennyiben egy szervezet ugyanis nem tud elszámolni támogatásokkal, vagy nem tud megfelelni a törvényi elvárásoknak, úgy az összefüggésben lehet a vezető ellenőrzői funkciójával, és rávilágít a civil szervezetek és az ellenőrzés összefüggésére. Tanulmányunkban az ellenőrzés mint vezetési funkción keresztül kívánjuk röviden áttekinteni a téma sajátosságait, ahol eredményeink szerint ezek a szervezetek egy jelentős része nem is igazán tud az elvárásoknak megfelelően teljesíteni.

Subsidy/Donation and Performance of Microfinance Institutions

Subsidies and Donations are veritable tools that are supposed to engender effective performance in Microfinance institutions. On the face value, subsidies seem to be very positive but they can be counterproductive when related to their effects on performance, efficiency and self-sustainability of the Microfinance institutions. This paper therefore focuses on the assessment and review of issues relating to Subsidy/Donation and their effect on Performance of Microfinance Institutions (MFIs) in Nigeria. The methodology adopted is descriptive in nature and secondary source of data were made use of. Our review revealed mix results on the empirical findings of effect of subsidies/donations on performance of Microfinance institutions. This review shows that Subsidies can disincentive workers and managers, thereby creating moral hazard problems (Corruption and Financial impropriety). However, when applied to effect low borrowing costs and Tax incentives/concessions, it affects performance positively. The review also shows that subsidies ought to be used only in the startup phases of the life cycle and to be withdrawn when the Microfinance institution improves. Overall, to achieve the double bottom lines of social and financial sustainability obligations, funding structure in Microfinance should de-emphasise subsidy dependence and encourage market based principles and commercialisation. For effective corporate governance, big Microfinance institutions at the status of Banks and big NGOs should be mandated to disclose their accounts to the public and not just mere annual returns to the Central bank of Nigeria (this may involve quoting them in Nigeria Stock Exchange).

Subsidy/Donation and Performance of Microfinance Institutions


 Subsidies and Donations are veritable tools that are supposed to engender effective performance in Microfinance institutions. On the face value, subsidies seem to be very positive but they can be counterproductive when related to their effects on performance, efficiency and self-sustainability of the Microfinance institutions. This paper therefore focuses on the assessment and review of issues relating to Subsidy/Donation and their effect on Performance of Microfinance Institutions (MFIs) in Nigeria. The methodology adopted is descriptive in nature and secondary source of data were made use of. Our review revealed mix results on the empirical findings of effect of subsidies/donations on performance of Microfinance institutions. This review shows that Subsidies can disincentive workers and managers, thereby creating moral hazard problems (Corruption and Financial impropriety). However, when applied to effect low borrowing costs and Tax incentives/concessions, it affects performance positively. The review also shows that subsidies ought to be used only in the startup phases of the life cycle and to be withdrawn when the Microfinance institution improves. Overall, to achieve the double bottom lines of social and financial sustainability obligations, funding structure in Microfinance should de-emphasise subsidy dependence and encourage market based principles and commercialisation. For effective corporate governance, big Microfinance institutions at the status of Banks and big NGOs should be mandated to disclose their accounts to the public and not just mere annual returns to the Central bank of Nigeria (This may involve quoting them in Nigeria Stock Exchange).

Dependence of Aspen Stands on a Subsurface Water Subsidy: Implications for Climate Change Impacts

AbstractThe reliance of 10 Utah (USA) aspen forests on direct infiltration of growing season rain versus an additional subsurface water subsidy was determined from a trait‐ and process‐based model of stomatal control. The model simulated the relationship between water supply to the root zone versus canopy transpiration and assimilation over a growing season. Canopy flux thresholds were identified that distinguished nonstressed, stressed, and dying stands. We found growing season rain and local soil moisture were insufficient for the survival of 5 of 10 stands. Six stands required a substantial subsidy (31–80% of potential seasonal transpiration) to avoid water stress and maximize photosynthetic potential. Subsidy dependence increased with stand hydraulic conductance. Four of the six “subsidized” stands were predicted to be stressed during the survey year owing to a subsidy shortfall. Since winter snowpack is closely related to groundwater recharge in the region, we compared winter precipitation with tree‐ring chronologies. Consistent with model predictions, chronologies were more sensitive to snowpack in subsidized stands than in nonsubsidized ones. The results imply that aspen stand health in the region is more coupled to winter snowpack than to growing season water supply. Winters are predicted to have less precipitation as snow, indicating a stressful future for the region's aspen forests.

Land Suitability and Insurance Premiums: A GIS-based Multicriteria Analysis Approach for Sustainable Rice Production

The purpose of this research is to develop a land suitability model for rice production based on suitability levels and to propose insurance premiums to obtain maximum returns based on the harvest index and subsidy dependence factor for the marginal and moderately suitable lands in the northern part of Bangladesh. A multicriteria analysis was undertaken and a rice land suitability map was developed using geographical information system and analytical hierarchy process. The analysis identified that 22.74% of the area was highly suitable, while 14.86% was marginally suitable, and 28.54% was moderately suitable for rice production. However, 32.67% of the area, which was occupied by water bodies, rivers, forests, and settlements, is permanently not suitable; 1.19% is presently not suitable. To motivate low-quality land owners to produce rice, there is no alternative but to provide protection through crop insurance. We suggest producing rice up to marginally suitable lands to obtain support from insurance. The minimum coverage is marginal coverage (70%) to cover the production costs, while the maximum coverage is high coverage (90%) to enable a maximum return. This new crop insurance model, based on land suitability can be a rational support for owners of different quality land to increase production.

Measuring the Performance and Achievement of Microfinance Institutions Incorporating Subsidy Dependence Index and Outreach Index in Pakistan’s Case

The curse of poverty had remained a significant problem throughout the history of civilisations. Even in this era of development at least one third of the world population is suffering from the problem of poverty. With such a huge number of human beings living in such a deprived situation, it becomes very crucial to target this issue and search out feasible ways to overcome it. Microfinance has come one of the important tools for reducing poverty. It offers a solution by stimulating economic growth and development. Established microfinance institutions use many instruments to fulfill their promise of poverty reduction. One of those instruments is microcredit. Through this instrument microfinance institutions provide small-scale loans to individuals or groups so that the borrowers could initiate their business and break out of poverty cycle.

Indicators of Agroecological Sustainability of Three Tillage Systems for Maize (Zea mayz L.) Production

Of the three tillage systems studied, the plots under the full animal traction system showed the largest values for total dry matter production as well as for the indicators of soil quality, crop health, and socioeconomic sustainability. Overall, the indicators that contributed the most to a higher soil quality ranking were: biological activity, soil structure, and soil cover. In the mixed traction and fully mechanized systems, the indicators that decreased plant health most were the use of mono-cropping and a low surrounding biodiversity. The sites with higher total value for socioeconomic indicators had smaller indebtedness and subsidy dependence, as well as a higher control of local resources.

Role of self-sufficiency, productivity and diversification on the economic sustainability of farming systems with autochthonous sheep breeds in less favoured areas in Southern Europe

Traditional mixed livestock cereal- and pasture-based sheep farming systems in Europe are threatened by intensification and specialisation processes. However, the intensification process does not always yield improved economic results or efficiency. This study involved a group of farmers that raised an autochthonous sheep breed (Ojinegra de Teruel) in an unfavourable area of North-East Spain. This study aimed to typify the farms and elucidate the existing links between economic performance and certain sustainability indicators (i.e. productivity, self-sufficiency and diversification). Information was obtained through direct interviews with 30 farms (73% of the farmers belonging to the breeders association). Interviews were conducted in 2009 and involved 32 indicators regarding farm structure, management and economic performance. With a principal component analysis, three factors were obtained explaining 77.9% of the original variance. This factors were named as inputs/self-sufficiency, which included the use of on-farm feeds, the amount of variable costs per ewe and economic performance; productivity, which included lamb productivity and economic autonomy; and productive orientation, which included the degree of specialisation in production. A cluster analysis identified the following four groups of farms: high-input intensive system; low-input self-sufficient system; specialised livestock system; and diversified crops-livestock system. In conclusion, despite the large variability between and within groups, the following factors that explain the economic profitability of farms were identified: (i) high feed self-sufficiency and low variable costs enhance the economic performance (per labour unit) of the farms; (ii) animal productivity reduces subsidy dependence, but does not necessarily imply better economic performance; and (iii) diversity of production enhances farm flexibility, but is not related to economic performance.

An Evaluation of Sustainability and Subsidy Dependence of Microfinance Institutions in Ghana

The research aims to explore the understanding of the relationship between sustainability of microfinance institutions (MFIs), subsidy dependence index (SDI) and operational self-sufficiency (OSS).The research study is based on initial exploratory study by analyzing data on 14 executive directors in qualitative interviews and 116 relationship executives in research questionnaires. The microfinance institutions identified were the Financial Non-Governmental Organizations (FNGOs), the Savings and Loans Companies (SL Sustainability; Operational self-sufficiency; Viability; Microfinance

Impact of CAP Subsidies on Technical Efficiency of Crop Farms in Germany, the Netherlands and Sweden

AbstractThis paper analyses the impacts of CAP reforms, particularly subsidies on technical efficiency of crop farms. An output distance function is employed and estimated together with an inefficiency effects model to capture the effects of CAP subsidies and farmer characteristics on farm efficiency. The model is applied to FADN data (period 1995–2004) of crop farms in Germany, the Netherlands and Sweden. The study shows that the 10‐year average technical efficiency is 64% in Germany, 76% in the Netherlands and 71% in Sweden. The average annual changes in technical efficiency are 0.1%, 0.4% and 2.3%, respectively. The share of crop subsidies in total subsidies has a negative impact on technical efficiency in Germany but a positive impact in Sweden, although insignificant in the Netherlands. The share of total subsidies in total farm revenues has negative impacts on technical efficiency in all three countries, consistent with income and insurance effects. Positive (negative) change in technical efficiency is mainly attributable to farm size (degree of specialisation) in Germany, and degree of specialisation (degree of subsidy dependence) in the Netherlands and Sweden.