Transaction Costs Research Articles

Supply chain concentration and financial performance: the moderating roles of marketing and operational capabilities

PurposeBased on resource dependence theory (RDT) and transaction cost theory (TCT), we aim to investigate the relationship between supply chain concentration and firm performance. Based on the resource-based perspective, we further investigate the moderating effect of marketing and operational capabilities on the relationship between supply chain concentration and firm performance.Design/methodology/approachBased on data from 2,082 firms with 8,371 observations from 2008 to 2020 in China, we use stochastic frontier analysis to calculate marketing capability and operational capability and use multinational regressions to test our research model.FindingsWe find a U-shaped relationship between supplier concentration and firm performance; there is also a U-shaped relationship between customer concentration and firm performance. In addition, the relationship between supplier concentration and firm financial performance is strengthened by the firm’s marketing capability, and the relationship between customer concentration and firm financial performance is weakened by the firm’s operational capability.Originality/valueDrawing from RDT and TCT, this study extends the research on the impact of supply chain concentration on firm performance. The study finds that supply chain concentration and firm performance have a nonlinear relationship, and it is further moderated by marketing capability and operational capability, providing insights for managers.

How Digital Platforms Promote Roles of Nonprofit Human Service Organizations During the COVID-19 in China

ABSTRACT The COVID-19 pandemic compelled nonprofit human service organizations (NPHS) to rapidly adapt to heightened service demands while prioritizing the well-being of their staff and volunteers. Although digital platforms hold promise in facilitating NPHS adaptation, little is known about their impact during the crisis. How and through what pathways do digital platforms help NPHS adapt their service roles in times of crisis? Did digital platforms with different types of sponsorship vary in the way they affect NPHS’s roles? Our study, based on 94 interviews in China, reveals that digital platforms assisted NPHS through three pathways: reducing transaction costs in stakeholder engagement, mitigating information asymmetry in targeting service recipients, and promoting shared responsibility for volunteer participation. Different sponsorship types influenced these pathways: government-sponsored platforms enhanced legitimacy, business-sponsored platforms leveraged private resources, and nonprofit-sponsored platforms bolstered citizen trust. This research informs scholars and practitioners on understanding how NPHS remained agile and innovative while facing extraordinary external challenges.

Determinants of public-private partnership governance structures: evidence from India

ABSTRACT Public-private partnerships (PPPs) represent a continuum of governance structures characterized by wide variability in private sector risk transfer. Despite the widespread adoption of PPPs, few studies examine the reasons for such heterogeneity. We investigate the factors explaining variability across PPP governance structures and their impact on the extent of private sector risk transfer using ordinal logistic regression on a novel dataset of 2330 Indian PPP projects. We find that the risk transfer is mainly driven by economic and fiscal factors, service-specific transaction costs and project-specific factors, while political factors and institutional quality barely influence it.

The Impact of Blockchain Technology on Financial Markets and Its Future Trends: An Economic Perspective Based on Data Analysis

Based on the economic perspective of data analysis, this paper deeply discusses the impact of blockchain technology on the financial market and its future trend. By using econometrics, we systematically analyze how blockchain technology can change the operation mechanism of financial markets, improve transaction efficiency, reduce transaction costs, and enhance the security and transparency of financial markets. The study has found that the decentralized nature of blockchain technology can help to break down the barriers of the traditional financial market and promote the popularization and inclusiveness of financial services. At the same time, the automatic execution function of smart contracts simplifies the process of financial transactions and reduces the risk of human intervention and fraud. In addition, the blockchain technology has also enhanced the trust mechanism of the financial markets by improving the security and traceability of the data. In terms of econometric analysis, we use a large amount of financial data to empirically test the impact of blockchain technology on the performance of the financial market by building regression models, time series analysis and other methods. The results show that there is a significant positive correlation between the application of blockchain technology and financial market efficiency, liquidity and stability. Looking into the future, with the continuous innovation and improvement of blockchain technology, its application in the financial market will be more extensive and deeper. On the one hand, blockchain technology is expected to promote the further digitalization and intelligence of the financial market, and improve the convenience and personalization of financial services. On the other hand, blockchain technology will also promote the cross-border integration and innovation of the financial market, and inject new vitality into the global economic development.

How to promote data sharing among enterprises based on dynamic evolutionary game analysis

ABSTRACT In traditional contexts, enterprises often hesitate to engage in data sharing due to the associated heightened risks and transaction costs. Blockchain technology, leveraging its encryption algorithms and smart contracts, effectively alleviates these challenges, thereby encouraging enterprises to actively participate in data sharing. The adoption of reasonable reward and penalty mechanisms can prevent opportunistic behaviours and stimulate data sharing among businesses. It is noteworthy that blockchain technology and data alliance have a mutually substitutive effect in terms of risk and communication costs, while they complement each other in regulatory and transaction costs. The integration of blockchain technology with data alliance can enhance collaborative revenue and reduce various costs. When distributing collaborative revenue, it is crucial to adhere to the guiding principle of ‘prioritizing efficiency while considering fairness’. Collaboration becomes a reality when all parties collectively achieve a substantial overall revenue threshold. Subsequently, in-depth exploration of fair resource allocation principles is crucial to ensure the equitable distribution of resources.

Current and future development of thermal grids in Switzerland: an organizational perspective

IntroductionThermal grids are key to decarbonizing heating and cooling. However, their development is a complex socio-technical process. This study aims to (1) understand the thermal grid ecosystem’s development under changing political, economic and cultural frame conditions, (2) elicit actors’ perception of options for future development, and (3) identify concrete problem situations for the future development of thermal grids and describe how to address them.MethodsWe draw on 18 semi-structured interviews with decision-makers in utilities, municipal administrations, planning and engineering companies and intermediary organizations.ResultsWith increased strategic importance of thermal grids, the ecosystem has been in a phase of rapid growth and professionalization in the last 10–15 years. This is reflected in a rapid increase in the number of grids, but also in capability and capacity building and greater quality standards. This transformation has been supported by a resource pool (e.g., knowledge base, capacities and capabilities, networks or decision-support tools), built partly through the value network’s activities and partly through purposeful orchestration by associations, authorities, utilities and other actors. While policy developments, energy price fluctuations and changes in customer perceptions spurred demand, thermal grid development is limited by supply-side constraints, especially a skill shortage. Four interrelated problem situations were identified: (1) Municipalities lack the resources to manage the implementation of their energy strategies. (2) The modernization of thermal grids and integration of low-carbon heat sources entails high transaction costs. (3) The implementation of thermal grids is subject to delays and quality risks, with consequences for the timely achievement of decarbonization goals. (4) Customers face uncertainty on available options, as well as on the systemic impacts of their decisions.DiscussionBased on current practices, suggestions by the interviewees, as well as a comparison with the international literature, we identify four development areas to address these problem situations: (1) Empower and support municipalities. (2) Manage the scarcity of qualified workforce. (3) Leverage digital technology for the planning, realization and operation of thermal grids. (4) Pilot technological and organizational innovations together. This complements the set of previously suggested measures to support the development of thermal grids, which focused strongly on technical and regulatory aspects.

Mobile phones, income diversification, and poverty reduction in rural Bangladesh

AbstractThe widespread adoption of mobile phones (MPs) presents the possibility of creating employment and self‐employment opportunities. Although several studies have documented the impact of MPs on income, the link between MP ownership and poverty reduction channeled by income diversification has not been fully explored. This paper aims to examine this relationship using nationally representative panel data and fixed effect models to account for confounding factors and unobserved heterogeneity. Results indicate that MP ownership is associated with increased income diversification, particularly through on‐farm and off‐farm self‐employment, as well as non‐earned income. This relationship is more pronounced in households with lower levels of education and deprived areas. In addition, owning a MP is also found to decrease poverty via income diversification. Therefore, policies aimed at enhancing access to mobile technologies could create a resilient income portfolio by decreasing transaction costs and improving market efficiency, ultimately mitigating poverty in rural regions.

Exploiting the sentiments: A simple approach for improving cross hedging effectiveness

This paper introduces a novel hedging strategy based on textual information for cross-hedging. The strategy allows the optimal hedge ratio to vary with the sentiment extracted from online oil news, leading to an improvement in cross-hedging effectiveness. We find that the sentiment hedging strategy outperforms traditional time-varying and static hedging strategies in both in-sample and out-of-sample scenarios, with statistical and economic significance. This superior performance benefits from the well-documented predictive power of sentiment on futures volatility. Furthermore, we confirm an asymmetric effect of sentiment on hedging effectiveness, with negative sentiment having a greater impact on hedge ratios. Finally, extreme sentiment can trade off the negative relationship between volatile hedge ratios and hedging performance, potentially leading to superior hedging performance compared to normal sentiment, which is robust when considering transaction costs. Our findings highlight the importance of sentiment for estimating the optimal hedge ratio and should be considered for risk management.

Факторы конкурентоспособности российского зерна на мировом рынке и перспективы развития зернового хозяйства в контексте наращивания экспортного потенциала

The article analyzes the domestic and export prices for grain in Russia, as well as the analysis of world prices among the top-7 leaders in terms of wheat supplies in the period from 2017 to 2021. The purpose of the study is to study the internal factors of the competitiveness of Russian grain on the world market and search for opportunities to increase the export potential of Russia as an element of the rehabilitation of domestic grain market and incentive to increase the volume of grain production. Methodology and methods. The author conducts a study of changes in export volumes in comparison with gross grain collections, analyzes the ratio of export prices for non-CIS countries and CIS countries in comparison with actual domestic prices, provides a comparison of prices among the largest grain-producing regions. Results. The article notes that price is an important factor in the competitiveness of Russian grain exports, ensuring its availability in countries with limited economic opportunities.. It is noted that in the period under study, domestic prices are growing elastically at the level of world prices, which limits the margin for grain exports from regions remote from ports, however, price increases create incentives for grain producers to increase grain yields, including through increased intensification. To further increase the export potential, the article recommends specifying the mechanisms of the grain damper in the direction of increasing targeted support for direct grain producers and creating conditions for reducing transaction costs as a way to ensure a competitive price of Russian grain on the world market. The scientific novelty it consists in the positioning of the price as a fundamental factor of the competitiveness of Russian grain on the world market, which forms a high export potential and allows it to be used as a tool for the rehabilitation of the domestic grain market, providing favorable price conditions and efficiency to grain-growing organizations and stimulating the increase in grain yields in the regions of Russia.

Bridging Distances: The Impact of ICT on Diaspora Connectivity and Cultural Exchange

This paper examines the transformative role of Information and Communication Technologies (ICT) in enhancing diaspora connectivity, cultural preservation, and economic contributions to homelands. Through quantitative and qualitative analyses, it delves into various ICT toolsincluding social media platforms, mobile applications, online forums, and virtual cultural festivalsand their pivotal role in sustaining and strengthening the ties of diaspora communities with their countries of origin. It also explores the revolutionized remittance landscape, crowdfunding for development projects, and the facilitation of diaspora entrepreneurship and investment through digital platforms. Employing models like the Network Analysis Model, Remittance Flow Model, and Event Participation Model, the study provides insights into the increased frequency and depth of communication, significant reductions in remittance transaction costs and times, and the enhanced engagement in cultural and economic activities. The findings highlight ICT's capacity not only to maintain but also to enrich the cultural, social, and economic fabric of diaspora communities, underscoring its vital role in promoting global connectivity, cultural exchange, and economic development.

Factors affecting the technological innovation of banks toward accounting benefits in a developing country’s industrial revolution 4.0 context: evidence from Vietnam

Purpose This study aims to investigate the factors affecting technological innovation intentions at banks listed in Vietnam, a developing country, to develop business activities and accounting benefits according to the trend of the 4th Industrial Revolution. Design/methodology/approach To collect and analyze the data for this study, qualitative and quantitative methods were used. Specifically, 20 finance and banking experts and 45 managers in the field of information technology were interviewed in qualitative research over a period of three months. Then, 1,000 questionnaires were sent to banks within six months, with the final sample for quantitative research being 324 respondents. Finally, the structural equation modeling (SEM) was used to check the hypotheses. Regarding the tools used, the qualitative study used a semistructured questionnaire to collect information. Meanwhile, SPSS software was used to analyze quantitative research information, including checking common method bias, nonresponse bias, evaluating scale quality and checking SEM. Findings The findings show that the usefulness, ease of application, credibility, innovation and efficiency of technology have certain impacts on technological innovation intentions at banks listed in Vietnam. Using the SEM analysis, the results showed that the five factors had a favorable influence on the technological innovation intentions. More specifically, this study proposed adding an efficiency factor, and the results showed that it has the greatest impact on technological innovation intentions. Research limitations/implications This study would be considered a continuation of prior studies because it provides empirical evidence for business models at banks listed in developing countries (for example, Vietnam) and so provides useful advice for bank management not only in Vietnam but across Asia. In fact, bank managers should consider introducing new technology as appropriate to make their reports more clear and up-to-date, therefore improving their performance. Banking managers, in particular, should focus on enhancing the bank’s application technology indicators to obtain a competitive edge. Originality/value This is a pioneering study that uses a combination of the reasoned action theory, planned behavior theory, transaction cost theory and unified theory of acceptance and use of technology to expand knowledge about technological innovation intentions at listed banks in the context of a developing country. The study also discovered and added the efficiency factor as a key factor affecting the intention to innovate technology at listed banks. These contribute to improving the literature of technological innovation intentions.

Corporate Taxes, Dividend Policy and Firm Performance in Nigeria Quoted `Firms

Purpose: This study examined corporate taxes, transaction cost, and dividend policy in Nigeria quoted firms. The main purpose of this research is to ascertain the relationship between taxes, transaction cost, and the dividend policy of quoted firms in Nigeria. Materials and Methods: The research adopted both statistical and econometric techniques to analyze data obtained from the Nigeria Stock Exchange between 2018 to 2022. The research work employed an ex-post facto research design to obtain, analyze, and interpret the relevant data for hypotheses testing. Simple random sampling and proportionate stratified random sampling was used to select 36 firms quoted in the Nigerian Stock Exchange to ensure all sectors are represented in the sample size. The data was analyzed and presented using E-views 12 statistical software. Using the OLS panel model, the fixed effect OLS model was considered the most appropriate for the empirical modeling and analysis of the equations.   Findings: Our findings in this study indicated that dividend payout ratio (DPR) has a negative and insignificant relationship with current income taxes (CIT), deferred taxes (DTL). Company size (SIZE) has positive but not significant relationship with dividend payout while assets growth (GHT) and leverage ratio (LEV) have positive and insignificant relationship with dividend payout (DPR). Also, dividend per share (DPS) has a positive relationship with company income taxes (CIT) but negative relationship with deferred tax liabilities (DTL). Implications to Theory, Practice and Policy: The study was informed by the “Dividend Policy Theory” The debate on whether corporate taxes has impact on dividend payments of companies is unending. The result of the study is consistent with the findings of scholars and researchers with similar interest such as Jensen and Johnson (1995); Miller and Scholes (1982). It is, therefore, recommended that companies should concentrate on other determinants of dividend policy and not corporate taxes and transaction cost, since corporate taxes and transaction cost have no significant effect on dividend policy. Management should design a dividend payout policy that maximizes market value of quoted firms.

Using Financial Contracts to Facilitate Informal Leases Within a Western United States Water Market Based on Prior Appropriation

AbstractThe ability to reallocate water to higher‐value uses during drought is an increasingly important “soft‐path” tool for managing water resources in an uncertain future. In most of the Western United States, state‐level water market institutions that enable reallocation also impose substantial transaction costs on market participants related to regulatory approval and litigation. These transaction costs can be prohibitive for many participants in terms of both costs and lengthy approval periods, limiting transfers and reducing allocation efficiency, particularly during drought crises periods. This manuscript describes a mechanism to reduce transaction costs by adapting an existing form of informal leases to facilitate quicker and less expensive transfers among market participants. Instead of navigating the formal approval process to lease a water right, informal leases are financial contracts for conservation that enable more junior holders of existing rights to divert water during drought, thereby allowing the formal transfer approval process to be bypassed. The informal leasing approach is tested in the Upper Colorado River Basin, where drought and institutional barriers to transfers lead to frequent shortages for urban rights holders along Colorado's Front Range. Informal leases are facilitated via option contracts that include adaptive triggers and that define volumes of additional, compensatory, releases designed to mitigate impacts to instream flows and third parties. Results suggest that more rapid reallocation of water via informal leases could have resulted in up to $222 million in additional benefits for urban rights holders during the historical period 1950–2013.

Efisiensi dan Efektivitas Penggunaan Uang Elektronika (E-Money) dalam Inovasi Pengembangan Bisnis

E-Money, or electronic money, has become a significant electronic payment instrument in the digital era, changing the way financial transactions are conducted and influencing business and the global economy. This study explores the impact of using E-Money in business development and the digital economy. His background includes the important role of E-Money in the financial transaction revolution and its impact on global markets. The research objective is to evaluate the efficiency and effectiveness of using E-Money in business innovation, as well as analyzing its impact on the digital economy. Research methods involve analysis of technology, regulations, and business impacts. The research results show that the use of E-Money provides innovative solutions for digital transactions, increases operational efficiency and reduces transaction costs. However, challenges also arise regarding security, data privacy and accessibility. In conclusion, E-Money has great potential to transform business operations and the global economy, with significant impacts on innovation, operations and policy. The integration of E-Money in business strategy can increase overall innovation and efficiency, although it is necessary to pay attention to the challenges that arise along with its use.

A framework for security improvement on usage of mobile money application based on iris biometric authentication method

ABSTRACT Offering transactions through mobile devices has many advantages, such as cashless payments, lower transaction costs, and provide employment opportunities. However, it introduces access security challenges that must be dealt with, which may allow unauthorized access, resulting in theft. This work proposes a framework to improve security on the usage of Mobile Money Services (MMS) by using two-factor authentication (2FA) of PIN and iris biometric authentication method (IRBAM). The rapid application development (RAD) approach was used to develop mobile money applications based on the proposed framework. The proposed framework will improve the security of accessing MMS.

PURCHASE CHANNEL SELECTION OF AGRICULTURAL MACHINERY BY WHEAT AND BARLEY FARMERS IN IRAQ: A TRANSACTIONS COST ATTITUDE

This study was aimed to identify the role of transaction costs and their attributes in the selection of markets for the purchase of agricultural mechanization services in Baghdad province. To achieve this goal, a random sample of 150 wheat and barley farmers in the province was selected, and the data was collected through a questionnaire form prepared for this purpose. The research was based on the transaction cost theory as a modified theoretical framework to explain the farmer's behavior towards choosing installment market channels to buy agricultural machinery and through the analysis of the binary logistic regression model. The results of the regression analysis showed that some elements of transaction cost, such as a privacy and uncertainty, have an important role in determining and choosing the installment market for the purchase of tractors, while the element of the number of repeat transactions proved its important role in choosing the installment market for seeders, and the time saving element showed its important role in choosing the installment market for combine harvesters. The results also showed the existence of significant differences in some demographic and economic characteristics related to farmer, such as farmer experience, farm area and net farm income, in influencing the respondents' decision towards choosing the markets for agricultural machinery transactions referred to above.

Determinants of Marketing Channels Choices: Evidence from Vegetable Farmers in the Eastern Cape Province of South Africa

Vegetable farmers are faced with computational and informational restrictions when making marketing decisions. Fresh produce markets in South Africa lack an efficient approach to supply chain management, from the farmers to the consumers. Improving market access can incentivise smallholder farmers to scale up their production. The present paper investigates factors influencing smallholder vegetable farmers' choice of market channels in the Eastern Cape Province of South Africa. A structured questionnaire and a multi-stage sampling technique were used to select 149 vegetable farmers. Multivariate probit regression and descriptive statistics were used for analysis. The results show that most sampled vegetable farmers in the study area sell their vegetable produce to traditional, wholesale, and retail outlets compared to other outlets. The study found that vegetable farmers can substitute one market with the other. Various socio-economic characteristics, transaction costs, asset ownership, membership of farm organisations, and access to extension services influence the selection choice. The study recommends intensive education and training to capacitate smallholder farmers through extension officers and farm organisations to enable farmers to understand and meet the requirements of high-value markets. 

Implications of Bid Rigging Practices in Small Island Developing States: A Case Study

The Bid rigging on construction projects has a wider societal implication that has spanned beyond the parties to the contract. This has led to costly litigation actions and additional unaccounted transactional costs derived from taxpayers’ funding. This study utilized a qualitative approach, through an emic view of a contemporary case study between the Government of Trinidad and Tobago and several contractors on bid rigging practices. The findings revealed that recommendations indicated within a Commission of Enquiry could have prevented unlawful practices. This research justifies the need for systems to be in place to comply with procurement laws and the heightened need for enforcement of ethical practices in state organizations. This research can assist policy makers in determining areas that require updating in relation to procurement and contract management practices within the construction industry.

Supply and demand behaviors in the Chinese emission allowances pledge credit market under different value type: An evolutionary game analysis

Chinese Emission Allowances (CEAs) pledge credit provides a new way for banks to reduce green credit risks and for low-carbon enterprises to improve the credit availability. However, insufficient supply and demand is the main dilemma of CEAs pledge credit in China. One of the reasons for this dilemma may be the neglect of the forward value of CEAs in value assessment. This research explores the decision-making behavior of the supply and demand subjects in the CEAs pledge credit market under different value types of CEAs. First, the improved B–S options pricing model with consideration of transaction costs is used in the construction of the payoff matrix to measure the option value of CEAs. The new matrix aims to place both the option value (corresponding to forward value) and the market value (corresponding to spot value) in the CEAs pledge value evaluation framework. Then, based on the new matrix, an evolutionary game model between key emission enterprises (KEEs) and commercial banks (CBs) is built to dynamically analyze the equilibrium state of supply and demand as well as the strategic interaction of participants in CEAs pledge credit market. Finally, numerical simulations demonstrate the driving factors of supply and demand for CEAs pledge credit. The research results show that compared to market value, the option value of CEAs is more conducive to stimulating the supply and demand of CEA pledge credit; and the shorter the remaining valid period of CEAs, the higher the participation enthusiasm of supply and demand parties. Furthermore, reducing low-carbon technology risks and increasing the carbon emissions trading prices at the end of pledge period can significantly improve the supply and demand of CEAs pledge credit, but the loan and deposit interest rates of CEAs pledge credit are ineffective.

Internal Determinant Of Firm’s Security Returns On Commercial Banks Listed On Nairobi Securities Exchange

The market for securities improves the exchange of shares of public firms. Companies utilize the essential market to float shares to the public through an initial public offer in return for financed capital. A firm’s performance concerning equities is a solid marker of how it is fairing financially and its contribution to the macroeconomy. The equity market records are a sign of the monetary solidness of the economy. Thus, the current study sought to establish the influence of market determinants on stock market returns among listed commercial banks at Nairobi Securities Exchange in Kenya. In Kenya, such risks as liquidity risks, non-performing loans (NPLs), and poor performance, among others, have been of significant concern for quite some time. Many studies have been carried out in Kenya concerning the stock market performance of the banking sector. While there may be several factors, such as favorable government policies, explaining these performances, there is a shortage of information on the justification of strategic bank factors influencing the financial performance of these banks. Hence, the research sought to address hypothesis around the influence of the determinants such as capital adequacy, asset quality, management efficiency and influence of liquidity on stock market returns among Commercial Banks listed in Nairobi Securities Exchange. The research adopted credit risk theory, liquidity risk theory transaction cost theory, capital structure theory and signaling hypothesis theory. The study also applied panel data analysis and survey design on 10-year primary and secondary data from from 2013 to 2022. The target population constituted 11 commercial banks listed on Nairobi Securities Exchange. The study used quantitative data sorted and analyzed using descriptive and inferential statistical techniques. The descriptive analysis results were in the form of mean, standard deviations, frequencies, and percentage forms. Tables, diagrams, and charts were adopted. From the study findings, asset quality and management efficiency ratios had a negative and significant association with stock market returns respectively. On the other hand, capital adequacy and liquidity had a positive and significant relationship with stock market returns respectively. Based on the study results, the study recommends that banks should balance asset quality and lending stringency due to its negative correlation with stock returns. Strengthening capital adequacy and maintaining optimal liquidity positively impact stock market returns. In addition, a focus on service quality and employee morale is recommended for indirect benefits on stock performance.