Transaction Costs Research Articles

Organisational Structures of Shared Services Centres (SSC): A Transaction Cost Economics Approach

Organisational Structures of Shared Services Centres (SSC): A Transaction Cost Economics Approach

Әртүрлі оқиғалардың криптовалюта құнына әсерін талдау

The relevance of the research topic is due to the fact that many crypto investors are attracted by the high liquidity of cryptocurrencies, low transaction costs and ease of transactions via the Internet. In contrast from Fiat currencies, corporate stocks, and bonds, cryptocurrencies do not have an underlying value. demand therefore market cost to a greater extent depends on how wellknown and popular this cryptocurrency is. Also, the price of cryptocurrencies is influenced by market sentiment, namely the thoughts, feelings and emotions of investors regarding the asset. With the help of traditional asset valuation models, it is impossible to qualitatively explain the latest changes in the price of cryptocurrencies. However, some financial models point to that cryptocurrency is currently overvalued. Apparently, the hypothesis of financial instability is better than any of the verified economic theories suitable to explain recent changesin prices of cryptoassets. The theory suggests that because the cryptocurrency market is moving against the macroeconomic fundamentals of the economy, emotions are a major factor. determining demand on a given market. In this article, the authors examined the influence of behavioral financial factors on investment decisions in the cryptocurrency market. Multiple regression analysis was used to examine this effect. The purpose of the article is to study the development of cryptocurrency in Kazakhstan and assess the impact of events on the value of cryptocurrency. Based on this goal, the authors put forward the following tasks: to analyze and evaluate the use of cryptocurrencies in the modern economy; explore the features of cryptocurrency pricing.

Interrelations between logistics, trade, and law in the Incoterms® context

This study uses a comprehensive bibliometric analysis to examine the relationships between the International Commercial Terms (Incoterms®), logistics, and legal issues in the context of international trade. By examining a dataset of 290 documents published from 1973 to 2023 in various academic databases such as Web of Science, Google Scholar, Science Direct, among others, the research aims to identify trends, key issues, and potential future directions in this interdisciplinary field. The analysis reveals a significant increase in publications since 2010, with a focus on topics such as legal and contractual issues, supply chain management, risk mitigation, and the evolution of Incoterms® rules. Co-occurrence analysis emphasizes six distinct clusters, ranging from international trade dynamics and transaction costs to regulatory frameworks and risk management. The abstract content analysis further highlights the interconnectedness of legal, logistical and implementation issues. The study also identifies the United Kingdom, the United States, and South Korea as the most important countries contributing to the field. It is concluded that Incoterms® and its multidisciplinary essence generates a greater interest in the international trade, not only because of its incidence in diverse fields of management; but also, because these rules are updated to regulate better the business transactions. The findings provide valuable insights for researchers, policymakers, and practitioners, and show the importance of considering the multifaceted nature of Incoterms® research and its impact on global trade practices.

Advanced AI Solutions for Securities Trading: Building Scalable and Optimized Systems for Global Financial Markets

Integrating Artificial Intelligence (AI) into securities trading software has revolutionized the financial markets by enhancing scalability, efficiency, and optimization. This paper explores the historical evolution and advancements in AI-driven trading systems, emphasizing their impact on global financial markets. The study investigates how machine learning, deep learning, and other AI technologies enable sophisticated trading strategies, improve market liquidity, and reduce transaction costs. It also addresses the challenges AI integration poses, including decision-making opacity, bias, increased market volatility, and data privacy concerns. The paper argues for the need for scalable architectures, optimization algorithms, and transparent governance to mitigate these issues. Additionally, human oversight remains crucial for evaluating AI outputs and maintaining accountability. This research aims to provide a comprehensive analysis of advanced AI systems in securities trading, highlighting their potential to enhance market efficiency and stability.

Conceptual principles of interorganizational (network) accounting in clusters based on the provisions of institutional theory

Purpose: The purpose of the article is to study the key theoretical principles of institutional theory as the basis for shaping an accounting system of interorganizational (network) linkages in the cluster and to propose directions for their solution. Methodology/approach: The methodological tool is a systematic analysis of the fundamental provisions of economic teachings and scientific works of accounting researchers. Bibliometric analysis was applied to scientific publications indexed in Scopus, which made it possible to determine the most popular economic theories as thematic guidelines. We also used methods of learning induction and deduction for contextual research of keywords in scientific publications and to establish links between the research characteristics of each of the selected theories. The abstract-logical method was used to formulate scientific-theoretical generalizations and conclusions. Findings: The problem of interorganizational accounting in the cluster is outlined based on the provisions of the institutional theory. Development directions are proposed, and recommendations are given for improving accounting within the framework of agency theory, transaction cost theory, contract theory, and actor-network theory. Originality/value: The results of the study contribute to the analysis of changes and directions of development of interorganizational accounting in the cluster and also complement accounting theory. The article fills a research gap by presenting the development of interorganizational accounting based on agency theory, transaction cost theory, con-tract theory, and actor-network theory. The originality of the research lies in its creation of a foundational framework and its introduction of a novel perspective on the role of accounting in interorganizational (network and cluster) relations, allowing for a more comprehensive understanding of their developmental peculiarities.

Agricultural land, governance, and institutional change: Evidence from a Bulgarian study

New Institutional Economics (NIE) uses solutions from law, economics and organization. The purpose of this article is to link in a single analytical approach the institutional environment, its change in the organizations uniting in one, what is happening in contracts with agricultural lands. The explanation of this type of governance means to integrate: theoretical definitions; formal rules (laws, court decisions and other legal acts); economic institutions—means and mechanisms of exchange; legal and economic forms in which, through governance of transactions property rights are transferred and protected. In order to achieve this goal, it is necessary to present the elements of the institutional matrix that are the cause of changes in subordination and coordination. Following the process of implementing an approach for reconciling the legal and economic nature of the contract forms and integrating the states, contract organizations and transaction costs in a common model. In order to solve the research problems tasks are adapted methods from law, economics, statistics. Such are: (a) positive legal analysis of legislation; (b) historical (retrospective) method of analysis of changes; (c) discrete-structural analysis to explain the process; (d) comparative-institutional analysis to clarify alternatives and an explanation of any of the effects; (е) regression analysis to model the relationships and present possible one’s scenarios to show the direction in which changes are needed. Changes in legislation, legal forms, mechanisms and the amount of payments create new behavioral patterns that change the contract. Therefore, in retrospect, we are witnessing how the number of changes in legal acts, the amount of fees; the number of participants-administrators of the processes; the number and registers - change the number of transactions; the duration of the actions in the contracts, which ultimately predetermines the different amounts of transaction costs for agricultural lands. This interdependence was established by constructing an econometric model. The analysis presents opportunities for change that would lead to scenarios with a reduced level of transaction costs, that is, improving governance and showing the way to improve the institutional environment related to agricultural lands in Bulgaria.

A taxonomy of business models of digital care platforms in Spain

AbstractIn the last few years, the proliferation of digital labour platforms has led to the transformation of business models and labour relations in an increasing number of economic activities, including highly feminized and informal traditional sectors, such as care and domestic work. Drawing on an analysis of 37 digital care platforms in Spain, this research compares the distinctive features and structural power dynamics they engender, and it constructs a taxonomy of business models of these care platforms. By analysing the main features of their operational models, we are capable of distinguishing three main types of platforms: marketplace, on‐demand, and digital placement agencies. First, the paper argues that the distinctive features of each digital platform business model have differentiated impacts on working conditions in terms of access to tasks, remuneration, flexibility and means of control. This differentiation allows us to understand what is transformative and what is continuous in platforms' precarization or formalisation of care work and working conditions of carers, mainly women and migrants. Each business model has its differentiated outcomes in terms of labour control and reorganization of women's and migrants' reproductive work. Second, more broadly, while digital care platforms may have contributed to facilitating workers' access to jobs, reducing transaction costs and standardising processes, this has often been through the creation of more flexible and insecure forms of work and to increased market pressures. Therefore, this study contributes to existing research addressing the degree of formalization of labour relations in digital platform work through a nuanced analysis of their business models.

Analysis of multi-factors affecting resource consumption efficiency in Vietnam

Theprimary objective of this study is todelve into the factors potentially influencing resource utilisationefficiency at the provincial level in Vietnam. We leverage 185 data points gathered from 63 Vietnamese cities or provinces, obtained from two key sources: the General Statistical Office of Vietnam and the Ministry of Information and Communications Vietnam. The collected data was subjected to analysis using an empirical econometric model that incorporates time-series characteristics to explore the connections between these potential determinants of resource consumption efficiency. The analysis revealed a strong correlation between resource utilisationefficiency and the quality of digital transformation, logistics performance, and various aspects of public governance,including accountability to higher authorities, control of corruption, administrative procedures, and public service delivery. Additionally, the provincial competitiveness index, encompassing factors like entry costs, policy bias, and labourpolicy, also demonstrated a significant association. These findings highlight a clear link between effective public governance and efficient resource utilisationin Vietnamese provinces. This suggests that robust public governance systems, combined with advancements in digitalisationand logistics, can play a crucial role in optimisingresource utilisationwithin Vietnamese provinces.

Border Barriers and Illicit Trade Flows

Abstracts The number of fortified borders around the world has risen precipitously. This surge in walls is an important part of the larger globalization “backlash,” as countries react to the unwanted consequences of economic openness and globalization, with a rise in illicit trade and smuggling being a prominent example. Despite the prominence of the idea that walls are built to combat illicit flows, no research systematically explores how walls generally affect illicit trade. This is a notable omission for at least two reasons. First, the most prominent explanations for wall construction put combating illicit trade front and center. Second, recent work that finds walls significantly reduce legal trade argues that this finding derives from border fortifications diverting illegal trade to ports of entry, which leads to more inspection, security, and transaction costs. We develop a new measure of illicit trade flows using over five decades of product-level data and provide a battery of evidence that shows border barriers increase illicit flows at ports of entry.

Назначение справедливых цен на основе смарт-контрактов (на примере музейной организации)

The article is devoted to the problem of ensuring fair pricing on the basis of smart contract technologies. Through the use of the Internet of Things, electronic payments and big data analysis, a more precise evaluation of consumption can be made based on measuring the time of various consumer actions. The method of research is the analysis of the decision-making process on the price, as well as the impact of modern digital technologies on it. The result of the study was the identification of the consequences of precise value in pricing and the pro-cess of concluding market agreements, including 1) the extension of the tariff payment model to the area of dis-crete sales of goods; 2) the consideration of consumers' actions as conditions of pricing and the subject of agreements; 3) inclusion of the transfer of information by consumers about themselves in the subject of ex-change; 4) reduction of transaction costs due to the automation of forced execution of contract terms. Conclu-sions are presented about the possibilities of comparing the value of goods by the time of their consumption in the sum of all human lives on the planet and the development of lean technologies for the use of limited resources for the maximum well-being of people in the world.

Enhancing Performance of Public-Private Partnership Projects: Data Management and Capacity Building of Standard Gauge Railway

This study assessed the impact of data management and capacity building on the performance of the Standard Gauge Railway (SGR) project in Kenya, specifically within the context of monitoring and evaluation (M&E) practices in public-private partnership (PPP) frameworks. Anchored in the tenets of the Principal-Agent Theory, Institutional Theory, and Transaction Cost Economics Theory, this research employs a survey-based approach, drawing insights from 55 SGR project employees. In exploring the influence of data management, the findings illuminate its significant correlation with the orchestration and advancement of the SGR project. Additionally, the study underscores the positive repercussions of capacity-building initiatives on enhancing the project’s performance metrics. Notably, participants exhibited a consensus regarding the efficacy of these programs in augmenting the skills and knowledge base of the project team and stakeholders. The study accentuates the imperative for a comprehensive review aimed at fortifying the accuracy and security of project data. It recommends a strategic emphasis on initiatives enhancing data reliability and security within the SGR project’s framework. These insights contribute crucial perspectives on the pivotal roles of data management and capacity building, specifically underscoring their influence on the SGR project in Kenya.

Research on value creation path of logistics platform under the background of digital ecosystem: Based on SEM and fsQCA methods

Digitalization and platform ecosystem have subverted the value creation mode between traditional logistics actors and brought new value additions. Few studies have been done to investigate the influencing factors prompting such value creation of digital platform ecological cooperation in the Chinese logistics industry. The study bridges the gap by using structural equation modeling and fuzzy-set qualitative comparative analysis methods to investigate data from 347 Chinese logistics firms cooperating under the logistics platform. Findings:(1) identification of customer value proposition, complementary cooperation, and multi-party interaction had an indirect influence on logistics service value realization. While transaction cost reduction and digital innovation had a direct influence. (2) Digital capabilities have a positive moderating effect on the relationship between transaction cost reduction and value realization. (3) Comparing the configurations of value realization and ～value realization, it is found that enterprises cannot create value if they only save costs without operation, and should improve digital capabilities to reduce transaction costs. At the same time, the identification of customer value proposition is the source of value creation.

The equally weighted portfolio still remains a challenging benchmark

This research replicates the paper “Optimal Versus Naive Diversification: How Inefficient is the 1/N Portfolio Strategy?”, DeMiguel et al. (2009b). Similar to the referring paper, working in the mean–variance context, we compare the out-of-sample performance of the same investment strategies on the basis of standard metrics (Sharpe ratio, certainty equivalent and turnover). We consider proportional transaction costs and estimation rolling windows of limited length. Our study updates the original paper for many interesting aspects. First, to exclude that the empirical evidence of DeMiguel et al. (2009b), whose data stopped in 2004, could depend on very specific market behavior, we use an updated version of the original databases that contains the returns of the last 20 years. Recent data are characterized by a few severe systemic events, the 2008 global financial crisis and the shock related to the pandemic, and a generally higher level of price volatility than the previous periods. In our opinion, this variation in the market’s conditions makes the replication very interesting. Second, we introduce the Equally Risk Contribution (ERC) portfolio within the allocation strategies under comparison. This allocation rule is strictly related to the mean–variance approach when the variance is used as the referring risk measure and it constitutes a very interesting alternative investment benchmark. Moreover, using real data, we study whether a variation of the holding period or the length of the estimation window can modify the performance of all the strategies under comparison. Our findings confirm the results of DeMiguel et al. (2009b), i.e. that the equally weighted portfolio still remains a challenging benchmark to beat. Nevertheless, we find a few significant differences: the number of strategies that outperform naive diversification is larger due to the increased market volatility; limiting the impact of transaction costs by investing in a portfolio with a stable allocation as the ERC, or modifying the lengths of the estimation window and the holding period, is not sufficient to beat naive diversification systematically.

Informality and aggregate productivity: The case of Mexico

This paper develops and estimates a quantitative model to analyze the aggregate productivity consequences of informality in Mexico. While informality is typically viewed as prevailing solely among small firms, we use rich census data to document a high and rising share of large informal firms between 1998 and 2013. The model is quantified using the observed size and productivity distributions of both informal and formal firms. We use the model to assess the role of changes in labor market regulations, entry costs and enforcement in contributing to the rise in informality and decline in TFP in Mexico from 1998 to 2013. We find that the factors most important for the decline in aggregate productivity were not important drivers of the increase in informality, and conversely, the factors most important for the increase in informality had little impact on aggregate productivity. Regulatory changes during the 2000s contributed to over a third of the observed rise in the informal employment share, but with small aggregate productivity consequences. In contrast, rising entry costs account for a third of the decline in TFP from 1998 to 2013, but had little impact on informality.

Diversification and idiosyncratic volatility puzzle: Evidence from ETFs

Exchange Traded Funds (ETFs) are considered diversified portfolios with low transaction costs and high liquidity. We test the impact of idiosyncratic risk on the cross-sectional returns of ETFs. We find the magnitude of idiosyncratic risk for U.S. equity ETFs is less than half of that of the sector equity ETFs. We show evidence that the idiosyncratic volatility (IVOL) puzzle only exists for sector equity ETFs, albeit they have a significant number of constituents. These findings are robust to ETF price, size, liquidity, different idiosyncratic risk estimates, and the subset of ETFs with a large number of constituents.

Cluster approach to regional oil and fat subcomplex development

The article studies regional oil and fat subcomplex development in terms of the cluster approach application based on coordinating economic interests of sunflower seed producers, processing and marketing organizations under the condition of appropriate government support, as well as methodological, organizational, and information support by the relevant structures. On the basis of the production and economic indicators analysis it has been revealed that in the Saratov region sunflower production is quite effective, but the lack of interconnection between the oil and fat subcomplex subjects leads to uneven production volumes and highly varying profitability in the context of municipal districts of the region and lost profits formation at all stages of product movement. The author has developed a scheme of the regional oil and fat cluster subjects territorial location, represented by the areas of the cluster production core (with sunflower production volumes above the average regional level), production linking areas (with sunflower production volumes below the average regional level), as well as areas with developed infrastructure (with the presence of processing and storage facilities, and transportation hubs), allowing to establish an effective logistics system with mutually beneficial cooperation between regions. On the example of sunflower seed producers in the Saratov region clustering efficiency has been shown, which consists in production costs reduction as a result of transaction costs reduction and sales revenue growth due to the increase in the sunflower purchase price. The study results can be used in programs and proposals development to strengthen integration ties between the agro-industrial complex subjects.

A Comprehensive Analysis of the Impediments Perceived by the Members of Farmer Producer Organizations in North Bihar, India

The agriculture sector in India is currently facing several challenges, such as increasing landholding fragmentation, diminishing per-capita land availability, and rural youth's disinterest in farming. FPOs help small and marginal farmers by lowering transaction costs, facilitating credit sources for farmers, providing technical guidance, producing support and capacity building, and creating long-term sustainability to improve the farming community. This study investigates the constraints perceived by members of FPOs. Data were collected from 240 members across 6 FPOs. An ex-post facto research design was used to study four broad constraints regarding Producer Organization Promoting Institution’s (POPI’s) support, marketing, organizational technical and operational constraints. The Friedman two-way ANOVA rank test was used to analyze thirty-five statements under four broad constraints. The findings revealed that marketing is the most severe constraint, followed by constraints regarding POPI’s support as well as organizational, technical, and operational support. Under marketing constraints without guaranteed procurement systems, inadequate storage facilities are most severe. Under constraints perceived by FPO members regarding POPI’s support, considering resource-affluent areas and exclusive attention to progressive farmers are significant. Competition of villages to get benefits and irregular procurement of the produce are most significant constraints under organizational and technical constraints. The research indicates that by overcoming these obstacles with better infrastructure, fair distribution of resources, and improved connections to markets, one can boost the sustainability and economic feasibility of Farmer Producer Organizations, thereby enhancing socio-economic benefits for farmers in North Bihar.

Rethinking institutional arbitrage: De jure exposure and de facto enforcement

AbstractResearch SummaryThis article disentangles the de jure and de facto dimensions of institutional distances to examine their impact on firms embedded across heterogeneous jurisdictions. I argue that significant transaction costs occur only when the de facto implementations of regulations from both home and foreign jurisdictions become irreconcilable. Using an original dataset of the enforcement actions of the US Foreign Corrupt Practices Act (FCPA), I find that institutional arbitrage becomes infeasible for non‐US‐based firms with de jure exposure to the FCPA when the de facto judicial constraints over bureaucratic discretion are weak in these firms' home countries targeted by FCPA enforcement. De facto FCPA enforcement makes such US‐listed firms more likely to divest from their home markets or voluntarily delist from US stock markets.Managerial SummaryMangers should consider the divergence or convergence between the de jure and de facto dimensions of institutional distance in evaluating their international business strategies. In analyzing the operational obstacles for engaging in cross‐jurisdictional activities, notably institutional arbitrage schemes, managers should realize that such obstacles do not simply arise from contradictions in officially stipulated regulations, but also from whether and the extent to which such de jure contradictions are activated. Assessing the feasibility of corporate political activities and other legally ambiguous nonmarket strategies as risk‐mitigation measures thus needs to take into account this distinction. MNEs' global strategies should also recognize the increasingly intertwined national and supranational legal systems and their interactions as sources of operational risks.

Investment–consumption optimization with transaction cost and learning about return predictability

In this paper, we investigate an investment–consumption optimization problem in continuous-time settings, where the expected rate of return from a risky asset is predictable with an observable factor and an unobservable factor. Based on observable information, a decision-maker learns about the unobservable factor while making investment–consumption decisions. Both factors are supposed to follow a mean-reverting process. Also, we relax the assumption for perfect liquidity of the risky asset through incorporating proportional transaction costs that are incurred in trading the risky asset. In such way, a form of friction posing liquidity risk to the investor is examined. Dynamic programming principle coupled with an Hamilton–Jacobi–Bellman (HJB) equation are adopted to discuss the problem. Applying an asymptotic method with small transaction costs being taken as a perturbation parameter, we determine the frictional value function by solving the first and second corrector equations. For the numerical implementation of the proposed approach, a Monte-Carlo-simulation-based approximation algorithm is adopted to solve the second corrector equation. Finally, numerical examples and their economic interpretations are discussed.

Big data, green loans and energy efficiency

Green digital finance is an instrumental way to promote technological innovation, accelerate the low-carbon transition, and foster sustainable development. With the emergence of green digital finance, how does it affect firms’ energy use efficiency? Using big data and green loans as an entry point, the impact of green digital finance on corporate energy efficiency and the role of big data are examined. We provided a simple theoretical model to analyze the green loaning behavior of the banking sector after applying big data and its impact on corporate energy efficiency. Our research finds that: (1) The application of big data can make it easier for the banking sector to obtain loan companies’ information and reduce loan delinquency rates. This will reduce the information and transaction costs of the banking sector and expand the scale of optimal green loans. (2) The optimal green loan scale has a negative relationship with the optimal green loan interest rate. (3) The application of green loans by firms can improve energy efficiency and have a range of impacts on firms’ decision-making, including an increase in the emission reduction ratio, innovation probability, output, and profit, followed by a decrease in energy consumption and pollution emissions. This paper further clarifies the channels through which green digital finance affects energy efficiency and specifies the role of big data in green digital finance. This could help relevant policymakers design more effective green digital finance policies, contributing to carbon peaking and carbon neutrality goals.