scholarly journals Approach of scaling the level of government intervention in the financial market

2020 ◽  
Author(s):  
Kristaps Freimanis ◽  
Maija Šenfelde
Keyword(s):  
Conceptual Framework ◽  
Financial Market ◽  
Government Intervention ◽  
Econometric Models ◽  
Deadweight Loss ◽  
Market Failures ◽  
Data Points ◽  
The Government ◽  
Intervention Costs ◽  
Categorical Scale

In the field of the economics’ regulation researchers so far have built the conceptual framework showing how the deadweight loss of market failures decrease and costs of the government intervention in-crease with the increased level of the government intervention. In order to quantify relationships between the level of intervention, intervention costs and the deadweight loss with econometric models it is im-portant to understand how to apply coordinates for the data points to be included in the modelling. The main goal of the research presented in this paper is to find the unit measure for the asis of the independentvariable, i.e. to shape the categorical scale corresponding to the level of intervention.

scholarly journals METHODOLOGY FOR THE ASSESSMENT OF REGULATION COSTS IN THE BANKING MARKET

2021 ◽  
Author(s):  
Kristaps FREIMANIS ◽  
Maija ŠENFELDE
Keyword(s):  
Government Intervention ◽  
Indirect Costs ◽  
General Rule ◽  
Deadweight Loss ◽  
Market Failures ◽  
Mathematical Methods ◽  
Banking Market ◽  
The Government ◽  
Intervention Costs ◽  
Regulation Costs

Purpose – In the field of the economics’ regulation researchers so far have built the conceptual framework showing how the deadweight loss of market failures decrease and costs of the government intervention increase with the increased level of the government intervention. In order to quantify relationships between the level of intervention, intervention costs and the deadweight loss with econometric models it is important to understand how to quantify the regulation costs as a part of intervention costs. The objective of the research presented in this paper is to find the appropriate methodology for the quantification of the regulation costs in the banking market. Research methodology – literature review (regarding theories), mathematical methods for quantification and econometric methods for validation purposes. Findings – research shows that in the assessment of regulation costs three main stakeholders should be included – microprudential regulator, macroprudential regulator and financial regulation’s policy maker. Research presents their cost assessment methodology. Its validation shows that in general methodology works as expected, i.e., higher government intervention levels lead to higher regulation costs, however this general rule has exceptions, which in authors’ view indicates that other factors have an impact on the cost levels. Research limitations – research shows how to assess the costs of main stakeholders based on the publicly available information. More precise view could be obtained if in the cooperation with authorities more details on certain cost items are received. Practical implications – research results will be used to assess all government intervention costs (other positions include compliance costs and other indirect costs) and finalize the quantification of the framework. Quantified framework could be used for more precise policy making regarding the regulation of the banking market. Originality/Value – research shows how to quantify the regulation costs of the banking market as currently there are only conceptual ideas.

The Role of Government in a Liberal Market Economy

2018 ◽  
pp. 53-61
Author(s):  
Claude Joseph
Keyword(s):  
Public Choice ◽  
Market Failure ◽  
Government Intervention ◽  
Rational Behavior ◽  
Market Failures ◽  
Role Of Government ◽  
Failure Theory ◽  
Theoretical Perspectives ◽  
The Government

This essay is a critical assessment of the market failure theory and public choice theory. While the market failure theory provides a justification for government intervention in the economy, the public choice theorists are very skeptical about the role of government as a corrector of market failures. Since government failures can be worse than market failures, the imperfections in the market process, they argue, do not necessarily call for government intervention. These two theoretical perspectives, notwithstanding their difference, do share something in common. Both assume that individuals are self-interested. This essay contends that a shift from rational self-interested behavior to bounded-rational behavior provides a less contested role for the government. With bounded-rational behavior, the state should no longer be viewed as a mere surrogate of the market, but as “a choice architect,” “an entrepreneur,” and “a manager of conflict.”

Towards a More Competitive Mobile Payment Industry: Standardization And Beyond

2020 ◽  
Author(s):  
Xingyu Yan
Keyword(s):  
Financial Market ◽  
Competitive Dynamics ◽  
Mobile Payment ◽  
Market Failures ◽  
Mobile Payments ◽  
The World ◽  
Chinese Industry ◽  
Definable Groups ◽  
Study Case ◽  
Bank Card

Abstract Mobile payments are becoming increasingly popular around the world. In countries like China, they appear in the form of barcode payments and are poised to replace cash and bank card payments for day-to-day consumer purchases. Against that backdrop, this paper analyzes the availability of barcode standardization as an approach to interoperability and ultimately to enhanced competition in the mobile payment industry. It uses the Chinese industry as a study case, which features a duopoly structure and shifting competitive dynamics among three definable groups of market players. This paper confirms that standardization can enhance competition and argues that, in this case, a government-mandated standardization is preferable to a voluntary one because the latter is prone to financial market failures. Along this line, this paper makes three suggestions for furthering the barcode standardization. It also advises prudence and competitive neutrality for the financial regulator and calls for more active involvements of the competition and data protection authorities.

Economic structure, power and institutions: A conceptual framework for analysing the historical transformation of US industrial strategy

2021 ◽  
pp. 102452942110154
Author(s):  
Mattia Tassinari
Keyword(s):  
Structural Change ◽  
Conceptual Framework ◽  
Economic Structure ◽  
Institutional Arrangements ◽  
Illustrative Case ◽  
Alexander Hamilton ◽  
The Government ◽  
Distribution Of Power ◽  
Illustrative Case Study

An industrial strategy emerges from possibilities for structural change, that depend on material constraints and opportunities afforded by economic structure, the distribution of power in society and the institutional arrangements organized at the political level. Building on a structural political economy perspective, this article develops a structure–power–institutions conceptual framework to describe how economic structure, the distribution of power, and institutions interact through a ‘circular process,’ which is useful for analysing the historical transformation of industrial strategy. In this framework, an industrial strategy refers to the institutional arrangements through which the government manages emerging conflicts or agreements between different powers and influences structural change. As an illustrative case study, the structure–power–institutions framework is applied to analyse the historical transformation of US industrial strategy from the era of Alexander Hamilton to that of Donald Trump.

Bank competition, government intervention and SME debt financing

2017 ◽  
Vol 7 (4) ◽  
pp. 478-492 ◽  
Author(s):  
Jianhua Du ◽  
Chao Bian ◽  
Christopher Gan
Keyword(s):  
Government Intervention ◽  
Generalized Method Of Moments ◽  
External Debt ◽  
Ordinary Least Squares ◽  
Debt Financing ◽  
Bank Loans ◽  
Bank Competition ◽  
Firm Level ◽  
Content Type ◽  
The Government

Purpose The purpose of this paper is to examine the effects of the government intervention and bank competition on small and medium enterprise (SME) external debt financing in Chinese capital market. Design/methodology/approach This study uses ordinary least squares with standard errors clustered at the firm level. In addition, the authors use the dynamic system generalized method of moments to address the possible endogeneity issue in the regressions. Findings Using a sample of 908 firms from 2000 to 2010, the authors found that SMEs are more likely to access bank loans only in regions with higher level of government intervention than median government intervention. Further, the result shows that the government is motivated to help SMEs to obtain more external debt in regions where the level of bank competition is lower than the median bank competition index. Last, the authors found evidence that firms with politically connected CEOs are likely to access bank loans. Research limitations/implications This paper highlights that government intervention enables the SMEs to secure more bank loans. Second, the authors’ results imply that the government is motivated to help SMEs to obtain more external debt in regions with low level of bank competition. Originality/value This study contributes to the current literature by revealing that government intervention is the driving force alleviating SMEs’ constraints in accessing external financing. Second, this study finds the evidence to supports the argument that government has a strong motive to help SMEs to secure long-term credits for political purpose (Fan et al., 2012), when the level of bank competition is low (Berger and Udell, 2006).

THE IMPACT OF GOVERNMENT INTERVENTION ON TECHNOLOGICAL REGIMES: THE SOURCING OF FINANCIAL INNOVATION

2018 ◽  
Vol 22 (03) ◽  
pp. 1850025
Author(s):  
PETER T. GIANIODIS ◽  
MATTHIAS THÜRER
Keyword(s):  
Government Intervention ◽  
Financial Innovation ◽  
Punctuated Equilibrium ◽  
Technological Regime ◽  
Knowledge Sourcing ◽  
Technological Regimes ◽  
Governmental Intervention ◽  
Disruptive Change ◽  
The Government ◽  
The Impact

Scholars and managers alike seek to better explain disruptive change and its effects on technological regimes. In this study, we apply two logics of change — Schumpeterian and punctuated equilibrium — and conduct a natural experiment to evaluate how a governmental intervention shock affected the sourcing of knowledge within an existing technological regime. In particular, we investigate the extent to which patterns of knowledge sourcing changed within the technological regime governing financial innovation. We find that patterns of knowledge sourcing change subsequent to the government intervention, but in more nuanced ways as predicted by Schumpeterian and punctuated equilibrium logic. Specifically, knowledge sourcing demonstrates an “accelerated” punctuated equilibrium change with knowledge convergence between incumbents and new entrants occurring under high levels of uncertainty, rather than when the regime stabilized. We discuss the implications on Schumpeter’s concept of creative destruction, as disruptive change may only undermine some aspects of an existing technological regime.

scholarly journals Economic impacts of craftsman statue on community based tourism development

2017 ◽  
Vol 1 (3) ◽  
pp. 59-73
Author(s):  
A.A. Gde Putra Pemayun ◽  
A.A. Istri Agung Maheswari
Keyword(s):  
Economic System ◽  
Small And Medium Enterprises ◽  
Tourism Development ◽  
Poverty Line ◽  
Market Failures ◽  
Economic Activities ◽  
Human Needs ◽  
Gary Becker ◽  
The Government ◽  
Medium Enterprises

This study examines the "Economic Impact of Craftsmen Statue on Community Base Tourism Development in Tohpati village Klungkung Bali". The core concept of economic problems is the imbalance between unlimited human needs and the means of satisfying the needs of a limited number. Economics should not be emphasized through the point, but it should be emphasized as an approach to explain human behavior (Gary Becker). The economic system is a means used to regulate all economic activities in society whether done by the government or private in order to achieve prosperity and prosperity together. The Economic system can be divided into three namely: a First capitalist economic system that is all economic activity submitted to the market. Second, the communist economic system is all things governed by the government. The third is a mixed economic system that is a combination of the two economic systems above (capitalist and communist). Indonesia should adopt a mixed economic system because firstly, Indonesia is an emerging country, where market failures often occur due to uneven information or accessibility to transportation and communication facilities. The second is that there are still many Indonesian people are below the poverty line. Thirdly most Indonesians have businesses that are still classified into small and medium enterprises that still can not compete perfectly with a bigger business.

scholarly journals POLICY ANALYSIS MATRIX FOR THE ESSENTIAL CEREAL CROPS VARIETIES (RICE BUHOOTH 1, AND CORN SYNTHETIC GENOTYPE BAGHDAD 3) (STUDY CASE) IN IRAQ FOR THE YEAR 2012

2017 ◽  
Vol 48 (3) ◽  
Author(s):  
Lateef & et al.
Keyword(s):  
Policy Analysis ◽  
Comparative Advantage ◽  
Government Intervention ◽  
Cereal Crops ◽  
Cost Coefficient ◽  
Governmental Support ◽  
Resource Cost ◽  
The Government ◽  
Domestic Producer ◽  
Policy Analysis Matrix

The objective of this research was to analyze the economic impact of government intervention in the essential cereal crops for (Rice Buhooth1, and Synthetic genotype Baghdad3) by comparing the social price and private prices through adopting policy analysis matrix approach PAM and the derived parameters from it .The research was divided into two chapters; the first chapter was about field counting for the policy analysis matrix PAM and measuring the implications of the government intervention on the Rice Buhooth1. The second chapter was about explaining the field counting for policy analysis matrix PAM and measuring the implications of the government intervention impact on the second synthetic genotype Baghdad3.The research found a set of results, the most important result showed that the value of profitability coefficient was about 3.69, this indicates that the rice crop production system for the Rice Buhooth 1  takes advantage of the adopted government policy in that year, which means that there is governmental support for the product. In addition, domestic resource cost coefficient value which was about 0.72 indicates that there is comparative advantage for the Rice Buhooth 1  for the year 2012. The values of the nominal and effective protection coefficient were about 1.74 and 1.59 respectively; the value of the first factor indicates that there is governmental support for the domestic producer for the above, while the second factor indicates that the domestic producer will obtain greater returns in the investment of its resources in the existence of the government intervention from its absence. Regarding the Synthetic genotype Baghdad3, the value of profitability coefficient was about  1.75  which means that there is governmental support for the product. The domestic resource cost coefficient value was about 0.24 which indicates that there was comparative advantage for the mentioned above for the year 2012. The values of the nominal and effective protection coefficient were about 1.48 and 1.56 respectively; the value of the first factor indicates that there is governmental support for the domestic producer for the above, while the second factor indicates that the domestic producer will obtain greater returns in the investment of its resources in the existence of the government intervention from its absence. Finally, it is highly recommended that support should be increased for the varieties that the country has greater comparative advantage in order to improve the utilization of available resources and reduce wasted resources. Moreover, similar studies should be done in the future by other researchers to major cereal crops varieties at the country level in order to do comparison between them to set a mechanism for the government intervention policy in the main crop prices in the country which help both the local producer and agricultural investor in directing its resources properly.

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