Institutional Structures and the Prevalence of Foreign Ownership of Firms

2018 ◽  
pp. 455-479
Author(s):  
Otuo Serebour Agyemang
Keyword(s):  
Institutional Economics ◽  
Positive Association ◽  
Foreign Ownership ◽  
New Institutional Economics ◽  
African Countries ◽  
Significant Positive Association ◽  
Country Level ◽  
Regulatory Quality ◽  
Institutional Structures ◽  
High Voice

This chapter examines how country-level institutional structures influence the prevalence of foreign ownership of firms in Africa. It reinforces the new institutional economics perspective by empirically highlighting that institutional structures influence the prevalence of foreign ownership of companies in an economy. Using archival data from 39 African economies, the authors found that there is a significant positive association between regulatory quality and foreign ownership prevalence. Also, foreign ownership is prevalent in African countries that are politically stable and embrace rule of law. However, the authors found that countries with high voice and accountability structures are associated with low foreign ownership prevalence.

Governing the Environment: the Intitutional Economics Approach

2009 ◽  
pp. 61-86
Author(s):  
Arild Vatn
Keyword(s):  
Transaction Costs ◽  
Environmental Governance ◽  
Institutional Economics ◽  
Specific Area ◽  
New Institutional Economics ◽  
Neoclassical Economics ◽  
Institutional Perspective ◽  
Institutional Structures ◽  
Plural Rationalities ◽  
Jel Classifications

- Analyzing environmental governance implies foremost to analyze institutional structures and their implications. In doing so, the present paper utilizes insights primarily from the tradition of classical institutional economics. The paper is divided in three. In the first part I describe the main features of the classical position and compare it briefly with that of neoclassical economics and the tradition of new institutional economics. In the second part I clarify what is considered the main aspects of governance as seen from an institutional perspective. In part three I move to the more specific area of environmental governance. The concept of resource regimes is defined. Moreover I analyze how different regimes influence which environmental problems appear and how they can be treated. I discuss how institutions influence the formation and articulation of knowledge and values, how they form and protect interests, how they influence the level of transaction costs and hence the possibilities for coordination, and finally how they form the motivations underlying human choices in concrete contexts. Given that all these variables are shown to be endogenous to the institutional system, the use of comparative analysis in the assessment of various governance options is emphasized.Keywords: classical institutional economics, interdependence, resource regimes, value articulation, interest protection, transaction costs, plural rationalities.JEL classifications: B52; Q50; D02; D70.

scholarly journals Experiments as a Tool of Verifying Efficiency of Implicitly Agreed-Upon Market Organizations

Ekonomika ◽  
2008 ◽  
Vol 83 ◽  
Author(s):  
Rafał M. Jakubowski ◽  
Paweł Kuśmierczyk
Keyword(s):  
Experimental Study ◽  
Institutional Economics ◽  
New Institutional Economics ◽  
Market Institutions ◽  
Coordination Problem ◽  
Market Participants ◽  
Potential Market ◽  
Institutional Structures ◽  
Pareto Efficient ◽  
Market Organization

We analyse the possibility of an experimental study of the efficiency of market institutional structures. In the paper “On the new institutionalism of markets: the market as an organization” by R. Richter, the implicitly agreed upon market organization is regarded as a Nash equilibrium of a game between potential market participants. The solution of such coordination problem is not necessarily Pareto-efficient but could be efficient given assumptions of New Institutional Economics (i. e. could be NIE-efficient). This framework can be very helpful as a descriptive tool used to explain the persistence or transition of market institutions, but in can be difficult to be verified empirically.Economic experiments have been successfully applied to analyse market institutions and to compare their efficiency. In the paper, we demonstrate how this methodology could be used to analyse the “spontaneous” market organizations reached as a tacit agreement in a coordination problem. We also advocate that economic experiments can be a very useful tool to verify the efficiency of such institutions.

scholarly journals International financial reporting standards and foreign ownership in South African companies

2019 ◽  
Vol 19 (1) ◽  
pp. 72-88
Author(s):  
T Sherman ◽  
M De Klerk
Keyword(s):  
South African ◽  
Financial Reporting ◽  
Positive Association ◽  
Foreign Ownership ◽  
Market Liquidity ◽  
International Financial Reporting Standards ◽  
Reporting Standards ◽  
Significant Positive Association ◽  
Financial Reporting Standards ◽  
Top 40

Previous literature suggests that the adoption of International Financial Reporting Standards (IFRS) can facilitate cross-border capital flows, as it results in an increase in market liquidity and comparability benefits. Using foreign ownership levels in South African listed companies during the period 2003 to 2007, we test whether this association holds in a South African context when the top 40 South African companies mandatorily adopted IFRS. The results indicate that the adoption of IFRS did not have a significant positive association with foreign ownership levels during the sample period. We attribute the result to the harmonisation project undertaken in South Africa to align local accounting standards (SAGAAP) with the IFRS before the mandatory adoption thereof.

Technology

2010 ◽  
pp. 123-144 ◽  
Author(s):  
Blaine G. Robbins ◽  
Maria S. Grigoryeva
Keyword(s):  
Institutional Economics ◽  
New Institutional Economics ◽  
Civic Culture ◽  
Future Research ◽  
Formal Institutions ◽  
Generalized Trust ◽  
Country Level ◽  
The World ◽  
Trust Measure ◽  
The Individual

The country-level determinants of generalized trust that usually command the most research are ethnic homogeneity, institutional performance, civic culture, and economic development. Despite the popularity and insight of this research, there is little quantitative empirical evidence that explores the impact of technology—a necessary and exogenous condition for many of these determinants—on generalized trust. In this chapter, technology measures from the World Bank are combined with a generalized trust measure from the World Values Survey and other country-level predictors from various data sources to test two competing theories of generalized trust across 57 countries. One theory, new institutional economics, argues that technology will yield formal institutions, which structure incentives and reduce uncertainty, that, in turn, increase generalized trust. The other perspective, overjustification and crowding theory, argues that actors constrained by extrinsic motivators, such as technology and institutional incentives, will attribute trust to the incentive rather than to the individual, and generalized trust, as a result, will decrease. Structural equation model results confirm the new institutional economics claim that the positive effects of technology on generalized trust are positively mediated by formal institutions. The authors conclude by outlining various managerial implications and directions for future research.

Country Environments and the Adoption of IT Outsourcing

2012 ◽  
pp. 31-52
Author(s):  
Wen Guang Qu ◽  
Alain Pinsonneault
Keyword(s):  
Legal System ◽  
Institutional Economics ◽  
Social Trust ◽  
New Institutional Economics ◽  
It Outsourcing ◽  
Future Research ◽  
Country Level ◽  
Coordination Costs ◽  
Internet Penetration ◽  
Domestic Outsourcing

Research on information technology (IT) outsourcing adoption has been confined to a single-country perspective. The understanding of how country-specific variables influence the adoption of IT outsourcing is limited. This study uses new institutional economics to build a framework that links country-level factors to the adoption of IT domestic outsourcing. The authors suggest that country-level factors, such as the maturity of the IT-related legal system, social trust, uncertainty avoidance, Internet penetration, and the maturity of the IT outsourcing market, affect the opportunism costs and coordination costs involved in domestic IT outsourcing and influence its adoption among firms. The results show that the maturity of the IT-related legal system, social trust, and the maturity of the IT outsourcing market are positively associated with IT outsourcing adoption. The authors conclude the paper with a discussion of the study’s implications for practice and future research.

Institutional structures and the strength of investor confidence in Africa

2017 ◽  
Vol 59 (6) ◽  
pp. 899-915 ◽  
Author(s):  
Otuo Serebour Agyemang ◽  
Millicent Kyeraa ◽  
Abraham Ansong ◽  
Siaw Frimpong
Keyword(s):  
Property Rights ◽  
Rule Of Law ◽  
Political Stability ◽  
Economic Reforms ◽  
African Countries ◽  
Content Type ◽  
Investor Confidence ◽  
Country Level ◽  
Institutional Structures

Purpose This paper aims to examine the role of country-level institutional structures in strengthening the level of investor confidence in Africa while controlling for real GDP growth, interest rate spread, inflation and country credit rating. Design/methodology/approach The paper uses panel data for the period 2009-2013. It takes into account the rule of law, political stability, regulatory quality, voice and accountability, control of corruption and property rights as potential institutional drivers of the level of investor confidence. These factors are based on their relative relevance from the extant literature. Correlated panels-corrected standard errors model was used to establish the relationship between the institutional structures and the strength of investor confidence. Findings The overall results show that rule of law, voice and accountability, property rights and political stability exhibit significant positive relationship with the strength of investor confidence in African economies. This implies that asking African economies to strengthen these institutional structures will result in enhanced investor confidence in their economies. This suggests that the establishment of these institutional structures is an effective tool to enhance investor confidence in African economies. Practical implications In addition to the long-term goal of promoting economic reforms, a corresponding long-term goal of strengthening institutional structures in African economies should be taken into consideration. Instead of waiting for their economic reforms to take effect, governments in African countries can, to some degree, attract investors into their economies by establishing credible institutional structures. Originality/value This paper contributes to the knowledge on how country-level institutional structures influence the level of investor confidence in the context of Africa.

scholarly journals The Spanish Empire and its legacy: fiscal redistribution and political conflict in colonial and post-colonial Spanish America

2006 ◽  
Vol 1 (2) ◽  
pp. 241-267 ◽  
Author(s):  
Regina Grafe ◽  
Maria Alejandra Irigoin
Keyword(s):  
Institutional Economics ◽  
Political Conflict ◽  
New Institutional Economics ◽  
Spanish America ◽  
Post Colonial ◽  
Weak Institutions ◽  
Institutional Structures ◽  
History Of ◽  
Contingent Event ◽  
Economic Failure

The comparative history of the Americas has been used to identify factors determining longterm economic growth. One approach, new institutional economics (NIE), claims that the colonial origins of respective institutional structures explain North American success and Spanish American failure. Another argues that differences in resources encountered by Europeans fostered divergent levels of equality impacting on institutions and growth. This paper challenges the theoretical premises and historical evidence of both views offering a historicized, statistically and economically validated explanation for the institutional and economic development of Spanish America. First, it revises the structure of the fiscal system challenging the characterization of Spain as an absolutist ruler. Secondly, an analysis of fiscal data at regional levels assesses the performance of the Imperial state. It shows the existence of massive revenue redistribution within the colonies, disputing the notion of a predatory extractive empire based on endowments as the source of original inequality. Finally, we discuss how a contingent event, the imprisonment of the Spanish king in 1808, contributed to the disintegration of a 300-year-old empire. The crisis of legitimacy in the empire turned fiscal interdependence between regions into beggar-thy-neighbour strategies and internecine conflict. We conclude by arguing for a reversal of the causality from weak institutions causing economic failure to fiscal (and economic) failure leading to political instability.

Country Environments and the Adoption of IT Outsourcing

2011 ◽  
Vol 19 (1) ◽  
pp. 30-50 ◽  
Author(s):  
Wen Guang Qu ◽  
Alain Pinsonneault
Keyword(s):  
Legal System ◽  
Institutional Economics ◽  
Social Trust ◽  
New Institutional Economics ◽  
It Outsourcing ◽  
Future Research ◽  
Country Level ◽  
Coordination Costs ◽  
Domestic Outsourcing ◽  
Country Specific

Research on information technology (IT) outsourcing adoption has been confined to a single-country perspective. The understanding of how country-specific variables influence the adoption of IT outsourcing is limited. This study uses new institutional economics to build a framework that links country-level factors to the adoption of IT domestic outsourcing. The authors suggest that country-level factors, such as the maturity of the IT-related legal system, social trust, uncertainty avoidance, Internet penetration, and the maturity of the IT outsourcing market, affect the opportunism costs and coordination costs involved in domestic IT outsourcing and influence its adoption among firms. The results show that the maturity of the IT-related legal system, social trust, and the maturity of the IT outsourcing market are positively associated with IT outsourcing adoption. The authors conclude the paper with a discussion of the study’s implications for practice and future research.

Political institutions and developmental governance in sub-Saharan Africa

2004 ◽  
Vol 42 (2) ◽  
pp. 163-187 ◽  
Author(s):  
Rod Alence
Keyword(s):  
Political Institutions ◽  
Institutional Economics ◽  
Good Governance ◽  
Policy Formulation ◽  
New Institutional Economics ◽  
Sub Saharan Africa ◽  
Democratic Institutions ◽  
African Countries ◽  
Sub Saharan ◽  
The Impact

This article addresses the question of whether, or under what conditions, democratic institutions contribute to ‘developmental governance’ in sub-Saharan Africa, in forms such as coherent policy formulation, effective public administration, and limited corruption. While few dispute the desirability for Africa of democracy and good governance in theory, many remain sceptical about whether the two necessarily go together in practice. Using a simple framework informed by the new institutional economics, I analyse the impact of political institutions on governance quality in a sample of 38 sub-Saharan African countries. The main finding is that a combination of democratic contestation and institutional restraints on governments' discretionary authority substantially improves developmental governance. Judged against liberal democratic ideals, Africa's emerging democracies have many shortcomings. Yet the article shows that democratic institutions systematically enhance African states' performance as agents of development.

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