Panel evidence from rural Uganda on mobile money, risk sharing, and educational investment

We investigate the influence of the rapidly developing mobile banking service "mobile money" on rural households' capacity to smooth their investment in education following a negative shock. We find that a negative shock reduces per school-age kid educational spending by 9.3 percentage points in families that do not utilize mobile money but by 8.3 percentage points in homes that have used mobile money. The underlying process is a rise in remittance receipts and sender variety as a result of the lower transaction costs afforded by mobile money. We demonstrate that our findings are resistant to alternative processes. We utilize the extension of the mobile money agent network as an exogenous variable in mobile money access.

The Revival of Business Groups’ Risk Sharing: Evidence from Japanese Real Estate Investment Trust Market

We examine the business groups’ risk-sharing hypothesis in the Japanese Real Estate Investment Trust (REIT) market in which the unique external management system seems to be reinforcing power relationships among firms affiliated with the modern Japanese business groups, called keiretsu. We find that REITs whose sponsors belong to one of the keiretsu groups (keiretsu REITs) have significantly lower volatility of profitability than REITs whose sponsors do not belong to the keiretsu groups (non-keiretsu REITs). There is no significant difference in profitability between keiretsu REITs and non-keiretsu REITs, controlling for firm and property characteristics. The abnormal portion of the profitability unexplained by firm characteristics is also significantly lower with keiretsu REITs. We also find that the keiretsu affiliation reduces the systematic volatility of affiliated REITs, while such an effect is not observed with the idiosyncratic volatility, suggesting that the risk-sharing effect may be beneficial for the value of REITs. Using the difference-in-differences design with propensity score matching, we find that the negative impact of the Great East Japan Earthquake on the profitability was significantly smaller with keiretsu REITs than with non-keiretsu REITs. Keiretsu REITs were also able to stabilize their capital structure by shifting some short-term debts to long-term debts without increasing the cost of loans under the uncertain situation caused by the Earthquake. Keiretsu REITs were able to borrow money from their affiliated group banks even right after the earthquake, while non-keiretsu REITs seem to have struggled to secure loans from those banks.

Optimal Risk Sharing in Society

We consider risk sharing among individuals in a one-period setting under uncertainty that will result in payoffs to be shared among the members. We start with optimal risk sharing in an Arrow–Debreu economy, or equivalently, in a Borch-style reinsurance market. From the results of this model we can infer how risk is optimally distributed between individuals according to their preferences and initial endowments, under some idealized conditions. A main message in this theory is the mutuality principle, of interest related to the economic effects of pandemics. From this we point out some elements of a more general theory of syndicates, where in addition, a group of people are to make a common decision under uncertainty. We extend to a competitive market as a special case of such a syndicate.

ПРИВАТНО-ДЕРЖАВНІ ПАРТНЕРСТВА У СФЕРІ ПРИРОДОКОРИСТУВАННЯ: ПЕРЕДУМОВИ, ТЕНДЕНЦІЇ ТА ПРОТИРІЧЧЯ

The article provides insights into the process of developing and implementing public-private partnerships (PPP) as a key pattern of interaction between government and business which is characterized by a range of advantages, in particular investment attraction, risk sharing, handling socioeconomic and infrastructural issues, creating new jobs, etc. It is argued that building PPPs in the area of nature management embeds features associated with the existence of certain contradictions, in particular, the issue of reducing the environmental burden is the government’s responsibility whereas nature management is held at the enterprise level where environmental costs are financed by a leftover principle. This article seeks to explore the critical importance of building public-private partnerships in nature management. To attain the above goal, it is recommended to pursue the following basic objectives: to explore global trends in the process of PPP creation including those in the field of nature management; to provide argument for the critical role of PPPs for nature management in Ukraine; to identify the key issues in the implementation of the principles of environmental responsibility at the corporate level. To meet the research objectives, general scientific research methods have been employed, in particular, logical generalization, graphic analysis of the dynamics of the key indicators of nature management and in PPP functioning. A study of international good practices in the implementation of PPPs in other countries has identified the main trends which translates in transaction and investment drop and active participation of international investors from the United States, China, and France. The article exposes the reasons for the excessive human-caused environmental load in Ukraine against the corresponding indicators in developed economies. Thus, implementation of PPPs should become an important tool to tackle environmental challenges. According to the research findings, the key barriers to successful PPP performance in Ukraine are the following: their low attractiveness due to lack of awareness, fragmentary character of the registration system, low level of project implementation and completeness. Based on the study results, a conclusion could be drawn that industries alone are not capable to reduce environmental risks and harmful effects. The amount of wastes and pollutant emissions does not demonstrate a positive trend towards reduction in recent years. The article substantiates the need to implement PPPs in nature management. However, it is argued that the search for such projects is a complicated process that requires a well-balanced approach.

Precaution Strategy of Moral Hazard Practice in Agricultural Insurance in Indonesia: An Approach of Soft Systems Methodology

This paper uses Soft Systems Methodology (SSM) to formulate strategies to prevent moral hazard acts in agricultural insurance in Indonesia. Agricultural insurance takes place, mainly, through Rice Crop Insurance and Cattle Insurance. Generally, the strategies that can be performed to minimize moral hazard practice in agricultural insurance programs are: developing the capacity of human resources, improving field communication, enforcing penalties, institutional strengthening, and adding new products through Islamic agricultural insurance. Specifically, this paper proposes that the prevention of moral hazard practices can be done by implementing Islamic agricultural insurance systems with the concept of risk-sharing instead of risk transfer.

Design of risk sharing and coordination mechanism in supply chain under demand and supply uncertainty

Perishable and short-life products can be seen everywhere in life. Due to the particularity of these products, they are more complicated in supply chain management. This paper studies whether the two-part tariff and ZRS contract can achieve the purpose of reducing risks and coordinating supply chain. We assume that market demand and supplier yield are uncertain, and we use game theory and probability distribution for research. The research results show that when the information is asymmetric, the manufacturer always ignore the demand forecast information provided by the retailer under the wholesale price contract. When the demand is uncertain, regardless of whether the information is symmetric or asymmetric, the two-part tariff contract and the ZRS contract can coordinate the supply chain and achieve maximum profit. When the retailer's degree of risk aversion is high, the ZRS contract is better than the two-part tariff, which can reduce the risk of retailers and achieve the purpose of coordinating the supply chain. When the supply is uncertain, the manufacturer can provide the supplier with a risk-sharing contract, including the return price and the sharing ratio that meet certain constraints. Such a contract can effectively reduce the supplier's risk and realize supply chain coordination.