On Conflicts between Pharmaceutical Patent Protection and the Right to Life and Health Based on a Stackelberg Game

To solve the conflict between pharmaceutical patent protection and the right to life, health and increased patient satisfaction, drug prices can be regulated by levying an excess profit tax. An optimal tax strategy was formulated that not only could lower drug prices and improve public health and welfare, but also considers companies’ earnings. The strategy was based on the Stackelberg game theory as a bi-level mathematical model. In the model, the government is the leader, with patient satisfaction as the main goal, and pharmaceutical companies are the followers, with maximum drug revenue as the goal. The results show that under the premise of ensuring sufficient incentives for patent holders, the optimized tax on excess profit can effectively compensate for the shortcomings of pharmaceutical patent protection, alleviate the failure of market regulation of drug prices, improve patient satisfaction, and increase total social welfare.

The Essence of Natural Rent and the Implementation of the Principles of Rental Taxation in the Interests of Increasing the Stimulating Effect of the Tax Mechanism and Strengthening the Economic Security of the State

The article analyzes and develops the theoretical views on the category of natural rent in the works of Adam Smith (income exceeding all reasonable costs plus the average profit typical for a given area), David Ricardo (income from the initial and indestructible forces of the soil, the other part of it is paid for the use of capital that was used to improve the quality of the soil and for the construction of buildings), and other economists from land rent (income due to differences in the location and fertility of land) to differential rent II (rental income from additional capital investments) and quasi-rent (rent of machines and equipment), etc. David Ricardo formulated the conditions for the formation and receipt of land rent (lands differ in their location and in their fertility; the number and area of plots that are best in terms of these parameters are limited; lands are privately owned). In turn, Alfred Marshall noted that land rent does not appear as an exclusive phenomenon, but only as one of income sources, among similar ones. In modern conditions, the understanding of rental income is reduced to its interpretation as a profit above the average normal level, that is, excess profit. However, when considering rent as excess profit, the determination of its size is based on a comparison of indicators such as actual and normal profitability rather than land fertility or differences in the depth of occurrence and other natural mining conditions compared with the worst land plot or deposit, and also minerals. The location of land plots, as one of the factors of land productivity affecting land rent, laid the foundation for research in the field of the theory of the location of productive forces. Therefore, in relation to natural (mining) rent, it is necessary to be guided by the classical understanding of it, as income due to objective differences in natural or climatic conditions of agricultural production or subsoil use in comparison with the trailing land plot or deposit. In these conditions, receiving natural rent as income independent of the efforts of the subsoil user (excessive/unearned profit) in favor of the owner of the subsoil, the state, increases the stimulating effect of the tax mechanism in agriculture and the extractive sector of the economy, the efficiency of production and the economy as a whole, and strengthens the national and economic security of the state.

Financing of Health Care in the Conditions of Pandemic Threats

The author, using data of health care systems and COVID in the USA, Italy and other countries makes a conclusion that effective parrying of pandemic threats demands correction of a health care system and its financing. In particular, expansion of access for «marginal» social groups to services of out-patient and polyclinic institutions including non-payable services on a constant basis is necessary. Situation when involvement of the low-paid migrants who are actually excluded from regional health care systems allows to get excess profit for employers, creates for society not only additional expenses, but also risks of catastrophic development of epidemiological situations. Such employers are a kind of «free-riders» too expensive for society.

Rethinking the Concept of Equity in Accounting: Origin and Attribution of Business Profit

In this paper I reconsider the concept of equity in corporate accounting from the perspective of the origin and attribution of business profit. In both Financial Accounting Standards Board’s (FASB’s) and International Accounting Standards Board’s (IASB’s) Conceptual Frameworks, shareholders’ equity is synonymous with a firm’s net assets. However, it is not the sole definition of equity. We may regard equity as the interest in the corporate capital itself. From this viewpoint, shareholders’ equity consists of retained earnings attributable to shareholders’ as well as invested capital provided by them. We should note that, under the current corporate accounting system, shareholders are assumed to be the sole residual claimants. However, the existence of implicit contracts in corporate activities implies other residual claimants in addition to shareholders. If shareholders are not the sole residual claimants, it is necessary to revisit the proprietary theory under which equity is identical to shareholders’ equity. In this paper I reconsider the significance of the entity theory, which emphasizes an entity as an organization comprising various stakeholders and attributes business profit above shareholders’ expectations to an entity itself. The ownership interest cannot generate the excess profit by itself. Without firm-specific investments by employees and/or entrepreneurial activities by managers, the excess profit would never emerge. We should critically examine the foundation of the current corporate accounting in order to design a more equitable and efficient corporate accounting in which business profit is attributable not only to shareholders but also to other stakeholders who contribute to its generation.

Financial Analyses and Corporate Evaluation on Sustainable Ability to Generate Excess Profit

This study empirically examined financial analyses and a market assessment on goodwill. Goodwill is not an individually identifiable asset but is recognized as an intangible asset because it is viewed as having future economic benefits from a business combination. The verification period for this study was from 2011 to 2019. The sample companies were 13,522 firms-years satisfying the selection criteria among listed companies in the Korean stock market. As a result of empirical analysis, it was found that goodwill is related to stock prices. Goodwill was shown to serve as useful accounting information by reflecting the economic realities of intangible assets called creating excess profitability and sustainable profit. For analysis, regression analysis was conducted by separating the companies listed on the KOSPI stock market and those listed on the KOSDAQ stock market. The results of the analysis were as follows. In the case of listed companies in the KOSPI stock market, goodwill was found to have a positive (+) stock price relationship as useful accounting information. These results suggested that goodwill is an asset that represents the ability to generate excess profit as a sustainable profit. The contributions of this study are as follows. First, this study verified that goodwill is related to stock prices even after the adoption of International Financial Reporting Standards (IFRSs). Second, it will be possible to induce rational decision-making regarding goodwill to accounting standards setters, supervisors, and users of financial information. Third, it recognized that the value of the financial market can be recognized only by providing reliable accounting information to the managers who prepare financial statements. This can lead managers to provide capital markets with more useful information.

Selection of Zambia’s optimal copper mining excess profit tax

Mineral taxation is an important revenue-generating instrument for the Zambian government. A good combination of tax instruments in a fiscal regime will help a mineral resource-rich country to generate revenue needed for economic development. This paper selects Zambia’s optimal copper mining excess profit tax. The choice was made between variable profit tax and windfall tax. This was attained by using the fuzzy analytic hierarchy process (AHP) and fuzzy technique order of preference by similarity to ideal solution (TOPSIS) methods. The selection process was anchored on four evaluation criteria: administrative efficiency, investor risk, government risk, and progressivity. Results show that windfall tax is technically superior to variable profit tax. Therefore, windfall tax was selected as Zambia’s optimal copper mining excess profit tax.

PROTECTORS OF THE ECONOMIC SECURITY SYSTEM OF AN ENTERPRISE

The issues of formation and evaluation of the business reputation of the enterprise have been updated. Existing methods and approaches to assessing the level of business reputation of companies, their advantages and disadvantages are analyzed and systematized. The problems of estimation of business reputation of water supply companies are covered. It is determined that the assessment should be made taking into account the specificity of activity and sectoral affiliation of enterprises, as well as their form of ownership. The necessity to develop a methodology for assessing the level of goodwill on the basis of calculating the integrated indicators of the level of stakeholders' interaction of water supply companies. An analysis of existing approaches to assessing goodwill has shown that each group of methods, both quantitative and qualitative, has certain advantages and disadvantages. The most appropriate methods for assessing goodwill, such as: assessing goodwill as an excess of market value over the value of its net assets; estimation by the excess profit method; Brand Finance Appraisal; evaluation using a multiplier; method of options; expert method, were identified. The use of qualitative approaches to the assessment of the goodwill of the water supply companies was justified. Using quality methods, you can manage business reputation and measure in which direction it will change over time. It is noted that the implementation of goodwill assessment is complicated by the diversity of interests of both individual groups, and interests within an individual stakeholder group. It is determined that the level of stakeholder interaction is a set of integrated indicators of interaction of each of the stakeholder groups on the basis of which the goodwill and measures taken to form and implement its management strategy are assessed . It is proposed to assess the level of business reputation of water supply companies based on the method of expert evaluation using the integrated indicator of the level of engagement. Keywords: business reputation, water supply companies, evaluation, stakeholders, quantitative methods, qualitative methods.