Credit constraints and growth gains from governance

This paper contributes to the governance literature by analyzing the specific mechanisms through which governance affects economic growth: The credit channel. Specifically, it investigates the growth impact of governance on industries with different levels of dependence on external finance. Better governance mitigates credit market imperfections by increasing transparency and accountability and reducing government-policy distortions, promoting productive investment and entrepreneurship development, with a disproportionate impact on sectors that depend on external finance. This paper indeed finds that countries with well-functioning governments are better at providing growth and investment environments for the expansion of industries that rely heavily on external finance and the formation of new establishments in these industries, when controlling for financial development. These results are robust to possible reverse causality, different specifications, subsamples and outliers.     

MODES OF GOVERNANCE IN THE DUTCH SOCIAL HOUSING SECTOR

ABSTRACT ** :  We describe and analyze five consecutive modes of governance in the Dutch social housing sector. We compare these institutional forms with the five policy values that the sector was assumed to realize. For that purpose we propose and use a new, analytical framework based on a separation principle that is applied to the coercion domain (the governance of transactions) as well as to the interaction domain (the welfare values). The consecutive modes of governance were introduced to cope with the changing welfare policies, but with varying results. In this paper we show that the implemented modes of governance in the Dutch social housing sector did not always realize the values that the sector was supposed to deliver. The framework we propose also facilitates the discussion about the concept of a social enterprise and the embedding of a service of general interest in the European Union.     

The governance of agro- and pharmaceutical biotechnology innovation: Public policy and industrial strategy

Multinational companies in the life science sector are heavily influenced by government policies and regulations and in turn attempt to influence these actors nationally and internationally. This paper focuses on recent and on-going research, principally on the agro-biotechnology and, to a lesser extent, on the pharmaceutical industries, covering the evolution of policy and regulation in Europe, how policies are influenced by stakeholder pressures and how policy in turn influences company strategies for product development. We focus particularly on new ‘governance’ agendas in Europe and consider the relative impacts of enabling, constraining, discriminating and indiscriminate policies on company strategies as part of our development of an integrated approach to policy and governance. We also consider changes in external operating environments for multinational companies and compare past histories and present pressures on agro-biotechnology and pharmaceutical companies. The paper argues, with evidence, that a more enabling and discriminating policy and regulatory environment can achieve public goals more efficiently and effectively, taking account of impacts on innovation, than more blunt policy instruments. This type of environment takes into account the resources and capabilities available to firms and research laboratories rather than relying on broad brush carrot and stick approaches.     

Governance structures in R&D networks: An analysis in the European context

This paper analyses governance structures used to organize partnerships in R&D networks using two approaches: transaction costs theory and social capital theory. We argue that these theories are complementary; this explains forms of governance through the degrees of administrative (structural and safeguard mechanism) and social factors (cohesion and openness) they embody. Data was obtained from European R&D networks created through Framework Programmes which include a great number of universities, non profit institutions and firms. Findings show the variables that characterize and explain the governance forms based on the applicability of R&D networks. This study not only provides a theoretical model for analysing governance structures of these networks, but is also useful for both improving the management of networks and for fostering collaboration at an international level.     

Institutional support for technological improvement — The case of Hungary

The technological “time warp” in which Hungary, like other Central and Eastern European countries, has found itself since the 1950s is at an end. This article concentrates on the transformation of institutional structures that support innovation and industrial technological development. First, it summarizes the types of institutions that support technological development. In a market economy, the process of generation and diffusion of innovation largely depends on the institutional and economic structure of the country. In a narrower sense, those institutions might be included in this group whose aim is wholly or in part to assist firms in experimenting with, understanding, and implementing new products and new production processes and improving quality. This article then details forms of inter-firm cooperation and highlights some empirical research findings based on three sectors — the pharmaceutical, machine tool, and car parts industries — which represent three different cases in the restructuring of Hungarian manufacturing. The main lesson of the study is that industry during its redeployment can create few demands for technology development institutes. Because of inherited structure, the accumulated knowledge of existing institutes and the supply and scattered demand of industry for technological support do not regularly coincide.     

“国家队”持股能促进企业绿色创新吗——重污染行业的异质性分析

绿色技术创新是我国实现碳达峰、碳中和目标,推动经济高质量发展的关键路径。以2015—2020年我国A股上市公司为样本,实证考察“国家队”这类特殊国有机构投资者持股对企业绿色创新的影响及作用机理,并对重污染行业进行异质性分析。结果表明：“国家队”持股能够提升企业绿色创新水平,并且该影响在重污染行业更加显著。机制检验结果表明,缓解内外部信息不对称和获取政府创新补贴是“国家队”持股促进企业绿色创新的重要传导路径。进一步研究发现,“国家队”持股时间越长,对绿色创新的激励效应越显著。研究结论对完善公司治理结构、促进企业绿色创新和实现高质量发展具有启示意义。     

Enhancing the user role in the development of technical standards for telecommunications

The paper examines the actual and potential roles of business users of telecommunications services in influencing the development of technical standards. Variours institutional structures in the user community are examined as they relate to user particioation in formally constituted standards development arganizations. Discreparcies between users and suppliers in participatory motivations, strategies and resources are noted. The standardization process in telecommunications emerges as a technology-push initiative led by the suplly industries. However, structural changes in the telecommunications industries have resulted in new approaches to standards making. As a result, standards have acquired a new significane in terms of user control user technical and service evolution. Using the development of European standards for digital wireless telephony as an example, it is argued that this new standardization environment mandates a much more active role for users. However, it is also argued that the user stake in telecommunications standards is not of an equivalent nature to the supplier stake. Thus, a theortical framework is presented which that effective user involvement will require the development of a parallel institutional structure for the user community.     

The innovation effect of dual-class shares: New evidence from US firms

The proliferation of dual-class structures in the US stock market presents a controversial trend since such shares are traditionally deemed to damage governance quality. We study the relationship between 362 firms with dual-class shares and their innovativeness using patent citations from Google Patents over the 1976 through 2006 period. We find dual-class shares have significant innovation effect in high-tech sectors, hard-to-innovate industries, firms with higher external takeover threat and firms heavily dependent on external equity financing. We also document a positive causality relationship between dual-class structures and the quality of innovation. The channel for this causal relationship is the protection mechanism by which managers can take a long-term view. From a policy perspective, regulators should promote a corporate governance system that protects corporate long-term interest for shareholders.     

Public service and competition in the European Union

In recent years, the Treaty of the European Union and the European institutions have had a rapidly increasing impact on the reorganization of commercial public services within the Member States. The trend has been dual—toward liberalization and toward harmonization of standards and national legislations. Progress is reported and analyzed in telecommunications, rail services, and electricity. A general concern is to reconcile legitimate public service obligations with the rules of competition that are prominent in the Treaty. New forms of regulation are tested in various countries preparing for the emergence of a European regulation framework.     

Institutions and environmental governance: A reconceptualization

This article presents the conceptual revisions needed to extend the new institutional approach to environmental governance from its current local and international domains of application to all governance solutions, including national environmental and natural resource use policies and multi-level governance solutions that are increasingly used to address global environmental change. The article suggests that environmental governance is best understood as the establishment, reaffirmation or change of institutions to resolve conflicts over environmental resources. It also explains why the choice of these institutions is a matter of social justice rather than of efficiency. The article suggests a way to understand formal and state-centered governance solutions as forms of collective ownership not unlike common property. The article demonstrates how institutional analysis can gain resolution by looking at the functional and structural tiers, organization of governance functions, and formulation of key institutional rules as key aspects of the design of governance institutions.     

The governance of agro- and pharmaceutical biotechnology innovation: Public policy and industrial strategy

Multinational companies in the life science sector are heavily influenced by government policies and regulations and in turn attempt to influence these actors nationally and internationally. This paper focuses on recent and on-going research, principally on the agro-biotechnology and, to a lesser extent, on the pharmaceutical industries, covering the evolution of policy and regulation in Europe, how policies are influenced by stakeholder pressures and how policy in turn influences company strategies for product development. We focus particularly on new 'governance' agendas in Europe and consider the relative impacts of enabling, constraining, discriminating and indiscriminate policies on company strategies as part of our development of an integrated approach to policy and governance. We also consider changes in external operating environments for multinational companies and compare past histories and present pressures on agro-biotechnology and pharmaceutical companies. The paper argues, with evidence, that a more enabling and discriminating policy and regulatory environment can achieve public goals more efficiently and effectively, taking account of impacts on innovation, than more blunt policy instruments. This type of environment takes into account the resources and capabilities available to firms and research laboratories rather than relying on broad brush carrot and stick approaches.     

The role of governance in privatisation reforms: A European analysis

This study analyses the role of regulatory and institutional context, denoted as governance, on privatisation reforms. Governance is represented by the Worldwide Governance Indicators and privatisation data are provided by the Privatization Barometer project. We found empirical evidence on a sample of 22 European countries over the period 2002–2013, through estimating several econometric equations that control endogeneity. Our findings suggest that privatisation is shaped by the quality of regulation and institutions. More specifically, privatisation reforms in modern Europe tend to be more relevant when governance quality is reduced, while results suggest the contrary effect in the case of transitional economies.     

The self-organisation of strategic alliances

This paper is based upon an analysis of various experiences of electronic commerce. It analyzes the role of private institutions in the organization of systems of transactions. Private institutions take place between public institutions (that are insufficiently specialized) and inter-individual governance structures (that do not benefit from scale and cognitive economies). These private institutions are very diverse and the paper points out the various types of services provided by diverse institutions depending on their constitutional mode.

While various possible institutional frameworks have very different features in terms of coordination, there is no most efficient institutional environment. Moreover, the emergence process of these institutional framework strongly influences their ability to survive. Very different institutional frameworks can therefore organize electronic trade quite differently in the various industries     

POLITICAL INSTITUTIONS,GOVERNANCE, AND CONSUMPTION EXPENDITURE IN DEVELOPING COUNTRIES: A PANEL DATA ANALYSIS

This article aims at identifying the determinants of government expenditures of developing countries by placing emphasis on the political institutions and governance variables, which have not been addressed so much in the previous literature. Using a panel data analysis for 97 developing countries from the period 1984 to 2004, this study finds evidence that controlling for economic, social, and demographical factors, political institutional and governance variables significantly influence the consumption expenditure in developing countries. Political institutional variables such as the type of political ruling and political power in the parliament positively influence consumption expenditure; on the contrary, governance variables such as corruption influence negatively. Furthermore, we find that autocratic governments with military ruling are not particularly accommodative toward consumption expenditures as the public spending significantly shrinks under military dictatorship compared with other forms of governance. In order to check consistency of our findings, we ran alternative specifications as well as conducted extreme bound tests. Our results largely survived these tests showing robustness of our findings. (JEL E01, E02, E61, E62, H2, H4, H5, H6, O11, O5)     

THE MUNICIPAL WASTE MANAGEMENT SECTOR IN EUROPE: SHIFTING BOUNDARIES BETWEEN PUBLIC SERVICE AND THE MARKET

ABSTRACT: This paper provides a comparative assessment of the organization of urban waste management in selected European countries and discusses the regulatory implications of the ongoing evolution. Using an institutional economic approach, focused on governance of transactions along the value chain, we argue that: i) there is evidence of an increasing shift towards operator‐based integrated systems; ii) the emphasis put on material and energy recovery opens the market far beyond the traditional legal monopolies established for managing urban services. These results pose new challenges for economic regulation and make it more complicate to trace the boundary between the public service and the market domain. Spaces for competition in the market have become much larger, but the role of public regulation and planning are nonetheless more far‐reaching than in the past.     

Foreign aid and governance in Africa

This paper investigates the effect of foreign aid on governance in order to extend the debate on foreign aid and to verify common positions from Moyo’s ‘Dead Aid’, Collier’s ‘Bottom Billion’ and Eubank’s ‘Somaliland’. The empirical evidence is based on updated data from 52 African countries for the period 1996–2010. An endogeneity robust instrumental variable Two-Stage-Least Squares empirical strategy is employed. The findings reveal that development assistance deteriorates economic (regulation quality and government effectiveness) and institutional (corruption-control and rule of law) governance, but has an insignificant effect on political (political stability, voice and accountability) governance. While, these findings are broadly in accordance with Moyo and Collier on weak governance, they neither confirm the Eubank position on political governance nor the Asongu stance on the aid-corruption nexus in a debate with Okada and Samreth. The use of foreign aid as an instrument to influence the election and replacement of political leaders in Africa may have insignificant results. It is time to solve the second tragedy of foreign aid and that economists and policy makers start rethinking the models and theories on which foreign aid is used to influence economic, institutional and political governance in recipient countries.     

Competition and Industrial Organisation in Transition Markets: What Can We Derive from Empirical Studies?

Competition is the basic concept for both industrial organisation theory and institutional economics. Transition economies, including Russia, are natural laboratories allowing us to trace the emergence of competition, the influence of competition on the conduct of market participants, the relationship between competition and market structure and the institutional foundation of competition. This article provides a summary of the results of empirical studies in the above area. We try to explain some puzzles concerning the influence of competition on the conduct of Russian market participants and interpret the results in the framework of institutional and industrial economics. Overall, the results of empirical studies can be generalised as follows. Competition in Russian markets has been gaining momentum over the last 15 years. The results of empirical studies have confirmed the assumption that competition is an incentive for active restructuring of privatised enterprises. Many of the data collected are evidence in favour of the endogenous market structure approach. From the institutional viewpoint, the history of the evolution of Russia's transition economy shows interdependence between private property and competition: better protection of property rights is a precondition for the development of competition. At the same time, the model of corporate governance that allows the property rights of private owners to be protected in the Russian institutional environment restricts organisational diversity and therefore competition in Russian markets.     

Institutional Differences between Developed Countries

There are various institutional differences between developed countries. This paper examines two of them---corporate governance and welfare systems---in the context of historical development. It has been usual in comparing developed countries to categorise their institutions as being either Anglo-American or European Continental.
However, this paper shows that this typology may not be applicable to welfare systems, particularly in the American case. In regard to banking institutions, regulation has sometimes played a major role in determining historical development.     

Electricity Market Restructuring: Reforms of Reforms

Electricity systems present complicated challenges for public policy. In many respects these challenges are similar to those in other network industries in providing a balance between regulation and markets, public investment and private risk taking, coordination and competition. As with other such industries, naturally monopoly elements interact with potentially competitive services, but electricity has some unusual features that defy simple analogy to other network industries. Following a reversal of a long-term decline in real electricity prices, the last two decades of the twentieth century were for the United States a time of reform, reaction, and reforms of reforms in electricity systems, moving slowly towards greater reliance on competition and markets. Changing technology, new entrants in the generation market, and a legislative mandate to provide access to the essential transmission facility accelerated a process that required major innovations in institutions and operations. Complete laissez faire competition is not possible, and the details of an efficient competitive electricity market are neither obvious nor easy to put in place. The benefits of reform may be substantial, but they require careful attention to market design. A review of the past identifies some choices on the road ahead.     

Governing Genomics: New Governance Tools for New Technologies?

This paper considers some of the 'new tools of governance' and how they might apply to the life science industries. Through a study of a number of UK government-industry 'task forces' and recent world events in drug regulation it identifies two opposing trends in play and suggests that there are actually limits to the all pervasive notion of governance. Instead, the multi-faceted policy and regulatory situation that applies to the life sciences is leading to the existence of a government-governance continuum where different aspects of genomics and life science technologies sit at different points; contrasting the role of the state in controlling and framing the context for the implementation of innovations in life sciences through the regulatory system with the more participative forms of policy-making that are being fostered both to promote national competitiveness and encourage public acceptance of these new technologies.