Sustainable development and circular economy: The role of institutional promotion on circular consumption and market competitiveness from a multistakeholder engagement approach

The transition from a linear economy to a circular economy (CE) is a real challenge to achieve long‐term sustainability. To push CE in the market, institutional promotion could become a key driver to positively impact both circular consumption and the competitiveness of the market. This paper analyzes the influence that soft and hard initiatives have on circular consumption and market competitiveness. Based on a survey of 1,281 respondents from different types of stakeholders, structural equations modeling statistical analysis was run. Results show that soft initiatives support the achievement of both objectives, whereas hard ones only influence greater circular consumption. However, the perception of the different stakeholders considered is very heterogeneous. It is indicative that not all institutional promotion initiatives are effective. Thus, institutions should guide, in an adequate and differentiated manner, their efforts to promote CE and sustainable development depending on the stakeholder they are targeting.     

Dependence of Informal Interest Rates and Level of Lenders’ Influence in the Informal Loan Market in Thailand

Informal finance with usurious interest rates seems to be the last resort for the poor in many developing countries. In Thailand, informal credit lenders can freely set up extortionate interest rates and use controversial enforcement actions to pressure borrowers to repay loans, because that legal enforcement is not practical due to the low punishment levels for those lenders. Despite widespread interest in the determinants of the informal interest rates, it remains a largely unexplored area. This study investigates whether level of lenders’ influence over the borrower, and some characteristics of the borrowers, are related to informal interest rates, enabling the rates to be classified into particular categories. Ordered logistic regression is used to analyze the data. The investigation was based on information collected in a survey presented to a sampled population of 694 participants from Bangkok, Nonthaburi, Phathum Thani, and Samut Prakan where the number of informal loans during the last seven years is highest when compared to other regions of the country. The results suggest that the level of lenders’ influence over the borrower in order to obtain a loan correlates with the informal interest rates applied. Moreover, some characteristics of a borrower, i.e., debt-to-income ratio and high level of familiarity between an informal lender and a borrower, also significantly affect the rates.     

Industrial loans and market structure

Based on the observation that financing is one of the main obstacles to create new firms, this paper deals with the interactions between the market structure of both the banking sector and the borrowing industries. We consider that firms’ installation costs are financed by means of industrial loans from specialized banks. With endogenous entry in banking activity as well as in the borrowing industry, we find that a natural oligopoly emerges in both sectors if the entry cost in the industrial sector is small enough, relative to the banks’ entry cost.     

Inflationary Rigidities and Orthodox Stabilization Policies: Lessons from Latin America

Orthodox stabilization programs in Latin American countrieshave been notoriously unsuccessful in combating inflation, despitethe imposition of stringent cuts in government deficits. Inmost cases inflation came down only slowly and temporarily,with concomitant declines in growth and employment. The Bolivianprogam, one of the only Latin American successes, is contrastedwith those of Argentina, Brazil, Chile, and Mexico. The problemsof dealing with chronic inflation are compared with those ofhyperinflationary countries, and the influence of price andwage rigidities, expectations, and credibility is explored.The study shows that fiscal restraint is a necessary but notsufficient condition for success, and that sound managementof nominal variables (the exchange rate and money supply) arealso necessary. The critical role of credibility is linked withprice and wage rigidities in the chronic inflation countries,whereas the unsustainability of hyperinflation is seen to increasethe credibility of and thus the potential for successful stabilizationprograms.     

Convergence among EU regions, 1990–2001

This article focuses on convergence in terms of output per working age person across regions in the European Union for the period 1990–2001. Controlling for the quality of national institutions, the authors investigate whether the status of “objective 1” region improves the speed of convergence as compared to what would be expected given the regions' initial conditions. They find evidence of conditional convergence among EU regions, with the quality of national institutions having a positive impact, but no evidence of a correlation between eligibility for objective 1 and faster convergence.     

Group Affiliation and Ownership Concentration as Determinants of Capital Structure Decisions: Contextualizing the Facts for an Emerging Economy

This study considers the firm’s affiliation with business groups and the ownership structure as determinants of leverage decisions in Chilean firms. The major findings show that group-affiliated firms take advantage of internal capital markets and transactions with related parties (e.g., low transference price or loans at competitive interest rates) that reduces the demand for external debt. Majority shareholders in affiliated firms behave as controllers of managers, on the one hand, and avoid the supervisory role of debt, on the other hand. In stand-alone firms, supervision led by majority shareholders is complemented by the monitoring role of debt through higher levels of leverage. We conclude that further developments in capital structure theories adjusted to the particularities of the different institutional contexts are needed.     

WHEN DO HETERODOX STABILIZATION PROGRAMS WORK?: Lessons from Experience

What advantages and disadvantages does the heterodox strategyoffer to stabilization programs in countries with chronic highinflation? Heterodox stabilization programs, in our definition,are those that support orthodox policies— that is, tightfiscal policy and a fixed exchange rate—with the initial,temporary use of incomes policies— that is, price andwage controls. This evaluation, based on several heterodox programs,successful and unsuccessful, from the 1960s and 1980s in LatinAmerican countries and Israel, affords four principal lessons: * The rapid reduction in inflation at the beginning of heterodoxprograms (which usually comes about at small cost) is the easypart; the problem is to maintain price stability over time. * Incomes policies in heterodox stabilization programs are justifiedonly in countries with high chronic inflation, where persistentinflation is more pervasive and problematic. * There is a case for a bigger fiscal adjustment in heterodoxthan in orthodox programs because of the risk that a programwith price controls may be misperceived as a populist devicefor achieving price stability without adjusting. * The failure of a heterodox program is more likely to destabilizeinflation than is the failure of an orthodox program.      

Convergence in the Spanish and Portuguese NUTS 3 regions: An exploratory spatial approach

Since their accession to the European Union in 1986, both Portugal and Spain have benefited from strong financial support. Both countries have experienced considerable growth in income per capita, converging towards average European levels. However, several studies suggest a high degree of persistence of regional asymmetries within the countries. This paper empirically analyses convergence among NUTS 3 regions of the Iberian Peninsula between 1995 and 2008. The results reveal divergent national trends and indicate no evidence of catching-up effects among the poorest regions, confirming the existence of economic clusters.