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This paper sheds light on the role of firm social connectedness in multiple banking relationships, controlling for other firm-level determinants. Using a large sample of Italian manufacturing firms, we develop novel text-based measures of firm connectedness and multiple banking relationships. We measure firm connectedness by exploiting information on the number of links that a non-financial firm has with any other non-financial firm through individuals who hold a position (such as shareholder, administrator, and technical or administrative employee) in both firms. The paper finds empirical evidence that firm connectedness is positively associated with the number of banks lending to the firm. This effect is stronger for younger, smaller, and more indebted firms, suggesting that firm connectedness favors the diffusion of soft information and ultimately their access to multiple sources of credit by reducing negotiation and transaction costs. Connectedness, on the other hand, does not seem to reduce firms' incentives to increase the number of lenders in order to minimize hold-up risks. [ABSTRACT FROM AUTHOR]

We present evidence that several popular low-frequency measures of effective spread suffer from a volatility-induced bias and that volatility is the primary driver of the variation of these liquidity proxies. Using data for U.S. equities and major foreign exchange rates, we show that the bias arises when the effective spread is small relative to volatility. We document that the bias has become more acute over time and show that volatility-biased measures fail to replicate some well-known results in empirical finance. We conclude by providing guidance on the choice of low-frequency measures in empirical applications. Authors have furnished an Internet Appendix , which is available on the Oxford University Press Web site next to the link to the final published paper online. [ABSTRACT FROM AUTHOR]

We examine the predictability of stock returns using implied volatility spreads (VS) from individual (nonindex) options. VS can occur under simple no-arbitrage conditions for American options when volatility is time-varying, suggesting that the VS-return predictability could be an artifact of firms' sensitivities to aggregate volatility. Examining this empirically, we find that the predictability changes systematically with aggregate volatility and is positively related to the firms' sensitivities to volatility risk. The alpha generated by VS hedge portfolios can be explained by aggregate volatility risk factors. Our results cannot be explained by firm-specific informed trading, transaction costs, or liquidity. [ABSTRACT FROM AUTHOR]

Our study assesses the performance of a threshold vector error correction model (TVECM) for the analysis of spatial price transmission. We specifically determine how inference about price regimes and the process of price adjustment to the established long-run equilibrium is affected when the stochastic transaction cost is exogenously or endogenously determined in fixed and flexible threshold models. The study first generates non-stationary but cointegrated price series and transaction costs based on true price transmission parameters: percentage of violations of spatial equilibrium, speed of price adjustment, threshold and inaction band using Monte Carlo simulations. Then, the generated data are used to estimate TVECMs under various assumptions on transaction cost variation and threshold specification. Finally, estimates of price transmission parameters are compared with the true parameters to evaluate the performance of model specifications. Our results indicate that the flexible TVECM accounting for transaction cost variation outperforms the standard fixed TVECM, which is consistent with findings from many previous studies in the literature. Our study also finds that although the flexible TVECM performs better than the fixed TVECM, it may not fully address the limitation of linear models when a real-world data represents a complex nonlinearity in the spatial price transmission. [ABSTRACT FROM AUTHOR]

The housing market in England is in crisis, in terms of both availability and costs of housing. Although it is not a solution for everyone, many advocates of the tiny house movement promote developing small houses that are financially affordable and environmentally sustainable. There is limited research on tiny houses, and the hidden costs of developing this type of housing have not been investigated. This paper addresses this gap through exploring the perceived transaction costs associated with developing tiny houses in England, and how these costs can be reduced. It was found that there are considerable transaction costs in different stages of the development process, including searching for information, finding suitable land, obtaining planning permission, and constructing the house. The paper concludes that tiny houses require enabling legislation in planning policy so that planning permission is easier to obtain. Also, awareness of tiny houses needs to be raised so that local planning authorities and the public understand the concept better. [ABSTRACT FROM AUTHOR]

This article examines how imperfect legislative agreements offer an opportunity for higher courts' intervention in policymaking. In concrete terms, it explains that lawmakers in certain situations avoid resolving apparent conflicts of interest due to high transaction costs in the legislative process, maintaining statutory criteria considered transparently inefficient or by simply developing regulatory arrangements with a significant degree of indeterminacy. Employing a simplified model of rational choice behaviour, the article asserts that those scenarios constitute an opportunity for strategic involvement of the higher courts in crafting public policy. As an unintended consequence of the imperfect legislative agreements, justices look at them as an indicator that members of the other branches of government have reached weak political compromises or are unable to impose their policy preferences. Therefore, justices can exercise discretion, foreseeing prospects to increase their authority while the risk of an overruling or the implementation of other retaliatory measures remains low. [ABSTRACT FROM AUTHOR]

Despite interest in preindustrial markets, archaeological discussions have largely been limited to proposing methods to determine the presence or absence of market exchange in ancient societies. While these contributions are important, methodological limitations have prevented theoretical considerations of the emergence and evolution of marketplaces and market exchange in prehistory. We propose that agent-based modeling provides a window to explore physical conditions and agent behaviors that facilitate the emergence of customary exchange locations and how such locations may evolve into socially embedded institutions. The model we designed suggests that simple bartering rules among agents can generate concentrated locations of exchange and that spatial heterogeneity of resources is the most important factor in facilitating the emergence of such locales. Furthermore, partner-search behaviors and exchange of information play a key role in the institutionalization of the marketplace. The results of our simulation suggest that marketplaces can develop, even with the absence of formalized currency or central planning, as a consequence of collective strategies taken up by agents to reduce exchange partner-search costs and make transactions more frequent and predictable. The model also suggests that, once established as a social institution, marketplaces may become highly conservative and resistant to change. As such, it is inferred that bottom-up and/or top-down interventions may have often been required to establish new marketplaces or relocate marketplaces to incorporate new resources, resolve supply–demand imbalances, or minimize rising economic costs that arise as a result of social, political, and economic change. [ABSTRACT FROM AUTHOR]

• Digital government (DG) can significantly promote corporate green innovation (CGI). • Digital government promotes CGI by digitizing the business environment. • Digital government promotes CGI by reducing transaction costs. • Digital government promotes CGI by increasing green investment. • The impact of DG on CGI varies across different companies, industries, and regions. This study leverages data of China's A-share listed companies spanning from 2010 to 2020, using the Internet Plus Government Services initiative as a quasi-natural experiment. By employing the difference-in-differences method, it empirically examines the empowering effects and underlying mechanisms of digital government on corporate green innovation. Research findings are as follows: 1) Digital government significantly enhances both the quantity and quality of corporate green innovation. 2) Corporate green innovation can be enhanced by digital government through promoting the digitization of the business environment, reducing transaction costs for enterprises, increasing R&D investment and green investments. 3) The enabling effects of digital government on corporate green innovation are particularly evident in companies with better environmental information disclosure, elevated levels of digital technology application, non-heavy-polluting industries, and enterprises located in regions with stricter environmental regulations. From the perspective of internalizing digital technology into government transformation, this study provides important insights for the future coordination of policies related to digital and green development. [ABSTRACT FROM AUTHOR]

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This paper proposes a cross‐section long short‐term memory (CS‐LSTM) factor model to explore the possibility of estimating expected returns in the Chinese stock market. In contrast to previous machine‐learning‐based asset pricing models that make predictions directly on equity returns, CS‐LSTM estimates are based on predictions of slope terms from Fama–MacBeth cross‐section regressions using 16 stock characteristics as factor loadings. In line with previous studies in the context of the Chinese market, we find illiquidity and short‐term momentum to be the most important factors in describing asset returns. By using 274 value‐weighted portfolios as test assets, we systematically compare the performances of CS‐LSTM and three other candidate models. Our CS‐LSTM model consistently delivers better performance than the candidate models and beats the market at all different levels of transaction costs. In addition, we observe that assets with smaller cap are favored by the model. By repeating the empirical analysis based on the top 70% of stocks, our CS‐LSTM model remains robust and consistently provides significant market‐beating performance. Our findings from the CS‐LSTM model have practical implications for the future development of the Chinese stock market and other emerging markets. [ABSTRACT FROM AUTHOR]

Purpose: This paper aims to explore how the effect of knowledge sharing through mergers and acquisitions (M&As) on new product development (NPD) performance is contingent upon two different types of control mechanisms: behavior control and outcome control. Design/methodology/approach: Leveraging the theory from transaction cost economics, this study provides answers regarding the roles of behavior and outcome controls. The hypotheses were tested empirically across a sample of 143 UK cross-border M&A firms. Findings: The results provide the increasing call for an integrative perspective and theory in the M&A literature in that knowledge sharing through M&As is deemed decisive for NPD performance, and while both control mechanisms are effective, behavior control is more effective in enhancing NPD performance than outcome control. Originality/value: The relevant M&A studies lack insights into the use of control mechanisms as a way to monitor the target firm's behavior and performance and reduce the risk of its opportunistic behavior. Appreciating the need for M&A literature that elaborates control strategy and structure, this study incorporates behavior control and outcome control into M&A mechanisms. [ABSTRACT FROM AUTHOR]

This study investigates the pricing strategies of a mobile payment platform connecting merchants and customers who may bypass the platform and trade in cash. Our analytical model incorporates cross-side network externalities at both sides of the platform. We find that the optimal pricing strategy involves cross-subsidization, including subsidizing customers to register for the service while charging the merchants per transaction. Moreover, the technology option adopted by the platform influences this optimal pricing format. In particular, the platform should subsidize customers more if the payment technology imposes larger transaction costs on customers and charge merchants more if banks demand a higher payment processing fee. Our major findings remain qualitatively valid when per-transaction subsidy is available and the marginal benefit of cross-side network externalities diminishes. Finally, the presence of a platform improves social welfare if the per-transaction subsidy sufficiently stimulates consumption on the platform. [ABSTRACT FROM AUTHOR]

Currently, China is the largest carbon emitter and the pressure of carbon reduction in China is very severe. However, the lack of technological innovation momentum is a bottleneck factor that restricts carbon reduction in Chinese cities. In this context, open innovation is gradually replacing closed innovation and playing an increasingly important role in improving the technological innovation performance of enterprises. Analysis shows that a large amount of literature has explored the impacts of industry technological innovation and green technology innovation on carbon emissions, while there is little research on how open innovation affects carbon emissions. This study calculates cities' open innovation indicators and the carbon emission intensity indicators of listed enterprises. Using a three-fixed-effects model, it examines the effect and mechanism of open innovation on carbon emissions of enterprises and verifies the heterogeneity effect. The research results indicate that open innovation can significantly reduce the carbon emission intensity of enterprises by reducing transaction costs and upgrading the industrial structure. Further heterogeneity analysis shows that open innovation has an obvious carbon emission reduction effect on non-state-owned, polluting, small- and medium-sized enterprises and enterprises in central cities. [ABSTRACT FROM AUTHOR]

This paper introduces the concept of citizenship rent to help explain the apparently contradictory coexistence of liberalising economic reforms and the entrenchment of patriarchal values. Citizenship rent (CR) is defined as the financial flows that move from the state to the citizen in the form of entitlements, employment, and access to state-subsidised goods, labour and business opportunities. Our innovative proposal substitutes transaction cost economics’ assumption of market selection for a selection by patriarchy to show how gender plays a central role in the reproduction of the asset specificities that increase transaction costs. This illustrates how an extractive, asset-based economy, like Kuwait's, can afford to double down on conservative social values, even at a considerable fiscal price, as long as the transaction costs of getting oil to the international markets are not increased through social disruption or political uncertainty. Rather than examining how women’s social reproductive work subsidises social and political stability, CR reveals women’s role in sustaining assets valuable to the state. This paper demonstrates that a close examination of the social values that inhibit transactions can also reveal patriarchal structures in rentier capital and exhibit a need to further analyse the patriarchal transaction costs that shape and sustain societies. [ABSTRACT FROM AUTHOR]

Adapting to horizontal market structures faces several drivers and challenges in the context of sustainable energy transition. The inherently decentralized nature qualifies blockchain technology as the major technical driver in the transition to peer-to-peer (P2P) energy market models. One major technical challenge encountered in the transition process is the active power loss associated with transactions, which can cause network congestion and economic loss. A review of existing research on the P2P transaction active power loss problem, examining the potential role of blockchain and the consequent additional costs incurred by blockchain transactions, is presented in this article. Consolidating major points and guiding observations for future research are provided to address the challenges while adapting to the potential driving blockchain technology. A conceptual peer-to-peer trading framework that considers blockchain transaction cost and active power loss compensation is also presented. [ABSTRACT FROM AUTHOR]

Previous studies have demonstrated that tangible and intangible transaction costs influence spatial price differences. The difference between the prices at which producers sell their goods, and the prices at which consumers purchase them is exacerbated by transaction costs. This indicates that farmers receive a lower price from buyers, who then charge consumers a greater price at urban marketplaces. However, existing documentation provides limited information on the relationship between spatial price differences and their drivers. Most research focused primarily on the co-movement of prices and the co-integration test, with little attention paid to the effects of transaction costs on spatial price differences. Thus, the paucity of information in the literature motivated the undertaking of this specific study. Therefore, this study assessed the impact of transaction costs on spatial price differences of maize in the Njombe District of Tanzania. A semi-structured questionnaire was developed and employed to collect information from maize traders. Also, checklists were used to collect information from market leaders. Both descriptive and quantitative analyses were undertaken. In the descriptive analysis, means and percentages were generated. On the other hand, in the quantitative analyses, the Ravalion model which is based on the co-movement of prices, was modified to fit the study in question and estimated. The outputs generated from the modified model were used for inferences. The estimated model results showed that transaction costs (transportation costs, years of schooling, bribery, and the number of maize bags carried in one trip) have significant effects on spatial price differences. Moreover, market leaders revealed that because of the poor quality of the roads, individual farmers find it challenging to deliver their produce to the Njombe market. Consequently, they obtain a low price when they sell their produce at the farm level. The study recommends deliberate measures to reduce transaction costs, such as improving urban and rural infrastructure, simplifying bureaucratic procedures that provide room for corruption, and, finally, promoting large-scale production or collective actions to reduce transaction costs. [ABSTRACT FROM AUTHOR]

Past empirical studies demonstrate a positive connection between revenue concentration and organizational efficiency. This supports the idea that concentrating revenue helps minimize transaction costs of nonprofit organizations, resulting in greater efficiency. However, this finding contradicts the belief that revenue concentration increases the risk of revenue volatility, leading to service delivery disruptions and reduced efficiency in nonprofits. Moreover, these studies have used an efficiency measure that might not be suitable. To address this, our study examines the relationship between revenue concentration and organizational efficiency using a more appropriate measure. Analyzing data from Habitat for Humanity, we discover a U-shaped relationship: nonprofits are most efficient when fully diverse or fully concentrated in revenue. These findings contribute to the ongoing debate on nonprofit revenue diversification, with significant implications for nonprofits. They also highlight the importance of using more appropriate efficiency measures in future scholarly research. [ABSTRACT FROM AUTHOR]

I measure the monetary value of ex-ante bargaining costs associated with China's rural land rental market, confirming the previously unverified existence of transaction costs in this market. I demonstrate that the ex-ante bargaining costs associated with contractual formality represent the main transaction costs that hinder market progress. In a three-step theory, I model the process through which transaction costs are generated. First, uncertainty regarding ex-post contract violations caused by non-agricultural income shocks and location specificity in China's fragmented farmland results in conflicting partner preferences. Second, the compromise mechanism that facilitates efficient bargaining makes the agent facing lower compromise costs in a transaction more likely to compromise. Third, ex-ante bargaining costs are generated in inefficient bargaining when theoretically predicted agents refuse to compromise. Using a subsample of data introduced in Yang (2020), I find that ex-ante bargaining costs are 126.5 RMB and 35.4 RMB per mu per year, respectively, for renting-out agents and renting-in agents who refuse to compromise in contract negotiations. [ABSTRACT FROM AUTHOR]

Small and medium-sized enterprises (SMEs) are fundamental to national economic development through poverty alleviation and employment creation. However, credit constraints severely challenge small and medium-sized enterprises' (SMEs) performance. Therefore, this study aims to establish the link between credit constraints and the financial performance of SMEs. The paper further examines whether the differences in performance between constrained and unconstrained firms can contribute to poverty reduction. To this end, the endogenous switching regression was applied to the cross-sectional data from a firm-level survey involving 520 SMEs from Cameroon. The paper considered four credit constraint categories: risk, quantity, price, and transaction cost. Results reveal that 74% of SMEs are credit constrained, and the majority (43%) are quantity constrained. Interestingly, risk and price-constrained SMEs are mainly more profitable than unconstrained SMEs, while quantity and transaction-cost-constrained SMEs are less profitable than their counterparts. Consequently, the impact on poverty reduction is equally varied. The scholarly and policy implications of the study are that alleviating credit constraints among SMEs does not always augment the profitability of the SMEs and contributes towards poverty eradication. [ABSTRACT FROM AUTHOR]

Despite the growing importance of servitization as a source of competitiveness for manufacturers, limited knowledge exists about organizational issues of servitization. Drawing on transaction cost economics theory and a configuration theoretical perspective, our study illuminates different organization architectures for servitization and how firms align such architectures with servitization approaches to achieve high financial performance. We analyze qualitative data based on interviews with 22 managers and quantitative data from a survey of 161 equipment manufacturers. The results indicate that manufacturers mostly opt for one of three organization architectures for servitization: internal product business unit, internal specialized service business unit, or external service provider. In addition, they reveal equifinal configurations of servitization characteristics to achieve high financial performance for each organization architecture. The internal specialized service business unit turns out as a flexible organization architecture to successfully provide smoothing, adapting, and substituting services. The use of an external service provider is less suited for the provision of adapting and substituting services, which require more knowledge specialization and coordination. All three organization architectures can be used to provide smoothing services. In summary, the results may serve as decision-making templates for aligning organization architecture, offering characteristics, and service provider integration to pursue servitization successfully. [ABSTRACT FROM AUTHOR]

This paper adopts a transaction costs (TCs) approach towards analysing the transactions of local governments in the service sector. The objective of the paper is to expand the analysis of the TCs concept by going beyond the conventional service-type-driven models. This study examines the cost of monitoring (MC) service contracts in Poland as perceived by local government officials, focusing on different forms of externalisation. The research involves utilising quantitative methods to examine how five distinct governance structures influence perceptions of TCs. The study suggests that the entity type, whether a public or private agent, affects the perceptions of monitoring costs in contractual agreements. The research found that the monitoring costs associated with public sector contracts are perceived to be higher than in public-private transactions, challenging previous findings. Further research on Inter-Municipal Cooperation should focus on the final product quality monitoring area, representing the most costly aspect of multi-principal structures. [ABSTRACT FROM AUTHOR]

This research introduces min-max portfolio optimization models that incorporating transaction costs and focus on robust Entropic value-at-risk. This study offers a unified approach to handl the distribution of random parameters that affect the reward and risk aspects. Utilizing the duality theorem, the study transforms the optimization models into manageable forms, thereby accommodating the underlying random variables' discrete box and ellipsoidal distributions. The impact of transaction costs on optimal portfolio selection is examined through numerical examples under a robust return-risk framework. The results underscore the importance of the proposed model in safeguarding capital and reducing exposure to extreme risks, thus outperforming other strategies documented in the literature. This demonstrates the model's effectiveness in balancing maximizing returns and minimizing potential losses, making it a valuable tool for investors that seek to navigate uncertain financial markets. [ABSTRACT FROM AUTHOR]

I examine the role of costly consumer search for the pricing of deposits. Estimates of a model of heterogeneous search cost households reveal a large fraction of high‐search‐cost depositors composed of elderly and less financially sophisticated households. Those households grant banks significant monopoly power that results in low and asymmetric interest rate pass‐through. The predictions of the estimated model are consistent with responses in the Survey of Consumer Finances to questions related to financial sophistication, search for investment return, and deposit allocations across multiple bank accounts. The estimated model also reveals a nonmonotone relationship between bank entry, deposit rates, and consumer surplus. [ABSTRACT FROM AUTHOR]

Scholars have long regarded government fiscal stress as a crucial factor driving public service outsourcing; however, further investigation is still needed to determine whether service outsourcing in turn helps governments improve fiscal conditions. Public choice theory suggests that outsourcing services can lead to efficiency improvement and cost savings. Nevertheless, transaction costs theory implies that the costs associated with service outsourcing may offset or even outweigh its potential benefits. Moreover, the extent of transaction costs depends on contextual factors such as market competition, bureaucrat support, and government management capacity. Empirically, we employ an instrumental variable estimation approach to examine the impact of service outsourcing on the budget balances and debt levels of U.S. municipalities. We find that service outsourcing improves government fiscal conditions, with contextual factors playing an important role in moderating this effect. Additionally, outsourcing services to different types of contractors has varying implications for government fiscal conditions. [ABSTRACT FROM AUTHOR]

Although relationship commitment (RC) is the foundation for inter-firm information sharing (IS) activities, extant studies have only discussed the influence of normative RC on IS but ignored the impact of instrumental RC and the moderators that affect these relationships. Combining transaction cost economics (TCE) and social exchange theory (SET), this study probes the impacts of normative RC and instrumental RC on IS content and IS system between manufacturers and suppliers and investigates the moderating effects of environmental uncertainty (EUN) on these relationships. Using the data collected from 410 Chinese manufacturers, this research finds that normative RC promotes IS content and IS system, but instrumental RC generates non-significant impacts on them. However, these effects significantly change when the business environment becomes more uncertain, demonstrating the necessity to consider EUN as the moderator. Besides, supplier IS content and IS system improve service performance and IS system increases IS content. [ABSTRACT FROM AUTHOR]

We investigate the out-of-sample diversification benefits of cryptocurrencies from a generalised perspective, a cryptocurrency-factor level, with traditional and machine-learning-enhanced asset allocation strategies. The cryptocurrency factor portfolios are formed in an analogous way to equity anomalies by using more than 2000 cryptocurrencies. The findings indicate that a stock–bond portfolio incorporating size- and momentum-based cryptocurrency factors can achieve statistically significant out-of-sample diversification benefits for investors with different risk preferences. Additionally, machine-learning-enhanced asset allocation strategies can boost the traditional approaches by enriching (shrinking) the distributions of weights allocated to potentially effective cryptocurrency factors. Our findings are robust to (i) the inclusion of transaction costs, (ii) an alternative benchmark portfolio, and (iii) a rolling-window estimation scheme. [ABSTRACT FROM AUTHOR]

The rapid development of rural e‐commerce in China has caught the attention of economists around the world. Through incorporating rural e‐commerce platform into the general equilibrium model, this paper theoretically analyzes the impacts of rural e‐commerce platform on industrial structure and the potential mechanisms. Then, taking the exogenous policy of Comprehensive Demonstration of National E‐commerce into Rural Areas in China as a quasi‐experiment, this paper constructs a staggered difference‐in‐differences model to empirically examine how rural e‐commerce platforms affect the output proportion of nonagricultural sector with samples of 2305 counties in China from 2009 to 2019. The findings indicate that the construction of rural e‐commerce platform promotes the transformation of industrial structure through technological advances and reduction of transaction costs. [ABSTRACT FROM AUTHOR]

The authors analyze trading costs across regions and asset classes using unique data on 2,022 portfolio transitions from February 2016 to December 2023 comprising over $3.1 trillion in trade value. Realized portfolio trading costs are consistent with pretrade forecasts; even relatively large and complex trades can be executed at modest cost. The authors use count-data models to determine the optimal trade horizon as a function of portfolio characteristics. Trade horizons are similar across equities and fixed income and increase with trade risk, value, and complexity. These results can be used by investors to better understand the potential capacity where urgency of trading is not a key determinant and can be applied to estimating the capacity and transaction costs in factor-based strategies. [ABSTRACT FROM AUTHOR]

Selecting a suitable project delivery method is one of the most critical decisions responsible for project success in heritage conservation. This is an area where projects have greater uncertainties and governance issues in comparison to other building projects. India has a huge inventory of built heritage sites, but the heritage conservation sector is highly fragmented, with a wide range of project delivery methods. This paper discusses the selection of project delivery in the Indian context, using the theoretical lenses of agency theory, transaction cost economics (TCE), and institution theory. A conceptual framework has been proposed to explain the selection based on economical and institutional constructs. Our conclusion is that when institutional factors are weak, projects are executed departmentally or through non-priced contracts. In contrast, strong institutional forces discourage non-priced contracts and replace them with priced contracts. [ABSTRACT FROM AUTHOR]

In the digital era of governance, few studies have analysed the influence of digital government on micro economies. To fill this gap, we explore the nexus between digital government and firm total factor productivity (TFP), and uncover the potential transmission channels behind this connection by focusing on Chinese listed firms from 2010 to 2017 and utilizing panel regression with firm-, year-, and province-fixed effects. Our findings confirm that digital government has constructive effects on firm TFP. Furthermore, empirical results suggest that this favourable impact can be transmitted through three channels of firm transaction costs and innovation, digital infrastructure construction, and government-market relationships. Further analysis reveals that the beneficial effect of digital government on firms is more significant in provinces with low fiscal transparency and complex topography, indicating that digital government compensates for the disadvantages of low fiscal transparency and inconvenience of steep terrain. Based on these conclusions, we provide suggestions for government digitalization to improve the performance of government-microeconomic complementation. [ABSTRACT FROM AUTHOR]

Energy performance-based contracts (EPCs) offer a promising solution for enhancing the energy performance of buildings, which is an overarching step towards achieving Net Zero Carbon Buildings, addressing climate change and improving occupants' comfort. Despite their potential, their execution is constrained by difficulties that hinder their diffusion in the architecture, engineering, construction, and operation industry. Notably, the Measurement and Verification process is considered a significant impediment due to data sharing, storage, and security challenges. Nevertheless, there have been minimal efforts to analyze research conducted in this field systematically. A systematic analysis of 113 identified journal articles was conducted to fill this gap. A paucity of research tackling the utilization of digital technologies to enhance the implementation of EPCs was found. Consequently, this article proposes a framework integrating Digital Twin and Blockchain technologies to provide an enhanced EPC execution environment. Digital Twin technology leverages the system by monitoring and evaluating energy performance in real-time, predicting future performance, and facilitating informed decisions. Blockchain technology ensures the integrity, transparency, and accountability of information. Moreover, a private Blockchain infrastructure was originally introduced in the framework to eliminate high transaction costs related to on-chain storage and potential concerns regarding the confidentiality of information in open distributed ledgers. [ABSTRACT FROM AUTHOR]

This study investigated the extent to which the low-risk anomaly is present in a pooled sample of nine African frontier equity markets from March 2004 to July 2023. Portfolio-level analysis was used to investigate the total stock returns of equally weighted quintile portfolios sorted on historical volatility. The presence of a monotonic relationship between historical volatility and subsequent returns was evaluated using monotonicity tests, controlling for possible mediating variables. The results revealed evidence of a statistically significant low-volatility premium, except during bull markets. These findings imply that investors can expect to earn higher returns by allocating to stocks with lower historical volatility, but only during bear markets. These results hold for realistic portfolio construction constraints, such as (il)liquidity and high transaction costs. [ABSTRACT FROM AUTHOR]

To address the issue of high auxiliary service costs caused by the grid connection of new energy generation, a dual layer optimization scheduling method for high penetration new energy power grids is proposed, taking into account the auxiliary service costs of grid connection. The correlation between the output fluctuations and load fluctuations of new energy generation is analyzed, and a calculation model for auxiliary service costs caused by grid connection of new energy generation is established. Taking into account the timescale division requirements for grid energy trading and auxiliary service market transactions, a new high penetration energy grid two-level optimization scheduling model is established. The upper level scheduling model aims to minimize the sum of grid energy procurement costs and auxiliary service costs caused by new energy generation and completes the optimization scheduling of the grid for several hours. The lower level scheduling model aims to closely follow the upper level scheduling plan for new energy power plants/groups. Optimization and scheduling of the power grid for tens of minutes is completed, taking into account the balanced allocation of wind and solar losses among various power plants within the new energy power plant group. The simulation results show that the method proposed in this paper can reduce the energy transaction costs and auxiliary service transaction costs of the power grid during low and peak load periods. [ABSTRACT FROM AUTHOR]

Software-Defined Networking (SDN) has transformed network management by introducing a centralized controller that simplifies network configuration. This separation of the control plane from the forwarding devices, while enhancing flexibility, also exposes vulnerabilities that can be exploited by adversaries to manipulate flow rules on SDN switches. Existing literature mainly focuses on using the switch version to preserve the integrity of flow rules, which does not provide complete security. In this work, we introduce FTISCON (Flow Table Integrity Through Smart Contract), a comprehensive OpenFlow security mechanism to preserve the integrity of the flow rules on SDN switches that leverage blockchain technology. We employ a specialized blockchain agent to verify flow rules through Smart Contracts before deployment. We implement our proof-of-concept using an Ethereum Private Blockchain and conduct a comparative analysis, based on a defined threat model. We evaluate their performance with a range of metrics such as delay, computation time, transaction cost, detection rate, and CPU overhead of the controller. Our proposed model successfully identifies all three types of attacks and achieves significant reductions in execution time compared to BlockFlow, BlockSDSec, and FRChain-specifically, by 52.36%, 48.62%, and 35.67% respectively. Overall, our findings affirm that the proposed model offers a practical and effective solution for safeguarding against malicious manipulation of flow rules in SDN networks. [ABSTRACT FROM AUTHOR]

AbstractMultinational firms establish foreign affiliates to reduce production and transaction costs and open markets. This study was conducted to determine whether foreign affiliates are efficient in production—the efficiency of foreign affiliates established by Korean multinationals through foreign direct investment from 2007 to 2018. DEA efficiency was measured by dividing it into pure, technical, and scale efficiency. An empirical analysis using the panel Tobit and Probit models examined the factors affecting efficiency decisions. It was confirmed that the total number of foreign affiliates’ employees significantly affects their efficiency. In addition, it was analyzed that establishments with traditional FDI motives, such as taking advantage of low wages and promoting exports, harm the efficiency of foreign affiliates. [ABSTRACT FROM AUTHOR]

Alongside the proceeding of rural land system reform in China, it becomes more and more critical to conduct policy performance evaluations on collective-owned construction land for profitable use to reflect the achievements and deficiencies of the reform. Traditionally, land policy performance evaluation is based on the theory of "policy-performance", which fails to explain the mechanism of transaction costs. From the perspective of spatial planning, land use and the spatial form shaped by land development management and control are a representation of land property rights, as well as an expression of land policy performance. Thus, a correct understanding of the role of spatial form in the relationship between land policy and land performance is of great significance in accurately evaluating land policy performance and further improving land policies. Focusing on the interrelation among the three factors, this article highlights and elaborates on the intermediary role of spatial form between land property rights and land policy performance and puts forward the analytical framework of "land property right–spatial form–land policy performance". It then takes the case of Wujiang District of Suzhou in southern Jiangsu Province to prove the effectiveness of this analytical framework. The outcome of this study can serve as a supplement to "policy-performance" theory, which refines and deepens the analysis of transaction costs from the perspective of spatial planning. It may also help deepen the recognition of land policy performance through visualized presentations, providing a new perspective for performance evaluation in quantitative and qualitative ways. [ABSTRACT FROM AUTHOR]

We examine the role of risk management in the context of commodity factor premia. Stopping losses in individual commodities effectively improves the average returns of long‐short commodity premia through persistent reduction in the frequency and severity of drawdowns. The magnitude of improvement is related to the quality of the signal, commodity return volatility, and autocorrelations, as well as transaction costs. The efficacy of a stop‐loss strategy can be enhanced by dynamically calibrating loss thresholds in accordance with realized volatility, and it performs best in high conviction weighting schemes. Overall, we highlight the pivotal role of risk management beyond volatility targeting and risk‐parity in harnessing commodity risk premia. [ABSTRACT FROM AUTHOR]

In the last few years, the proliferation of digital labour platforms has led to the transformation of business models and labour relations in an increasing number of economic activities, including highly feminized and informal traditional sectors, such as care and domestic work. Drawing on an analysis of 37 digital care platforms in Spain, this research compares the distinctive features and structural power dynamics they engender, and it constructs a taxonomy of business models of these care platforms. By analysing the main features of their operational models, we are capable of distinguishing three main types of platforms: marketplace, on‐demand, and digital placement agencies. First, the paper argues that the distinctive features of each digital platform business model have differentiated impacts on working conditions in terms of access to tasks, remuneration, flexibility and means of control. This differentiation allows us to understand what is transformative and what is continuous in platforms' precarization or formalisation of care work and working conditions of carers, mainly women and migrants. Each business model has its differentiated outcomes in terms of labour control and reorganization of women's and migrants' reproductive work. Second, more broadly, while digital care platforms may have contributed to facilitating workers' access to jobs, reducing transaction costs and standardising processes, this has often been through the creation of more flexible and insecure forms of work and to increased market pressures. Therefore, this study contributes to existing research addressing the degree of formalization of labour relations in digital platform work through a nuanced analysis of their business models. [ABSTRACT FROM AUTHOR]

Concepts are introduced and applied for analyzing and selecting arbitrage portfolios in the face of uncertainty about initial positions and risk preferences. A stochastic arbitrage opportunity is defined as a zero-cost investment portfolio that enhances every feasible host portfolio for all admissible utility functions. The alternative to the existence of such investment opportunities is the existence of a solution to a dual system of asset pricing restrictions based on a class of stochastic discount factors. Feasible approaches to numerical optimization and statistical inference are discussed. Empirical results suggest that equity factor investing is appealing for all risk-averse stock investors with a wide range of initial position and sufficiently low transactions costs by mixing multiple factor portfolios with high after-cost appraisal ratios, low mutual correlation, and negative exposures to the relevant host portfolios. These findings weaken the case for risk-based explanations for the profitability of factor investing. This paper was accepted by Kay Giesecke, finance. Supplemental Material: The data files are available at https://doi.org/10.1287/mnsc.2023.4892. [ABSTRACT FROM AUTHOR]

This study mainly investigates the effects of supply chain network centrality on firm innovation output. We uncover that supply chain network centrality has a negative impact on firm innovation. The negative impact of network centrality on corporate innovation quantity is stronger when economic policy uncertainty is higher and the firm belongs to high-tech industries. Similarly, the detrimental effect of network centrality on corporate innovation quality is magnified when the level of marketization is lower and the firm belongs to high-tech industries. Firms with high supply chain network centrality are associated with more severe short-sightedness, higher transaction costs, and greater operational risks, and thus inhibits firm innovation output. [ABSTRACT FROM AUTHOR]

Geopolitical conflicts, particularly economic ones, introduce significant uncertainties into the global supply chain. The impact of these conflicts on cross‐border buyer–supplier transactions remains underexplored, as does the capability of global suppliers to mitigate such risks by locking in their foreign buyers. Employing a combined perspective of resource dependence theory and transaction cost economics, we examine a natural experiment to investigate the effects of the 2018 U.S.–China trade war on the transactional relationships between Chinese suppliers and their U.S. buyers. Our study reveals that the trade war generally adversely affected these buyer–supplier transactional relationships, leading to a negative abnormal transaction value in the affected dyads, which amounted to 18.42% of their pre‐event level. However, we find that this adverse impact can be attenuated when Chinese suppliers demonstrate superior innovation capabilities, higher corporate social responsibility performance, or fewer local political ties. These findings yield insights for international suppliers and buyers on strategies to maintain buyer–supplier transactions and minimize the detrimental effects on global supply chain relationships during geopolitical conflicts. Highlights: The U.S.–China trade war slashed transactions between sampled U.S. buyers and Chinese suppliers by 18.42%.Innovative and socially responsible Chinese suppliers showed more resilient, effectively retaining U.S. buyers amid the trade war.U.S. buyers distanced themselves from Chinese suppliers with local political ties to navigate geopolitical uncertainties. [ABSTRACT FROM AUTHOR]

From the perspective of Transaction Cost Theory, this paper proposes a conceptual model to assess ownership and management control decisions of private partners in public‐private partnerships for infrastructure with regard generic risk factors, namely asset specificity, demand risk, environmental risk, social risk, macroeconomic risk, and governance or behavioral risk. Using an ordinal logistic model, hypotheses are tested on data covering 2152 projects in 12 emerging countries for the period 2010–2019. Overall results indicate that the extent of private ownership and management control is negatively related to risks, the marginal effects of which are moderated by high‐quality public institutions. [ABSTRACT FROM AUTHOR]

Public–Private Partnerships have been implemented globally as a key procurement strategy for addressing the issue of funding gaps amidst the immense pressure to deliver new major infrastructure projects. However, in current practice, procurement selection is applied to the entire bundle of project activities. This often leads to unduly large bundles of externalized project activities that create unduly large PPP contracts and attempt to transfer too much risk. To address this gap, this paper presents the development and testing of an implementable model that embodies a range of microeconomic theories—namely, transaction cost and resource-based theories—and property rights theory. This paper presents the first empirical testing of this model based on two road and two health projects, using competition as an independent measure of the validity of the recommended procurement strategy. The results provide compelling evidence that a rigorous application of the model will enable a substantial improvement of existing procurement approaches, such as identifying the most suitable bundle to be procured using a PPP approach. [ABSTRACT FROM AUTHOR]

Purpose: Challenges of property data in developing markets have been reported by several authors. However, a deep understanding of the actual nature of this phenomenon in developing markets is largely lacking as in-depth studies into the actual nature of data challenge in such markets are scarce in literature. Specifically, the available literature lacks clarity about the actual nature of data challenges that developing markets pose to valuers and how this affects valuation practice. This study provides this understanding with focus on the Lagos property market. Design/methodology/approach: This study utilises a qualitative research approach. A total of 24 valuers were selected using snowballing sampling technique, and in-depth semi-structured interviews were conducted. Data collected were analysed using thematic analysis with the aid of NVivo 12 software. Findings: The study finds that the main data-related challenge in the Lagos property market is the lack of database of market property transactions and not the lack or absence of transaction data as it has been emphasised in previous studies. Other data-related challenges identified include weak property rights institution with attendant transaction costs, underhand dealings among professionals, undocumented charges, undisclosed information, scarcity of data relating to specialised assets and limited access to the subject property and required documents during valuation. Also, the study unbundles the factors responsible for these challenges and how they affect valuation practice. Practical implications: The study has implication for practice in the sense that the deeper knowledge of data challenges could provide insight into strategy to tackle the challenges. Originality/value: This study contributes to the body of knowledge by offering a fresh and in-depth perspective to the issue of data challenges in developing markets and how the peculiar nature of the real estate market affects the nature of data challenges. The qualitative approach adopted in this study allowed for a deep enquiry into the phenomenon and resulted into an extended insight into the peculiar nature of data challenges in a typical developing property market. [ABSTRACT FROM AUTHOR]

In modern conditions, much of the relationship between agrarian agents, and agricultural activity in general, is governed by some forms of contract. However, economic analyzes of agrarian contracts in Bulgaria are incidental, limited to individual types of contracts, and detached from the process of contracting and contract imlementation, and dominating institutional order. This article continues the presentation of a holistic A-M-P-O approach to the economic analysis of contracts and contractual relations of agrarian Agents by conducting an economic analysis of the available contractual Means, the agrarian contracting Process, and the resulting contractual Order. First, a classification of the principle types of contracts is made and their economic characteristics, possibilities and disadvantages for governing the relations of agrarian agents are analyzed. After that, the stages of the agrarian contracting process is analised, the critical factors of transaction costs presented, and a matrix for determining the most efficient governing form, depending on the combination of critical dimensions of agrarian transactions, suggested. Finally, the specific contractual and governance order resulting from the contractual process is analyzed, and the stages of the process of improving contractual relations in the agrarian sphere are presented. [ABSTRACT FROM AUTHOR]

Purpose: Based on resource dependence theory (RDT) and transaction cost theory (TCT), we aim to investigate the relationship between supply chain concentration and firm performance. Based on the resource-based perspective, we further investigate the moderating effect of marketing and operational capabilities on the relationship between supply chain concentration and firm performance. Design/methodology/approach: Based on data from 2,082 firms with 8,371 observations from 2008 to 2020 in China, we use stochastic frontier analysis to calculate marketing capability and operational capability and use multinational regressions to test our research model. Findings: We find a U-shaped relationship between supplier concentration and firm performance; there is also a U-shaped relationship between customer concentration and firm performance. In addition, the relationship between supplier concentration and firm financial performance is strengthened by the firm's marketing capability, and the relationship between customer concentration and firm financial performance is weakened by the firm's operational capability. Originality/value: Drawing from RDT and TCT, this study extends the research on the impact of supply chain concentration on firm performance. The study finds that supply chain concentration and firm performance have a nonlinear relationship, and it is further moderated by marketing capability and operational capability, providing insights for managers. [ABSTRACT FROM AUTHOR]

The transaction cost economics framework has been used for more than three decades to explain how firms transact and organize in hierarchies and markets. However, when market innovations and societal changes occur, organizing theories should be updated to reflect the novel aspects of the environment. In this paper, we leverage recent technology and social innovations as a catalyst for synthesizing and extending transaction cost theory. Venture funding transactions today only vaguely resemble funding transactions from decades past. Yet, scholars still frequently rely on theoretical tenets that were established before the advent of the internet to explain funding transactions. In this research, we codify venture-funding modalities along a continuum from more market-esque to more hierarchical and develop funding transaction propositions for the new funding context. [ABSTRACT FROM AUTHOR]