Quantifying the Impact of Moral Hazard: Evidence From a Structural Estimation

2016 ◽  
Author(s):  
Hengjie Ai ◽  
Rui Li
Keyword(s):  
Moral Hazard ◽  
Structural Estimation ◽  
The Impact

scholarly journals Analysis of moral hazard in Engineering agent construction system

2020 ◽  
Vol 3 (1) ◽  
pp. 22
Author(s):  
Lihua Wang ◽  
Shuguang Zhou ◽  
Yuetong Hui
Keyword(s):  
Moral Hazard ◽  
The Impact ◽  
Construction System

Analyze the moral hazard issues in the construction agency system, and enumerate the performance of moral hazard. Deeply analyze the causes, start with strengthening supervision and perfecting incentive measures, eliminate the impact of moral hazard, and give play to the advantages of agent construction.

scholarly journals Village Level Analysis of Credit and Livelihood Enhancement of Microfinance in Andhra Pradesh

2014 ◽  
Vol 10 (1) ◽  
pp. 37-60
Author(s):  
Jaya Priyadarshini Yarikipati ◽  
Srinivasa Rao Pinamala
Keyword(s):  
Moral Hazard ◽  
Adverse Selection ◽  
Andhra Pradesh ◽  
Rural Poverty ◽  
Secondary Data ◽  
Vulnerable Groups ◽  
Primary Data ◽  
Rural Credit ◽  
Positive Effects ◽  
The Impact

Micro finance as an institution are seen to have characteristics that help to solve the problems of moral hazard and adverse selection, which are the existing problems of rural credit institutions which other institutions failed to do. Group lending, peer monitoring and joint liability systems solve the adverse selection and moral hazard issues associated with rural credit markets. This study also focused in finding out the impact of micro finance programme on poverty, money lenders, women empowerment and living standards of the rural poor based on the primary and secondary data collected from Kamavarapukota mandal in Andhra Pradesh in India. Using primary data collected from the filled survey through the constructive schedules and personal interview to estimates the linkages between microfinance and its impacts on rural credit facilities, dependency ratio of money lenders for their credit needs, reduction of rural poverty, and empowerment of women in socio-economic activities.  The conclusion of this study, clearly states that the introducing microfinance inducing the overall improvements of their credit facilities as well as augmentations of their livelihood facilities in different sections of the society.  Further positive effects of this programme is that to  reinforcements of vulnerable groups or targeted population Particularly, SCs, STS, OBCs and other weaker section of the society directly to empower and to participate  in social, economic,  and political activities

Perverting Activism

2011 ◽  
Vol 2 (2) ◽  
pp. 14-29 ◽  
Author(s):  
Tommaso Bertolotti ◽  
Emanuele Bardone ◽  
Lorenzo Magnani
Keyword(s):  
Moral Hazard ◽  
New Technologies ◽  
Political Accountability ◽  
Democratic Institutions ◽  
Political Dynamics ◽  
The Impact

This paper analyzes the impact of new technologies on a range of practices related to activism. The first section shows how the functioning of democratic institutions can be impaired by scarce political accountability connected with the emergence of moral hazard; the second section displays how cyberactivism can improve the transparency of political dynamics; in the last section the authors turn specifically to cyberactivism and isolate its flaws and some of the most pernicious and self-defeating effects.

Inter-Firm Connections, Alliance Formation and the Value Created by Alliances

2020 ◽  
Vol 10 (04) ◽  
pp. 2050019
Author(s):  
Yun Liu ◽  
Tomas Mantecon ◽  
Sabatino Dino Silveri ◽  
Wei Sun
Keyword(s):  
Moral Hazard ◽  
Information Asymmetry ◽  
Social Connections ◽  
Opportunistic Behavior ◽  
Alliance Formation ◽  
Board Interlocks ◽  
Valuation Effect ◽  
Ex Post ◽  
The Impact ◽  
Flow Of Information

We investigate the impact of inter-firm connections on alliances. We find that both professional connections and social connections, borne out of board interlocks, employment ties and educational ties, increase the likelihood of alliance formation. In addition, the market reacts more favorably to alliance announcements in the presence of such connections, and this positive valuation effect increases with the degree of information asymmetry between the partner firms. Our findings are consistent with inter-firm connections creating value because they facilitate the flow of information between partner firms, thereby reducing moral hazard concerns and the risk of ex-post opportunistic behavior.

scholarly journals The Unforeseen Consequences of Extended Deterrence: Moral Hazard in a Nuclear Client State

2017 ◽  
Vol 63 (1) ◽  
pp. 218-250 ◽  
Author(s):  
Neil Narang ◽  
Rupal N. Mehta
Keyword(s):  
Moral Hazard ◽  
Policy Implications ◽  
Potential Target ◽  
Extended Deterrence ◽  
Important Policy ◽  
The Us ◽  
Target States ◽  
Using Data ◽  
Client State ◽  
The Impact

Do “nuclear umbrellas” create a moral hazard that can increase the risk of war? In this article, we investigate whether situations of extended deterrence in which a nuclear patron makes a defensive commitment to a nonnuclear client state can inadvertently increase the likelihood that a client will initiate a crisis with another state. Using data on the crisis behavior of states from 1950 to 2000, we estimate the impact of a nuclear umbrella on various crisis outcomes, including the initiation and escalation of militarized conflict. Interestingly, we find no evidence that such commitments increase the risk of war or even two-sided violence at lower levels. However, consistent with both the moral hazard logic and bargaining theories of war, we show that this appears to be because potential target states offer increased policy concessions to client states to avoid costly fighting. Thus, the link between nuclear umbrellas and moral hazard appears to be real, but it is reflected in the division of benefits rather than a greater likelihood of war. The results have important policy implications as the US contemplates extending its nuclear umbrella.

scholarly journals Contemporary Aspects of Financial – Banking Responsibility

2020 ◽  
Author(s):  
Renate Doina Bratu
Keyword(s):  
Moral Hazard ◽  
Market Economy ◽  
Financial System ◽  
Financial Education ◽  
Financial Responsibility ◽  
Positive Effects ◽  
Time Value ◽  
The Impact

We all as individuals have responsibility for any decisions, in terms of time, value and risk. In time, the system in which we are evolving requires different behaviors that are in alignment with our interests, as individuals, as organizations or as institutions. The paper brings into attention the concept of financial responsibility manifested in financial – banking environment, as a concept and as a species of financial education (or literacy). The main aim of this article is to evaluate the awareness, the manifestation and the importance of financial responsibility in Romania. The primary results reveal the fact that financial responsibility can improve the positive effects on individual’s welfare, and also the good impact that the financial system has on market economy.  Moreover,  here it is also evaluating the impact of financial education on  the financial responsibility manifestation, as well as the theoretical interdependence ratio between those two terms – financial responsibility and financial education/literacy. Keywords: financial – banking responsibility, moral hazard, financial education.

China’s VAT Tax Reform: A Boon for the Economy or an Opportunity for Moral Hazard?

2020 ◽  
Vol 23 (01) ◽  
pp. 2050004
Author(s):  
Ben Sopranzetti ◽  
Yue Ma
Keyword(s):  
Moral Hazard ◽  
Negative Impact ◽  
Value Added ◽  
Free Cash Flow ◽  
Chinese Government ◽  
Effective Tax Rate ◽  
Tax Rate ◽  
Positive Effects ◽  
Tax Savings ◽  
The Impact

In 2012, the Chinese government replaced the existing business sales tax with a Value-added tax for some, but not all, Shanghainese firms. The change was intended to reduce the effective tax rate for firms and stimulate capital investment and employment. Of concern is the potential for managerial moral hazard, whereby self-interested managers might appropriate some of the tax savings for themselves rather than use the tax savings as intended. This paper examines the impact of the tax change on the affected firms and finds no significant evidence that the intended positive effects were achieved. Moreover, it also finds no strong evidence of moral hazard. Instead, the paper documents that the tax change seems to have had a deleterious effect on firm performance. Specifically, employee compensation, capital expenditures, and free cash flow are all lower when the tax changes became effective, with the negative impact on cash flows lingering through 2014. An examination of the effective tax rate reveals that the tax change increased rather than decreased the effective tax rate in 2012 and 2013.

Perverting Activism

2012 ◽  
pp. 53-69
Author(s):  
Tommaso Bertolotti ◽  
Emanuele Bardone ◽  
Lorenzo Magnani
Keyword(s):  
Moral Hazard ◽  
New Technologies ◽  
Political Accountability ◽  
Democratic Institutions ◽  
Political Dynamics ◽  
The Impact

This paper analyzes the impact of new technologies on a range of practices related to activism. The first section shows how the functioning of democratic institutions can be impaired by scarce political accountability connected with the emergence of moral hazard; the second section displays how cyberactivism can improve the transparency of political dynamics; in the last section the authors turn specifically to cyberactivism and isolate its flaws and some of the most pernicious and self-defeating effects.

Moral hazard and risk-taking incentives in Islamic banks, does franchise value matter!

2017 ◽  
Vol 10 (1) ◽  
pp. 42-59 ◽  
Author(s):  
Mehdi Mili ◽  
Sami Abid
Keyword(s):  
Moral Hazard ◽  
Risk Taking ◽  
Bank Risk ◽  
Islamic Banks ◽  
Total Risk ◽  
Empirical Examination ◽  
Content Type ◽  
Islamic Bank ◽  
Franchise Value ◽  
The Impact

Purpose This paper aims to examine risk-taking in Islamic banks by exploring moral hazard and owner/manager agency problems simultaneously. Design/methodology/approach The authors propose to estimate a model of bank risk-taking that includes both franchise value and ownership structure as explanatory factors of bank risk. Findings The results show that franchise value is an important determinant of Islamic bank risk-taking. Banks with high franchise values are less likely to take risks than banks with low franchise value. In contrast, outside block holders have, at best, limited influences on bank risk-taking. Originality/value This paper conducts the first empirical examination of the relationship between managerial risk preferences and Islamic banks ownership. The authors examine simultaneously the effect of franchise value and owner/manager problem on Islamic bank risk taking behavior. They consider separately the impact on total risk, systematic risk and bank specific risk.

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