scholarly journals Moral Hazard Assessment in State-subsidized: Renewable Energy Investments

2019 ◽  
Vol 27 (1) ◽  
pp. 37-47
Author(s):  
Olivér Hortay
Keyword(s):  
Renewable Energy ◽  
Theoretical Model ◽  
Moral Hazard ◽  
Information Asymmetry ◽  
Hazard Assessment ◽  
Incentive Structure ◽  
Ceteris Paribus ◽  
Market Prices ◽  
The Impact ◽  
Great Protection

This paper presents the impact of state subsidy programs on moral hazard in renewable energy investments. The purpose of the research is to build a theoretical model which is able to handle the borrower’s behavior under asymmetric information circumstances, thus creating a new aspect in the debate about the choice of the financially ideal incentive structure. The general conclusion of the article is that technology based subsidy mechanisms which provide great protection to the investing companies (ceteris paribus), increase information asymmetry and agency costs. While these systems improve predictability of revenues, they block effective lending or otherwise, the market dependent subsidies moderate the moral hazard, which reduce the risk of fluctuating market prices.

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.

Information asymmetry and incentive contracting with the tax department

2017 ◽  
Vol 16 (3) ◽  
pp. 385-402 ◽  
Author(s):  
Horn-chern Lin ◽  
Tao Zeng
Keyword(s):  
Theoretical Model ◽  
Information Asymmetry ◽  
Private Information ◽  
Relevant Information ◽  
Tax Planning ◽  
Risk Averse ◽  
Content Type ◽  
Incentive Schemes ◽  
The Impact ◽  
Optimal Incentives

Purpose This paper aims to examine the design of optimal incentives for a firm’s tax department in the presence of information asymmetry. Design/methodology/approach This paper provides a theoretical model to examine the design of optimal incentives. The focus is on a situation in which a risk-averse tax department has private information about its efficiency type or effort to be exerted before the firm sets the incentive schemes. Findings This paper shows that a tax department’s risk aversion leads to a decline in the fraction of the cost borne by the tax department. It also shows that the optimal contract schemes should be designed to filter out as much uncontrollable risk as possible by using third-party information relevant to a tax department’s realized cost. Social implications It contributes to a better understanding of the impact of corporate incentive plans on firms’ tax practices. This study, by designing a theoretical model, helps explain why there exist differences in tax planning across firms based on the finding that incentives for tax planning activities differ across firms. Originality/value This paper is the first study that considers the situation in which tax managers’ risk-averse and types, as well as relevant information collected by the firms, can be used to set up incentive schemes and investigates whether and how the incentive schemes will be affected when firms improve their prior information by acquiring relevant information before the tax department acts.

scholarly journals THE IMPACT OF INFORMATION ASYMMETRY, MORAL HAZARD AND THE STRUCTURE OF FUNDING ON CORPORATE U.S. DOLLARS LOAN PRICING: THE EMPIRICAL STUDY IN INDONESIA THE PERIOD 1990-1997

2017 ◽  
Vol 11 (1) ◽  
Author(s):  
Deddy Marciano ◽  
Suad Husnan
Keyword(s):  
Moral Hazard ◽  
Information Asymmetry ◽  
Ordinary Least Squares ◽  
Regression Coefficients ◽  
Special Relationship ◽  
Pricing Model ◽  
Loan Pricing ◽  
Capital Costs ◽  
Increased Risk ◽  
The Impact

This study aims to answer the question: "What factors that influence the price of corporate loans in Indonesia?" And "Are there some differences in loan pricing between several types of creditors?". Furthermore, this research is to develop and test the loan pricing model that was developed in America and Europe to the context or setting in Asia, especially Indonesia. Different conditions and settings of the financial system between America/Europe and Asia, especially Indonesia, causing the loan pricing model that was developed in America/Europe can not be fully implemented for Indonesia. Key issues in this study consisted of: information asymmetry, moral hazard and funding structure. The first issue, information asymmetry consists of the type of creditors, foreign and domestic ownership, public and non-public ownership. The second issue, moral hazard problem consists of variables governmental and non-government ownership, and the special relationship between creditors and debtors. The last issue, creditors’ structure of funding is proxied by the ratio of CD / ML. In addition, this study also adobt the loan pricing models that are developed in America / Europe as control variables. This study also examines the argument of Strahan (1999) whether the loan fees also reflected the condition of the loan as well as loan spreads. The OLS regression (Ordinary Least Squares) with white correction method (White heteroskedasticity correction) for heteroscedasticity problem is conducted to test the model. Various samples and sub samples are prepared to answer various research questions and hypotheses. Testing between regression coefficients are conducted to examine differences in loan pricing between different types of creditors for each variable in the model. The test results generally show that only two new variables suggested by the study, namely: ownership and structure of funding have a significant contribution to the loan pricing model. For variable type of institution consisting of investment banks and commercial banks indicate that generally there is no difference in loan pricing between the two, only in some models of these variables are not significant with signs consistent.Ownership variable show results consistent with the hypothesis and significant effect on loan prices. While the variable special relationship between creditors and debtors have no effect on loan prices, it is due to inter-group loans made by conglomerates. For the case of capital costs of the creditor shows that the variable has a positive effect on lending rates set by creditors. Testing different regression coefficients lead to the conclusion that domestic creditors succeeded in detecting an increased risk of the debtor before the economic crisis of 1997 compared with foreign creditors.

scholarly journals Analysis of wheat production in the Republic of North Macedonia from 2016-2019

2021 ◽  
Vol 68 (3) ◽  
pp. 675-686
Author(s):  
Aleksandra Angeleska ◽  
Risto Uzunov ◽  
Radmila Crceva-Nikolovska ◽  
Elizabeta Dimitrieska-Stojkovik ◽  
Katerina Blagoevska ◽  
...  
Keyword(s):  
Arable Land ◽  
Food Sources ◽  
Cereal Crops ◽  
World Population ◽  
Ceteris Paribus ◽  
Market Prices ◽  
Daily Diet ◽  
The World ◽  
The Republic ◽  
The Impact

Corn, wheat and other different types of cereal crops, are one of the basic nutritional products in general, which have essential and vast application in the daily diet of people around the world. Cereal crops are the most important food sources, and cereal-based food is the main source of energy, protein, B vitamins and minerals for the world population. Therefore, the goal of this research is to analyze the production of wheat on arable land in the Republic of North Macedonia, as an agricultural country, which will indirectly help to draw conclusions about the impact on the economic structure of the population, their standard of living, the investment and economic fluctuations in market prices, taken as a sui generis element, set as an assumption ceteris paribus against the other determinants and factors that affect the national economy in the Republic of North Macedonia.

scholarly journals Information asymmetry on the market of non-banking financial services in Ukraine: causes, consequences, methods of control

2016 ◽  
Vol 5 (1) ◽  
pp. 29-37 ◽  
Author(s):  
Valentyna Levchenko ◽  
Myroslav Ostapenko
Keyword(s):  
Moral Hazard ◽  
Information Asymmetry ◽  
Adverse Selection ◽  
Financial Services ◽  
Opportunistic Behavior ◽  
Information Asymmetries ◽  
Key Participants ◽  
The Impact ◽  
Methods Of Control

The article examines the features of the impact of information asymmetry on the key participants of the market of non-banking financial services in Ukraine. It defines the basic reasons of its existence on the market. The analysis of the consequences of information asymmetry for the functioning of non-banking financial services in Ukraine shows that it creates the conditions for opportunistic behavior and leads to adverse selection and moral hazard on the market. Based on the research of existing methods and approaches to the reduction of information asymmetries the paper offers recommendations to overcome this problem on the market of non-banking financial services in Ukraine

Investment climate and government turnover in russian regions

2014 ◽  
pp. 88-117 ◽  
Author(s):  
G. Syunyaev ◽  
L. Polishchuk
Keyword(s):  
Economic Development ◽  
Theoretical Model ◽  
Private Sector ◽  
Authoritarian Regimes ◽  
Russian Regions ◽  
Investment Climate ◽  
Regional Data ◽  
Endogenous Property Rights ◽  
The Impact

We study the impact of Russian regional governors’ rotation and their affiliation with private sector firms for the quality of investment climate in Russian regions. A theoretical model presented in the paper predicts that these factors taken together improve “endogenous” property rights under authoritarian regimes. This conclusion is confirmed empirically by using Russian regional data for 2002—2010; early in that period gubernatorial elections had been canceled and replaced by federal government’s appointments. This is an indication that under certain conditions government rotation is beneficial for economic development even when democracy is suppressed.

Overcoming stereotypes of renewable energy

2019 ◽  
pp. 124-136
Author(s):  
Victor D. Gazman
Keyword(s):  
Renewable Energy ◽  
Empirical Analysis ◽  
Energy Generation ◽  
New Paradigm ◽  
Financial Instrument ◽  
Promising Direction ◽  
Investment Projects ◽  
Power Stations ◽  
New Generation ◽  
The Impact

The article considers prerequisites for the formation of a new paradigm in the energy sector. The factors that may affect the imminent change of leadership among the energy generation are analyzed. The variability of the projects of creation and functioning of power stations is examined. The focus is made on problematic aspects of the new generation, especially, storage and supply of energy, achieving a system of parity that ensures balance in pricing generations. The author substantiates the principles of forming system of parities arising when comparing traditional and new generations. The article presents the results of an empirical analysis of the 215 projects for the construction of facilities for renewable energy. The significance and direction of the impact of these factors on the growth in investment volumes of transactions are determined. The author considers leasing as an effective financial instrument for overcoming stereotypes of renewable energy and as a promising direction for accelerated implementation of investment projects.

Assessing Impact of Freshwater Lake Ecosystem on Residential Property Prices using Hedonic Property Pricing approach: Evidence from Vellayanilake of Kerala

2020 ◽  
pp. 125-130
Keyword(s):  
Economic Effect ◽  
Lake Ecosystem ◽  
Aesthetic Value ◽  
Market Prices ◽  
Scenic Beauty ◽  
Property Prices ◽  
Property Price ◽  
Valuation Technique ◽  
Hedonic Property ◽  
The Impact

ABSTRACT The ecosystem services provided by wetlands can be direct or indirect. The direct services can be mostly valued through market prices, but the indirect service like aesthetic beauty and its impact on property prices surrounding the natural resource cannot be directly measured. To single out the economic effect of particular amenity which influenced the land property prices, the advanced valuation technique Hedonic property pricing was most popularly used. In this study, it was attempted to assess using the hedonic property pricing technique, the impact of the presence of the freshwater body, the Vellayani Lake on land property prices surrounding it. The results revealed that the marginal implicit price of getting one cent of land with lake view evaluated at mean property price of Rs. 2,44250 was Rs.79171. The total aesthetic value of land with the scenic beauty of the lake was Rs. 275.92 crores.

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