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Article
Publication date: 21 April 2020

Shuangying Chen, Feng Fu, Tingting Xiang and Junli Zeng

Extant research on the crowding-out effects of government subsidies on the positive role of firm innovation resources or activity remains limited. This paper aims to…

Abstract

Purpose

Extant research on the crowding-out effects of government subsidies on the positive role of firm innovation resources or activity remains limited. This paper aims to investigate the crowding-out effects of subsidies on the utilization of technological capabilities and also the contingency mechanisms of market-oriented economy based on the resource-based view (RBV), given the co-existence of the subsidies and technological capabilities for firm innovation in transitional economy.

Design/methodology/approach

This paper used panel data of 115 Chinese high-tech firms from 2002 to 2010. Fixed-effects model was used to test several hypotheses.

Findings

This paper empirically demonstrates that the subsidies crowd out the utilization of firms’ technological capabilities for invention outcomes in the near-term. Furthermore, this paper finds that the crowding-out effects are weaker when firms have high export intensity or are located in provinces with high market-oriented systems.

Research limitations/implications

The findings of this paper apply to Chinese firms. Future research could test their generalizability to different samples and other transitional economies.

Practical implications

This paper highlights the crowding-out effects of the subsidies, revealing that high-tech firms should balance the direct effects and crowding-out effects of the subsidies.

Originality/value

This paper highlights the neglected interactions between the subsidies and technological capabilities based on RBV and provides a more nuanced understanding of the crowding-out effects of the subsidies in transitional economy.

Details

Chinese Management Studies, vol. 14 no. 4
Type: Research Article
ISSN: 1750-614X

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Article
Publication date: 13 December 2018

Magdalena Smeds and Bozena Bonnie Poksinska

The Swedish health-care system currently implements cancer care pathways (CCPs) for better and more timely cancer diagnostics. The purpose of this paper is to elucidate…

Abstract

Purpose

The Swedish health-care system currently implements cancer care pathways (CCPs) for better and more timely cancer diagnostics. The purpose of this paper is to elucidate and define “crowding out” effects associated with the CCP implementation.

Design/methodology/approach

A document study based on implementation reports and action plans from Swedish county councils (n = 21) and a case study in one county council were conducted. Qualitative data collection and analysis were used to acquire more knowledge about the “crowding out” effects associated with the CCP implementation.

Findings

Three effects discussed under “crowding out” were defined. The first effect, called the push-out effect, occurs when other patients have to wait for care longer in favour of CCP patients. Another effect is the inclusion effect, whereby “crowding out” is reduced for vulnerable patients due to the standardised procedures and criteria in the referral process. The final effect is the exclusion effect, where patients in need of cancer diagnostics are, for some reason, not referred to CCP. These patients are either not diagnosed at all or diagnosed outside CCP by a non-standard process, with the risk of longer waiting times.

Originality/value

Crowding out” effects are an urgent topic related to CCP implementation. While these effects have been reported in international research studies, no shared definition has been established to describe them. The present paper creates a common base to measure the “crowding out” effects and support further development of CCPs to avoid the negative effects on waiting times.

Details

International Journal of Quality and Service Sciences, vol. 11 no. 2
Type: Research Article
ISSN: 1756-669X

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Article
Publication date: 1 January 1979

JEAN L. HECK

According to the Keynesian income determination model, as the level of expenditures is instantaneously increased through government or private investment a portion of that…

Abstract

According to the Keynesian income determination model, as the level of expenditures is instantaneously increased through government or private investment a portion of that amount (b), the marginal propensity to consume, is immediately respent. This precipitates a perpetual turnover of each fractional amount throughout time such that the level of expenditures eventually amounts to (1/1‐b) times the initial increase in investment. The total impact on the level of income resulting from an increase in investment or government expenditures is called the multiplier. As derived in the macro‐economic models no leakages from the system to reduce the total impact are assumed, so that in reality the multiplier is considered to fall short of (1/1‐b).

Details

Studies in Economics and Finance, vol. 3 no. 1
Type: Research Article
ISSN: 1086-7376

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Article
Publication date: 29 November 2018

Tanzeem Hasnat and Shahid Ashraf

The purpose of this paper is to empirically investigate the possibility of financial crowding out in the long-term debt market in India taking the corporate bond market as a proxy.

Abstract

Purpose

The purpose of this paper is to empirically investigate the possibility of financial crowding out in the long-term debt market in India taking the corporate bond market as a proxy.

Design/methodology/approach

The study follows a two-pronged approach. First, it tests the corporate bond market sensitivity to interest rate, along with other determinants like commercial bank credit and government securities size using the autoregressive distributed lag approach. These are considered instrumental in the development of a long-term debt market. Second, it tests if the interest rate changes are fiscal deficit (FD) induced using Granger causality framework.

Findings

It finds evidence of both the interest rate sensitivity of the corporate bond market and the interest rates to be FD induced, thereby empirically validating the possibility of financial crowding out in the Indian debt market segment.

Research limitations/implications

Based on the results, it seems that any deviation from the path of fiscal prudence can prove dear in the development of the corporate bond market. Also, the banking sector is overexposed to the risks it is not geared to handle, given by the serious asset-liability mismatches and contraction it leads in the market debt, like the corporate bond market. The government securities market could be further developed, which would provide a cue to corporate segment further and also a benchmark yield curve.

Originality/value

The study adds to the very limited literature on the corporate bond market in India, especially in the empirical domain and possibly is the first attempt to empirically explore the aspect of financial crowding out with reference to corporate bond market.

Details

International Journal of Emerging Markets, vol. 13 no. 6
Type: Research Article
ISSN: 1746-8809

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Article
Publication date: 3 October 2018

Hyelin Choi

The purpose of this paper is to investigate the impact of the foreign investment on the exit and sales of the domestic firms. Furthermore, it studies whether domestic…

Abstract

Purpose

The purpose of this paper is to investigate the impact of the foreign investment on the exit and sales of the domestic firms. Furthermore, it studies whether domestic firms undergo different influences by foreign firms according to the size of domestic firms.

Design/methodology/approach

Korean firm-level data for the period of 2006 through 2013 provided by Statistics Korea are used to study the impact of the foreign investment on the exit and sales of the domestic firms.

Findings

The result shows that foreign firms crowd out small firms from the market and take their shares in the domestic market. On the other hand, larger firms rather enjoy positive spillover effect from foreign firms, reducing its exit probability and increasing sales. It may be that large firms have enough competitiveness and ability to learn and apply the advanced technology of the foreign firms.

Practical implications

Despite the strong belief on the positive impacts of the foreign firms such as knowledge spillovers or job creation, there might be crowding-out or market-stealing effect from the presence of foreign firms. If the latter effect is larger than positive effect, the incentives provided by host country government to the multinational firms cannot be justified. In this regard, the question addressed in this paper is very important.

Originality/value

While most of previous papers have focused on the impacts of the foreign firms on productivity of the domestic firms, this paper deals with their impacts on the exit and sales of the domestic firms in order to examine more direct crowding-out and market-stealing effect of foreign firms.

Details

Journal of Korea Trade, vol. 22 no. 4
Type: Research Article
ISSN: 1229-828X

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Article
Publication date: 20 December 2021

Ernan Haruvy and Peter Popkowski Leszczyc

The purpose of this study is to determine how self-driven (intrinsic motivators) and monetary incentives (extrinsic motivators) are mediated by an effort to affect…

Abstract

Purpose

The purpose of this study is to determine how self-driven (intrinsic motivators) and monetary incentives (extrinsic motivators) are mediated by an effort to affect fundraising outcomes. This integration sheds light on crowding out between the two types of incentives as well the drivers of fundraising outcomes, specifically effort and donations.

Design/methodology/approach

A field experiment is conducted over a two-month period, involving an online fundraising campaign with over 300 volunteers assigned to one of five different incentive conditions. A special website was created to monitor fundraiser efforts. Fundraisers filled out pre- and post-study surveys.

Findings

While high monetary incentives result in the greatest immediate increase in funds raised, they crowd out future intentions to volunteer once incentives are withdrawn. Mediation analyzes show that fundraiser effort fully mediates the effect of intrinsic motivators and partially mediates the direct effect of extrinsic motivators on funds raised.

Research limitations/implications

A major limitation of field experiments is the lack of control, resulting in higher variation. However, while a more controlled experiment will reduce this variation, this goes at the expense of lower external validity.

Practical implications

Results indicate that – at least in the short run – monetary incentives can result in higher fundraising outcomes. However, this goes at the expense of a reduction in future volunteering once the incentives are withdrawn.

Originality/value

This study examines whether extrinsic or intrinsic motivators have a greater impact on funds raised and whether extrinsic motivators crowd out future intentions to volunteer. Different from previous research in which effort is a latent variable, the effort is directly observed over time.

Details

European Journal of Marketing, vol. 56 no. 1
Type: Research Article
ISSN: 0309-0566

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Book part
Publication date: 2 May 2011

Maria Claudia Lopez, Esther Blanco and Eric A. Coleman

Purpose – This chapter tests the effectiveness of different institutions to fundraise for environmental projects at tourism destinations.Methodology – We conduct a series…

Abstract

Purpose – This chapter tests the effectiveness of different institutions to fundraise for environmental projects at tourism destinations.

Methodology – We conduct a series of experiments with tourists visiting the Island of Majorca, Spain, and test the fundraising capacity of a voluntary donation scheme, two tax levels, and a matching instrument. In the first treatment of our experiment, tourists have the opportunity to make a voluntary donation to a local environmental organization involved in environmental projects. In a high-tax and low-tax treatment, tourists are taxed some proportion of their initial endowment and then are allowed to make voluntary contributions from their remaining endowment. In a final treatment, the experimenters match, one-for-one, any voluntary donations.

Findings – We test the crowding-out hypothesis of taxes over voluntary environmental donations and find imperfect crowding-out (from 60% to 65% for different tax levels).We also explore potential crowding-in of matching instruments (widely used in nontourism settings for fundraising campaigns), but do not find any support for it.

Practical Implications – Our results support the conclusion that it would be reasonable to use voluntary donation programs and tourism taxes complementarily (instead of independently), to increase fundraising for environmental purposes at tourism destinations.

Details

Experiments on Energy, the Environment, and Sustainability
Type: Book
ISBN: 978-0-85724-747-6

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Article
Publication date: 4 July 2016

Bin Hao and Yanan Feng

This paper aims to offer a novel set of insights to understand the role of network ties in pursuit of radical innovation. In this sense, the purpose of the study is to…

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Abstract

Purpose

This paper aims to offer a novel set of insights to understand the role of network ties in pursuit of radical innovation. In this sense, the purpose of the study is to analyze how the heterogeneity in the content of network ties affects radical innovation performance.

Design/methodology/approach

Based on a comprehensive review of existing literature, this paper conceptualizes how different types of network ties affect radical innovation performance by deriving five research propositions.

Findings

Both buyer-supplier ties and peer collaboration ties are positively related to radical innovation performance, whilst the peer collaboration ties may be further affected by partner similarity. Compared to other two types of network ties, equity ties act as more of moderating roles on spurring radical innovation. Crowding out between network ties prevents firms from knowledge searching within an extensive network scope, reducing the opportunities of mixing and matching different kinds of knowledge needed for radical innovation.

Research limitations/implications

The study suggests a natural way of launching marketing strategy by selectively integrating different sources of knowledge (market, supplier or technology) needed for commercializing radical technologies, highlighting the importance of partner selection for radical innovation among different types of firms surrounding the current market. For managers, it is necessary to identify and select network ties helpful for long-term business and strategic interests.

Originality/value

This paper makes two main contributions. First, it addresses the question of how networks influence radical innovation by identifying three types of network ties and their effects – individual and in combination – on extension of the depth and breadth of knowledge and development of disruptive ideas. Second, it develops the existing literature by demonstrating the crowding-out effect of network ties.

Details

Journal of Business & Industrial Marketing, vol. 31 no. 6
Type: Research Article
ISSN: 0885-8624

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Article
Publication date: 3 April 2018

Nurlan Atabaev, Junus Ganiev and Nargiza Alymkulova

The crowding-out and crowding-in effects have been at the core of arguments among economists regarding the influence of government spending on private investment. This…

Abstract

Purpose

The crowding-out and crowding-in effects have been at the core of arguments among economists regarding the influence of government spending on private investment. This study aims to examine the crowding-out (or -in) effect of public spending on private investment in the transition economy of Kyrgyzstan.

Design/methodology/approach

The empirical model is an autoregressive distributed lag (ARDL) and the vector autoregression approach (VAR). Monthly data from 2005 to 2013 of the private investment, government expenditures, remittances from abroad and broad money data were used in the empirical analysis.

Findings

The authors found that an increase in government purchases leads to rise in private investment. More precisely, the public spending crowds-in private investment at the speed with 2.06 months. On the other hand, despite the fact that remittances to GDP ratio has reached to almost 30 per cent, there is no any statistically significant effect between these variables. On the contrary, it was revealed that the broad money has statistically significant, affirmative effect on private investment. Furthermore, findings of the VAR model support the results of ARDL. The variance decomposition demonstrates that private investment shock accounts for 58.16 per cent in government expenditures, 11 per cent in broad money and 5 per cent in remittances.

Originality/value

The results of the study allow policymakers to demonstrate that the growth of national economy of the Kyrgyz Republic may be encouraged by expanding public investment with external source assistance such as grants and international loans. Accordingly, efficient use of those external funds is one of the suggested ways for economic development. Nevertheless, expansionary monetary and fiscal policy may be beneficial for economic growth in Kyrgyzstan.

Details

International Journal of Development Issues, vol. 17 no. 1
Type: Research Article
ISSN: 1446-8956

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Article
Publication date: 28 August 2009

Carlos F. Liard‐Muriente and Michael Meeropol

The purpose of this paper is to analyze and understand the Rubinomics hypothesis or the argument that “fiscal discipline” will bring private investment to a growth path as…

Abstract

Purpose

The purpose of this paper is to analyze and understand the Rubinomics hypothesis or the argument that “fiscal discipline” will bring private investment to a growth path as a result of a decrease in real interest rates, during the 1990s in the USA.

Design/methodology/approach

The paper relies on a range of previously published works and macroeconomic data to test the Rubinomics hypothesis.

Findings

The paper concludes based on data from the experience of the US economy during the 1990s that the evidence does not validate the arguments of Rubinomics.

Originality/value

The “crowding‐out” debate is an important controversy in macroeconomics. By shedding light over this controversial issue, this paper shows that the US experience during the so‐called roaring 1990s, a period of extraordinary “fiscal discipline,” did not follow the classical crowding‐out hypothesis.

Details

Humanomics, vol. 25 no. 3
Type: Research Article
ISSN: 0828-8666

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