Search results

Internationally public utilities, sometimes referred to as network industries, are being privatised and dedicated regulatory structures to protect the public interest are being introduced. This study looks at the related issues of post‐privatisation performance, regulatory risk and management strategies in privatised public utilities, drawing on evidence from the UK. The main findings are, first, that in assessing the impact of privatisation on economic performance it is difficult to separate out the effects of ownership, competition, regulation and technological change. Second, that in terms of the distribution of the efficiency gains, initially investors were the main beneficiaries in the UK, but consumers gained as competition developed and regulation tightened. Third, regulated enterprises are subject to regulatory risk as well as commercial risk with implications for types of management strategies adopted. Following privatisation the dynamics of regulation involve both the regulator and management learning about regulation and the optimal strategies to adopt. The UK's experiences are educational for those countries now contemplating or in the process of introducing privatisation programmes.

The purpose of this paper is to demonstrate that overcapacity and tariff deficit (external constraints) negatively affect the efficiency of distribution firms in the Spanish electricity sector. To do this, the paper is based on the theory of constraints and theory of economic regulation.

Data envelopment analysis (DEA) window methodology is carried out on the constant scales (I-C) with a sample consisting of five main distribution firms during the period from 2006 to 2015. In turn, an analysis of the Malmquist index is carried out to assess whether it has had a displacement with respect to the efficiency frontier.

The results show that the overcapacity and the tariff deficit negatively affect the efficiency of the distribution firms of the Spanish electricity sector. In addition, there is an existence of external constraints that affect the activities of regulated organisations and the importance of adequate legislation in regulated sectors.

This study defines a model that shows how the efficiency problems associated with electricity distribution companies such as productive overcapacity or tariff deficit can be measured based on the theory of constraints and theory of economic regulation.

Asset recovery and the incentivisation of law enforcement is a theme within both the official and critical discourses on anti‐money laundering and asset recovery. This paper attempts to find out whether this so‐called “new policing of assets” in the UK has produced new assets for policing.

The aim is achieved by producing an estimate for the costs to private companies and public authorities as well as an estimate of the financial benefits, both of which challenge the costs and benefits stated in previous work on the issue.

In doing this work it points out the difficulty of producing such costings and questions whether the regime justifies the compliance costs imposed.

The paper contributes to the debate about improving the quality of cost‐benefit analyses of the money laundering regime.

The retail sector is one of the fastest growing sectors in India. Increase in per capita income, growing urbanization, and economic reforms are some key factors that have propelled its growth. The growing Indian market has attracted many foreign retailers and Indian corporates to invest in this sector. However, this is one of the few sectors in which there is a restriction on foreign direct investment. The sector is politically sensitive, and the Indian government is trying to formulate an appropriate policy regime.

In this context, based on a primary survey, this chapter tries to analyze what should be the right policy regime that will help to sustain the growth of retail in India. The chapter shows that due to the quasi-federal nature of governance, the retail sector is regulated by a large number of ministries/departments at the centre state and local level, which leads to multiple regulations and the requirement of multiple clearances. The laws relating to this sector are outdated and their definitions and enforcement varies across different states of India. Lack of supporting infrastructure, high real estate costs and low purchasing power of consumers are some other barriers. To sustain the growth of this sector, there is an urgent need for regulatory, fiscal, and other reforms. Precisely, the clearances process needs to be streamlined and outdated regulations should be amended. To encourage investment in the supply chain and inflow of technical know-how and skills the government should allow FDI in multibrand retail. However, since retail is a sensitive sector, India cannot take an international commitment on liberalization of retail before streamlining the domestic policy regime.

This study aims to investigate the effects of board cultural diversity (BCD) and board gender diversity (BGD) of the board of directors on environmental, social and governance (ESG) performance in the European banking sector using resource-based view (RBV) theory. In addition, this study analyses the linkages between BCD and BGD and knowledge sharing on the board of directors to improve ESG performance.

This study selected a sample of European-listed banks covering the period 2021. ESG and diversity variables were collected from Refinitiv Eikon and analysed using the ordinary least squares model. This study was conducted in the European context regulated by Directive 95/2014/EU, which requires sustainability disclosure. The original population was represented by 250 banks; after missing data were excluded, the final sample comprised 96 European-listed banks.

The findings highlight the positive linkages between BGD, BCD and ESG scores in the European banking sector. In addition, the findings highlight that diversity contributes to knowledge sharing by improving ESG performance in a regulated sector. Nonetheless, the combined effect of BGD and BCD negatively impacts ESG performance.

To the best of the authors’ knowledge, this is the first study to measure and analyse a regulated sector, such as banking, and the relationship between cultural and gender diversity for sharing knowledge under the RBV theory lens in the ESG framework.

The purpose of this paper is to explore the existence of underpricing in the cooperative insurance sector in the Saudi Arabian market and to examine whether Sharia compliance requirements have an impact on the level of underpricing.

Underpricing and the effect of Sharia compliance are analysed using a comprehensive sample of 33 insurance companies with data collected between 2007 and 2013, after taking into account market movements, as well as some factors well-known in the literature.

The authors find that underpricing not only exists but also is among the highest in the world (455 per cent), which contradicts the literature on initial public offerings (IPOs)’ pricing in highly regulated sectors. In light of one of the other findings of the authors, namely, the small number of insurance underwriters, the authors attribute these very high levels of underpricing in part to the monopsony power of insurance underwriters in Saudi Arabia. Regarding the Sharia compliance effect, they find that it does not significantly reduce the underpricing of insurance offerings. The authors interpret this as the fact that Sharia status might not be taken into account by underwriters when they price the offerings of insurance companies, due to a major drawback in the implementing regulations of cooperative insurance which have been highly criticised by practitioners.

Future research should try to include more factors that might explain the underpricing and its determinants. Two important recommendations flowing from this study for regulatory and supervisory institutions are the need to improve disclosure and transparency conditions and to work towards reducing the monopsony power enjoyed by the underwriters. As for Sharia effect, the Saudi central bank should resolve the issue of Sharia compliance by adopting one of the Sharia-friendly models suggested by Islamic finance scholars, such as wakala or mudaraba.

To the best of authors’ knowledge, this paper is among the first to offer empirical evidence of the impact of Sharia compliance on the initial return of the IPOs of cooperative insurance firms.

Testing the efficiency in the economy has been highly pronounced since the financial crisis in 2008, as many countries have started to deregulate their economic sectors. The potential impact of testing efficiency is thus the key driver of world output and welfare. For this purpose, the main objective of the Capital Market Authority consists of more regulation of securities trading to boost economic efficiency. In particular, the purpose of this paper, is to examine the efficiency of 40 investment companies in Kuwait. In this study, the authors investigate the efficiency in the investment sector in Kuwait. Studying such a case is important for several reasons. First, the investment sector in Kuwait is affected by the World Trade Organization (WTO) conditions and regulations for more market liberalization. Second, most studies on efficiency have focussed on developed countries, such as those of Europe and the USA, with very few studies examining developing countries, such as Kuwait. Third, the study efficiency features is important in helping policy makers evaluate how the investment sector will be affected by increasing competition and then formulate policies that affect that sector and the economy as a whole.

In this study, we use non-parametric data envelopment analysis (DEA) to estimate investment companies’ efficiency in Kuwait. The authors test predictions of the model using yearly data for 2006-2010. In the analysis, the authors follow the two-stage approach suggested by Coelli et al. (1998). In the literature on DEA efficiency score measurement, this two-stage approach is the most prominent. This approach uses the efficiency score, measured by the DEA model, as the dependent variable in a regression model with explanatory variables that are supposed to capture the impact of external factors (Hahn, 2007). In the second stage, the authors used a Tobit model to investigate factors affecting the efficiency in the Kuwaiti investment sector.

The findings of the second stage suggest that 2008-2010 had a negative impact on firms’ efficiency in Kuwait. The results confirm the substantial influence of the 2008 global financial crisis on the investment sector in Kuwait. In addition, the results show that factors affecting production efficiency in the investment sector in Kuwait include the total revenues, total assets, government participation, and Islamic firm dummy. These second-stage results are confirmed using different specifications of a fixed effect model, a random effects model, and a logit model.

The results may be utilized by both monetary authorities and policy makers in establishing the general economic policy in the country. A number of policy implications may be derived from the estimates obtained in the current paper. First, the results show that the investment sector in Kuwait faced a sharp drop in its efficiency in 2008 due to the global financial crisis. This result tells us that there was a spillover effect of the global financial crisis in the Kuwaiti investment market, as companies in this market are highly vulnerable to global shocks. As a result, the investment sector needs to be regulated by, for example, encouraging more company mergers and acquisitions. Second, to meet the appropriate regulations in the investment sector in Kuwait, monetary authority in Kuwait should take into consideration the WTO conditions for more openness in the economic sector. Therefore, companies in the investment sector should be more efficient to compete with foreign investment companies that decide to enter into Kuwaiti market. Therefore, the need for regulations in the Kuwaiti investment sector is more necessary than before. Third, the study of efficiency features is important to help policy makers evaluate how the investment sector will be affected by increasing competition and then formulate policies that affect that sector and the economy as a whole. Furthermore, monetary policy can play an important role in influencing the efficiency in the investment sector. Therefore, the Central Bank of Kuwait should take a leading role in regulating abnormal financial activity in the Kuwaiti market.

The aim of this paper is to describe, analyze and explain the level of compliance of accounting practices with legislation and generally accepted accounting principles (GAAP) within the Swedish water and sewerage sector.

The empirical data are based on a document study of the annual full cost accounting reports for the financial year 2010. We obtained complete data from 250 of Sweden's 290 municipalities. The data are analyzed by statistical methods. The explanations are based on an institutional theory.

Most of the organizations surveyed in this study had taken measures in line with the new regulations, but none of them had adapted fully to the new requirements. Thus, we suggest that the industry has responded to the new regulation by compromise and avoidance. The statistical analyses show that compliance with legislation and GAAP is associated with legal form, minority governance, fee, tax base, population growth and audit firm.

This paper provides insight into the factors that explain compliance with accounting regulation. Future research would benefit from researching the decision process when organizations choose to comply or not to comply with specific accounting regulations in the public sector.

Few prior studies focus on the actual compliance of accounting practices at the municipal level in relation to accounting regulation and the factors that explain the level of compliance. Knowledge of the factors that explain compliance to accounting regulation will benefit from future policy decisions on regulation and auditing of public sector accounting.

Due to stringent regulations on carbon emissions, green manufacturing has become a critical issue in manufacturers’ strategic planning. Manufacturers are greening production through carbon abatement activities. The purpose of this paper is to investigate the factors that influence the effects of carbon abatement on environmental productivity growth.

Using data envelopment analysis with directional distance function, this study examines productivity growth associated with carbon abatement under regulated and unregulated production technologies. A pollution abatement index (PAI) is constructed for determining the effects of carbon abatement on environmental productivity growth. Panel data of 18 European countries in paper and pulp and coke sectors are collected for the analysis.

The empirical findings reveal that carbon abatement may positively or negatively affect environmental productivity growth which is dependent on the nature of technology in a sector, the innovation capabilities of a country and environmental regulations.

Conventional approaches in measuring productivity changes do not normally take undesired outputs (e.g. carbon emissions) into consideration. This study contributes to literature by constructing a PAI that considers productivity changes under a joint production technology (where both desired and undesired outputs are considered). The findings enhance current understandings on the effectiveness of carbon abatement activities and help managers establish corporate environmental strategies to adopt green manufacturing.

The purpose of this study is to highlight the determinants of market rents and to build a hedonic market rent index for each urban area and rental sector in France for the period 1970–2013. The authors also analyse the market rent dynamics over this period, with a special attention to the turning points in the French housing policy.

For this purpose, the authors implement a hedonic model, called stratified time dummy variable, using the Box–Cox transformation as a functional form.

The contribution of this study to the housing research is threefold: First, the study improves our understanding of the French’s rental submarket specificities and their valuation. It sheds new light on the determinants of rents. Second, this study builds a hedonic market rent index over the period 1970–2013 for each geographical and sectoral segment (Paris urban area, urban areas of more and less than 100,000 inhabitants and private and public rental sectors). Third, this study explains rent dynamics focusing on the turning points in the French housing policy.

Finally, the authors provide the first long-term market rent index in France by submarket (geographical and sectoral). In the case of the French market, no long-term market rent exists. The only long series available is an indexed rent.