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1 – 10 of over 1000Md. Habibur Rahman, Md. Faruk Abdullah, Noor Mohammad Osmani and Nur Suhailah Zakiyyah Binti Aziz
This study aims to investigate the possibility of practicing cross-subsidisation of underwriting surplus among different takaful operators. It responds to the recent discussion…
Abstract
Purpose
This study aims to investigate the possibility of practicing cross-subsidisation of underwriting surplus among different takaful operators. It responds to the recent discussion paper published by Bank Negara Malaysia (BNM) on broader application of tàawun (mutual assistance), which seeks insights into cross-tàawun of underwriting surplus within takaful industry.
Design/methodology/approach
A qualitative, semi-structured interview is used to gather primary data, featuring 13 one-to-one interviews with selected Sharìah and operational experts in takaful. Open-ended questions are drafted according to BNM’s discussion paper to guide the interview. A content analysis method is used to delve into the topic based on scholarly papers, books and regulatory guidelines. A thematic analysis is applied to explore the qualitative data.
Findings
This study establishes the feasibility of cross-subsidisation of underwriting surplus in takaful. Given that participants are the rightful owners of the underwriting surplus, cross-tàawun is deemed permissible with participants’ consent. With the view that underwriting surplus belongs to the fund due to outright transfer of contributions by participants, the regulators have discretion to permit cross-tàawun. The authorities can make any decision if it serves the public interest. Furthermore, the study provides Sharìah and regulatory requirements to govern the practice of cross-tàawun in takaful. Respondents of the study advocate for policy reviews and regulatory adjustments to facilitate cross-subsidisation of takaful surplus.
Practical implications
This study significantly contributes to the existing body of knowledge in Islamic insurance studies. It offers valuable insights for the regulators to formulate the required policies and guides takaful operators to develop products accordingly. Moreover, the study supports Sharìah scholars in making informed decisions about cross-tàawun practices.
Originality/value
This study fills a critical gap in the existing literature by being the first to examine cross-subsidisation of underwriting surplus in takaful. The proposed cross-subsidisation of underwriting surplus will enhance sustainability of takaful funds and contribute to stability of takaful industry. As a foundation, this study encourages future research to explore other relevant aspects of cross-subsidisation of underwriting surplus in takaful operation.
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Xiaodong Lu, Jingjun Liu and Janus Jian Zhang
This study aims to take advantage of exporters’ product codes and examine the effects of government subsidization on corporate product strategies by focusing on the dimension of…
Abstract
Purpose
This study aims to take advantage of exporters’ product codes and examine the effects of government subsidization on corporate product strategies by focusing on the dimension of product differentiation.
Design/methodology/approach
This study uses harmonized system (HS) product codes to construct a novel measure of product differentiation among a sample of Chinese exporters during 2000–2012. It uses propensity score matching to construct a comparable sample of control firms for exporters receiving government subsidies, and then a difference-in-differences (DID) analysis is conducted.
Findings
This study finds that product differentiation decreases immediately upon receiving a government subsidy. This finding suggests that in an emerging market, firms use their subsidy to imitate competitors rather than increase innovation. Further analyses show that this effect is concentrated among wholly foreign-owned enterprises and firms that focus on general trade rather than processing trade. In addition, the authors find some evidence that government subsidization leads to an increase in the number of product lines and decreases in domestic value added and export product quality.
Originality/value
This study constructs a novel measure of product differentiation for a large sample of Chinese exporters and provides insights that government subsidization can affect corporate product strategies.
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Monika Bandi Tanner, Adrian Künzi, Therese Lehmann Friedli and Hansruedi Müller
The subsidization of events by public authorities at different administrative levels has become increasingly important in recent years. Event portfolios are an important supply…
Abstract
Purpose
The subsidization of events by public authorities at different administrative levels has become increasingly important in recent years. Event portfolios are an important supply component of tourism destinations. The development of a valuation tool with an event performance index (EPI) as the key output should enable public authorities to develop transparent, systematic and fair subsidization practices in the future. The paper aims discuss these issues.
Design/methodology/approach
Using a theoretical impact model and event evaluation practices, this work develops a new holistic valuation tool for events with key indicators along the dimensions of sustainable development. Basic cost-benefit analysis ideas enrich the approach conceptually. Indicator development was based on a process of elaboration that considered the scientific literature, event stakeholders and municipal representatives.
Findings
The EPI consists of seven core indicators: size, economic value, touristic value and image, innovative strength, value of networking, value of participation and social exchange and relative ecological burden. The application of this tool to a case study revealed that it generates comprehensive and robust indicators of multifaceted and destination-unspecific event values and supports the process of allocating event subsidies using different remuneration schemes. Straightforward and destination-unspecific indicators assure the transferability and adaptability of the valuation tool to different complex and multifaceted contexts of event subsidization.
Originality/value
The EPI seeks to reduce complexity and incentivize event organizers to meet future sustainable development goals. Additionally, this work contributes to future discussions of both the form and process of event subsidization.
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Dimitris Tzelepis and Dimitris Skuras
Capital subsidization is a widespread instrument of regional and industrial policy in Europe. A number of recent works have examined the influence of capital subsidization on the…
Abstract
Capital subsidization is a widespread instrument of regional and industrial policy in Europe. A number of recent works have examined the influence of capital subsidization on the total factor productivity of recipient sectors and firms, and have provided strong evidence of neutral or even negative effects. The present study examines the effect of capital subsidization on four dimensions of the financial performance of firms, that is efficiency, profitability, capital structure, and growth, and provides evidence that capital subsidization affects solely firm growth.
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Karen Pittel and Dirk T.G. Rübbelke
The purpose of this paper is to examine the commonly used policy approach to subsidize the private provision of public goods by granting agents deductions with respect to their…
Abstract
Purpose
The purpose of this paper is to examine the commonly used policy approach to subsidize the private provision of public goods by granting agents deductions with respect to their income or corporate tax burden.
Design/methodology/approach
In the framework of a microeconomic representative agent model the commonly used policy approach to subsidize donations by granting agents deductions with respect to their income tax burden is examined. The paper especially considers that most income tax schemes are progressive and deductibility is limited. After pointing to the problems arising from these specific properties of tax‐refund schemes the paper turns towards the effects that such a tax‐refund scheme has with respect to donations on the one hand and welfare on the other hand.
Findings
Findings shows that the effects of the commonly practiced methods of supporting donations depend crucially on the specific properties of the tax scheme and preferences of agents. While Pareto‐improvements and even Pareto‐efficiency can result from the implementation of such a scheme, it is also conceivable that some agents perceive a utility reduction.
Research limitations/implications
The analysis builds on a static approach although taxation also exerts important dynamic effects. These effects have been neglected in the current paper as the interaction of taxation and preferences is already quite complex. However, they should be considered in future research.
Practical implications
Owing to the dependency of welfare effects on the tariff structure, income tax reforms as they are planned in many countries might not only induce a reduction in donations, but might as a result also alter the induced welfare effects.
Originality/value
The paper shows that the generally applied tax‐refund schemes constitute no effective means to induce optimal donation levels. Implications depend crucially on, e.g. deductibility ceilings and progressiveness of tax rates.
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This study aims to examine competitive entry in the presence of cross‐subsidization of firms in the telecommunications industry.
Abstract
Purpose
This study aims to examine competitive entry in the presence of cross‐subsidization of firms in the telecommunications industry.
Design/methodology/approach
How variations in cross‐subsidies, received via the separations mechanism, influence firms to enter the territories of incumbents is assessed for the population of local exchange firms in the USA.
Findings
Firms able to obtain greater cross‐subsidies, on average, experience less entry within their territories. Competition has evolved considerably in the telecommunications industry in the last two decades.
Research limitations/implications
These results point to the need for evaluating cross‐subsidies, where these may still exist, so as to encourage entry.
Originality/value
This article is the first to look at the consequences of an important regulatory phenomenon and its impact on competition. The results at the confluence of regulation and competition policies have potential applications across the world.
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Dimitris Tzelepis and Dimitris Skuras
This paper seeks to show that capital subsidies are used as instruments of long‐term corporate strategy. Previous research indicates that capital subsidies do not improve firm…
Abstract
Purpose
This paper seeks to show that capital subsidies are used as instruments of long‐term corporate strategy. Previous research indicates that capital subsidies do not improve firm performance, as this is reflected by measures of productivity growth or by financial measures of profitability and improved capital structure.
Design/methodology/approach
The paper shows that a large, publicly available database of firms in the Greek food and beverages, covering a significant time span, is used to evaluate the effects of capital subsidies on strategic performance. Strategic performance is reflected by three novel indicators capturing a firm's orientation towards market power and leadership.
Findings
The paper finds that capital subsidies have a positive impact on firms' long‐term strategic orientations such as the firms' net market growth and the optimal scale of operation. The provision of capital subsidies assists firms to overcome the cost disadvantages coming from operation at a sub‐optimal scale of output and fixed capital, and increase their net market share.
Research limitations/implications
The paper shows that more measures of long‐term strategic corporate performance should be employed in order to provide more research evidence that is required to detail the exact impacts of capital subsidies on corporate strategy.
Practical implications
The paper shows that the capital subsidies have an impact on strategic performance and thus their provision should be the outcome of careful design from the point of view of both the individual manager and the policy authorities.
Originality/value
In this paper three new indicators of a firm's strategic orientation are employed and provide the first empirical evidence of the impacts of capital subsidies on corporate strategy.
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Administrative data on the universe of employees, firms, and unemployment insurance (UI) recipients in Canada over an 11-year period are used to examine the operation of UI using…
Abstract
Administrative data on the universe of employees, firms, and unemployment insurance (UI) recipients in Canada over an 11-year period are used to examine the operation of UI using the firm as the unit of analysis. Persistent transfers through UI are present at both industry and firm levels, and an analysis using firm fixed effect indicates that an important fraction of variation in them can be attributed to firm effects. Calculations of overall efficiency loss are very sensitive to the degree to which firm-level information is used. A full appreciation of how UI interacts with the labour market requires recognition of the characteristics and human resource practices of firms.
Ross Harrold and Phillip McKenzie
A means by which a nexus can be drawn between a secondary school′seducational operations and its resource allocation is suggested.Resources associated with the school′s teaching…
Abstract
A means by which a nexus can be drawn between a secondary school′s educational operations and its resource allocation is suggested. Resources associated with the school′s teaching and its learning activities are “mapped”, then compared, on a grid of the school′s curriculum arrangements. If it is a non‐government (private) school, the analysis is made by comparing average with “breakeven” class sizes; if it is a government (public) school, the analysis compares the patterns of teaching class periods with pupil periods. The analysis identifies implicit resource cross‐subsidisation among groups of students who take different levels and types of subjects. There is no intention that cross‐subsidisation should be eliminated but decision makers are challenged to justify the revealed pattern of subsidisation in terms of the educational and equity purposes of their school.
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