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Monitoring Costs (monitoring + cost)

Distribution by Scientific Domains
Business, Economics, Finance and Accounting85%

Selected Abstracts

Property Rights Protection of Biotechnology Innovations

JOURNAL OF ECONOMICS & MANAGEMENT STRATEGY, Issue 4 2005
Diana M. Burton
Protection of intellectual property embedded in self-replicating biological innovations, such as genetically modified seed, presents two problems for the innovator: the need for copy protection of intellectual property and price competition between new seed and reproduced seed. We consider three regimes in two periods with asymmetric information: short-term contracts, biotechnological protection, and long-term contracts. We find that piracy imposes more intense competition for seed sales than does durability alone. Technology protection systems yield highest firm profit and long-term contracts outperform short-term contracts. Farmers prefer, in order, long-term, short-term, and biotechnical protection. Depending on monitoring cost, long-term contracts may be socially preferred to short-term contracts, with both preferred to biotechnical protection. [source]

PERFORMANCE ANALYSIS FOR A SAMPLE OF MICROFINANCE INSTITUTIONS IN INDIA

ANNALS OF PUBLIC AND COOPERATIVE ECONOMICS, Issue 2 2008
Alain De CROMBRUGGHE
ABSTRACT,:,We use regression analysis to study the determinants of self-sustainability of a sample of microfinance institutions in India. These institutions stand out by their ability and willingness to report financial and operational data to Sa Dhan, a know-how sharing organization. We investigate particularly three aspects of sustainability: cost coverage by revenue, repayment of loans and cost-control. Our results suggest that the challenge of covering costs on small and partly unsecured loans can indeed be met, without necessarily increasing the size of the loans or raising the monitoring cost. The analysis suggests other ways to improve the financial results, like a better targeting of the interest rate policy or increasing the number of borrowers per field officer especially in collective delivery models. [source]

Ownership and Incentives in Joint Forest Management: A Survey

DEVELOPMENT POLICY REVIEW, Issue 1 2005
Tuukka Castrén
The relationship between the state and communities has been an overriding issue in the development of forestry institutions globally. In many countries, the trend is for communities to become co-managers of public forests. Meanwhile, in development co-operation both poverty and multiple rural livelihoods have received increased attention. In this article, the potential of joint community-state management of forests is discussed. Forest production has several characteristics that make it suitable for joint management where both parties benefit. Involving communities in management decreases the state's monitoring costs, while communities benefit from better access to market information. For this to take place, however, the state forest apparatus needs to be free from undue rent-seeking. The most advantageous solutions are case- and context-specific. [source]

Inflation, Inflation Variability, and Corruption

ECONOMICS & POLITICS, Issue 1 2004
Miguel Braun
We present a model where agents can inflate the cost of goods needed to start an investment project and inflation variability increases monitoring costs. We show that inflation variability can lead to higher corruption and lower investment. We document a positive relationship between corruption and inflation variability in a sample of 75 countries. The effect is robust to the inclusion of country fixed effects, other controls, and 2SLS estimation. The results are economically significant: a one standard deviation increase in inflation variance from the median increases corruption by 12 percent of a standard deviation and reduces growth by 0.33 percentage points. Our paper highlights a new channel through which inflation reduces investment and growth, thus bridging the perception gap over the costs of inflation between economists and the public. We also find evidence that political competition reduces corruption and that corruption is pro-cyclical. [source]

Moral Hazard in Reinsurance Markets

JOURNAL OF RISK AND INSURANCE, Issue 3 2005
Neil Doherty
This article attempts to identify moral hazard in the traditional reinsurance market. We build a multiperiod principal,agent model of the reinsurance transaction from which we derive predictions on premium design, monitoring, loss control, and insurer risk retention. We then use panel data on U.S. property liability reinsurance to test the model. The empirical results are consistent with the model's predictions. In particular, we find evidence for the use of loss-sensitive premiums when the insurer and reinsurer are not affiliates (i.e., not part of the same financial group), but little or no use of monitoring. In contrast, we find evidence for the extensive use of monitoring when the insurer and reinsurer are affiliates, where monitoring costs are lower. [source]

Structuring residual income and decision rights under internal governance: results from the Hungarian trucking industry

MANAGERIAL AND DECISION ECONOMICS, Issue 5 2005
Josef Windsperger
The paper offers a property rights and monitoring cost explanation for the allocation of residual income and decision rights between the carriers and truck drivers under internal governance. First, by applying the property rights theory, we argue that the structure of residual income rights depends on the importance of noncontractible (intangible) assets of the truck driver to generate residual surplus. The more important the truck driver's intangible knowledge assets, the more residual income rights should be transferred to him. Second, we controlled for the monitoring costs as an additional explanatory variable of the allocation of residual income rights. According to agency theory, the variable proportion of the driver's income should be higher where monitoring costs are higher. Third, we investigate the relationship between residual income and residual decision rights under internal governance. If the contractual relation is governed by an employment contract, residual decision and residual income rights may be substitutes because, under fiat, a certain incentive effect of the governance structure may result either from the allocation of high-powered incentives or the transfer of residual decision rights to the driver. These hypotheses were tested by using data from the Hungarian trucking industry. The data provide partial support for the hypotheses. Copyright © 2005 John Wiley & Sons, Ltd. [source]

The extent, motivation, and effect of tying in franchise contracts

MANAGERIAL AND DECISION ECONOMICS, Issue 5 2000
Steven C Michael
Tying in franchise contracts has been the subject of considerable antitrust litigation and theoretical analysis. Tying can enhance efficiency by increasing standardization and reducing monitoring costs, or it can be used with market power for price discrimination. In this paper, I report on the extent of tying among restaurant franchisors and test whether it is motivated by efficiency or market power considerations. The results show that the use of tying is not affected by market share or outlet share in various industry sectors, but it is affected by equipment required and by business strategy. The results are weakly supportive of efficiency and not supportive of market power. Copyright © 2000 John Wiley & Sons, Ltd. [source]