SN Business & Economics

This exploratory paper identifies ethical work climates in organizations in India using the ethical climate typology developed by Victor and Cullen. India offers interesting opportunities to study ethical decision making in organizations, considering its recent economic growth, rich spiritual heritage, and relatively weak implementation of regulatory provisions. Using the original ethical climate questionnaire, we conduct a survey on Indian workforce to identify key ethical climates the participants relate to. Exploratory factor analysis results in six climate types: (a) Law and Codes of Professional Conduct, (b) Organizational Processes, (c) Integrity and Fairness, (d) Collective Prosperity, (e) Personal Value System, and (f) Pursuit of Excellence. Consequently we assess how organizational and individual characteristics influence the participants’ association with the identified climate types. Multivariate analysis of variance shows that men in Indian workforce are more likely to relate to law, professional codes of conduct and organizational processes, whereas women are more likely to relate to personal value system. We discuss the implications and antecedents of these findings from socio-cultural perspectives, specifically India’s ancient values.

Despite Nigeria being Africa’s largest economy, it has one of the lowest taxes to Gross Domestic Product (GDP) ratios globally estimated at 6 percent. Although tax revenue is generally low among the states in Nigeria, disparities are noticeable in different parts of the country. The understanding of “what” accounts for the variation in tax revenue and “where” are vital for place-based policy intervention to stimulate tax revenue generation. To this end, this study examines how the geographical differences in macro-economic, political economy, socio-economic and geographical location factors in the country explain the spatial variation in tax revenue, and pinpoints where these relationships are significant using the geographically weighted regression. Findings show spatial dispersal in government tax revenue with literacy rate and distance to the coast the two significant predictors. These factors predict more of government tax revenue in the south than the northern part of the country, reinforcing that geographical location and improved socio-economic conditions of the citizens are vital to drive up government revenue. The study recommends the education of taxpayers on the benefits of tax payment in northern Nigeria, while southern Nigeria should continue to take advantage of the coastal economy.

This study employs a multinomial logit model to examine the determinants of Land Tenure Formalization (LTF) under customary and statutory tenure systems using Living Standard Measurement Study-Integrated Surveys on Agriculture (LSMS-ISA) data for Tanzania’s National Panel Survey (NPS) wave of 2014/15. The findings show that household education levels, formal employment status, migrant status, and possession of dwelling certificates positively influence statutory LTF, while agricultural occupation status negatively influences statutory LTF. Conversely, household education level, farm size, and financial assistance positively influence customary LTF, while access to formal employment, the migrant status of the household head, and purchased plots negatively influence customary LTF. Taken together, these findings are suggestive of the costly and bureaucratic nature of Tanzania’s LTF systems, which potentially favour educated formal wage earners and migrants over less educated, indigenous, farmers who represent most households that derive their livelihoods directly from agriculture. The study recommends implementing land policy reforms that promote cost-effective, less bureaucratic, and inclusive systems of LTF for more socially optimal outcomes. Furthermore, since the determinants of LTF differ between tenure systems, the impact of LTF programs may also differ. This calls for future studies to explore this possibility, as it might shed light on the current debate on the conflicting results on the impact of LTF programs in many African countries.

The author name was written incorrectly and has been corrected to Schumann now.

OECD governments provide billions in export credit annually in support of national exporters to developing countries. Linked to the OECD-recommendation on anti-bribery and export credits, the research focuses on whether support of the export credit agencies is dependent on the corruption levels and so called ‘tax haven’ status of the countries to which the exports are destined. We compose a unique panel data set based on data on the export credit agencies of the United Kingdom, the Netherlands and Sweden. We find that corruption levels in the countries to which the exports are destined do not have an influence on the presence and level of export credits. Conversely, whether the destination country of the export is a ‘tax haven’ is important: British and Dutch agencies are significantly more likely to provide export credit for export transactions to tax havens than for non-tax-havens, all else being equal. This declines for the Netherlands over time. The results indicate that the chances that the United Kingdom Export Finance supports transactions with EC to a tax haven are 12 times more likely than for a non-tax haven countries, all else being equal. In the Netherlands, this is 3 times more likely. Based on the findings, we recommend that export credit agencies and their financial backers be extra vigilant in their due diligence policies, especially with respect to ‘tax havens’ and make these policies publicly available.

Various studies have shown that green buildings trade at a premium, with estimates of it ranging widely from low single-digits up to 26% for sales values and up to 21% for rents. There is, however, little quantified evidence of why people are willing to pay more for sustainable housing. We investigate the green premium for MINERGIE-certified residential properties in the Canton and City of Zurich, which have among the highest densities of certified green buildings worldwide. Using a comprehensive data set of 17,743 condominiums for sale and 50,075 apartments for rent, we show that the premium can be decomposed and associated with various benefits for owners and tenants. The overall green premia in the canton amount to 2.45% and in the city to 4.91%. From these total premia, 6% (city: insignificant) are attributed to energy savings, 71% (city: 70%) to increased comfort, and 23% (city: 33%) to making the building future proof against regulators and market participants.

The paper examines the effect of risk-taking behaviours, ownership and regulations on insurance efficiency. The study uses the robust 2-stage Simar and Wilson simultaneous truncated regression for 40 Ghanaian insurance firms over 2008–2017 period. First, it provides evidence that insurance risk-taking behaviours reduce insurance efficiency. It found that regulations complement insurance ownership in explaining insurers’ efficiency. Finally, it shows that insurance ownership and regulations are important in reducing the negative impact of risk-taking behaviours on insurance efficiency in the long run. The policy implication is that shareholders should align their interest with managers by designing effective complementarity framework between ownership structures and risk-taking behaviours to yield an optimal insurance efficiency. Regulators should provide regulatory frameworks that align with the interest of inside ownership of insurers to provide effective risk management that generate optimal insurance efficiency.

The paper proposes a continuous-time overlapping generations (OLG) model, in which the representative agent of each generation faces a finite lifetime horizon, maximizes intertemporal consumption utility, and accumulates human capital as the single input employed in the generation of income. The model allows for highlighting and scrutinizing a few sources of nonlinearities and cyclical behavior on growth, namely those associated with technology diffusion, intergenerational knowledge spillovers, intergenerational income transfers, and the influence of role models over future generations. Analytical results regarding the growth of aggregate income and consumption are derived and numerical illustrations are used to elucidate about the formation of a variety of distinct patterns of growth. The novelty of the analysis resides on the fact that although new generations are born at every instant, there is a delayed impact of any event or action over future generations; thus, triggering unconventional growth paths, which are typically absent from long-term growth analysis, both in the context of OLG models and representative-agent intertemporal models.

Socially mandated expenditures on occasions like weddings and death rituals are unique to the Indian socio-cultural milieu, and are often excessive, being disproportionate to poor families’ income and earnings potential. Combined with economic shocks like illnesses, loss of jobs, or death of the principal bread earner, these expenses serve as major setbacks to economic stability, often leading to borrowings and incidences of high indebtedness. This study examined the social expenditure patterns and outlays, vis-a-vis earnings and savings, among poor informal sector workers in urban settings, and tried to find out the extent to which obligatory and contingent expenditure was responsible for indebtedness, and whether the cost of debt was mediated by informality of occupation. The study found that disproportionate spending beyond earning capacity was the cause of indebtedness and compounding penury among the respondents. Comparing the prevalence and cost of debt with formal sector workers in similar income brackets, it concluded that though the extent of indebtedness did not vary by the formality of occupation, high-cost debt was the norm in the informal sector but not in the formal sector.

We consider the problem of organizing capital to produce public goods with broad societal value. We review why market corrections via government subsidies or philanthropic initiatives are inadequate, in addition to considering the paradox of patents. Our proposed mechanism (an Ever-growing Prize and a Patent Repository) directs capital towards two innovation problems routinely overlooked: (1) problems for which the reward is insufficient even with established mechanisms (e.g. patents or academic prestige), and (2) problems for which the reward is large, but the effort risk is incalculable. The proposed hedge fund mechanism facilitates crowdsourcing, addressing the challenge of determining problems with broad societal interest; the ever-growing prize allows for an emergent rather than predetermined reward; the patent repository turns private intellectual property into a public good for target problems while circumventing the inventors’ threat of patent expiration. We guide this discussion by considering two problems: treating Cystic Fibrosis and curing Diabetes.