Search

Digital transformation has emerged as a powerful force in reshaping the business landscape and enabling organizations to enhance their capabilities. One critical aspect of this change is how it impacts an enterprise’s innovation ability. To explore this question, we select data regarding China’s A-share listed enterprises from 2007 to 2021 as the research sample. We employ crawler technology to gather keywords related to “digital transformation” from annual reports, portraying detailed journeys of enterprises’ digital transformation. Through descriptive statistics and multiple covariance tests, a linear relationship is established between digital transformation and innovation ability. Benchmark regression is conducted and a robustness test is utilized to determine the robustness of the benchmark regression. The mechanism, heterogeneity, and moderating effects of this study are also tested. The results reveal that digital transformation makes a significant positive contribution to the innovation capability of enterprises. Meanwhile, among different types of enterprises, the impact of digital transformation on enterprise innovation capability shows heterogeneity. In terms of the impact mechanism, digital transformation can enhance the innovation output of enterprises by reducing the agency cost and improving the risk-taking level of enterprises, so as to further improve the innovation capability of enterprises. The research results of this paper provide essential theoretical support for the digital transformation of enterprises and the government’s formulation of enterprises’ digitalization strategies. More profoundly, it provides significant reference for how to further promote the digital transformation of Chinese enterprises. [ABSTRACT FROM AUTHOR]

Cloud applications are becoming central and critical to the delivery of financial services. Despite their significance, banks face increased exposure to transaction risks related to the use of cloud services and internal and external pressures to improve their risk management practices. In this study, we use a unique data set from a bank's cloud register to examine the effectiveness of internal governance on an ongoing cloud outsourcing transaction between a bank and cloud service provider. We employ structural equation modeling and a simple linear regression to test for transaction misalignment and causes of governance inefficiencies. We find that a strong degree of misalignment is largely due to poor design of internal controls and a weak control system that does not provide acceptable indications of residual risk likelihood. The findings indicate that cloud risks are driven not only by agency costs, but also by firm-specific risks which contribute to a number of transaction uncertainties and governance misalignment. [ABSTRACT FROM AUTHOR]

This research aims to investigate the level of agency costs faced by the universities in the UK, and how these costs impact the performance of these universities. A sample of 118 government-funded universities has been selected to collect financial data regarding various proxies of agency costs and quality of education. The research has utilised a multivariate regression model and t-tests to study the impact of agency costs on the quality of education in the UK universities. The results costs indicate that the UK universities suffer from extremely high level of agency costs however, the impact of these costs on the performance of these universities is contrary to their impacts on performance of the organisations in other sectors, that is, these costs positively contribute to the quality of education in these universities. [ABSTRACT FROM AUTHOR]

How do public procurement practices influence effective public financial management (PFM) in Africa? Notwithstanding the several public procurement reforms to improve PFM in Africa, outcomes have not been sustainable. Prior studies have failed to explain this phenomenon. With a descriptive case study design based on comprehensive datasets, this paper explains this situation with three key factors underlying the public procurement environment in three African countries: Ethiopia, Central African Republic, and Ghana. From the agency theory lenses, these factors affect the agency cost in public administrative systems necessary for addressing the agency problems in public procurement management towards desired PFM outcomes. [ABSTRACT FROM AUTHOR]

Worldwide, more than 1.25 million people die annually in road traffic accidents and between 20 and 50 million more are injured. By 2030, highwayrelated crashes are projected to be the 5th leading cause of death in the world. Road accidents have several contributing factors, including roadway conditions, vehicle conditions, and factors related to the road users. While some of these factors have been studied extensively by researchers very few focused on quantifying the relationship between accidents frequency and pavement quality. Before 1990s, due to the lack of pavement data collection technology, it was very difficult to carry out state-wide scale studies relating pavement quality and road safety. However, in the past decades, there has been a huge growth and awareness in the importance of road safety, leading to a significant increase of research in the topic. Researchers start ed to study other contributing factors to accidents occurrence and due to the development of high-speed friction measurement tools, agencies can now include friction into network level Pavement Management Systems (PMSs). The objective of this article is to contribute to the incorporation of safety concerns into Pavement Management by performing an exploratory analysis to assess the impact in the agency, user and total costs of performing two different maint enance policies. The methodology consisted in evaluating the evolution of the condition of the road pavements using pavement performance prediction models, followed by the prediction of the expected number of accidents and, finally the calculation of the agency and user costs. The results obtained provided a strong starting point to understand the requirements to solve this type of problems that not only affect road agencies but also the society in general. [ABSTRACT FROM AUTHOR]

The present study presents a comprehensive framework for optimal highway capacity expansion through lane(s) addition. The applicability of the proposed framework is demonstrated using data from a multi-lane urban arterial. In the proposed methodology, annualized widening costs (agency lane addition cost and work zone user delay cost) and excess user costs for do-nothing scenario (excess travel delay cost, excess vehicle operating cost and excess crash cost) were estimated for each analysis year within highway life cycle to estimate a range of traffic volumes for highway capacity expansion. Furthermore, a sensitivity analysis was conducted to evaluate the sensitivity of optimal time for highway capacity expansion to: (1) annual traffic growth rates (2) agency to user cost relative weights and (3) annual discount rate. Study results revealed that optimal highway capacity expansion time corresponds to an ADT ranging between approximately 34,430 and 37,600 vehicles per day for the case study traffic mix conditions. The sensitivity analysis results revealed that increase in agency to user cost relative weight and annual traffic growth rate would result in later and earlier optimal highway capacity expansion, respectively, while variations in annual discount rate have minimal impact on optimal highway capacity expansion timings. It is anticipated that the application of proposed framework can result in a sustainable decision by saving a huge amount of agency expenditures and excess user costs due to non-optimal decisions. [ABSTRACT FROM AUTHOR]

This paper aims to reassess the dogma of creditor protection in light of the corporate finance principles and theories. To this end, I set forth two methodological premises to reach a substantive conclusion on the optimal creditor protection strategies. First, I draw a double-layered taxonomy of classes of creditors; second, I underscore the importance of legal systems and the statutory allocation of powers and authority on creditor-sensitive corporate decisions. The corporate finance literature shows that (1) debt matters for the firm's value maximization and governance and (2) the optimal capital structure is influenced by various determinants. Creditor protection and debt governance serve as determinants of financial behaviour. Legal strategies can positively or negatively determine the cost of capital. Against this framework, I argue that ex ante corporate law techniques of creditor protection hamper firms' financing maximization, whereas ex ante contractual arrangements bolster optimal capital supply. Ex post creditor protection is applicable only to distressed firms and has positive effects on capital structure when it involves directors, whereas it is rather cumbersome and unjustified when it impinges upon stockholders. Alternative, non-corporate law techniques may efficiently outperform strategies based on unlimited shareholder liability. I conclude that, while creditor protection techniques are a function of the interplay between legal environment and the specific features of each class of creditors, the case against ex ante corporate law, and toward ex ante contractual strategies, is substantial. Corporate finance forces should drive the legal design and assessment of this function. [ABSTRACT FROM AUTHOR]

This article deals with the exclusion of non-profit-making entities from the right of freedom of establishment of Articles 49 and 54 TFEU. It analyses the historical reasons for this exclusion. It is argued that the exclusion from freedom of establishment is no longer justified on the basis of two elements. Firstly, the development of the jurisprudence of the European Court of Justice in the fields of competition law, free movement of capital and tax law makes such exclusion systematically no longer tenable. Secondly, a law and economics treatment of non-profit firms as organisations that efficiently provide services in alternative to for-profit firms weakens the reasons for the exclusion. The article proposes a uniform, European notion of non-profit entity based on a law and economics analysis of this type of firm for the purposes of Article 54 TFEU as opposed to possible different national notions. This is followed by a brief analysis of the hypothesis of regulatory competition among jurisdictions for the law regulating the corporate governance of non-profit entities. [ABSTRACT FROM AUTHOR]

This article examines the regulation of directors' remuneration in EU, UK and Belgian law. The author argues that there are two categorises of norms for the regulatory framework of directors' remuneration: one is market-based, market efficiency norms of agency costs; the other is socio-legal norms. The paper argues that agency costs – a responsive mode of governance – alone cannot adequately address the problems of directors' remuneration. On the other hand, socio-legal norms – which are value and ethics-focused – can better construct a paradigm capable of addressing a broader issue of directors' remuneration in the EU context. Agency costs-based regulation has been used by the EU whereas socio-legal matters have been left to Member States. The article shows how socio-legal norms could form the underlying basis of the regulatory regime by examining the laws in the UK and Belgium. It is concluded that the European Court of Justice will need to carry out the role of negative integration by harmonising these social values in developing EU company law. [ABSTRACT FROM PUBLISHER]

We apply the paradigm of the firm as a nexus of contracts to the debate on regulatory competition vs. unification of law as an alternative way of regulating the business corporation. This approach views the business corporation as a set of coordinated contracts among different parties. Agency problems and related agency costs are the result of this interaction. The economic analysis of corporate law, securities regulation and bankruptcy law identifies law as a means to minimise such agency costs. In this paper, we develop a model where companies are heterogeneous in their preferences about the legal regulation of contractual relationships. We then compare a regime of regulatory competition with one of single supply of regulation and we analyse their relative costs and benefits. [ABSTRACT FROM AUTHOR]