Band 14, Heft 3

We study the incentives for firms’ obfuscation strategies and their impact on social welfare in a market with boundedly rational consumers. We assume that firms obfuscate product information, which can prevent consumers from acquiring type information. Some naive consumers in the markets exhibited limited comprehension and default bias toward higher-quality products. We show that firms chose obfuscation in all cases except those in which consumers have a strong degree of bounded rationality and more pessimistically evaluate themselves as the naive type. This means that for firms, the benefits from second-degree price discrimination are limited and obfuscation may be a more important strategy than informing. We also find that, under certain conditions, obfuscation may result in socially desirable product allocation. This result indicate that careful consideration needs to be given to policies that reduce the incentive for firms to obfuscate, such as increasing the proportion of sophisticated consumers.

This study aims to investigate the impact of different facets of corruption on domestic investment (DI) in the Middle East and North Africa (MENA) economies. The main purpose of this empirical research to assess the influence of bribes, abuse of public office and nepotism on domestic investment in 14 MENA countries over the period 2005–2022. The results of 2SLS model indicate that corruption could affect negatively on domestic investments through two channels, namely: illegal payments (bribes) and the abuse of public office for private gain. In this case, the regulators and decision makers have to formulate new strategies that aimed particularly to fight these kinds of corruption to increase domestic investment.

Specific clauses used in marine insurance policies and the wordings thereof have an impact on the imposition of liability on the insurer. Such an impact can be proved by establishing that there is a statistically significant relationship between the two variables, and the extent of influence can be measured by examining the correlation between them. This paper limits the scope of such an examination to marine insurance claims in India regarding breach of warranties, representation, and disclosure requirements. The authors have selected the marine hull policies of public insurance companies that have been subject to such litigation and have used Fisher’s Exact Test to determine whether there is a statistically significant relationship between imposition of liability on the insurer and the policy used. Upon finding a statistically significant relationship, the policies and cases arising therefrom were examined in detail. The comprehensiveness of certain clauses of some policies, as well as the absence of these clauses in other policies, has directly contributed to the imposition of liability on the insurer in certain cases, leading to the conclusion that modification of certain clauses and addition of others could reduce rates of imposition of liability on the insurer.

Does inefficiency interrelate with more risk? Is there any real distinction between traditional (interest based) and Islamic banks (non-interest based) as far as efficiency and risk taking concern? The purpose of this research is to answer these inquiries with regards to Pakistan. A few studies tried to analyze the performance of traditional and Islamic banking, but, no study specifically examines the trio between bank’s risk, capital and efficiency in Pakistan. By doing so the date has been extracted from the audited annual reports of concerned banks. Additionally, sophisticated statistical techniques applied to drew valid estimations such as; Data Envelopment Analysis (DEA), Seemingly Unrelated Regression (SUR) respectively. Moreover, the outcomes indicate that Islamic banks are highly effective in cost control as compared to traditional banks. Furthermore, the estimations of SUR establish the interrelation among efficiency and capital for Islamic banks only. Precisely, enhanced risk reduces capital and efficiency of Islamic banks, whereas the dynamic of traditional banks are different.

This Article empirically investigates the impacts of the board’s rejection of shareholder proposals on corporate value and the appropriate approach to regulation. The study utilizes a dataset of such incidents in China, where the board enjoys significant discretion in rejecting proposals due to the inadequacy of legal enforcement mechanisms. The findings provide suggestive evidence that the market reacts negatively to the announcement of proposal rejections, leading to a significant decline in a firm’s stock value. The most adverse effects are associated with rejections of director nomination proposals and blockholder-sponsored proposals. The inclusion of external legal opinions can help alleviate these adverse consequences. Additionally, the research uncovers that while the two stock exchanges in China demonstrate overall competence in identifying harmful rejection decisions, the effectiveness of their regulatory actions via comment letters is hindered by the inherent weakness of the soft law approach. Drawing upon these results, this study posits that the critical value of the shareholder proposal regime lies in providing a low-cost approach for dissident shareholders to replace poorly performing management and facilitating the constructive engagement of large shareholders and the management. Furthermore, it is recommended that China establish an SEC-style review process for board rejection decisions, with the exchanges as the ultimate authority permitting the exclusion of shareholder proposals.