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Need of "ACGU" Tourist Market for Inbound Tourism in India: Marketing and Promotional Strategies
Australia, Canada, Great Britain and the United States of America (ACGU), are among the top 10 tourist origin countries generating inbound tourism for India. Australia, Canada, Great Britain and the United States of America (ACGU), contribute almost 40 percent of inbound tourism in india. Hence it is quite natural that operation ACGU is very important for inbound tourism marketing and promotion. The ACGU countries are the largest supplier of inbound tourism in India. The present paper is mainly focused on marketing and promotional strategies to promote India as a tourist destination for ACGU countries. The paper is also focused on the importance of ACGU countries for inbound tourism in India and prospective benefits from inbound tourism received from these countries. It emphasizes marketing and promotional strategies to promote India as a multi choice tourist destination. The paper is conceptual in nature and based on secondary data. Overall, it is observed there is a need for special attention on ACGU tourist market to increase inbound tourism in India. Inbound tourism can play an important role to boost India GDP growth due to its multiple economic benefits i.e. employment generation, foreign exchange earning, infrastructure development, export of services and traditional handicrafts etc.
Introduction
India is one of the fastest growing economies of the world with a GDP of more than 3 trillion and ranks 5th largest economy of the world. It is expected that India can become the world's third largest economy by 2030. With the introduction of economic reforms, liberalization privatization and globalization (LPG) 1991 in India it is amazing as an investment center for the world. FDI is one of the main factors responsible for world class infrastructure and superstructure development in India. One can find world class airports, hotel chains, resort highways, super highways, banking services, security, hospitals and many more here which can be a pull factor for international tourists toward India especially from world's most outbound tourism center countries.
India has a great potential to attract foreign tourists. It has a great source for tourists that is natural and man made. There are 40 UNESCO World Heritage sites and numerous natural sites. The diversity of Indian culture represents almost the whole World's culture. People from almost every religion of the world can be seen here. The physiography of India is unique in itself which provides the glimpses of world physical outlook i.e. deserts, mountains, plain areas, coastal lines plateau and many more. The climate, weather conditions and wildlife here is known as the home of varieties. India is one of the most suitable destinations for every kind of tourist. In spite of having all these qualities in Indian destinations it is not receiving international tourists as per capability. India is sharing almost 1.5% of international inbound tourism which is negligible as per the capacity of Indian tourism. So there is a need to re-examine and think over existing tourism planning and promotional strategies etc. In this concern ACGU countries i.e Australia, Canada, Great Britain and USA can play important role to increase the market share of inbound tourism in India. While one review of international tourist arrival statistical data, can find almost 40% of international tourist arrival is from ACGU countries in India. It is also found that almost 35 to 40% of receipts received from ACGU countries. India should focus on inbound tourism market potential with special interest in Australia, Canada, Great Britain and the USA (ACGU). No doubt the modern world is rapidly changing due to geopolitical relationships, international agreements, technology innovations, artificial intelligence, trade and economic corridors etc. Tourism and hospitality is also not untouched to these factors. Every country of the world is trying to grow its economy with partnership and collaboration with other countries on different levels, that is military, security, technology, cultural exchange, trade and tourism etc. The tourism and hospitality industry is one of the fastest growing industries in the world. It represents almost 10% of world employment. It has become very urgent to promote inbound tourism to gain foreign exchange and other economic benefits from the tourism and hospitality industry. The Standing Committee on Transport, Tourism, and Culture in its report indicated that Promotion of Indian Tourism in Overseas Markets is under-utilization of inbound tourism potential. As per 2018 statistics, India ranks 22 nd in terms of international tourist arrivals (around 1.24% share), which is very low as per the capability of India as a tourist destination. The following steps and attention can be helpful for the growth of inbound tourism in India.
Need of special focus on ACGU countries:-Australia Canada great Britain and USA or the develop and CNT economy of the world the processing power of the tourist related to these countries are higher than other countries that is developing and third world countries focus on is your country can be come the main segment to enhance international tourism share of India Innovative Marketing and promotional strategies for ACGU countries:-There is need to examining and evaluate marketing strategies for the development of inbound tourism in India special marketing and promotional studies should be implement in a schedule countries there is a need to enhance marketing promotional budget for this countries also electronic media and print media should be evaluate in this concern electronic media specially social media platform should be used for the promotion of India as a tourist destination.
Promote India as a destination of variety of tourist packages:-Till now, India has been presented mostly as a cultural tourism destination on the international tourism platform, whereas along with cultural tourism, India also has tourism potential in medical tourism, wellness tourism, health tourism, coastal based tourism, adventure tourism, rural tourism etc. Europe needs to be informed about.
MICE, medical and adventure tourism focus strategies:
-Today India has world class infrastructure which mainly include hospitals, highways, super highways, railway system, metro, technology. Which fulfills all the needs to attract medical tourists, health tourists. Chennai is emerging as a healthcare capital of India. There is a need for more visa schemes for medical facilities like Ayush VISA. There is an opportunity to brand India medical tourism with the concept of one earth-one health in ACGU countries. There is a need to provide networking opportunities for Medical Value Travel (MVT) stakeholder, professional, and experts. According to Medical Tourism Index 2020-2021 (MTI) India is ranked tenth globally for medical tourism. There is a great scope to establish India Medical tourism in world top ranking in the field of Naturopathy, Unani, Siddha, Sowa-Rigpa and Homoeopathy, Yoga and meditation. The geography of India is unique to attract foreign tourists in the field of adventure tourism. There is a great scope for land based, air based, and water based adventure tourism. India can attract tourists from ACGU on the behalf of different adventure tour packages and itineraries.
Need of liberation in visa regulation and other legal formalities:
-flexible and liberal visa and legal formalities between India and ACGU countries can become the main factor to grow international tourism between India and ACGU countries. India should engage in negotiations with ACGU countries to establish bilateral agreements that can help to facilitate easier visa processes for tourists. There should be focused on reduction of visa fees, simplified application process, visa on arrival, e-visa expansion and multi entry visa.
Flexible taxation policies for hospitality and tourism:-The Standing Committee on Transport, Tourism, and Culture in its report indicated that no doubt inbound tourism play a significant role to earn foreign exchange (Rs 2,11,661 crore in 2019), but the taxes levied on inbound tourism and tourism oriented services are among the highest in the country. So there is a need to review the tax regime applicable to the hospitality and tourism industry so that India can gain economic benefits from the tourism and hospitality sector in the field of employment generation, foreign exchange earning and infrastructure development etc.
Tourism ministerial meeting with ACGU countries:-At present, India needs to hold a Tourism Minister level meeting to promote international tourism from ACGU so that tourism related partnerships can be established with these countries. It is necessary to ensure that India is promoted as an international tourism hub in tourism related meetings.
India and its international image:-The way India is emerging as a strong economy and country at the global level, it is necessary to present its positive image in the field of tourism in ACGU countries also. So that the number of international tourism in India can be increased. The modern picture of India as a country of potential opportunities should be highlighted all over the world.
Conferences, exhibitions, rallies and campaigns to promote brand India:
-There is a need to organize exhibition conference meeting rallies within Europe to make people aware about the different types of tourist destinations, culture, heritage, coastal areas, rivers and mountains in India so that Europe and North America can become aware about the tourism potential of India. India tourism stakeholders like travel agents, tour operators, hoteliers, organizations and offices should participate in the major international Travel trade Fairs and Exhibitions in major tourist generating, emerging and potential markets especially ACGU countries. These exhibitions can become showcases to promote the tourism resources and products of the country. Special campaigns and rallies in ACGU countries can also be significant to promote tourist attractions in India.
Visit of media personal, influencers, travel agent/operators:-there is a need for Visit of media personal, influencers, travel agent/operators, hoteliers, professionals from Hollywood industry and other tourism professionals in India from ACGU countries. These visits will be helpful to promote India as a tourist destination. In the modern competitive world Influencers can play a significant role to aware people in discovering new and exciting locations, particularly in India where there are numerous destinations related to different themes and specialities for different market segments related to culture, heritage, rural, farm, green, health, youth, and adventure tourism.
Updating tourism oriented programs and websites:-Due to technological advancements Travelers are preferring to plan their vacations and holidays online instead of visiting traditional travel agencies offices. A McKinsey and Google study on European travelers found that 87% of all travel bookings are online. So as per the changing environment there is a need to update tourism websites and programs There should be use of augmented and virtual reality marketing programs.
Seek partnership with tourism stakeholders:-This strategy is concerned with looking out for partnerships with organizations with similar interests to build trust and gain new resources. Such partnerships can include hotels, restaurants, airlines, tour operators, travel agents, entertainment venues, travel and tourism organizations/associations, tourism stakeholders or even local authorities from India and ACGU countries. Partnership among these tourism stakeholders can play a significant role to highlight India as a tourist destination in ACGU countries. Vertical or horizontal partnership can exist among tourism stakeholders for the growth of inbound tourism in India.
Conclusion
No doubt, the modern world is full of uncertainty. International relationships are changing rapidly at international level due to factors related to geopolitics, diplomacy, technology, competition and personal interest of a country. There may be some diplomatic factors which can affect international relationships with ACGU countries for a short term, which can affect tourism and hospitality industry but in long term India and ACGU relationship is most important for world's prosperity and growth. In conclusion, it can be said that the ACGU tourist market is one of the main segments for inbound tourism in India.
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Domain: Business Economics
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Enterprise risk management: An important process for feasible profit and growth
This study is based on the importance of enterprise risk management systems in the organization. Enterprise risk management is a tool that helps organizations to identify those areas which possess potential risks and on how to mitigate those risks. The objective of this paper is to investigate the importance of the ERM system to the firms’ achievement of financial and economic goals. The study focused on four independent variables which are controlling risk, the role of the board of directors, the role of the management, and the size of the organization while the dependent variable is the performance of the firm. Using the quantitative approach, data were collected from 3 organizations namely KPMG Taseer Hadi, Deloitte Pakistan, and a bank known as Islamic Bank, the Bank Islami Private Limited. Purposive sampling was employed to take a 100-sample size from different departments. Key outcomes revealed that the controlling risk, the role of the board of directors, and the size of the organization significantly influenced the performance of the firms while there is no significant impact on the role of management on the firm’s performance. Based on these findings, it is highly recommended to implement the ERM system as it will help in achieving the long-term economic and financial goals of the corporation.
Introduction
ERM system is a definition of an underlying structure, which means that it is a rational process of finding and eliminating corporate risks. Risk should treat as the event or chance of getting a competitive advantage over other entities (American Society for Healthcare Risk Management, 2006). Enterprise Risk Management is becoming a new era in the contemporary business world. Risk has considered an important part of every business and managing it is a crucial part of the business for every entity. Globally the corporate world is changing at a rapid rate everyday new invention and innovation is taking place the old methods of doing business are replacing with new tactics and strategies. In this case, where the companies are facing competition with one another it is difficult to diversify the focus of the organization to all parts of the business operations that's why the organization is run by a huge number of individuals each of them has a certain role and responsibility in the firm.
Apart from running the company and implementing all the strategies and planning successfully, it has also become very important for the organizations to measure the risks relating to the implementation 120 of the strategies of the firm objectives. Sometimes the strategies failed to implement due to several factors in which one of them is failing to measure the risks involved in the business. Deloitte is a well-known audit firm; it observed that managing risk is becoming an important part of a business because of the complexity and nature of today's corporate environment (Kimbrough & Componation, 2009). As per the report of AESRM corporate world is changing day by day, the complexity of businesses has given a rise to the external stakeholders and nowadays it is observed that the value of the business has shifted from physical ownership to informative-based systems (Hamilton, 2005).
Organizations have initiated to developed different approaches to manage risk. Some of them have eliminated traditional approaches and have adopted new tactics. A decade ago people used to avoid share information of their department with the other departments in the same organization which makes an entity less efficient and effective but after the tragic incidents of bankruptcies and 2008 economic crises a new approach was integrated with the corporate world and that approach was named as Enterprise Risk Management ERM (Connair, 2013).
Moreover; because of the increasing pressures from government rules and community pressures, firms have acknowledged the importance of financial, non-financial, and environmental performance (Ilyas et al. 2020;Memon et al. 2020). With ERM, the emphasis is on looking for emergent method/s in reducing risk (Hopper, 2019). For example, ERM has become a very important ingredient for company performance and profitability in the financial institutions in Jordan although it still requires a high magnitude of researches have to be undertaken which is also true in Taiwan financial industry wherein the implementation of ERM resulted in 9.22% cost-effectiveness improvement and a rise in firms' revenues by 16.34% (Chen et al., 2020).
Research problem
Enterprise risk management system improves an organization's economic performance by measuring the risk regarding complex business strategies. Still many organizations avoid implementing this tool in their companies because of which they face difficulties in measuring risks. Nowadays to compete in the corporate world ERM has become a very important tool.
Research objectives
The main objective of this study is to assess the importance of ERM in company profitability and growth.
It seeks to address the following objectives: ➢ To evaluate the importance of ERM in today's business environment.
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➢ To examine whether this tool helps in improving the economic performance of the organization.
➢ To gain an understanding of the risk management system.
Research questions
From the developed research objectives, the following questions were drawn: ➢ What is the importance of ERM in the today's corporate world?
➢ What makes ERM so useful in improving the financial performance of the organization?
➢ What are the different strategies and methods, which help in implementing the ERM system successfully in the organization?
Justification
The research aim is to evaluate the impact of the ERM system on achieving organizational economic goals and objectives. Every business possesses a risk to some extent it is very important for the firms to measure those expected risks and to develop some methods for mitigating those expected risks. It is very important to establish a unit that is responsible to measure or forecast the risks related to the strategies and planning of the firms. This study contributes positively to different stakeholders in various ways. Firstly, the outcome of the paper aids organizations and their management in evaluating how important is considering as variables of effective ERM the controlling of risk, the role of the board of directors, the management's role, and the size of the organization in achieving profitability and growth. Secondly, it helps organizations devise different ways and mechanisms on how to assess, evaluate, control, and manage the risk at the earliest point of time upon taking into consideration the predictors of ERM hypothesized in this study.
Finally, the result of this study can serve as input for wider and contextual studies not only in audit firms, banks, financial institutions, but even in non-financial institutions.
Limitations
A researcher from around the world has suggested that the implementation of effective ERM in the business can increase the performance of the organization. However, it is a difficult task to implement the system of ERM in the industry. Risk assessments carry different methods and instruments, which include historical studies, interviews, and previous assessments. Each of these methods provides its advantages 122 and disadvantages that should be subjected to further evaluation. Because of this, a careful study is needed to be analyzed in order to determine the appropriate judgment regarding the expected risks.
Literature review
The data used in this research was gathered from several sources. The purpose of this research is to determine the importance of risk management in the corporate world, to reduce chances of strategies failures and business operation failures the management along with the upper and lower management should identify risk factors. This will provide them a feasible and undisturbed platform for the growth of the company.
Controlling risk
Controlling risk is a difficult job. Organizations follow a prescribed way to minimize the chances of risk but still number of organizations encounters risk on daily basis. This risk can minimize by implementing an effective ERM system in the industry. An effective ERM significantly affects the firm performance (Malik et al., 2020, p.3). Similarly, implementing an enhanced ERM can contribute to high revenues and cost reduction when associated with the business model innovation (Rodríguez et al. 2020). Chen et al. (2020) also postulated that ERM enables companies to develop a business model that facilitates cost and risk reduction thus, promotes profitability and sustainability. Managing and controlling ERM favorably helps organizations prioritize its activities, commit its resources effectively, establish effective controls to minimize risks and threats and at the same time exploit its opportunities (West Yorkshire Combined Authority, 2020).
In the past employees used to mitigate risk by using traditional approaches one risk at a time but the world is changed due to the complexity of the business world it has become difficult to detect risk.
Controlling risk should go through official communication channels, every department in the organization should communicate with other departments if they found any risk in any business operation, they should directly communicate it with the concerned department on time for reducing the failure of business operations (Abbasi & Al-Mharmah, 2000). Enterprise Risk Management would be effective when it is used with due care while planning the goals and objectives of the firm, leading the operational activities along with encouraging the subordinates for performing their duties in an efficient way and by controlling the activities of the firm so that the potential financial risk could be minimized (Cassidy, 2005). According to some researchers project management tasks can be accomplished by taking into consideration some of the major steps which include preparation of the plans, arranging the platform for the people that will be 123 engaged in the project, critically staffing only the competent staff, observing the work done by the staff members, controlling their authorities so that they cannot misuse their powers, and by leading all the members engaged in the project (Neinaber and Bardnard, 2007).
Ten Six Consulting (2021) highlighted the trifold benefits of an effective ERM at the corporate level. The significance of professionally handling the enterprise risk management leads to the success of the business with emphasis on having a system or tool that identifies, analyzes, and takes active steps to risk management. The three benefits derived from ERM are: • Financial benefitsefficient implementation of ERM lowers operational costs, controls spending, effective management of corporate expenses, and maximizes potential profitability.
• Corporate governanceeffective ERM helps management better plan and evaluate all the significant risks that will be encountered and reduce the incurrence of uncertain and unforeseen issues. It also facilitates well-planned decisions particularly in determining where to invest and what projects to undertake.
• Brand reputationapplying strong risk management adds value to the shareholders and improves the perception of the brand especially in effectively managing and mitigating risk which in turn builds a strong brand reputation and customer satisfaction.
Furthermore, West Yorkshire Combined Authority (2020) stipulated that ERM has become an essential portion of desirable management and a major contributor to good governance of corporations.
Accordingly, management of risk effectively enhanced performance and financial management, annual corporate plans and processes, operational plans, demonstrate accountability and transparency, and supporting corporate plan delivery. However, the study of Rubino (2018) as cited in the recent research of Lopez (2021) titled "How Can Enterprise Risk Management Help in Evaluating the Operational Risks for a Telecommunications Company?" stressed that ERM frameworks have their limitations such as the lack of risk evaluation techniques, inadequate application with the processes related to identification of operational risks, and the deficiency in the evaluation and management of the risks. Hence, the most significant tasks for the firms are to increase their favorable outcomes on these inadequacies mentioned.
Role of board of directors
After the 2008 economic crisis, the ERM system became an essential tool for the business world. It helps the organizations to detect expected risks promptly. The adoption of the ERM system was encouraged by the upper management of the companies, which consist of the board of directors. They are the caretakers of the organizations on behalf of the shareholders it is their responsibility to take every measure against 124 those things that can affect the operations of the businesses (Kleffner et al., 2003). ERM is a process that upper management uses for one common task, which includes identifying the potential risk factors that may harm the organizational activities. This system not only identifies those risk factors but also helps in managing those factors so that they no longer harm the activities of the firm; it guides the management for mitigating the risk factor activities (Curtis & Carey, 2012).
Furthermore, many companies adopt the ERM system when they are encouraged by the board of directors so that the operational activities smoothly run (Kleffner et al, 2003). One of the main factors that entities should know is what goals and objectives the organization wants to accomplish. If the entity is not well, aware of what they want to achieve then it would be hard for them to accomplish those objectives. Therefore the firm must know its objectives because if they are well aware of the goals then they are likely to motivate themselves for achieving those objectives if any uncertainty occurs while achieving the goals they will do whatever it takes to mitigate those factors (American Society for Healthcare Risk Management, 2006). Firms which highly depends on their upper management is most likely to implement ERM system in their organization because reliance of the firm on board of directors means that their stake in the organization is more than other stakeholders that's why they are more concerned about the prosperity and growth of the organization (Beasley et al., 2005).
Role of the management
It has been observed that ERM system is impossible to implement without the support of the management of the organizations because they are the real agents of the company, they have the responsibility to operate the business they perform (Walker et al., 2002). Having the consent of the management regarding the implementation of the ERM system is a crucial part because when the management detects risk, they also try to find the reason for that particular risk which causes time delays in performing business activities (DeFrank & Ivancevich, 1998). Enterprise risk management should observe based on three perspectives, which are changing the role of the managers, changing the tactics of regulating their roles and responsibilities, creating backup plans (Lam, 2000). Every organization has the desired level of risk and actual level of risk to balance this fact the management should use various means and instruments, which helps them to adjust both levels of risk in an efficient way (Chance & Brooks, 2010). Enterprise risk management system helps the management to manage all the operational activities of the organization to achieve all economical and financial goals of the firm as well as to make strong corporate governance (Manab, Othman, & Kassim, 2012).
Size of the organization
As the size of the organization increases, the happening of uncertain events is also likely to happen. In large organizations, risk differs in size, extent, nature, and complexity. Therefore, the implementation of an efficient ERM system becomes important. Large organizations are more cautious to adopt the ERM system as compare with small organizations because large entities operate in a much more complicated and complex business environment (Colquitt et al., 1999). Those entities which possess a large size of operational activities are likely to face more financial risks because the higher the firm size is the high level of uncertainties that are likely to occur (Golshan and Rasid, 2012). Enterprise risk management helps the companies to overcome the potential risks the firm might face in the present or future (Hoyt & Liebenberg, 2009). The performance of the firm depends on its capital structure. The uncertainties threaten the operational activities of the firm. Logically big firms have backup plans for the uncertainties to protect themselves from the loss attached with the risk factors (Beasley et al., 2006).
Research methodology
Research methodology is a systematic way of collecting data and information for the sole purpose of evaluating the research topic (Haradhan, 2020). In this research positivism, the approach has been used as it depends on the already available knowledge and through the deductive approach. The Methodology comprises Research Design, Research Procedure, Sampling Plan, Theoretical framework, tools used for data analysis, and Software used for processing data.
Research design and approach
As the study's research design, the positivism paradigm along with deductive methodology has been used for the research process. Positivism is a study that cannot be applied to the study of the behavior of humans because of their nature's complexity and unreal quality of social experience (Cohen, Manion, and Morrison, 2010). It also includes quantitative research techniques along with descriptive evaluation techniques and methods for collecting data will be in the form of a questionnaire to achieve the objectives of the research topic.
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Further, this research has been conducted with the available knowledge, which makes this research deductive approach-based research. This approach helped us in expanding our knowledge regarding the importance of ERM, how it improves the financial performance of the company. The process of research includes identifying, judging, testing, and establishing the concept of the researchers (Williams, 2013).
Research strategy
There are mainly two types of research strategies quantitative and qualitative. In our research, a quantitative strategy is used. Quantitative strategy is also known as the descriptive technique this type of strategy helps us in gathering information through a large number of respondents and based on the answers of the respondent's hypothesis are made which makes our research reliable (Saunders et al., 2009). A quantitative approach has been used for our research. The data was collected from the respondents and based on their answers a judgment is concluded. Participants have asked to fill the questionnaire, which includes some questions regarding enterprise risk management.
Sampling and sample size
Respondents were asked to carefully answer the questions based on their knowledge and thinking.
Method of data collection
The data has been collected using a questionnaire-based survey. A structured questionnaire has been prepared and those questions have been filled by our group members. Employees of three different 127 organizations were approached of which two of them are audit firms and the other one is a registered Islamic bank. All the participants are currently working in these three organizations.
Hypotheses
The hypothesis has been prepared based on the variables presented in the conceptual framework. The purpose of this research is to demonstrate a relationship between dependent and independent variables.
Findings and discussion
Enterprise risk management is a great tool for measuring risk. Every organization possesses some sort of risk, which stops the entity to accomplish its organizational goals. All most every organization encounter risk at some point in time, to mitigate those risk factors there is a need of a well-equipped system and ERM is one of them. This system allows the corporations to identify risk-possessing units it also gives an eye view to the management that how these identified risk factors could be minimized. ERM has become very useful tool as it turns out to be a great strength for the organizations. The bigger the organizations are the great it will find the need for ERM system.
The implementation of this system is a hard task some corporations relies on their management as they do not find this system useful, they consider it as a costly expensive that's why they avoid to implement it in their organizations. The implementation of ERM system lies with the board of director, as they possess the supreme authority in the organizations. Therefore, it is their duty to implement this useful system. Management also have a role in the implementation of ERM system because when the board members decides to implement this system, they direct the management of the organization for doing this task (i.e. implementing ERM system).
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The data for this research work collected through survey questionnaire.
Demographics of respondents
The data was used to explore the thinking of the employees regarding the ERM system and the performance of the entity. The respondents were asked to give their views and knowledge regarding the importance of ERM in organizations. The below presented demographic characteristics of the respondents include their age, gender, level of education, and their work experiences. The above table shows us the descriptive statistics of our research-based questionnaire. It includes mean, standard deviation, minimum and maximum values. In our research questionnaire, minimum value is 1, which is strongly agree, and maximum is 5, which means strongly disagree with our statements. The above chart shows us the consistency of the responses we get from our respondents as all most the respondents lies within the range of 1 to 3 (i.e. 1 means strongly agree, 2 means agree and 3 N 100 100 100 100 **. Correlation is significant at the 0.01 level (2-tailed).
Correlation matrix and hypothesis testing of significance
The above chart shows us the relationship of independent variables, which includes controlling risk, role of board of directors, role of management, and size of the organization. It shows us the strength of independent variables among each other. Controlling risk and size of the organization have 0.573, which means 57.3% relationship, and similar relationship lies with the dependent variables as well. The relationship between size of organization and controlling risk is 0.573 which is 57.3% as well as in the previous case. The above chart shows us the relationship of independent variable on dependent variable. Independent variables include controlling risk, role of the directors, role of the management, size of the organization and dependent variable is performance of the firm. The results of the matrix have 95% confidence interval and two tail approach used to see the positive or negative impact of the independent variables on dependent variables. The above table shows controlling risk having 0.000, role of directors 133 having 0.000, role of management having 0.237 and size of the organization having 0.000 significances.
All the variables except role of management has a positive relationship with performance of the firm while role of management possesses negative relationship with the performance of the firm. Controlling risk shows 65.5% relationship with performance of the firm while role of directors shows 64.6% relationship, role of management have a negative relationship with the performance of the firm which is -11.9% and size of the firm have 76.6% relationship with firm performance. Size of the firm have the most concerned percentage as compare with the other variables. Table 9 Alternative Hypothesis
Alternative Hypothesis
Accepted / Rejected Significant level (0.05 at two tailed) H1: Controlling the Employees in An Efficient Way Has A Significant Impact on The Firm Performance
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H4: The size of the organizations has a positive relationship with the performance of the firm.
The hypothesis is accepted at 0.00 level of significance and 95% confidence interval as the value is less than the 0.05 at two tail tests.
Exploratory factor analysis (EFA)
The EFA analysis also called as exploratory factor analysis is used to determine the reductions in both data and dimension perspective. This analysis is usually based on the factor loading which shows multicollinearity between independent variables. In our case questionnaire was used as the method of data collection. We have conducted our research based on the four dimensions namely as controlling risk, role of directors, role of management, and size of the organization these variables were used to see the impact of these variables on the performance of the firm.
Multiple regression analysis and hypothesis testing
The linear regression model is used to determine the relationships of independent variables on the dependent variable. Whether there is a positive or negative relationship between the variables. The chart of model summary has a figure named as R which shows us the coefficient of determination to further explain the dependent variable. Two statistics namely as T and F are also presented below T shows us the individual significance of the variables while F shows us the significance of the model. We can see in the above chart that the T values of controlling risk and size of the organization are highest (i.e. greater than 1.96) which explains us that these two variables are highly predictable on the dependent variable.
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H2: The role of board of directors in the organization has a positive relationship with the performance of the firm. The Hypothesis is rejected as our T-value is 1.198 which is less than 1.96 at 95% confidence Interval with 0.234 significance level.
H3: Management role and ways of performing work in the organization has a negative relationship with the performance of the firm. The Hypothesis is rejected as our T-value is -.113 which is less than 1.96 at 95% confidence Interval at 0.910 significance level.
H4: The size of the organizations has a positive relationship with the performance of the firm.
The Hypothesis is accepted as our T-value is 6.732 which is greater than 1.96 at 95% confidence Interval at 0.000 significance level.
The research was based on the importance of the ERM system in organizations for feasible growth and profitability for corporations. We have tested our variables one by one on the basis on which we have calculated the relationships and impact of our independent variables on the dependent variables.
We have four independent variables and one dependent variable.
The first independent variable is the controlling risk of the organization, the correlation analysis result is 0.000 which is less than 0.05 therefore we have accepted the hypothesis of controlling risk variable. The second variable is the role of the board of directors in the organization. As we have seen while studying the paperwork and by getting the responses of our respondents we can say that board members of the organizations play a vital role in the organization. They have a great impact on the decision-making system if they do not prefer the ERM system then it cannot be implemented in the organization (Coso, 2004).
Finally, the last variable is the size of the organization. The bigger the firm size is the more it is concerned about the potential risk factors. It is a hypothetical statement that organizations do not possess risk because every return is related to the risk attached to it. Without risk, there will be no return at all.
The hypothesis testing of this variable is accepted as it has the level of significance of 0.000 which is less than 0.05 based on which is accepted.
Conclusion and recommendations
The study was conducted to have an idea related to the importance of the ERM system in the organization.
ERM system helps the organization to substantially achieve its financial objectives without any interference from any part of the organization. Every risk to some extent is the responsibility of the management along with the board members to develop backup plans and protocols for every person working on the premises of the organization for the prosperity of the corporation. For this study we have taken 5 variables out of the 4 are independent and one is the dependent variable.
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These variables are tested mutually and individually. We have conducted our research using a quantitative approach with the help of a questionnaire we have collected data. 100 questionnaires were filled from 3 organizations two of them were audit firms and one was an Islamic bank.
Implications of research
This research was conducted to get an overview of whether the ERM system is useful or not. Our study has shown us that the ERM system is very useful as it will enhance the productivity of the company, in the long run; it also provides opportunities to the stakeholders to overcome any sort of issue on time. It reduces the chances of uncertainties in the entity. This system is applied in almost every entity whether it is big or small for feasible growth and profitability it is highly recommended to implement the ERM system as it will help in achieving the long-term economic and financial goals of the corporation.
Recommendations
After studying and conducting this research work following points are recommended • ERM system helps in achieving long-run organizational goals more easily as it detects risk before it happens.
• ERM system identifies those areas which possess potential risk so that the management can take necessary steps to mitigate those risk factors.
• Implementation of ERM does not rely on the size of the entity, it is useful regardless of the size of the entity because sometimes our policies are failed and become unsuccessful not because of the idea but because of not identifying the risk associated with the implementation of those policies.
Areas of further research
Although this research was based on the importance of the ERM system within the organization. Our research only focuses on the above-mentioned variables we can further extend our areas of research to other variables as well, we can also further study the risk involved with those employees who implement this system, or those individuals who are responsible for handling this system.
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Domain: Business Economics
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ASSESSMENT OF STRATEGIC OPPORTUNITIES OF THE ENTERPRISE IN CONDITIONS OF UNCERTAINTY
The work contains the development of theoretical and methodological provisions, practical recommendations for the analysis of the strategic capabilities of the enterprise and the evaluation of the effectiveness of the enterprise’s strategy in complex conditions of uncertainty. The object of the study is the strategic capabilities of enterprises as a basis for the formation of strategic plans. The problem of evaluating the effectiveness of strategies and strategic capabilities of enterprises forced to function in conditions of uncertainty is solved. The activity of Ukrainian enterprises in the difficult conditions of the war contributed to the emergence of the need for the formation of new approaches to the development and evaluation of strategies or the adaptation of existing ones to the new conditions of the external environment. If the factors and their characteristics cannot be determined, then the consequences of their impact on the enterprise’s activities will be unexpected. And since the uncertainty of the future is often underestimated, this leads to companies choosing those strategies that do not help the company avoid external threats and do not allow to use the opportunities that uncertainty can hide. With the help of economic-mathematical modeling, a model for assessing the company’s strategic capabilities was formed, which would make it possible to compare the available resources and possible challenges from the external environment, to investigate the relationship between the company’s capabilities and its ability to achieve strategic goals. A methodology for assessing the strategic capabilities of enterprises using the tools of probability theory and the scenario approach is proposed. The obtained results can be useful for determining when choosing a strategy and its evaluation by Ukrainian enterprises operating in conditions of uncertainty.
Introduction
Ukrainian enterprises not only carry out, but also plan their activities in difficult and dangerous conditions of war, which made it necessary to form new approaches or adapt existing ones to the assessment of new threats of the external environment and situations that may arise. If in previous periods, problems arose due to insufficient awareness of the probability of future events that affect the opportunities of market participants, or events that are difficult to predict, then at the current stage, significant problems arise in enterprises due to the lack of experience in responding to these events and the need to assess one's capabilities under one or another scenario of the development of events.
In economic science, different interpretations of the concept of uncertainty are used. This is both the variability of the market and a certain form of existence of the real surrounding world, which is determined by the objective existence of probability and the incompleteness of the reflection of real events in the human mind [1][2][3][4][5].
Thus, it is possible to generalize «uncertainty» as the objective impossibility of obtaining any information about the functioning of factors of the external environment due to the ambiguity of their parameters.
In the practical activities of enterprises quite often, the uncertainty of the future is simply underestimated. Such a situation leads to the choice of those strategies that do not contribute to the company's avoidance of external threats and do not make it possible to use the opportunities that may be hidden by uncertainty. The traditional approach, which is used by most enterprises and which is based on the use of primarily financial forecasting tools, requires accurate predictions. This leads to their underestimation of uncertainty. Therefore, understanding the essence and nature of uncertainty, researching ways to take it into account when forming and evaluating the strategic capabilities of an enterprise will contribute to both increasing the level of effectiveness of strategic plans and the level of probability of their successful implementation and development of the enterprise, in general [3,[6][7][8]. TECHNOLOGY AUDIT AND PRODUCTION RESERVES -№ 5/4(73), 2023
ISSN 2664-9969
When evaluating the strategic capabilities of an enterprise, it should be taken into account that the meaning attached to this concept is not always the same. Most often, this concept denotes the potential of the enterprise in the long-term perspective or to characterize the internal factors of the enterprise. In this case, it is about the availability and efficiency of the use of various types of resources by the enterprise. Along with this, another approach to the interpretation of strategic opportunities is found in the economic literature [4,5]. This is the presence of favorable environmental factors or the absence of threats. It is also the ability to resist threats from the external environment. Thus, the assessment of the strategic capabilities of enterprises, taking into account the multifaceted nature of this concept, should be aimed at determining both the internal potential and forecasting the development of the external environment, which requires reducing the level of its uncertainty.
Strategic capabilities of enterprises were and are the subject of study by scientists [1][2][3][4][5][6][7][8]. Their attention was mainly focused on the analysis of external industry factors. Therefore, the subject of research in the field of strategic analysis for quite a long time was the relationship between the company's strategy and its external environment. They also formed a resource approach to the formation and selection of the company's strategy. However, the methodological aspects of the analysis of the strategic capabilities of enterprises, which involves a thorough assessment of the enterprise's ability to respond appropriately to the modern challenges of the external environment, require refinement and adaptation to today's conditions.
In view of the above, the conducted scientific research is important and relevant, since the effectiveness of their activities depends on the level of effectiveness of the strategies of enterprises. And how effective the strategy is depending on an objective assessment of the company's capabilities. Such an assessment should be based on reliable information about the internal and external environment of the enterprise in the present time and in the strategic perspective. Analysis of the level of uncertainty of the external environment will enable enterprises to take into account the probability of the occurrence of dangerous (or, conversely, favorable) scenarios of its development in their practical activities and react accordingly.
The aim of the research (in the scientific aspect) is to obtain effective mechanisms for assessing the strategic capabilities of enterprises in conditions of uncertainty in the external environment, to develop methods and tools for applying probability theory methods to reduce the level of this uncertainty. In the practical activity of enterprises, the implementation of the specified goal will make it possible to objectively assess the threats and challenges that may arise with a certain probability in the environment of their functioning, and adequately react to them.
Materials and Methods
Research methods were used in the work: -mathematical modeling to form a model for assessing the company's strategic capabilities; -scenario analysis for the analysis of the scenarios of the development of the external environment and the assessment of the strategic capabilities of the enterprise depending on the choice of the relevant scenarios; -two-dimensional model for assessing the uncertainty of the external environment; -methods of probability theory (in particular, Bernoulli and Bayes formulas).
Results and Discussion
Since the external environment is constantly and rapidly changing, it is advisable to direct the study of the company's strategic capabilities to the formation of the appropriate response of the company to these changes, depending on the scenario of the development of events. In this regard, the choice of strategy by an enterprise should, on the one hand, be based on an objective assessment of its capabilities in real time and in a strategic perspective, and on the other hand, focus on the most likely changes in the external environment and their consequences can cause Such a choice requires an assessment and comparison of the company's strategic capabilities with its goals and the necessary resources that will enable effective use of these capabilities. At the same time, methods of minimizing the level of uncertainty of the external environment, as well as contrasting possible threats with the company's potential capabilities to overcome these threats or minimize their impact on the company's activities, are especially important.
Uncertainty is a much broader concept than the risk faced by the enterprise while carrying out its activities, as it characterizes ambiguity, lack of knowledge about factors and the consequences of their influence. Most scientists believe that it is impossible to find means or methods that make it possible to completely get rid of uncertainty. In their opinion, the emergence of uncertainty and, as a result, risk is associated with two groups of factors: -direct (occur in the internal and external environment of the enterprise and have a direct impact on its functioning, other things being equal); -indirect (related to the influence of other enterprises on the enterprise's activities).
Taking into account the diversity and ambiguity of the concept of «uncertainty», both fuzzy sets, which involve the construction of a membership function, and the use of parameters characterizing the dispersion of measurement results accepted within the framework of probability theory are used for its assessment [9][10][11][12]. The given study is based precisely on the application of the second approach, that is, the interpretation of this concept as a doubt about something. If to take into account the result of measuring the state of the external environment, then «uncertainty» means doubt in the measurement results, since it is always reliably unknown how close the measurement result is to the actual value of the parameter. In the given interpretation, the uncertainty is a random variable, because the ability to disperse is a property of random variables.
Since the level of effectiveness of the chosen strategy depends on the objectivity and reliability of taking into account the conditions in which it will be implemented, the list of factors and their characteristics will not be determined, and accordingly, the consequences of their impact on the enterprise's activities will be unexpected. Depending on these conditions, which are presented in the research in the form of events that mean the occurrence of the influence of certain factors, the formation and selection of a strategy is carried out. TECHNOLOGY AUDIT AND PRODUCTION RESERVES -№ 5/4(73), 2023 ISSN 2664-9969 In the conditions of uncertainty of the external environment, it is advisable to use generalized data characterizing the factors of the external environment for the development of the company's development strategy. Let's choose the two-dimensional model of assessment of the external environment by R. Duncan as the basis of the research. According to this model, there are four types of uncertainty: low, moderately low, moderately high, and high uncertainty. Belonging to a certain type is determined by the corresponding characteristics of the environment: simple-complex, static-dynamic. Accordingly, the more complex and dynamic the nature of the factors of the external environment, the higher the level of its uncertainty. Let: -A -an event characterized by the presence of a small number of factors; -B -an event characterized by a slow change of factors over time; -N -an event characterized by the presence of a large number of factors; -M -an event characterized by rapid changes in factors over time.
Then the values of the probabilities of these events will be significant (Table 1).
Let's consider the probability space (S, F, P), in which: -S -an arbitrary set, the elements of which are elementary events (a finite set of elementary events), S = (S 1 , S 2 , S 3 , ... , S n ); -F -the sigma-algebra of subsets S of random events, closed with respect to operations of counted union; -P -a probability measure or the probability of an elementary event (sigma-additive finite measure P(S) = 1).
Then the space of elementary events S consists of events S 1 , S 2 , S 3 , S 4 , i. e. S S i j , if i ≠ j (Fig. 1). The specified elementary events are equally possible, since there is no objective reason to claim that the possibility of one of them occurring is different from the possibility of another event. At the same time, the sum of the probabilities of all elementary events is equal to one: ∑ ( )= . Accordingly, event S 4 is opposite to event S 1 , these events are not compatible, since they do not have elementary events that were simultaneously favorable for both event S 1 and event S 4 . Events S 1 and S 2 , S 1 and S 3 , S 2 and S 4 , S 3 and S 4 are pairwise compatible because there are elemental events that are favorable to both of them. Therefore, events S 1 and S 4 constitute a complete group of incompatible random events. In addition, the event S is a consequence of the corresponding events (A, B, N, M) if all the elementary events that are favorable to the event A (B, N, or M) are also favorable to the event S.
Thus, when analyzing the number of factors of the enterprise's external environment and the speed of their changes, one should take into account the nature of their occurrence, which may be random, or may be completely natural, when one event contributes to the occurrence of another. In addition, events that may initially be perceived as favorable, that is, as potential opportunities, under certain conditions can turn into their opposite -threats. In particular, favorable events (opportunities) used by competitors can be such threats.
The company's potential opportunities can be manifested in the following ways: attracting new customers, entering new markets or new market segments, expanding the range of products, increasing competitiveness, developing and improving performance and efficiency indicators, effective use of resources, etc. The given list of possibilities clearly characterizes the belonging of one part of them to the external environment, and the other to the internal environment. In part, they can be considered external and internal reserves that can be used by the enterprise.
Sometimes in the external environment of the enterprise there is a scenario in which the factors of this environment fully contribute to the realization of the potential opportunities of the enterprise, but the enterprise does not have the necessary resources or other components of the internal environment to take advantage of these opportunities.
Let's denote the possibility of achieving the appropriate level of strategy effectiveness (profitability or profitability of activity) as the occurrence of event R. Then the possibility of achieving a certain level of strategy cost (a parameter characterizing the costs of providing the enterprise with the necessary resources that are necessary for the implementation of its chosen strategy) will mean event C, and the level of strategy feasibility (parameter indicating the level of achievement of the strategic goal) -event D and other parameters. In particular, these can be events that mean the achievement of appropriate levels of adaptability, competitiveness, dynamism, reliability, reality, etc. Thus, let's get a new probability space (E, F, P). This space, formed by the specified elementary events, will reflect the internal capabilities of the enterprise to take advantage of the corresponding scenarios that have developed as a result of the occurrence of certain events in the external environment. For simplification, let's choose only eight from a large number of possible events, each of which characterizes the probability of the enterprise achieving the appropriate level of the specified parameter in the strategic perspective. Then P(E) is the probability that all of the above events will occur, that is, the company will reach the strategically necessary level of values of the selected parameters. Under these conditions, it is possible to determine P(E) by the rule of the product of the corresponding probabilities of elementary events R, C, D and others that form it: Let's introduce the notation: m is the number of parameters characterizing the potential strategic capabilities of the enterprise, and n is the number of parameters for TECHNOLOGY AUDIT AND PRODUCTION RESERVES -№ 5/4(73), 2023 ISSN 2664-9969 which there is a probability of obtaining a low level of their importance in the strategic perspective.
Since the mentioned events characterize the formation of strategic capabilities of the enterprise in sufficiently different aspects of its activity, they can be considered as a set of eight relatively independent events. If the probability (p) that one of the parameters will reach the required strategic level is assumed to be 0.8, then the probability (k) that the corresponding strategic level will not be reached by the parameter will be 0.2 (as the probability of the opposite event, k = 1-p). Then, according to Bernoulli's formula (1), the probability that half of the specified parameters will not reach the strategic level can be calculated as (2): As it is possible to see, the probability that half of the specified parameters will not reach the strategic level is less than 5 %, which indicates a rather low probability of such an event.
In order to establish a connection between the strategic opportunities of the enterprise, which may arise in the external environment as a result of the occurrence of certain events, and the ability to use these opportunities (in the form of a strategy that contains a prospective plan of events with the corresponding probabilities of their occurrence), let's apply the Bayesian formula (3): Events of the external environment (probability space (S, F, P)) can be sufficiently predictable and simple (as in the case of event S 1 ) or correspond to a high level of uncertainty (as in the case of event S 4 ). Whereas the events of the internal environment (probability space (E, F, P), E -a set of elementary events R, C, D and others) characterize the possibility (probability) of enterprises achieving the corresponding planned level of a strategic parameter in the long term. These parameters provide and characterize a generalized assessment of the effectiveness of the company's strategy.
Let's assume that the total probability of the enterprise achieving the appropriate level of strategy effectiveness P(E) = 0.07, and the probability of occurrence of event S 4 , which corresponds to a high level of uncertainty of the external environment and is defined as the product of elementary events P(N) and P(M): P(S 4 ) = 0.05. Conditional probability characterizing the probability of an event (probability of reaching the appropriate level of all strategic parameters) P E S i | . .
( )= 0 09 Then, substituting the values of the probabilities of the specified events into the Bayes formula, let's obtain: Thus, the probability that the enterprise will achieve the planned level of strategy effectiveness (that is, all (eight according to the conditions of the study) strategic opportunities of the enterprise will be realized) before the end of the strategic planning period in the presence of a high level of uncertainty in its external environment is equal to 6 %.
The proposed technique will make it possible to investigate the probability of the enterprise realizing its capabilities under various types of uncertainty in the external environment. In addition, this technique will make it possible to analyze the existence of a gap between the company's goals and its capabilities, if such a gap exists, and also to identify directions for reducing this gap in the long-term perspective.
The technology of applying the method of assessing the strategic capabilities of the enterprise according to the proposed method involves the implementation of the following sequence of stages: -determination of the main parameters, the level of achievement of which interests the company from the standpoint of achieving its long-term goals; -determination of the overall probability of the enterprise achieving the appropriate level of strategy effectiveness in the strategic perspective; -determination of the main characteristics of the external environment (the number of factors, the speed of their change and other features of their impact on the enterprise's activities); -determination of the uncertainty type of the external environment in a strategic perspective; -establishing the difference between the indicators of the strategic plan and the opportunities dictated by the actual state of the enterprise and the existing growth trends of the enterprise; -determination of the probability of the enterprise achieving the appropriate level of strategy effectiveness (which will correspond to the full use of its strategic capabilities) in the conditions of existence of a certain type of uncertainty of the external environment during the strategic planning period; -development of measures to increase the probability of full use of the company's strategic capabilities.
The list of specified measures can include, for example, measures to redistribute resources from unpromising or low-promising areas of the enterprise, measures to increase the level of its competitiveness or effectiveness, updating or expanding the product range, promotion to new markets or the development of new market segments, a more active innovation policy, reformatting or closing certain types of activities or divisions, etc.
Therefore, it can be argued that such characteristics of the external environment as the level of predictability and stability need to be used in the analysis of the strategic capabilities of enterprises, assessment of the factors of the external environment of the enterprise and its development prospects, scenarios of its possible states, as well as factors that may represent threats to the enterprise or constitute reserves improving its performance. In addition, in order to obtain an objective and reliable assessment of the internal capabilities of the enterprise, it is advisable to analyze the necessary reactions of the enterprise to the threats and opportunities of the external environment, the peculiarities and the nature of the influence of the factors of the internal environment of the enterprise. It will also be appropriate to form a forecast of the company's development prospects, taking into account the assessment of its resources and the efficiency of their use, and to evaluate the ratio between their actual TECHNOLOGY AUDIT AND PRODUCTION RESERVES -№ 5/4(73), 2023 ISSN 2664-9969 and required (strategic) value from the point of view of the probability of avoiding a threat or using advantages.
The proposed methodology will make it possible to determine the strategic opportunities and strategic orientations of the company's activity in view of the possible scenarios of the development of the external environment in conditions of its uncertainty and instability.
The results obtained during the research can be applied in the practical activities of enterprises during the development of strategies and evaluation of their effectiveness according to the parameters of effectiveness, cost, dynamism, adaptability, etc. In today's conditions, most Ukrainian enterprises are forced to plan their activities in conditions of complete uncertainty. Given this, having tools to reduce this uncertainty will help them make the process of selecting and evaluating strategies more informed and rational. Research and comparison of the opportunities that enterprises receive as a result of the influence of internal and external environmental factors will make it possible to choose the most competitive and optimal strategy, taking into account the complex and unpredictable conditions of today.
The proposed methodology is being tested in the practical activities of a number of Ukrainian enterprises in the western region. Since this process requires time to adapt the methodology to the specifics of activity and strategic planning of these enterprises, as well as measurement and generalization of indicators, the obtained results will be presented in subsequent studies.
The revision concerns the selection of a list of parameters characterizing the external environment of enterprises in wartime conditions. The limitations imposed by these conditions require further study and systematization. Further research will be conducted in this direction and will relate to a more thorough analysis of the features of the strategic planning of enterprises during the war.
Conclusions
The application of the proposed methodology in the practical activities of enterprises when forming their strategic plans and determining their effectiveness will contribute to the study of probable changes in the external environment, the assessment of opportunities for obtaining competitive advantages, as well as the need for the necessary resources and costs. The study of the strategic possibilities of the enterprises will make it possible to evaluate the possible scenarios of the development of the external environment and to choose adequate strategies for the development of the enterprise. They can be useful for assessing existing resources, as well as forecasts for their more effective use in the future, researching the strategic gap between these indicators.
Analysis and assessment of existing resources and their comparison with the company's capabilities, taking into account the identified scenarios of environmental development, will make it possible to form optimal competitive advantages in the long term.
The possibility of simultaneous assessment of a large number of criteria characterizing the situation that will occur with a certain level of probability in the future, makes it possible to choose an effective strategy of the enterprise's activity, to predict the results of this activity. Therefore, it is advisable to carry out further research in the field of evaluating the effectiveness of enterprise stra-tegies in the direction of a more detailed analysis of the factors of the internal environment in order to obtain an assessment of the nature of the emergence of its internal opportunities and factors of the external environment that form the level of its certainty and stability.
Fig. 1 .
Fig. 1. Space of elementary events according to uncertainty types
Table 1
Determination of the type of uncertainty of the external environment by the probability of occurrence of relevant events\===
Domain: Business Economics. The above document has 2 sentences that start with 'TECHNOLOGY AUDIT AND PRODUCTION RESERVES', 2 sentences that start with 'At the same time', 2 sentences that end with 'activities will be unexpected', 3 sentences that end with 'of the enterprise', 2 sentences that end with 'in the strategic perspective', 2 sentences that end with 'in the external environment', 2 paragraphs that start with 'The proposed methodology'. It has approximately 4211 words, 124 sentences, and 47 paragraph(s).
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Dividend Policy Determinants of Islamic vs Conventional Companies: Is There a Difference?
This study aims to examine the determination of dividend policy in Islamic companies and non-Sharia companies in the manufacturing sector. The dependent variables used are tax, EPS, VOE, institutional ownership, DER, firm size, ROE, MBV, and current ratio with one independent variable namely dividend yield. The population unit used in this study is a manufacturing company listed on the Indonesia Stock Exchange for the 2017-2019 period. Using purposive sampling method to determine the research sample, there are 51 companies consisting of 33 Islamic companies and 18 non-Islamic companies that fall into this category, respectively. Using multiple linear regression as a method of data analysis. The results show that INS, DER, ROE, MBV, CR are significant determinants of dividend policy on Islamic stocks, while INS and CR are significant determinants of dividend policy on non-Islamic stocks in the manufacturing sector. There is a difference in influence between the two.
INTRODUCTION
Investment is a delay or sacrifice of consumption in the present to be used in productive assets for a certain period of time ( Jogiyanto, 2003:5). One of the investment options that investors can make is investment in the form of equity participation or stock investment that can be made in the capital market. The capital market is divided into two categories, namely the Islamic capital market and the conventional or non-Islamic capital market (Fadilla, 2018) Barowi & Ma'rifah (2018) defines the Islamic capital market as a capital market whose activities include the types of securities traded, issuers, as well as mechanisms that are traded in accordance with sharia principles.and limited to prohibited activities such as: usury, speculation, gambling, etc. The existing system in the Islamic capital market is inseparable from the capital market system as a whole.
According to Article 1 of the Regulation of the Financial Services Authority Number 17/ POJK.04/2015 concerning the issuance and requirements of sharia securities in the form of shares by sharia issuers or sharia public companies, sharia issuers are issuers whose articles of association state the activities and types of business and how to manage their business based on sharia principles. in the capital market.
Based on the Decree of the Chairman of Bapepam and LK Kep-208/BL/2012 that the securities in the sharia determined by the OJK are in the form of sharia pre-emptive rights shares and sharia warrants issued by the OJK.issued by issuers that do not include the type and business activities, as well as management and services provided based on sharia principles as long as the issuer does not carry out business activities that are contrary to sharia principles such as gambling and games including gambling, usury financial services, producing, distributing, providing, and trade in goods that are contrary to sharia principles.
Securities in sharia companies must meet financial ratios, namely the total debt originating from interest compared to total assets of no more than 45% and total income from interest and non-halal income compared to total operating income and other income not more than 10%. According to Article 8 Paragraph (1) of the Financial Services Authority Regulation Number 17/POJK.04/2015what is meant by conventional securities is that it is not stated in the articles of association that activities and types of business as well as business management methods are carried out based on Sharia Principles in the Capital Market for activities company business.
Investment activities in Islamic or non-Islamic securities are both faced with uncertainties and risks that are unavoidable and predictable by investors (Laksono, 2006). The company's effort to attract investors to invest their capital is to offer a high rate of return. Dividends are one of the strong reasons that motivate investors to invest (Puspita, 2017). The company's ability to pay dividends can reflect the value of the company. If the dividend paid is high, the stock price is also high which can affect the value of the company (Handriani, 2020), in the dividend there is information related to the company's prospects in the future (Kusumawati, 2018).
according to Manneh & Naser (2015) Dividend policy is very important for investors because it is a signal to the stability of the company's growth. Dividend policy is a decision to determine the amount of dividends to be distributed to investors (Swastyastu et al., 2014). Dividend policy can also overcome agency problems through those arising from imperfect behavior of managers, this agency problem can be reduced through the use of company funds distributed to shareholders.(Yuliato, 2013). Aguenaou et al. (2019) identify several factors related to dividend policy, namely the company's financial performance and liquidity position, the company's life cycle, as well as taxes and investment opportunities. In determining the amount of dividends distributed and retained earnings, the company determines it with its own consequences in each selected portion. Research on the determinants of dividend policy has been studied for decades, but there are no aspects that discuss the factors that influence the tendency to pay dividends and dividend payments themsel-ves using the dividend variable, payout ratio or the tendency to pay dividends (paid or not) on the determinants.dividend policy, but the results are inconsistent (Dewasiri et al., 2019).
Botoc & Pirtea (2014) identify that profitability and liquidity are positive determinants of DPR in 26 emerging markets, while Al-Kayeed (2017) states that past dividends are a significant factor in determining the dividend policy of companies in Saudi Arabia. Negative effect of profitability, liquidity, leverage, growth, and past dividends on dividend yields Companies that are included in sharia companies more often distribute dividends than non sharia companies in the same sector, namely the manufacturing sector. Companies in the manufacturing sector have a greater prospensity to pay dividend rather than other sector (Martono et al., 2020). In sharia companies the percentage of companies that distribute dividends is higher than companies that do not pay dividends every year. While in Non sharia companies the percentage of companies that distribute dividends is much smaller than companies that do not distribute dividends. The difference in percentage is reflected in the dividend yield distributed, namely the average dividend yield for companies that are included in sharia companies is higher than that of non-sharia companies in the manufacturing sector. In line with research Muthoharoh & Sutapa (2014) and Yuliani (2013) the increasing development of alternative investment and to invest, investors should be better at determining the investment option. It is taken into consideration is the investor return and risk. In principle, investors expect high returns with minimal risk. Establishment LQ 45 is a superior collection of 45 stocks to facilitate investors in choosing. Public interest in increasing sharia-based economy, then formed the Jakarta Islamic Index ( JII which states that the rate of return on Islamic stocks is higher than the rate of return on conventional stocks or in other words, Islamic companies are more likely to distribute dividends than non-Islamic companies. This condition is not in accordance with the statement Khoiruddin & Faizati (2014) that the special criteria for Islamic stocks make the information available is limited so that it affects the value of the company which will affect the unstable dividend policy compared to non-sharia stocks. Furthermore, the limited company information causes sharia shares to have difficulty increasing capital or attracting investors because the dividend yield is lower than non-Islamic or conventional shares (Al-Kayeed, 2017). This shows that there is a discrepancy between the theory and the phenomena that occur related to dividend policy on Islamic and non-Islamic stocks, thus encouraging the authors to find out the policy determinants between the two.
The novelty of the present study is that this study comparing the determinat dividend policy between two categories companies there are sharia and non sharia in manufactured company wich known as the biggest sector company in Indonesia.
Hypothesis Development
The Effect of Tax on Dividend Policy Lintner (1956) identified that in the overall pattern and internal logic contained in dividend policy and practice, the effect of taxes on the amount of dividends distributed must be clear because they relate to income as reported to shareholders after taxes have been paid. Net income is a determining factor in changing dividend policy. The higher the tax liability, the smaller the reported net income, which means the smaller the dividends distributed. Dewasiri et al. (2019) found that taxes have a negative effect on corporate dividend policy, a study on the determination of dividend policy in developing markets in Sri Lanka. There are other significant factors that affect dividend policy. H1: Taxes have a negative effect on dividend policy The Effect of Earning on Dividend Policy High income aims to maximize wealth in the form of higher dividend payments, because dividends are a form of return or reward to shareholders for the investments made. Yusof & Ismail (2016) stated that the significant results of income on dividend policy showed that an increase in corporate profits had a positive effect on higher dividend payments to shareholders, which supported the signaling theory. In accordance with the- Dewasiri et al. (2019) that earnings and profitability have an impact on dividend policy in Sri Lankan companies H2 :Income has a positive effect on the decision to pay dividends.
The Effect of Business Risk on Dividend Policy
Business risk which is a measure of the probability of loss inherent in the company's operational activities that affect the company's dividend policy (Al-Najjar & Hussainey, 2009). Companies that have high business risk will pay low dividends to avoid dividend cuts in the future (Halim, 2013).
Companies with high business risk will pay low dividends in order to avoid dividend cuts in the future (Epayanti & Yadnya, 2014).(Epayanti & Yadnya, 2014) and (Dewasiri et al., 2019) that business risk has a significant influence on dividend policy. Patra et al. (2012), Booc & Pirtea (2014) and Dewasiri et al. (2019) describes business risk measured by income volatility (VoE) from year to year. H3 :Business risk has a negative effect on dividend policy
The Effect of Ownershop on Dividend Policy
The concentration of company ownership describes the control over the company including the business investment activities in it. Ehsan et al. (2013) and Setiawan et al. (2016) shows that the overall ownership structure has an effect on dividend policy. Other than that, Ullah et al. (2012) states that the company's ownership structure plays an important role in the company's dividend policy which can reduce agency costs in agency theory.
The ownership structure plays a role in overseeing every company decision, including the company's financial decisions, especially those made by management that can affect the company's dividend policy (Manneh & Naser, 2015), research conducted Yunita & Yulianto, (2020) and Yusof & Ismail (2016) states that institutional ownership of shares has a positive effect on the company's dividend policy. H4 :Company ownership has a positive effect on dividend policy
The Effect of Leverage on Dividend Policy
Companies use signaling in leverage to give information and reduce asymmetric information between manager and shareholder (Yulianto et al., 2021). Dividends come from profits minus the principal debt, thus if the debt is getting bigger, the debt installments will be bigger and cause the remaining profit to be distributed in the form of dividends is small Leverage reflects the level of total debt in the company's capital structure (Nisa, 2019). When the level of debt in a company increases, the money needed to pay the debt also increases. Companies with low equity levels result in a high DER so that the interest paid is also high which allows the profit to be distributed by the company to be smaller which results in a smaller dividend policy.(Larasati, 2019). H5 : Leverage negative effect on dividend policy The Effect of Firm Size on Dividend Policy Large companies generally have easy access to capital markets and have a tendency to hold less income for investment financing.(Kuzucu, 2016).
Large companies have the potential to pay higher dividends than small companies. Companies with high business risk will pay low dividends in order to avoid dividend cuts in the future (Epayanti & Yadnya, 2014) H6 : Firm size has a negative effect on dividend policy
The Effect of Profitability on Dividend Policy
High profitability is good for both companies and investors, and vice versa, low profitability is not good for companies and investors. Profitability is used as a benchmark for the company's financial performance which is a description of the company's financial condition (Safitri & Yulianto, 2015). Patra et al. (2012) and Taufan & Wahyudi (2013) identify profitability as a determinant that has a positive impact on the company's dividend policy.
Profitability is an important factor in dividend policy because profitability is the main source of dividend distribution. Profitability can be an indicator used to assess the company's prospects in the future (Tandelili, 2010). Botoc & Pirtea (2014), Al-Kayeed (2017), and Dewasiri et al. (2019). ROE shows the company's ability to generate net income on the equity used. H7: Profitability has a positive effect on dividend policy The Effect of Investment Opportunity on Dividend Policy Myers (1977) identify that Every company has investment opportunities, but there are companies that have not been able to maximize these investment opportunities, which results in high company expenses. Investment opportunities can show the value of the company through the company's goals that are reflected in the company's future expenses. The higher the MBV describes the level of market confidence in the company's prospects (Sari, 2013). Kuzucu (2016) states that companies with high investment opportunities require internal funds to finance company investments, which results in companies having a tendency to pay dividends in small portions. Dewasiri et al. (2019) and Abor & Amidu (2006) that investment opportunities have a negative effect on dividend policy. H8 : Investment opportunities have a negative effect on dividend policy
The Effect of Liqudity on Dividend Policy
A high level of liquidity indicates the company's ability to pay short-term debt using its current assets. Liquidity is a measure of disposable income or income that is ready to be spent on consumer goods and services, the rest will be in the form of investment (Malik et al., 2013).
When stock prices rise, investors will also experience an increase and cause profits to rise. The increase in profit causes an increase in the liquidity ratio so that the dividends paid also increase. According to Sari & Sudjarni (2015) liquidity has a positive effect on dividend policy H9 : Liquidity has a positive effect on dividend policy.
METHOD
This type of research is a quantitative research. The research design used is a causal relationship to determine the causal relationship between one variable and another, which can state the classification between the causal variable and the dependent variable. The population used in this study are manufacturing sector companies in 2017 to 2019 which are listed on the Indonesia Stock Exchange.
The sample used in this study are manufacturing companies that are included in the shares belonging to the DES (Sharia Stock List) and stocks that are not classified as DES (Non Sharia Securities List) for the 2017-2019 period, there are 33 manufacturing companies included in the sharia companies and 18 non-sharia companies for the period 2017-2019 using purposive sampling technique. The independent variables used in this study are dividend lag, tax, EPS, VOE, institutional ownership, DER, firm size, ROE, MBV, and CR, while the dependent variable used is dividend policy which is proxied by dividend yield.
RESULT AND DISCUSSION
Based on the results of the descriptive statistical test of Table 1 Dividend Yield (DY) the results show that the average DY on the sharia effect of the manufacturing sector is 2.6448 in 2017-2019. Score a maximum of 45 that is at PT. Merck K Tbk in 2018 with a minimum score of 0 in several companies such as: PT Garuda Metalindo Tbk 2016, PT Gajah Tunggal, PT Indorama Synthetics Tbk, etc.
The results show that the average tax (TAX) is 0.7203 in 2017-2019. The maximum value is 45.2295, namely at PT Sekar Bumi Tbk in 2019 with a minimum value of -0.3784, na-mely at PT Merck Tbk in 2019.
The results show that the average Earning Per Share (EPS) of Islamic stocks in 2017-2019 is 253.4872. The maximum value of 2597 is at PT Merck Tbk in 2018, then the minimum value is 0. which is at PT Gajah Tunggal Tbk in 2018.
The results show that the average Earning Volatility (VOE) of Islamic stocks in the manufacturing sector in 2017-2019 is 0.1156. The maximum value of 0.6062 is at PT Unilever Indonesia in 2018, then the minimum value is 0.0017 at PT Sat Nusapersada Tbk .
The results show that the average Institutional Ownership (INS) of sharia shares in the manufacturing sector in 2017-2019 is 0.6949. The maximum value of 0.9885 is at PT Unilever Indonesia in 2018 which means that almost 100% of the share ownership in this company is owned by institutional then the minimum value is 0.0130 which is at PT Sat Nusapersada in 2017 and the rest is owned by manager ownership, foreign ownership, etc.
The results show that the average Debt to Equity Ratio (DER) of Islamic stocks in the manufacturing sector in 2017-2019 is 0.7910. The maximum value is 3.1300, namely at PT Indo Spring Tbk in 2019 then the minimum value is 0.0900, namely at PT Sido Muncul Tbk in 2017.
The results show that the average company size (SIZE) of Islamic stocks in the manufacturing sector in 2017-2019 is 14,8850. The maximum value is 22.1730, namely at PT Kordsa Tbk, then the minimum value is 11.9802, namely at PT Pyridan Farma Tbk in 2017. The results show that the average tax (TAX) of non-Islamic stocks in the manufacturing sector in 2017-2019 is 0.1616. The maximum value is 1.4981, namely at PT SLJ Global Tbk then the minimum value is -3.4809, namely at PT Asia Pacific Fiber in 2017.
Table1. Descriptive Statistics Sharia Companies
The results show that the average Earning Per Share (EPS) of non-Islamic stocks in the manufacturing sector in 2017-2019 is 415,034. The maximum value of 5655,0000 is at PT Gudang Garam Tbk then the minimum value is -66,2500, namely at PT Pacific Asia Fiber Tbk in 2018 and 2019.
The results show that the average Earning Volatility (VOE) of non-Islamic stocks in the manufacturing sector in 2017-2019 is 0.0972. The maximum value of 0.5721 is at PT Multi Bintang Indonesia Tbk then the minimum value is -0.1454 which is at PT Central Proteina Prima Tbk in 2017.
The results show that the average Institutional Ownership (INS) of non-sharia shares in the manufacturing sector in 2017-2019 is 0.6694. The maximum value of 0.9943 is at PT Central Proteina Prima Tbk or more than half of the company's ownership is owned by the institution then the minimum value is 0.051 which is at PT Wismilak Inti Makmur Tbk.
The results show that the average Debt to Equity Ratio (DER) of non-sharia stocks in the manufacturing sector in 2017-2019 is 3.9702. The maximum value is 94.1000, namely at PT SLJ Global Tbk in 2017 then the minimum value is -4.9400 at PT Central Proteina Prima Tbk in 2017.
The results show that the average company size (SIZE) of non-Islamic stocks in the manufacturing sector in 2017-2019 is 15.7712. The maximum value is 19.3230, namely at PT Primarindo Asia Infrastructure Tbk in 2019 then the minimum value is 13.0556 at PT Inti Komoditi Korpora in 2019.
Return on Equity (ROE) of non-sharia shares in the manufacturing sector in 2017-2019 was 0.24431. The maximum value is 2.5546, namely at PT Centra Proteina Prima in 2018 then the minimum value is -1.0588, namely at PT Centra Proteina Prima in 2019. The maximum and minimum values are the same at PT Centra Proteina Prima. The standard deviation value is 0.6193.
The results show that the average Market to Book Value (MBV) of non-Islamic stocks in the manufacturing sector in 2017-2019 is 5.4325. The maximum value is 64.4300, namely at PT SLJ Global Tbk in 2017 then the minimum value is -0.9300, namely at PT Centra Proteina Prima Tbk in 2017.
The results show that the average Current Ratio (CR) of non-Islamic stocks in the manufacturing sector in 2017-2019 is 2.0389. The maximum value is 9.9096, namely at PT Delta Djakarta Tbk in 2017 then the minimum value is 0.0525, namely at PT Kertas Basuki Rahmat Indonesia Tbk in 2018.
The estimation result of table 3 show that the model has Adjusted R-Square at 79,2%, the remaining 29,8% is explained by factors outside the model. The probability of F-statistics for the efficiency model has a significant effect on 0,0000 so the value is smaller than the standard erroe 5%. These result indicate that all variables TAX, EPS, VOE, INS, DER, SIZE, ROE, MBV, CR have simultaneous effect on DY values.
The probability value of the TAX variable is 0.5322, which is greater than the 0.05 significance level with a negative t-value of -0.6207. Then the right decision is to accept H1 and H0 is rejected. The results of this test can be concluded that the tax variable (TAX) has an insignifi-cant negative effect on the dividend yield (DY) of sharia shares in the manufacturing sector which is included in the Sharia Securities List for the 2017-2019 period. Taxes paid can reduce the amount of company income, the impact of reducing the amount of income causes a decrease in the proportion of income that will be distributed as dividends (Demirgune, 2015) in line with research Dewasiri et al., (2019) which shows the same result.
The probability value of the EPS variable is 0.5322, which is greater than the 0.05 significance level with a positive value of 1.5057. Then the right decision is to accept H2 and H0 is rejected. The results of this test can be concluded that the income variable (EPS) has a positive and insignificant effect on the dividend yield (DY) of the manufacturing sector sharia shares which are included in the Sharia Securities List for the 2017-2019 period. In line with researchstudySkinner & Soltes (2011)examines the relationship between dividends and earnings quality. Dividends contain information about the sustainability of the company's earnings. Companies that pay dividends find a stronger relationship between current earnings and future earnings than companies that do not pay dividends.
The probability value of the VOE variable is 0.0012 which is smaller than the 0.05 significance level with a negative t value of -3.3485. Then the right decision is to accept H3 and H0 is rejected. The results of this test can be concluded that business risk (EPS) has a significant negative effect on the dividend yield of sharia shares in the manufacturing sector which are included in the Sharia Securities List for the 2017-2019 period. High risk indicates the company's high operational and financial costs, for that the company pays lower dividends to avoid external costs (Halim, 2013). In line with researchHalim (2013) and Lusiana & Wijoyo, (2017) which states that business risk has a negative effect on the company's dividend policy. When the company's market risk is high, the dividends paid are low.
The probability value of the INS variable is 0.0457, which is greater than the 0.05 significance level with a positive t-value of 2.0268. Then the right decision is to accept H4 and H0 is rejected. The results of this test can be concluded that the company ownership variable (INS) has a significant positive effect on the dividend yield (DY) of the manufacturing sector sharia shares included in the Sharia Securities List for the 2017-2019 period. In line with research (Ullah et al. ( 2012), Manneh & Naser (2015) and Yusof & Ismail (2016) states that share ownership affects the company's dividend policy. The greater the proportion of share ownership implies control over the company's management, the greater the control over management to .000000maximize shareholder wealth distributed in the form of high dividends.
The probability value of the DER variable is 0.8274, which is greater than the 0.05 significance level with a positive t-value of 0.2186. Then the right decision is to accept H5 and H0 is rejected. The results of this test can be concluded that the leverage variable (DER) has no significant positive effect on the dividend yield (DY) of the manufacturing sector sharia shares included in the Sharia Securities List for the 2017-2019 period. In line withAl-Kayeed (2017) and Dewasiri (2019) stated that DER had a significant positive effect on DPR, in contrast to Nisa' (2019) and Anggoro & Yulianto, (2019), DER has no significant effect on DPR.
The probability value of the SIZE variable is 0.7935, which is greater than the 0.05 significance level with a negative t value of -0.2625. Then the right decision is to accept H6 and H0 is rejected. The results of this test can be concluded that the firm size variable (SIZE) has an insignificant negative effect on the dividend yield (DY) of sharia shares in the manufacturing sector which is included in the Sharia Securities List for the 2017-2019 period. On the contrary tostudy, Kusuma et al., (2018) and Yusof & Ismail (2016) states that firm size has a positive effect on dividend policy.
The probability value of the ROE variable is 0.0000 which is smaller than the 0.05 significance level with a positive t value of 13.1091. Then the right decision is to accept H7 and H0 is rejected. The results of this test can be concluded that the profitability variable (ROE) has a significant positive effect on the dividend yield (DY) of the manufacturing sector sharia shares which are included in the Sharia Securities List for the 2017-2019 period. Al-Najjar (2011), Patra et al. (2012) and Taufan & Wahyudi (2013) identify profitability as a determinant that has a positive impact on the company's dividend policy. This means that the higher the profitability ratio, the higher.dividends distributed. High profitability indicates a good company performance condition (Rahayuningtyas et al., 2014).
The probability value of the MBV variable is 0.0000 which is greater than the 0.05 significance level with a negative t value of -7.8356. Then the right decision is to accept H8 and H0 is rejected. The results of this test can be concluded that the investment opportunity variable (MBV) has a significant negative effect on the dividend yield (DY) of sharia shares in the manufacturing sector which is included in the Sharia Securities List for the 2017-2019 period.
In line with research Kuzucu (2016) states that companies with high investment opportunities require internal funds to finance company investments, which results in companies having a tendency to pay dividends in small portions.
The probability value of the CR variable of 0.0008 is smaller than the 0.05 significance level with a positive t value of 3.4842. Then the right decision is to accept H9 and H0 is rejected. The results of this test can be concluded that the liquidity variable (CR) has a significant positive effect on the dividend yield (DY) of sharia shares in the manufacturing sector which is included in the Sharia Securities List for the 2017-2019 period. Sari & Sudjarni (2015) and Sari & Suryantini (2019) which states that liquidity has a positive influence on the company's dividend policy.
The estimation result of table show that the model has Adjusted R-Square at 43,29% the remaining 56,71% is explained by factors outside the model. The probability of F-statistics for the efficiency model has a significant effect on 0,00047 so the value is smaller than the standard erroe 5%. These result indicate that all variables TAX, EPS, VOE, INS, DER, SIZE, ROE, MBV, CR have simultaneous effect on DY values.
Based on table 4, it can be seen that the results of the hypothesis test (t test) regarding the determination of the dividend policy of non-Islamic companies for the 2017-2019 period are as follows: The probability value of the TAX variable is 0.2239, which is greater than the 0.05 significance level with a positive t-value of 1.2336. Then the right decision is to reject H1 and H0 is accepted. The results of this test can be concluded that the tax variable (TAX) has an in-significant positive effect on the dividend yield (DY) of the manufacturing sector sharia shares included in the Sharia Securities List for the 2017-2019 period. As in research (Ardiyanti, 2015)that EPS has a positive effect on dividend policy.
The probability value of the EPS variable is 0.8482, which is greater than the 0.05 significance level with a negative t value of 0.1925. Then the right decision is to accept H2 and H0 is rejected. The results of this test can be concluded that the income variable (EPS) has an insignificant negative effect on the dividend yield (DY) of non-Islamic stocks in the manufacturing sector that are not included in the List of Sharia Securities for the 2017-2019 period. In line with researchwith research Skinner & Soltes (2011) examine the relationship between dividends and earnings quality has a positive effect.
The probability value of the VOE variable is 0.0146, which is greater than the 0.05 significance level with a positive t-value of 2.5425. Then the right decision is to reject H3 and H0 is accepted. The results of this test can be concluded that business risk (VOE) has a significant positive effect on dividend yields (DY) for non-Islamic stocks in the manufacturing sector that are not included in the Sharia Securities List for the 2017-2019 period. High risk indicates the company's high operational and financial costs, for that the company pays lower dividends to avoid external costs (Halim, 2013).
The probability value of the INS variable is 0.5506, which is greater than the 0.05 significance level with a positive t-value of 0.6015. Then the right decision is to accept H4 and H0 is rejected. The results of this test can be concluded that the variable of company ownership (INS) has a positive and insignificant effect on the dividend yield (DY) of non-Islamic stocks in the manufacturing sector that are not included in the List of Sharia Securities for the 2017-2019 period. This research is in line with research Ullah et al. (2012), Manneh & Naser (2015) and Yusof & Ismail (2016) states that share ownership has a positive effect on the company's dividend policy.
The probability value of the DER variable is 0.5939, which is greater than the 0.05 significance level with a positive t-value of 0.5370. Then the right decision is to accept H5 and H0 is rejected. The results of this test can be concluded that the leverage variable (DER) has an insignificant positive effect on the dividend yield (DY) of non-Islamic stocks in the manufacturing sector that are not included in the List of Sharia Securities for the 2017-2019 period. In line with Al-Kayeed (2017) and Dewasiri (2019) stated that DER has no significant positive effect on dividend policy..000047 The probability value of the SIZE variable is 0.6321, which is greater than the 0.05 significance level with a positive t-value of -0.4822. Then the right decision is to reject H6 and H0 is accepted. The results of this test can be concluded that the firm size variable (SIZE) has an insignificant negative effect on the dividend yield (DY) of non-Islamic stocks in the manufacturing sector that are not included in the Sharia Securities List for the 2017-2019 period. On the contrary tostudy Kuzucu (2016) and Yusof & Ismail (2016) states that firm size has a significant positive effect on dividend policy.
The probability value of the ROE variable is 0.6307, which is greater than the 0.05 significance level with a positive t-value of 0.4865. Then the right decision is to reject H7 and H0 is accepted. The results of this test can be concluded that the profitability variable (ROE) has an insignificant positive effect on the dividend yield (DY) of non-Islamic stocks in the manufacturing sector that are not included in the List of Sharia Securities (Non Sharia) for the 2017-2019 period. Al-Najjar (2011), Patra et al. (2012) and Taufan & Wahyudi (2013)identify profitability as a determinant that has a positive impact on the company's dividend policy. This means that the higher the profitability ratio, the higher.dividends distributed. High profitability indicates a good company performance condition (Rahayuningtyas et al., 2014).
The probability value of the MBV variable is 0.4299, which is greater than the 0.05 significance level with a negative t-value of -0.7967. So the right decision is to accept H8 and H0 is rejected. The results of this test can be concluded that the investment opportunity variable (MBV) has an insignificant negative effect on the dividend yield (DY) of non-Islamic stocks in the manufacturing sector that are not included in the List of Sharia Securities (Non Sharia) for the 2017-2019 period. In line with research Kuzucu (2016) states that companies with high investment opportunities require internal funds to finance company investments, which results in companies having a tendency to pay dividends in small portions.
The probability value of the CR variable is 0.0188, which is greater than the 0.05 significance level with a positive t-value of 2.4400. Then the right decision is to reject H9 and H0 is accepted. The results of this test can be concluded that the liquidity variable (CR) has a significant positive effect on the non-Sharia dividend yield (DY) of the manufacturing sector which is not included in the Sharia Securities List (Non Sharia) for the 2017-2019 period. In line with research According to Sari & Sudjarni (2015) that liquidity has a positive effect on dividend policy.
CONCLUSSION AND RECOMMENDATION
Based on the test of the determinants of the dividend policy of Islamic companies and non-Islamic manufacturing companies, it is concluded that there are differences in the results of testing the two categories of data. Institutional ownership, leverage, profitability, and liquidity are positive determinants of dividend policy, while investment opportunities are negative determinants of dividend policy on Islamic stocks. In non-sharia stocks, only company ownership and liquidity are positive determinants of dividend policy. Specific criteria for Islamic stocks make the limited information available does not affect the value of the company which will affect the unstable dividend policy compared to non-Islamic stocks. Furthermore, the limited information due to the company's specific criteria does not cause sharia shares to have difficulty increasing capital or attracting investors, the dividend yield of sharia companies is higher than non-Islamic companies that do not have special criteria. However, the limitation in this study is the test results where a high Adjusted R square value is obtained, however, many variables are not significant. For further researchers, it is hoped that they will examine other sectors to find possible differences in sectors other than manufacturing. In the selection of variables, especially if you want to use the lag variable, you must reconsider so that the research results are more significant.
Table 2 .
Descriptive Statistics Non Sharia CompaniesThe results show that the average Return on Equity (ROE) of Islamic stocks in the manufacturing sector in 2017-2019 is 0.16803. The maximum value is 2.2446, namely at PT Merck in 2018 then the minimum value is 0.0127, namely at PT Sat Nusapersada in 2019.
Table 3 .
Regression Analysis Sharia Company
Table 4 .
Regression Analysis Sharia Company
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Domain: Business Economics
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Bank Digital Transformation and Enterprise Innovation—Evidence from China
: With the rapid advancement of digital technology, the banking industry has embarked on a journey of digital transformation. While existing literature primarily examines how these changes impact the banks themselves, our study focuses on a relatively unexplored aspect: the direct influence of bank digital transformation on the performance and behavior of borrowing enterprises. The research objective of this study is to explore the influence of bank digital transformation on the innovation performance of borrowing enterprises and the underlying mechanisms. Leveraging data from Chinese listed companies and commercial banks, we find a positive effect of bank digital transformation on enterprise innovation output as measured by firms’ patent applications. The findings remain robust across alternative model specifications, controls for regional digital economy development levels, and bank financial performance, as well as alternative measures of bank digital transformation. Mechanism tests show that bank digital transformation contributes to corporate innovation by alleviating corporate financial constraints and improving corporate governance. Further research demonstrates that bank digital transformation also helps promote corporate innovation efficiency as measured by the proportion of patent output to total R&D input and corporate innovation output as measured by firms’ invention patent applications and patent grants. Additionally, borrowing firms’ own digital transformations may substitute for bank digital transformation in their effect on innovations.
Introduction
Innovation is a key driver of economic development. Since the first industrial revolution in history, every leap in the development of human society has been promoted without exception by breakthroughs in scientific and technological innovation [1]. However, corporate innovation efforts face serious external financing challenges [2] due to a long investment horizon, large capital requirements, and high uncertainty of innovation initiatives [3], as well as their innate information asymmetry [4]. In this regard, real businesses need a new financial service model because traditional finance faces the issue of having insufficient capacity to support the real economy. Moreover, the problem is exacerbated by poor corporate governance, where tunneling behaviors such as insider misuse of funds prevent firms from providing financial support for innovative activities.
In recent years, with the rapid advancement of digital technology, traditional finance has intensified its profound integration with technology and the banking industry has embarked on a journey of digital transformation. Banks are leveraging technologies like big data to modernize and revamp traditional operations, incorporating digital technology into their products and processes. For instance, in China, the banking sector's investment in information technology reached CNY 207.8 billion in 2020, demonstrating substantial progress in driving digital transformation compared to other financial sectors. Digital transformation has been reshaping the traditional financial services model of China's banking industry. Research on the economic consequences of bank digital transformation has concentrated on how banks themselves are influenced by it. However, there is a lack of studies directly examining the impact of bank digital transformation on borrowing enterprises' performance and behavior. The research objective of this study is to investigate the impact of bank digital transformation on the performance and behavior of borrowing enterprises, particularly with regard to their innovation output and efficiency. Through empirical testing using data from Chinese listed companies and commercial banks, we also aim to explore the influencing mechanism by which bank digital transformation contributes to corporate innovation and whether borrowing firms' own digital transformations can substitute for the effect of bank digital transformation on innovation.
We argue that bank digital transformation can enhance firm innovation performance by alleviating firms' financing constraints and improving corporate governance. On the one hand, by leveraging digital technology, banks can reduce information asymmetry and improve risk control. This results in a shift from mortgage to credit loans (nonmortgage loans) and lowers the entry threshold for access to bank loans. Furthermore, the cost of bank financing is also reduced through the use of digital technology. As a result, bank digital transformation helps alleviate corporate financing constraints, enabling firms to obtain more funds to support innovation activities and thus improve enterprise innovation performance. On the other hand, bank digital transformation can enhance their roles in corporate governance by curbing the opportunistic conduct of firms' managers and major shareholders. This reduces the misuse of funds and enhances the effectiveness of capital utilization. It permits firms to retain more funds for innovation activities, ultimately leading to enhanced enterprise innovation performance.
Drawing on the study of Zhao et al. [5], we measure the indicator of bank digital transformation using data on digital transformation-related patents applied for by China's commercial banking sector between 2010 and 2020. After matching companies with their lending banks year by year based on their loan information, we calculate the annual average digital transformation indicators of the corresponding lending banks. We empirically examine the impact of these digital transformation indicators on the innovation performance of the companies. Through our study, we provide robust evidence to support the positive effect of bank digital transformation on enterprise innovation.
Prior studies have documented the impact of bank digital transformation on banks' stability [6], nonperforming loan (NPL) ratios [7], operational capabilities [8], production efficiency improvement [9], and financial performance [10]. Existing literature has predominantly concentrated on the economic effects of bank digital transformation on the behavior and performance of banks themselves. However, there has been a notable absence of direct examination on the impact of bank digital transformation on the behavior and performance of the companies that borrow from these banks, leaving a significant gap in our understanding of whether and how bank digital transformation serves the real economy. This research gap holds significance because it limits our ability to fully understand how bank digital transformation contributes to the real economy and to develop effective policies/interventions to address related problems.
Additionally, previous literature has primarily measured the degree of digital transformation based on textual analysis, using the frequency of digital transformation-related keywords in annual reports [10][11][12]. However, this method may overlook the actual practices and effects of banks in the process of digital transformation. Relying only on the number and frequency of keywords to evaluate the level of digital transformation can lead to one-sided and inaccurate assessment results. Moreover, this method may also be affected by the completeness and accuracy of the disclosure of annual reports. Banks may have an incentive to highlight specific keywords related to digital transformation in their reports to create a positive image, or they may not fully disclose information related to digital transformation in annual reports. This can lead to reporting bias, where the actual level of digital transformation may not match the emphasis placed on certain keywords. Furthermore, this method is primarily applicable to listed banks with publicly available annual reports. It may not cover non-listed banks that do not disclose annual reports, limiting the scope of analysis.
Finally, the established literature on the economic consequence of digital transformation solely concentrates on a single digital transformation entity, for example, listed firms or commercial banks [6][7][8][9][10][11][12]. However, existing research has not fully addressed how bank digital transformation interacts with the digital transformation of their enterprise customers, leaving another significant research gap.
Our study aims to fill the above research gaps and is innovative in the following ways: The primary innovation in our study lies in being the first to directly investigate the impact of bank digital transformation on enterprise innovation. We provide empirical evidence to support the positive influence of bank digital transformation on enterprise innovation. We demonstrate that this effect persists even after controlling for the level of regional digital economy development. Furthermore, we introduce and explore the mechanisms through which bank digital transformation benefits the real economy by alleviating financing constraints and enhancing corporate governance. This in-depth analysis sheds light on the effect of bank digital transformation on enterprise innovation in a more comprehensive and detailed manner.
Second, instead of measuring the extent of bank digital transformation by the frequency of digital transformation-related keywords in annual reports of listed banks, we use the data on digital transformation-related patent applications filed by banks. This innovative approach to measuring the extent of bank digital transformation offers several advantages compared to the conventional method of relying on keywords in bank annual reports, as seen in previous literature. To begin with, patent applications directly reflect a bank's innovations and technological advancements in the digital domain. It is a tangible outcome of their digital transformation efforts. As an objective and quantifiable metric, patent applications furnish concrete evidence of a bank's investment in and dedication to digital transformation. Moreover, patent data tend to be less susceptible to reporting biases. Lastly, this approach is applicable to both listed and non-listed banks, providing a more comprehensive view of the digital transformation landscape across the banking sector.
Third, we explore the interaction between bank digital transformation and the digital transformation of their enterprise customers. Through this exploration, new avenues of research related to digital transformation are presented, providing innovative ideas and insights for future study.
The remainder of this paper proceeds as follows. Section 2 develops the testable hypotheses. Section 3 explains the data source and the model specifications. Section 4 presents the empirical results of the baseline regression and robustness tests. Section 5 presents the results of the mechanism tests, followed by additional analyses in Section 6. Section 7 concludes with a summary and the discussions. Section 8 discusses the implications, the limitations, and the outlook on future research.
Hypothesis Development
We believe that bank digital transformation can play a role in enhancing enterprise innovation performance for the following reasons.
On the one hand, bank digital transformation can enhance firm innovation performance by alleviating firms' financing constraints. Our study is mainly based on Chinese data to explore the impact of bank digital transformation on borrowing firms. The Chinese financial system is more bank-based [13]. Bank financing still plays a large role in the Chinese financial system, and firms rely heavily on it. Meanwhile, given its long cycle time, high capital consumption, and a high degree of uncertainty and information asymmetry, innovation activity is particularly affected by financing constraints when compared to other investment projects [3,4]. Traditional bank lending practices often prioritize collateral or guarantees, with a focus on the value of fixed assets that can serve as collateral, rather than a firm's technological or innovative capabilities [14]. This can create challenges for businesses with high growth potential but limited fixed assets to leverage for financing.
As a result, these companies may struggle to secure sufficient funding to support their innovative activities. In contrast, bank digital transformation can alleviate firms' financing constraints and enable them to obtain more funds to support innovation activities, thus improving their innovation performance, which is discussed below: First, the information asymmetry between banks and borrowing firms is greatly reduced through real-time data collection and processing of multidimensional data. Regarding information collection, cutting-edge technologies, such as Internet of Things and data mining, can help banks obtain multidimensional data in real time, which provides a company's fundamental information in greater detail [15] and enables banks to accurately portray the risk profile of their customers. In terms of information processing, banks can use big data and artificial intelligence methods to effectively capture nonlinear relationships in massive amounts of data and to harden soft information by enabling traceability management and remote monitoring through Internet of Things and blockchains [16].
Second, digital transformation allows banks to shift their risk control model from collateral-to credit-driven. For example, the big data credit model leverages the information and modeling advantages of big data and artificial intelligence to establish an intelligent risk control framework. This framework enables precise and real-time assessment of the credit risk associated with borrowing firms [17,18]. Subsequently, loans are granted based on this assessment. Within the scope of the big data credit model, banks are better able to identify and manage risks even when making loans to businesses without security or guarantees. Khalifaturofi'ah et al. [19] demonstrated that banks with a higher investment in digital transformation provide a higher number of cheaper and faster guaranteed loans. As a result, banks have been able to bring more long-tail customers who lack collateral and credit history into their credit services through the use of digital technology [20]. For instance, in 2022, Industrial Bank implemented the "technology flow" evaluation system, leveraging the technical support of "data + model + system". This groundbreaking system employed digital methods to measure the effectiveness of an enterprise's science and technology endeavors. It evaluated the growth potential of technology startups and facilitated the conversion of their technological "soft power" into tangible financial resources. Consequently, the system extended credit support to these startups ( [URL]:// news.sina.com.cn/shangxunfushen/2023-11-02/detail-imztfnvn7913709.shtml(accessed on 8 November 2023)).
Third, through the use of digital technology, banks may fully utilize prelending review techniques and postlending supervisory methods based on big data and artificial intelligence. This can not only improve operational efficiency and reduce banks' review and monitoring costs but also reduce human intervention and rent-seeking in the loan approval process, ultimately reducing the cost of financing for enterprises [21]. Industrial Bank, for instance, has implemented a digital operation management platform. The platform enables visualized internal control management, replacing manual statistics with intelligent algorithms for complex indicator calculations. Through this platform, managers can obtain a comprehensive understanding of the front-line business operations. The platform dynamically displays key risk indicator data. Furthermore, the internal control management platform clarifies the standardized business management process for each segment. By leveraging the digital operation management platform, the bank reduces the workload of manual operations, supervision, and traceability. It streamlines standardized business management and strengthens the full life-cycle management of business processes. Ultimately, the platform improves the quality and efficiency of operation management and reduces the bank's operating costs ( [URL] on 8 November 2023)).
In short, through the utilization of digital technology, banks can mitigate information asymmetry and enhance risk management, leading to a transition from collateral-based to credit-based lending and lowering the barrier to entry for accessing bank loans. Additionally, digital technology adoption reduces the cost of bank financing. Consequently, bank digital transformation effectively alleviates firms' financing constraints, facilitating their access to more funds to bolster innovation activities and to ultimately improve their innovation performance.
On the other hand, by enhancing corporate governance, bank digital transformation can improve enterprises' innovation performance. To protect the security of loan money, banks have the incentive to discipline the opportunistic behavior of borrowing firms. Commercial banks are relational creditors, according to debt heterogeneity theory [22]. They maintain diverse business relationships with enterprises beyond debt obligations, including fund custodianship and financial consulting [23]. Their aim is to establish enduring partnerships with these enterprises to generate stable income over the long term. As a result, banks are motivated to oversee the borrowing firm and focus on its long-term growth. Due to agency problems, resources that businesses may employ for projects such as technological progress could instead be used by firm managers and large shareholders for their self-interest [24,25]. The adoption of digital technology can potentially enhance banks' oversight of borrowers, allowing them to effectively prevent misappropriation of funds and ensure that a greater amount is allocated towards innovation investments, ultimately improving businesses' innovation performance, as discussed further below.
First, by using digital technology, a comprehensive analysis and assessment of the borrowing business could be carried out prior to loan disbursements. For example, through big data analysis and mining, banks can gain insights into various aspects of a borrowing company's operating conditions, financial performance, and funds flow, which help banks assess the credit risk of a company. Another example is that banks can utilize digital technology to collect multi-dimensional data to multi-dimensionally assess the personal conduct and wealth of significant shareholders, gaining insights into their financial standing and business track record. These data may include real-time transaction data at the point of sale [26], social media data [27], user rating data [28], and satellite imagery data [26], among others. This, in turn, allows for a more accurate estimation of the borrowing company's risk profile [21]. Based on a full understanding of the risk profile and potential opportunistic behavior of the borrowing enterprise, banks can better achieve the objective of the ex-ante prevention of self-interest behaviors. Loan covenants can be designed to increase the cost to insiders for self-dealing, discouraging capital abuse by management or major shareholders. This encourages firms to reallocate resources from generating private profits to innovation activities, promoting innovation performance [29].
Second, through the use of digital technology, banks are able to conduct comprehensive monitoring and review of borrowers after loan disbursements [8]. This improves the governance of borrowing companies and helps reduce opportunistic behaviors, such as the misuse of funds by firm management or major shareholders. The existence of information asymmetry incurs significant costs for banks to collect information to monitor borrowing firms. The adoption of digital technology can reduce banks' cost of information collection while improving the efficiency and effectiveness of monitoring [9]. For example, the use of digital technology by banks not only allow them also to convert soft information into hard information that can be transmitted and processed [30] but also to combine traditional financial and nonfinancial data from various data sources to evaluate the performance of their borrowers from multiple dimensions [15]. This can help them identify problems in a timely manner and to strengthen the monitoring of borrowing firms. Banks can also use information technology and data analysis tools to examine the financial data of borrowers to reduce the risk of manipulation and falsification. For example, the Industrial and Commercial Bank of China (ICBC) proposed a new development strategy named E-ICBC 2.0 based on big data technology and internet technology in 2015. By employing emerging technology, the ICBC greatly reduced the credit risks involved with its business [31]. Additionally, by using AI-powered tools and multiple data sources, banks can conduct investigations into firm management, controlling shareholders and related parties more thoroughly and effectively. By doing so, they can better assess their own risk and receive early warnings that will help them lower the likelihood of opportunistic behaviors, such as financial misuse. A notable example is Jiangsu Suning Bank, which has been at the forefront of digital risk control technology and has successfully registered relevant patents. It has developed a core system called "Cloud Opening" and established a comprehensive and rigorous data risk control system. The bank has implemented a digital risk management system that includes the "Lens" intelligent risk control engine, "Unified Credit Limit System", "Unified Loan Management System", "Sharp Eye" risk warning system, and "Capture Overdue" intelligent collection system ( [URL]/713815925_407695 (accessed on 8 November 2023)).
In short, bank digital transformation can enhance their roles in corporate governance by curbing the self-interested actions of firms' managers and major shareholders. Doing so reduces the misuse of funds, enhances the effectiveness of capital utilization, permits enterprises to retain more funds for longer-term investments such as innovation activities, and motivates enterprises to choose wisely regarding innovation projects, all of which ultimately improve enterprise innovation performance.
Based on the above analysis, the following hypothesis is proposed: Bank digital transformation helps boost the innovation performance of their borrowing firms.
Hypothesis 2. Bank digital transformation helps boost the innovation performance of their borrowing firms by alleviating the financial constraints of these firms.
Hypothesis 3. Bank digital transformation helps boost the innovation performance of their borrowing firms by enhancing the corporate governance of these firms.
Sample and Data Source
Using China's A-share companies from 2011 to 2021 as the initial sample, we obtain 13,052 firm-year observations for estimating the baseline regression. We apply the following sample selection criteria: (1) exclusion of firms in the finance industry, (2) removal of observations with missing data, and (3) exclusion of delisted companies.
The research data in this article come from three sources: listed companies, commercial banks, and the borrowing-lending interactions between these two entities. The data on corporate financial performance indicators, corporate governance indicators, and stock market trading data are all from the China Stock Market Accounting Research (CSMAR) database. The level of bank digital transformation usage is mainly measured using the bank's digital transformation-related patent data. We follow the following steps to obtain the data on bank digital transformation. 1 We collect patent application records from the National Intellectual Property Administration patent retrieval database ( [URL] on 6 May 2023)) from 2010 to 2020, specifically for those filed by the banks as applicants. These records reveal information such as the patent applicant, application time, and patent summary. The patent summary discloses the primary purpose and technology involved in the patent. 2We use a self-built digital transformation dictionary to further examine each patent application summary. If the summary contains keywords related to digital technology, the patent is identified as a digital transformation-related patent. The digital transformation dictionary is established based on the research by Du et al. [32] (see Appendix A). 3 After identifying digital transformation-related patent applications from 2010 to 2020, we count the number of digital transformation-related patent applications of each bank in each year and organize a panel dataset of "Bank-Year-Digital transformation-related patent applications" from 2010 to 2020. The bank-level financial performance indicators come from the Banking Research database of the CSMAR database.
In addition, to establish the correspondence between banks and their borrowing firms, we use the bank loan data for listed companies from the CSMAR database. First, the loan records are uniformly organized into a dataset of "listed company-year-bank."Next, these data are matched with the number of digital transformation-related patent applications filed by each bank in that year, resulting in the dataset of "Listed company-Year-Bank-Bank digital transformation-related patent applications".
Variables and Models
To test Hypothesis 1, we construct the following OLS (Ordinary Least Squares) regression Equation ( 1) that includes the industry (IND) and year (YEAR) effects. Controlling for industry effects helps to account for industry-specific factors that could influence the outcome variable, while year effects help account for aggregate fluctuations.
Prior studies have noted that China's patent statistics are the most suitable indicator for measuring Chinese enterprises' innovation performance [33,34]. Thus, we use the number of patent applications of listed companies as an indicator of enterprise innovation output. The explained variable, LNPATENT, is defined as the natural logarithm of one plus the number of patent applications of listed companies.
We use the cumulative number of digital transformation-related patent applications filed by the banks corresponding to a company in a given year as a measure of their digital transformation efforts. We calculate the bank digital transformation variable, BANKDIGIT, by dividing the cumulative number of digital transformation-related patent applications of the corresponding bank by the total number of such patent applications filed by all banks in the same year. Specifically, this variable is defined as follows: Bpatent int represents the cumulative number of digital transformation-related patent applications filed by bank n that lends to company i in year t. Sum_bpatent t represents the sum of the total number of digital transformation-related patent applications of all banks in year t. Loan int represents the amount of the bank loan borrowed by company i from bank n in year t. Sum_loan it represents the total amount of the bank loan of company i in year t. The economic interpretation of BANKDIGIT is the proportion of the cumulative number of digital transformation-related patent applications filed by the lending banks of firm i in year t to the total number of digital transformation-related patent applications of all banks in year t. This proportion is weighted by the amount of the bank loan and averaged at the firm level. A higher value of BANKDIGIT indicates that banks from which the sample firm is borrowing have undergone a higher degree of digital transformation.
Following Lin et al. [35], we control for a series of corporate finance and governance variables that may affect enterprise innovation performance: SIZE (firm size, measured as the natural logarithm of total assets of the firm), LEV (debt ratio, measured as the ratio of total debt to total assets), ROA (return on assets, measured as the ratio of net income to total assets), GROWTH (sales growth rate, measured as the growth rate of sales revenue), OCF (operating cash flow, measured as the ratio of cash flow from operating activities to total assets), TANG (tangible assets, measured as the ratio of tangible assets to total assets), AGE (firm age, measured as the natural logarithm of one plus the number of years that the firm has been listed), MANHOLD (management shareholding, measured as the fraction of shares held by management), BOARD (size of the board, measured as the natural logarithm of the number of directors on the board), and BALANCE (equity balance, measured as the shareholding ratio of the second to fifth largest shareholders divided by the shareholding ratio of the largest shareholder). Appendix B provides detailed definitions of the main variables.
Descriptive Statistics and Baseline Results
Table 1 reports the descriptive statistics. All of the variables, except for the dummy variables, are winsorized at the 1st and 99th percentiles. The mean and median of BANKDIGIT variables are 0.150 and 0.077, showing a right-skewed distribution as a whole. The minimum and maximum values of LNPATENT are 0 and 4.234, respectively, with a standard deviation that greatly exceeds its median and mean. This suggests a wide variation in the innovation performance of Chinese-listed companies. Although not reported, the VIF scores are smaller than 10 for all independent variables, indicating no high multicollinearity issue in our study. Table 2 reports the results of the baseline regression Equation (1). Column 1 reflects the regression of the enterprise innovation performance variable, LNPATENT, on the bank digital transformation variable, BANKDIGIT, which shows that enterprise innovation performance is positively related to the level of bank digital transformation. Column 2 reflects the inclusion of the control variables. The coefficient of BANKDIGIT remains significantly positive after including the control variables. Taken together, the results from Table 2 suggest a positive effect of bank digital transformation on enterprise innovation performance, supporting Hypothesis 1. High-quality listed companies may have a preference for banks with a high degree of digital transformation, and banks that have undergone digital transformation may also choose high-performing enterprises. Therefore, this research may encounter endogeneity issues stemming from self-selection. As a robustness test, we adopt the propensity score matching (PSM) approach to mitigate potential endogeneity issues. Propensity score matching is a widely employed statistical technique in finance, management, and business research to enhance the comparability of treatment and control groups in observational studies. This method is particularly valuable when conducting non-randomized studies. The core idea behind propensity score matching is to estimate the probability (propensity score) of an individual firm being in the treatment group based on a set of observed covariates, which can include factors like firm size, financial performance, and other relevant characteristics. By estimating these scores, researchers can then match treatment group firms with control group firms that have similar or nearly identical propensity scores, thus creating a balanced comparison group. This matching process helps mitigate selection bias and potential confounding effects, allowing researchers to draw more robust conclusions about the impact of the treatment or intervention on firm outcomes [36]. To apply this approach, firstly, the propensity scores will be estimated, which represent the likelihood of each observation being assigned to the treatment group. Statistical methods, typically logistic regression, are used to calculate these scores based on a set of observed covariates. Next, the observations in the treatment group can be matched with those in the control group that have similar or nearly identical propensity scores. This matching process ensures that the treatment and control groups are more comparable in terms of their observed characteristics. Finally, it is essential to assess the quality of the matching to ensure that the post-matching treatment and control groups exhibit balanced covariate distributions. This verification is necessary to validate the effectiveness of the analysis.
We first run a logit regression to calculate the propensity score based on the matching variables that are the control variables of the baseline regression Equation (1). If the lending banks from which the firm borrows have had digital transformation-related patents for the past five consecutive years, such firms are used as the treatment group, and the rest are in the control group. We then match each treatment observation to a control observation with the nearest estimated propensity score. Panel A of Table 3 demonstrates that the differences in the means for the covariates between the treatment group and the matched control sample are nonsignificant except for firm size, suggesting a successful matching process. Finally, we re-estimate the baseline regression using the treatment samples and the matched control samples. According to Panel B of Table 3, the coefficient on BANKDIGIT remains significantly positive when the baseline regression is estimated based on the matched samples.
Considering the Impact of Confounding Factors
An important omitted variable in this study is the level of regional digital economy development, which acts as both an influential factor on bank digital transformation and a determinant of enterprise innovation output [37]. Without proper control, an omitted variable bias may arise.
Following Li et al. [37], we measure the level of regional digital economy development using the Peking University Digital Inclusive Finance Index. The digital inclusive finance index, DIGINCFIN, which proxies for the level of digital economy development in the firm's locality, is controlled for in Column 1 of Table 4. Furthermore, Columns 2 and 3 of Table 4 reflect the control for the secondary digital inclusive finance indices, which refer to coverage breadth (COVBRE) and usage depth (USGDEP), respectively. Columns 1-3 of Table 4 show that the coefficients on BANKDIGIT remain significantly positive.
Alternative Measurement of Bank Digital Transformation
In the baseline regression, we measure bank digital transformation by the digital transformation-related patent applications. As part of the robustness testing, we employ an alternative approach to measure this indicator. Specifically, we calculate the frequency of digitization transformation-related keywords within the annual reports of listed banks, where these keywords are derived from the study conducted by Du et al. [32]. As shown in Column 1 of Table 5, the coefficient on BANKDIGIT is still significantly positive after changing the method of measuring bank digital transformation.
System GMM Approach
System Generalized Method of Moments (System GMM) is an advanced econometric technique that can be used in panel data settings to address issues related to endogeneity, unobserved heterogeneity, and serial correlation [38]. It is employed in econometrics, finance, and various fields to estimate dynamic models when time series data are persistent and may exhibit serial correlation over time. System GMM is known for its ability to improve the efficiency and consistency of estimates in such settings. Given that enterprise innovation performance may exhibit persistence and may exhibit serial correlation over time, we introduce the one-year lagged variable of innovation performance, L. LNPATENT, into the baseline regression and use a System GMM method for estimation. The results are shown in Column 2 of Table 5. The model passes the Arellano-Bond test, and the coefficient of BANKDIGIT is significantly positive. This indicates that after taking into account the potential serial correlation of enterprise innovation performance, the role of bank digital transformation in promoting enterprise innovation still exists.
Controlling for the Firm Fixed Effect and Applying the Poisson and Tobit Model
In addition to the industry and year effect controlled in the baseline regression, we further control for the firm fixed effect. The results reported in Column 3 of Table 5 do not change substantially from the baseline results. Moreover, we replace the explained variable, LNPATENT, with the number of patent applications, PATENT, and employ the Poisson and Tobit models to re-estimate the baseline regression Equation (1). As shown in Columns 4 and 5 of Table 5, the conclusion still holds.
Controlling for Bank Financial Performance Indicators
We include the weighted average bank financial performance indicators for each firmyear sample as additional control variables. These variables include BLEV (bank leverage, measured as the ratio of total liabilities to total assets), BAGE (bank age, measured as the natural logarithm of one plus the number of years that the bank has been established), and BSIZE (bank size, measured as the natural logarithm of the bank's total assets). Taking BLEV as an example, we use Equation (3) to calculate this indicator for each firm-year sample as follows: BLEV it refers to the weighted average leverage ratio of the lending banks that lend to firm i in year t. Bank_lev int refers to the leverage ratio of bank n that lends money to company i. Loan int represents the amount of bank loans that company i borrows from bank n in year t. Sum_loan it represents the total amount of bank loans that company i has in year t. The other bank financial performance indicators are calculated similarly. Thus, the financial performance indicators for each bank are weighted by the size of the bank loan and averaged to the firm level to generate the bank's financial performance indicators. These indicators are then added as additional control variables in the baseline regression.
Our results remain robust after controlling for the bank's financial performance indicators, as shown in Column 6 of Table 5.
Mechanism Tests
In Section 2, we introduce Hypotheses 2 and 3, asserting that bank digital transformation can enhance firm innovation performance by mitigating firms' financial constraints and enhancing corporate governance. In this section, we empirically test these mechanisms. Previous studies usually use two methods, mediating effect analysis or grouped regression analysis, to test the influencing mechanisms [39]. In this section, the two main mechanisms through which bank digital transformation affects enterprise innovation will be tested using both the mediating effect analysis and grouped regression analysis.
Mediating Effect Analysis
Bank digital transformation can help alleviate corporate financing constraints, allowing businesses to raise more money to support innovative activities and thus enhancing enterprise innovation performance. To test this mechanism, first, we use the mediating effect analysis. This is a statistical technique frequently used in management and business research to explore the underlying mechanisms that explain how an independent variable (X) influences a dependent variable (Y) through one or more mediator variables (M). This method helps researchers understand the process by which the initial effect of X on Y is transmitted through the mediator(s). A stepwise regression approach is often applied in this context to identify and test the significance of these mediation paths. We use the three-step procedure proposed by Baron and Kenny [40] to test the mediating role of financial constraint. The first step is to regress the explained variable LNPATENT (enterprise innovation performance) on the explanatory variable BANKDIGIT (bank digital transformation), as shown in Equation ( 4). We use Equations ( 5) and ( 6) below to test the second and third steps. Following Lamont et al. [41], we measure the level of corporate financial constraint using the KZ index and denote it as KZ. The data on the KZ index are obtained from the CSMAR database. In Equation ( 5), we regress the mediating variable KZ on the explanatory variable BANKDIGIT. In Equation ( 6), the explained variable LNPATENT is regressed simultaneously on the explanatory variable BANKDIGIT and the mediating variable KZ.
The results of Equation ( 4) are reported in Column 3 of Table 2. It shows a positive influence of bank digital transformation on corporate innovation performance. Columns 1 and 2 of Table 6 present the regression results of Equations ( 5) and ( 6), respectively. As seen in Column 1, the coefficient of BANKDIGIT is significantly negative, showing that the level of bank digital transformation is significantly negatively correlated with the level of corporate financial constraint. This means that bank digital transformation helps reduce the financial constraints of borrowing companies. In Column 2, the coefficients of KZ and BANKDIGIT are observed to be significantly negative and significantly positive, respectively. As such, these results confirm the mediating role of corporate financial constraints.
Grouped Regression Analysis
Next, we conduct a grouped regression analysis to examine how the effect of bank digital transformation on enterprise innovation differs among firms with different levels of financial constraint. Jiang [39] posited that grouped regression is an important method for testing influencing mechanisms. The process first involves a theoretical analysis to suggest that X may affect Y through a specific mechanism. Next, subgroups (M = 1) where the mechanism is more likely to exist and subgroups (M = 0) where it is less likely to exist are identified. This leads to the formation of two groups of subgroups. Following this, grouped regression tests are performed. If a stronger correlation between X and Y is observed in one subgroup (M = 1), i.e., in the regression of Y on X, the absolute value of the estimated regression coefficient of X is significantly larger in one subgroup (M = 1) than the other (M = 0), it validates the mechanism through which X affects Y. Previous mainstream literature has also utilized a grouped regression analysis or similar methods to validate the influencing mechanisms [42,43].
The adoption of digital technology has resulted in a shift from a collateral-based to a credit-based lending model. Given more collateralizable assets, large enterprises have traditionally had easier access to collateralized loans through traditional banking channels, resulting in lower financing constraints and reduced sensitivity to the impact of bank's adoption of digital technology. Small businesses, on the other hand, have insufficient collateralized assets and must take advantage of the shift in lending patterns brought about by bank's adoption of digital technology to reduce financing restrictions and boost innovative investments. Thus, if bank digital transformation encourages enterprise innovations by easing financing constraints, then this benefit ought to be more evident for small enterprises that have more severe financing constraints.
To test the above conjecture, we partition the full sample into small and large enterprises according to their total assets. The results in Table 7 report significantly positive coefficients of the bank digital transformation variable, BANKDIGIT, for small firms in Column 1 but not significant coefficients of BANKDIGIT for large firms in Column 2. The results of the SUR (seemingly unrelated regression) estimation also demonstrate that the coefficient on BANKDIGIT is significantly higher for small enterprises than for large enterprises. These findings demonstrate that the positive effect of bank digital transformation on enterprise innovation performance is stronger for small firms than for large firms. Firms with lower information disclosure quality have higher information asymmetry with their banks and face higher financing constraints than other firms. Thus, the role of bank digital transformation in providing more financial support for enterprise innovation by reducing information asymmetry and alleviating financing constraints should be more significant for firms with lower information disclosure quality.
We measure the quality of corporate information disclosure in two ways. First, following Dechow et al.
[44], we use the absolute value of discretionary accruals, which is a widely used proxy for information quality. Second, as pointed out by studies from China, the information disclosure quality of Chinese listed companies can be measured as the quality rating of corporate information disclosure released by the stock exchanges [45]. This indicator takes values of 1, 2, 3, and 4, which correspond to ratings of A, B, C, and D (i.e., excellent, good, pass, and fail), with higher values indicating lower ratings of information disclosure quality. We use the annual median of these two indicators to split the sample and define company-year samples as having high (low) quality of information disclosure if their values are lower than (equal to or higher than) the annual median.
According to Table 8, the coefficients of BANKDIGIT are significantly positive in Columns 1 and 3 (the group with low information disclosure quality) but not significant in Columns 2 and 4 (the group with high information disclosure quality). The SUR estimation results show that the coefficient on BANKDIGIT is significantly higher in the group with low information disclosure quality than in the group with high information disclosure quality. These results indicate a more significant role of bank digital transformation in improving enterprise innovation performance for firms with lower information disclosure quality.
Improving Corporate Governance
When corporate governance is weak and the misuse of capital by major shareholders and firm management leads to insufficient financial support for innovation activities, there is more scope for digital technology to improve the corporate governance roles of banks and curb the self-interested behaviors of major shareholders and management so that firms can allocate more capital to support innovation. Thus, if bank digital transformation enhances enterprise innovation by improving corporate governance, we may anticipate that the beneficial impact of bank digital transformation on enterprise innovation will be greater for companies with weak governance.
Following La Porta et al. [46] and Ang et al. [47], we measure the quality of corporate governance by the divergence between the control and cash-flow rights of the controlling shareholder and the ratio of operating expense to sales revenue. Next, we use the annual median of the divergence between control and cash-flow rights, as well as the ratio of operating expense to total assets, to split the sample. A company-year sample is defined as having weak (strong) corporate governance if the divergence between control and cash-flow rights or the ratio of operating expense to total assets is higher than or equal to (lower than) the respective annual median.
As shown in Table 9, the coefficient of BANKDIGIT is significantly positive in Columns 1 and 3 (the group with weak corporate governance) but not significant in Columns 2 and 4 (the group with strong corporate governance). Then, the SUR model is used to test if the difference in the coefficient of BANKDIGIT is significant among the two groups. According to the chi2 statistics, the coefficients of BANKDIGIT are significantly larger for the group with weak corporate governance than the group with strong corporate governance. Thus, we have found a more prominent role of bank digital transformation in boosting enterprise innovation for firms with weak corporate governance.
Additional Tests 6.1. Different Measurement of Enterprise Innovation
When estimating the baseline regression, we measure enterprise innovation output using the logarithm of one plus the number of total patent applications made by firms, which includes invention patents, utility model patents, and design patents. Invention patents are believed to better reflect the quality of innovation than the other two types of patents, to some extent [48]. Therefore, in this section, we now examine whether bank digital transformation has an enhancing effect on the number of invention patent applications. We also use the number of patent grants, which are certified by the National Patent Office, to measure innovation output. In addition to innovation output, innovation efficiency is also suitable for representing enterprise innovation performance and is thus an effective supplement to innovation output.
We define INVPATENT (GRAPATENT) as the natural logarithm of one plus the number of invention patent applications (patent grants). Following Guan et al. [34], we measure innovation efficiency as the number of total patent applications divided by the average R&D input in the previous four years and denote it as INNEFF. These three variables are used to replace the explained variable, LNPATENT, in the baseline regression Equation (1).
As shown in Columns 1-3 of Table 10, the variable BANKDIGIT is positively correlated with innovation output, measured by the number of invention patents and patent grants. Additionally, it is positively correlated with innovation efficiency, measured by the proportion of patent output to total R&D input. These findings suggest that bank digital transformation plays a favorable role in enhancing the number of invention patent applications, number of patent grants, and innovation efficiency.
The Role of Corporate Digital Transformation
Finally, we explore how firms' own digital transformation interacts with bank digital transformation in promoting enterprise innovation. There are two possibilities. First, firms' own digital transformation and bank digital transformation may complement each other in improving enterprise innovation. Digital technology strengthens banks' information processing ability when making loan decisions, which ultimately lowers the entry threshold for access to bank loans and enables banks to provide more financial support for enterprise innovation activities. Such an effect is more significant for firms with a higher level of digital transformation itself and thus accumulate more data available for banks' information processing. If this is true, we anticipate that the positive relation between bank digital transformation and firms' innovation output increases with firms' own level of digital transformation.
Second, in contrast, firms' digital transformation may substitute bank digital transformation in their effect on enterprise innovation. Prior studies have documented that a firm's own digital transformation promotes its innovation performance [49,50]. Given this, it could be expected that firms' digital transformation may lower the marginal effect of bank digital transformation on enterprise innovation. When firms' level of digital transformation is higher, the room left for bank digital transformation to encourage innovation is relatively limited. Thus, the positive relation between bank digital transformation and firms' innovation performance is less pronounced for firms with higher digital transformation. Taken together, how firms' own digital transformation interacts with bank digital transformation in promoting enterprise innovation appears to be an empirical question.
To clarify this empirical question, we measure the level of corporate digital transformation by the frequency of digitization-related keywords in the annual report and denote it as FDIGIT, where digitization-related keywords are obtained from Du et al. [32]. Next, we add the interaction term between FDIGIT and BANKDIGIT to the baseline regression Equation (1). The results in Column 4 of Table 10 show that the coefficient on FDIGIT*BANKDIGIT is significantly negative, which confirms that firms' own digital transformation may act as a substitute for bank digital transformation in their effect on enterprise innovations.
Conclusions 7.1. Summary of the Findings
We empirically test the impact of bank digital transformation on enterprise innovation by collecting data on digital transformation-related patents applied by China's commercial banking sector from 2010 to 2020 to measure the bank digital transformation indicator. We find that bank digital transformation has a favorable impact on enterprise innovation output, as shown by firms' patent applications. The mechanism tests' findings imply that bank digital transformation may promote company innovation by easing financial restrictions and enhancing corporate governance. This is illustrated by not only the mediating role of the KZ index but also the more positive effect of bank digital transformation on enterprise innovation for firms with greater financial constraints and firms with weak corporate governance. Further research shows that bank digital transformation also helps support enterprise innovation efficiency (as measured by the proportion of patent output to total R&D input) and enterprise innovation output (as measured by firms' invention patent applications and patent grants). Additionally, firms' digital transformations substitute for bank digital transformation in terms of their impact on enterprise innovations.
Discussion
Our study directly investigates the impact of bank digital transformation on the innovation performance of borrowing enterprises. From one perspective, our study both parallels and diverges from previous literature in terms of the factors affecting corporate innovation performance. We find common ground with existing research in highlighting that macro-level regional digital economic development and enterprises' own digital transformations can bolster corporate innovation performance. Yet, when we delve into the underlying mechanisms at play, our study sets itself apart. The influencing mechanism of bank digital transformation on enhancing the innovation performance of borrowing enterprises diverges from that associated with regional digital economic development and firms' internal digital transformation. In our analysis, we propose that bank digital transformation enhances the innovation performance of borrowing companies by mitigating their financing constraints and bolstering debt governance. Firstly, though earlier literature also hints at the role of regional digital economic development in alleviating financing constraints to enhance innovation [37,51], this effect is somewhat indirect. In contrast, our study places the spotlight on bank digital transformation, which offers a more direct avenue to alleviate financing constraints for borrowing companies since banks serve as the immediate fund providers. Moreover, bank digital transformation not only alleviates financing constraints but also reinforces debt governance on borrowing firms since they serve as relational creditors to these firms [22]. Secondly, prior research highlights that firms' internal digital transformation predominantly amplifies innovation performance by streamlining internal operational processes, such as production, management control, and product development [11,52]. This stands in contrast to the impact mechanism we explore in the context of bank digital transformation.
On the other hand, previous literature has primarily explored the impact of bank digital transformation on its own operations and performance [6][7][8][9][10], whereas our study takes a distinct perspective by delving into the contribution of bank digital transformation to borrowing companies and the broader real economy. While the focus of the research is on the impact of bank digital transformation on borrowing companies, it indirectly implies potential benefits for banks themselves. Bank digital transformation not only fosters more innovative borrowing companies but also contributes to banks' own competitiveness and sustainability. By effectively addressing the financing constraints of their borrowing firms and improving corporate governance, banks can build stronger, more reliable relationships with their clients. This, in turn, may lead to reduced default risks and a healthier loan portfolio for the banks. Furthermore, as borrowing companies thrive in their innovative endeavors, they may become more attractive prospects for loans, enabling banks to expand their client base and boost their financial performance. In this regard, our research aligns with previous studies on the economic implications of digital transformation in banking. However, we broaden the scope by examining the larger issue of how digital transformation in banking supports the real economy.
Implications
This study fills a critical research gap by directly investigating the impact of bank digital transformation on the performance and behavior of borrowing enterprises. While prior literature has predominantly focused on the effects of bank digital transformation on the banks themselves, this research delves into a relatively unexplored dimension, shedding light on the direct influence of bank digital transformation on borrowing enterprises. The findings provide valuable insights into whether and how bank digital transformation serves the real economy.
We utilize an innovative approach to gauge the extent of bank digital transformation. Instead of relying on the frequency of digital transformation-related keywords in annual reports, as often is the case in previous studies, we employ data on digital transformationrelated patent applications filed by banks. This methodology offers several advantages, including a more tangible reflection of a bank's digital innovations, objectivity, and applicability to both listed and non-listed banks, thus presenting a more comprehensive assessment of digital transformation.
Another important theoretical implication of this study is the exploration of how bank digital transformation interacts with the digital transformation of their enterprise customers. The existing literature has primarily concentrated on single digital transformation entities, such as listed firms or commercial banks. This study broadens the scope of inquiry, opening new avenues for understanding the interplay between bank digital transformation and the digital transformation efforts of their enterprise customers.
Overall, these theoretical implications contribute to a deeper understanding of the economic consequences of bank digital transformation and offer innovative perspectives for future research in this domain.
Apart from its theoretical implications, our study also has practical implications for commercial banks and policymakers. Commercial banks should take two key steps. First, they need to enhance their own innovation leadership position by accelerating patent drafting in critical areas and increasing R&D spending on the underlying technology. Additionally, they should encourage the creation of systematic patent technology from the ground up. Second, commercial banks should actively encourage the digital transformation of their traditional financial service divisions, which would help modernize these divisions and ensure that they can meet the evolving needs of businesses. Through this digital transformation, banks can link their digital departments with their business technology, thus empowering them to effectively allocate the credit resources necessary for enterprise innovation. For the government, first, it should actively build a new digital infrastructure to provide the technical foundation for banking and other financial institutions to carry out digital transformation. This can be achieved, for example, by building a data-sharing platform to further release the empowering value of digital technology for financial businesses. Second, it should provide institutional support for banks' digital transformation and enhance the space for innovation application and innovation risk tolerance.
Limitations and Future Directions
This study's primary limitation lies in its specific focus on the Chinese banking industry. Therefore, the generalizability of these findings to other regions or countries with different economic and regulatory environments may be limited. Future research can undertake cross-country comparative analyses to investigate how bank digital transformation affects borrowing firms in different contexts, allowing for the identification of common trends and unique regional variations.
Secondly, this study primarily investigates the influence of bank digital transformation on corporate innovation without delving into the broader economic implications, including aspects like corporate investment efficiency, cash holding, and liquidity management. Future research can investigate the wider economic consequences of bank digital transformation to gain a more comprehensive understanding of its effects on borrowing enterprises and the economy.
Finally, to establish the correspondence between banks and their borrowing firms, we use the bank loan data for listed companies from the China Stock Market Accounting Research (CSMAR) database. The loan data of listed companies in the CSMAR database is sourced from the designated information disclosure website of the China Securities Regulatory Commission, known as CNINFO ( [URL] data source is both authoritative and reliable. Other studies have also extensively relied on the loan data of listed companies from the CSMAR database [53,54]. Nevertheless, it is important to note that there is a possibility that some listed companies may not have disclosed all of their loan information. Consequently, this study may have a potential limitation in the data. Future research can focus on broader and more extensive data sources, including a wider variety of banks and firms, to provide a more holistic understanding of the effects of digital transformation.
Table 1 .
Summary statistics of the main variables.
Table 4 .
Controlling for the regional digital economy development.
Table 7 .
Small versus large enterprises.
Table 8 .
Low versus high quality of information disclosure.
Table 9 .
Weak versus strong corporate governance.
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Domain: Business Economics Computer Science
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Effectiveness of The Electronic Procurement Service System in Procurement of Goods and Services in Gayo Lues District In 2021
: Public services in government administration must be realized immediately in order to create good governance. E-procurement as a website is an auction system for the procurement of goods and services by the government using internet-based technology, information and communication tools, but the problems that occur with this system are not yet running effectively in terms of timeliness, cost accuracy, choice accuracy and precision. targets and problems of lack of human resource capacity and supporting infrastructure, the grand theory used is timeliness, cost accuracy, choice accuracy and target accuracy. This research uses descriptive qualitative research methods using techniques to obtain data through observation, interviews and documentation. This research used 13 informants who were determined purposively, consisting of the Head of the Goods and Services Procurement Section of the Gayo Lues Regency Government and his staff, e-procurement operators, some participants in the goods/services procurement auction and some residents of the Gayo Lues Regency community. To overcome the various weaknesses that exist in the conventional goods/services procurement process, the government has introduced an innovation in the procurement of goods/services in the public sector, namely e-procurement. E-procurement is a website which is an auction system for the procurement of goods and services by the government using internet-based technology, information and communication tools. The results of the research explain that the effectiveness of the E-Procurement System in Procurement of Goods and Services in the Gayo Lues Regency Government is not yet effective because there are still constraints in infrastructure and human resources which are still lacking, which affects effectiveness in procuring goods and services. The conclusion of this research is the Effectiveness of the E-Procurement System in Procurement of goods and services at the Gayo Lues Regency Government has not been effective, this can be seen from four indicators of effectiveness, namely timeliness, cost accuracy, choice accuracy and target accuracy, as well as obstacles for the Gayo Lues Regency Government in implementing the e-procurement system in the procurement of goods and services. two, namely Human Resource Barriers and Infrastructure Barriers.
INTRODUCTION
Effectiveness in procuring goods and services for the Gayo Lues Regency government using an electronic system can improve maximum service. The use of this system is service-oriented which has the impact of government management providing services electronically so that the process of procuring goods and services becomes efficient and open. Government actions in the public service delivery system are an effort to fulfil community needs. This service system aims to ensure that services are carried out transparently, fairly and in accordance with the implementation of statutory provisions, according to presidential regulation Number 12 of 2021 concerning Amendments to Presidential Regulation Number 16 of 2018 concerning Government Procurement of Goods/Services, the Government will create a process Government procurement of goods and services becomes efficient, open and competitive (Aziz, Abdul, dkk, 2023).
The policy of electronic procurement of goods and services (eprocurement) is an effort to overcome various weaknesses in the traditional goods/services procurement process. E-Procurement as a website, auction system weak so they cannot give providers confidence in data security, and data leaks from one company/provider to another often occur, so that the weaknesses of one company/provider become public consumption. Marei, A. (2022).
This research examines the effectiveness of electronic procurement in procuring goods and services in Gayo Lues Regency in order to assess the pros and cons of electronic procurement in procuring goods and services. This effectiveness is related to achieving e-procurement goals. This means that an organization, program or activity has achieved its stated goals.
RESEARCH METHODS
The main focus of this research is the effectiveness of the electronic procurement service system in procuring goods and services for the Gayo Lues Regency Government in 2021. By using a qualitative approach, researchers are trying to get a complete picture of the chronic e-procurement system. So, in applying the methodology in the field, researchers combined several data collection techniques such as literature study, participant observation and indepth interviews. The process of collecting data, categorizing data, verifying data and writing up research results was carried out reciprocally, meaning that repetition was carried out to obtain data that was close to actual reality. Informants in this research were selected to represent their knowledge related to electronic procurement service systems in the procurement of goods and services.with several stakeholders involved in this service system as well as several academics who are concerned about this issue (Waithaka, RK, & Kimani, JG, 2021).
RESULTS
Gayo Lues is one of the districts located in the province of Aceh in Indonesia. The district government and its capital are in the city of Blangkejeren. This district originates from the expansion of Southeast Aceh Regency from 57% of the area expanded in 2002 to form Gayo Lues district, geographically Gayo Lues has an area of 5,719 km2 and is located at coordinates 3°40'46.13"-4°16'50.45"N 96°43'15.65"-97°55'24.29"E 1)Effectiveness of the E-Procurement System in Procuring Goods and Services at the Gayo Lues Regency Government The services of goods and services through this electronic system are attended by various goods and service companies in the form of tenders or construction workers in Gayo Lues Regency with the following data: Based on the data above, it can be seen that the number of companies participating in the tender program through the implementation of eprocurement is still low. This can be seen from the data above where in 2021 there were failed tenders, this shows the participative of auction companies in participating in the online construction tender process is still not effective even though this program was implemented to attract companies to participate more in the development process in Gayo Lues Regency, because the LPSE service is a transformation of the national procurement mechanism through manual auctions into online auctions, meaning that all auction companies can register their companies through the LPSE service for contributed to construction work projects in Gayo Lues Regency.
Presidential Regulation Number 16 of 2018 concerning Procurement of Government Goods/Services. This regulation was created so that the eprocurement implementation system in Gayo Lues Regency. The results of the research and discussion in Chapter II (theory) use prosperity theory, there are 4 indicators of effectiveness, namely timeliness, cost accuracy, goal accuracy and target accuracy. The implementation of e-Procurement is a manifestation of the implementation of good governance to realize solid, responsible, effective and efficient state government, by maintaining constructive cooperation and interaction between the state domain, the private sector and society. One of the characteristics of good governance according to the UNDP (United Nation Development Program) is efficiency and effectiveness, namely that the management of public resources is carried out efficiently and effectively (Adrian, 2018) The implementation of e-Procurement itself is expected to provide direct benefits (increasing data accuracy, increasing efficiency in operations, processing applications faster, reducing administrative costs and reducing operating costs) and indirect benefits (electronic procurement to make procurement more competitive, improve customer service, and improving relationships with e-Procurement partners allows resource consolidation so that electronic networking between organizations is believed to improve coordination between companies and reduce costs in searching for suitable goods and services (Nico, 2012).
Punctuality
Basically, effectiveness is a measurement of the level of success of an organization or program in achieving its stated goals. Therefore, to see whether the implementation of e-procurement in Gayo Lues Regency is effective or not, it can be seen from the extent to which the implementation of e-procurement in Gayo Lues Regency has achieved the goals set in the next step to see the implementation of the e-procurement system in the Regency. Gayo Lues is running well or not, it can be seen from how effective the implementation of procurement of goods/services is in Gayo Lues Regency. Measuring whether or not the implementation of the e-procurement system is effective in Gayo Lues Regency can be seen from the size of the objective indicators listed in Presidential Regulation Number 16 of 2018 concerning Procurement of Government Goods/Services, which consist of: transparency indicators, indicators of increasing healthy business competition, indicators of improving the level of efficiency of the procurement process, indicators supporting the monitoring and audit process and indicators meeting the need for real time access to information.
Based on findings in the field, the e-procurement system greatly facilitates the procurement of goods and services. One of the reasons is that the procedures for selecting goods/service providers are carried out openly and can be followed by all goods/service providers registered in the Electronic Procurement System. So that the process of providing goods/services becomes very effective and efficient for companies that want to take part in tenders, however, regarding timeliness, shifts often occur, this is caused by many factors, including technological factors, political factors and other factors. Apart from that, the findings Another is that punctuality is often shifted and is often caused by not supporting facilities and infrastructure during the tender process, or it can also occur due to inadequacy of partners in participating in the tender process carried out by the Government, as well as many other factors. Based on theory and findings, it can be analysed that the communication that occurs tends to be less harmonious, resulting in frequent shifts in punctuality, this is caused by many factors, including technological factors, political factors and other factors (Maurino, Daniel E., dkk, 2017).
Cost Accuracy
E-procurement is one of the most effective e-government initiatives that provides real results in the form of transparency and efficiency of the government procurement process (LKPP, 2009). E-procurement is an integrated system between communication system databases for all or part of the process of purchasing goods or services (BPK, 2014). E-procurement technology provides a monitoring and complaint mechanism for suspected irregularities in a procurement process. Transparency and openness of the procurement process will certainly make the monitoring process easier. All elements of society, especially non-government institutions, are expected to play an active role in supervising the procurement process. Based on findings in the field, this system helps the government save money and provides a more accountable, more effective and faster way to manage procurement. The e-procurement system shows an important development for the purchasing process, offering benefits to organizations through purchasing process efficiency and reducing prices. Furthermore, findings in the field are that the e-procurement system which is implemented in all local governments to handle procurement of goods/services has advantages such as lower waste, more suitable for internet applications and relative to other distribution technologies, using the system is constructive, efficient and open.
Based on the results of theoretical analysis and research results, it can be concluded that the e-procurement system is one of the most effective egovernment initiatives in providing real results in the form of transparency and efficiency. The e-procurement process is an integrated system between communication system databases for all or part of the process of purchasing goods or services for government procurement.
Choice Accuracy E-procurement technology provides a mechanism for how effective the implementation of the e-procurement system is in the procurement of goods/services in Gayo Lues Regency based on the following indicators: Transparency. Basically, the implementation of e-procurement in the procurement of goods/services has demonstrated transparency. This shows that information related to the goods/services procurement process can be obtained openly and easily by interested parties, namely ULP, LPSE, auditors, PPK (Commitment Making Officials) and the public or the general public.
Increasing healthy business competition. The efforts made by the Gayo Lues Regency government to increase healthy business competition with eprocurement is to follow the Electronic Procurement System (SPSE) created by the Central Government to avoid collusion and influence the procurement committee, as well as improving the level of efficiency of the procurement process. Basically, the implementation of e-procurement in the procurement of goods/services in Gayo Lues Regency has benefited from the efficiency of the procurement process. This is because with e-procurement, committees and prospective providers of goods/services can save costs and time. Apart from that, e-procurement has shortened the procurement process, namely that there cannot be face-to-face meetings between the committee and prospective providers of goods/services in the process of procuring goods/services. Based on the findings in the field, the readiness of the Gayo Lues Regency Government to implement an e-procurement system shows that the regional government is quite ready to implement it. Although apart from that, there are several things that need to be prepared again to support this system to run perfectly. For example, the government must prepare better Human Resources (HR). However, so far we can say that the government is very ready to implement this system.
Target Accuracy
Presidential Regulation Number: 16/2018 defines e-procurement as the procurement of goods/services carried out using information technology and electronic transactions in accordance with statutory provisions. This decree formulates the objectives of implementing an electronic procurement system, including increasing transparency, increasing accountability, increasing market access, encouraging healthy competition, increasing the efficiency of the procurement process, supporting the monitoring and audit process, and providing timely access to information. LKPP further explained that by developing the electronic procurement process, the role and benefits of eprocurement can be felt by the Government, in this case the ULP/UKPBJ, by providers of goods and services as well as the general public. Support monitoring and audit processes.
Based on the results of research in Gayo Lues Regency, the goal of eprocurement to support the monitoring and audit process was achieved. This indicates that all data regarding the procurement of goods/services or what is usually called an auction, will be continuously stored in the Goods/Services Procurement System (SPSE) and website, making it easier for the Corruption Eradication Commission, BPK, Government Goods/Services Procurement Policy Institute (LKPP), BPKP and Inspectorate to supervise and inspect procurement of goods/services or auctions, Fulfilling the need for real time access to information. According to research results in Gayo Lues Regency, the goal of e-procurement to meet the need for real time access to information has been achieved. This shows that with e-procurement, information regarding the procurement of goods/services can be obtained whenever the information is needed, and there is no need to wait until a later date. Any party can easily access it at any time via the internet (Febriani, 2019).
Based on the findings in the field, the Gayo Lues Regency Government, in order to improve Human Resource Readiness, has also conducted e-procurement application training for the procurement of government goods and services intended for Commitment Making Officials, Procurement Service Unit (ULP) Working Group Members, Procurement Officials, and implementing eprocurement application operators. The material presented is regarding the operation of the Electronic Procurement System (SPSE) application and purchasing through the web based e-catalogue application and Anti-Corruption mentality to create effective independence. Based on the results of theoretical analysis and findings in the field, government procurement of goods/services is often identified with various types of fraud, both in the planning process, the implementation process and the final completion of the procurement. Fraud/fraud in the procurement of goods/services is deliberate deception intended to influence every stage of procurement to obtain financial gain or cause losses, which can be carried out by external and internal parties to the organization (Kalsum, Ummi, 2021).
There are four factors that cause someone to commit fraud. Firstly, the element of greed is related to a person's internal element of never having enough. The two elements of need are related to the fulfilment of increasing needs that encourage fraudulent actions to benefit oneself or a group. Third, opportunity is related to open opportunities due to the organization's lack of control over acts of fraud. Lastly, exposure (punishment for deterrent effect) is related to the consequences obtained by the perpetrator of the fraud. It is hoped that the greed, opportunity, need and exposure factors can be controlled through a procurement system that can minimize fraud. This is the background for the Goods/Services Procurement Policy Institute (LKPP) to develop a procurement system that can minimize fraud. The procurement system is carried out by adding electronic elements, which is then known as e-procurement (Khoiriyah, Luluk. DKK, 2018). The benefits that can be felt by the government are that it can save and simplify the administrative process, offer more goods and services providers, simplify process accountability. The benefit for providers is that it creates healthy business competition because the opportunity for unhealthy competition through bribes to the committee can be minimized. The benefits for the community are providing knowledge to the wider community about the procurement system in general and getting better services.
Barriers and Supports for the Gayo Lues Regency Government in Implementing the E-Procurement System for Procurement of Goods and Services
In connection with the obstacles to the Gayo Lues Regency Government in implementing an e-procurement system for procuring goods and services, the author has conducted interviews with several sources. In implementing the eprocurement system, the Gayo Lues Regency Government also faces certain obstacles that could hamper the process of implementing this system. The quality of human resources is a very important element for the implementation of procurement of goods and services using an e-procurement system in achieving success. Along with developments in time and technology, human resource development is very much needed. This is because rapid environmental changes require human resources to move actively, creatively and innovatively. However, the phenomenon we encounter in the field is that there is still a lack of human resources to support the running of the e-procurement system.
Supporter
Supporting LPSE services in Gayo Lues Regency is the existence of a legal basis and available SPSE applications that support the implementation of online tenders in order to create efficient, open and competitive public services. Obstacle Obstacles faced by the Gayo Lues Regency Government in Implementing the E-Procurement System in the Procurement of Goods and Services. This resulted in the implementation of the e-procurement system being slightly hampered. However, related to this problem, the Gayo Lues Regency Government has also made certain efforts to overcome the problems that occur. There are several factors that hinder the Gayo Lues Regency Government in implementing the E-Procurement System in the Procurement of Goods and Services, namely resource constraints and facilities and infrastructure constraints.
Resource Barriers
The obstacles for the Gayo Lues Regency Government in implementing an e-procurement system in the procurement of goods and services, namely the lack of skilled human resources, human resource competency as factors that influence the implementation of e-Procurement. If employees have good competence, it will have an impact on e-Procurement, namely getting better towards the goal.
Improved employee competency in implementing the e-Procurement system will result in success in implementing this system. From the discussion above, it is known that the role of human resource competence and infrastructure is very important for the success of the e-Procurement system. Therefore, based on the order of influence according to the results of statistical tests, a conclusion was obtained with the results that infrastructure has the strongest or dominant role in the implementation of the e-Procurement system in Gayo Lues Regency, then the human resource competency factor.
Based on the results of interviews that have been conducted, there are obstacles in terms of human resources. Namely, there is still a lack of skilled human resources to use available technological facilities to support the implementation of e-Procurement. Technology will not be able to run by itself without someone managing it. E-procurement requires an adequate number of human resources. Not only in terms of numbers that must be considered, but also in terms of the competencies they have. E-procurement requires human resources who have expertise in IT infrastructure and also human resources who understand procurement provisions (Ramli, Samsul, 2013).
Based on several explanations regarding the obstacles to implementing eprocurement above, it can be concluded that the obstacles in implementing eprocurement are still a lack of quality human resources in operating the system, and the application system often experiences server errors. However, in relation to this problem, the government has also and will continue to take steps to deal with it. In connection with the problems that occur, the government also continues to try to find solutions to these problems. Various efforts have been made both in terms of improving the quality of human resources and improving facilities and infrastructure so that the implementation of the e-procurement system can run well. In fact, human resources are the most important element in the success of a government, especially related to public services. Human resources become planners, thinkers and movers in achieving government goals in this case related to LPSE. Human resources are also related to management information systems.
Facilities and Infrastructure Barriers
The infrastructure referred to here includes many things, from hardware, software, to communication networks and other physical facilities. In terms of hardware, the implementation of this technology requires a server and also several personal computers both for administrative activities such as registering business actors, including procurement packages, as well as for bidding purposes. In terms of software, all required applications have been provided by LKPP. Then from the communication network side, if it is hoped that each unit can manage procurement activities from their respective locations, then of course a communication network is needed that connects each unit with the location where the server is located (Lea, Perry, 2018).
Implementation of e-Procurement is influenced by infrastructure factors. This indicates that the more complete and adequate the infrastructure will increase the implementation of e-Procurement. The influence of infrastructure in applying the e-Procurement system in the goods and services procurement section of Gayo Lues Regency can improve and influence the work of applying the e-Procurement system which is carried out comfortably and with quality by each committee tasked with the system in order to achieve the objectives of applying this system. Network infrastructure and application infrastructure indicators have a large influence on infrastructure variables. Network infrastructure includes network access with the LKPP center, internet network speed, communications, technology and bandwidth or servers used as well as security. This situation explains and proves to be in line with the phenomenon that existed during the implementation of e-Procurement in Gayo Lues Regency regarding obstacles in e-Procurement that the technical network from the LKPP center was not running smoothly and the bandwidth or server used often experienced problems.
Gayo Lues Regency Government's Efforts to Implement an E-Procurement System for Procurement of Goods and Services
Efforts to improve the implementation of the e-Procurement system were obtained through interviews with leaders from the Goods or Services Procurement Section and several Gayo Lues Regency staff. The recommended strategy is based on the strongest indicators related to human resource competency and infrastructure in applying e-Procurement. Recommended strategies for improving the implementation of the e-Procurement system are developing guidelines for providing direction with training and education, guidance for the use of technology, utilization of resources, providing awards/appreciation to increase motivation, directing understanding of personal abilities, technology and effective use of technology, providing comments in the form of input to the LKPP centre (Neef, Dale, 2001) Use of support servers from the Communication and Information Service, requesting action, corrections/improvements and suggestions for findings from the party carrying out supervision, providers supervising procurement, in supervision it is necessary to increase the performance or role of APIP to carry out audits, and the audit process must be carried out as optimally as possible, call for and issue regulations and standard procedures governing e-audits. Based on findings in the field, the Gayo Lues Regency Government, in order to improve Human Resource Readiness, has also conducted e-procurement application training for the procurement of government goods and services intended for Commitment Making Officers, Procurement Service Unit (ULP) Working Group Members, Procurement Officer, and implementing e-procurement application operator. The material presented is regarding the operation of the Electronic Procurement System (SPSE) application and purchasing via the web based ecatalogue application.
CONCLUSION
Based on the description and discussion in the previous chapters as well as the opinions of the informants, the author can put forward several conclusions, namely: The effectiveness of the E-Procurement System in Procurement of Goods and Services in the Gayo Lues Regency Government is not yet effective, this ineffectiveness is measured by the timeliness of procurement which often shifts in Gayo Lues Regency, thus affecting development in Gayo Lues Regency. This is caused by several factors, including problems with supporting equipment for electronic procurement services such as servers and internet networks which do not run smoothly and with limited human resources. There are two obstacles for the Gayo Lues Regency Government in implementing the e-procurement system in the procurement of goods and services, namely: Human Resource Barriers, namely: there is still a lack of skilled human resources to use the available technological facilities to support the implementation of e-Procurement.
Technology will not be able to run by itself without someone managing it. E-procurement requires an adequate number of human resources. Not only in terms of numbers that must be considered, but also in terms of the competencies they have. E-procurement requires human resources who have expertise in IT infrastructure and also human resources who understand procurement provisions, and obstacles to facilities and infrastructure, namely limited infrastructure availability: Implementation of e-Procurement in Gayo Lues Regency regarding obstacles in e-Procurement that the technical network from the centre LKPP sometimes does not run smoothly and the bandwidth or server used often experiences problems. Implementation of e-Procurement is influenced by infrastructure factors. This indicates that the more complete and adequate the infrastructure will increase the implementation of e-Procurement. The influence of infrastructure in applying the e-Procurement system in the goods and services procurement section of Gayo Lues Regency can improve and influence the work of applying the e-Procurement system which is carried out comfortably and with quality by each committee tasked with the system so that the objectives of applying this system are achieved and The efforts of the Gayo Lues Regency Government in implementing an e-procurement system in the procurement of goods and services, namely in improving the implementation of the e-Procurement system, are developing guidelines for providing direction with training and education, guidance for the use of technology, utilization of resources, directing to understand personal abilities, technology as well as effective use of technology.
SUGGESTION
Based on the research results and conclusions above, the following suggestions are given: To the Gayo Lues Regency Government as the implementer of the LPSE system to conduct training/technical guidance or regular courses for operational technical human resources, Committees, PPK and service providers who have an interest in the implementation of LPSE, as well as socializing the implementation and use of LPSE to the wider community, especially providers services, with the hope of better understanding and making it easier to use the LPSE service process that will be implemented.
ACKNOWLEDGMEN
The solution to writing this article is the author's mind-set to reveal the effectiveness of using electronic service systems in procuring goods and services in Gayo Lues Regency. This research can contribute to procurement service users and make it easier to understand the auction and tender system implemented by the Gayo Lues district government.
Table 1 .
Company Data Following the E-Procurement Program Tender Process Gayo Lues Regency from 2017-2021
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Domain: Business Economics Computer Science
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Cross-faculty proximity and academic entrepreneurship: the role of business schools
Over the past decades, entrepreneurial activity has started to be considered a third mission of higher education institutions. Our study examines the extent to which entrepreneurship at universities is driven by spatial proximity between university faculties. To this end, we use a new dataset that links information on business idea generation by faculties of German universities between 2007 and 2014 with comprehensive data on structural characteristics of these universities and faculties (e.g., number of academic staff, students, industry funding). Our analysis shows that the emergence of entrepreneurial ideas in natural sciences is positively affected by proximity to business schools. This pattern suggests the presence of knowledge flows between these two types of university faculties as an important source of science-based and technology-oriented business ideas. We do not find such a relationship between proximity to business schools and other faculties.
Introduction
The increasing need to produce, transfer, and exploit commercially viable research findings has led today's universities to rethink and adjust their role. With the Massachusetts Institute of Technology (MIT) and Stanford University as early archetypes, higher education institutions have begun to expand their traditional mission of performing research and training of highly qualified people to include more applied research of greater commercial relevance, and to diffuse technical knowledge and provide technical support to industry (Etzkowitz 2000(Etzkowitz , 2003Thursby and Thursby 2002). As a result, mainly in the U. S. and Western Europe, universities have become increasingly entrepreneurial (Shane 2004;Siegel et al. 2007).
Ever since this transformation process started, fostering research commercialization has gained importance and became one of today's priority issues for policy-makers and public authorities. In recent decades, Western governments introduced many measures to actively promote the transformation of scientific knowledge into innovative and practical goods (Link and Scott 2010;OECD 2003). The Bayh-Dole Act of 1980 is probably the best-known piece of legislation for that purpose.
Accompanying this development, spin-off entrepreneurship, patenting, licensing and other activities of knowledge and technology transfer from universities to the private sector, have attracted considerable scholarly attention (see Astebro and Bazzazian 2011;Rothaermel et al. 2007;Perkmann et al. 2013 for comprehensive overviews). An important part of this literature has sought to explain institutional differences in technology transfer. For example, it has been found that the level of industry funding and the nature of research within the university (O'Shea et al. 2005;Powers and McDougall 2005), the size and quality of research faculty (Di Gregorio and Shane 2003;O'Shea et al. 2005), and a university's entrepreneurial tradition Shane 2004) all are strong predictors of the probability and number of spin-off companies. These prior efforts notwithstanding, important questions are still unanswered. From a process perspective of spin-off venture creation (Rasmussen 2011), it is less clear whether and how characteristics of the university and its faculty exert influence on the initial stage, i.e., the emergence of the science-based business idea. Generally, the business idea represents the core of the entrepreneurial process, defined by Grandi and Grimaldi (2005, p. 826) as "the complex of products/services, knowledge, competencies, market, and technologies that are necessary to run a business". As Audretsch (2007) emphasized, not only is the success of a new venture rooted in the quality, newness, and potential of its business idea, but the success of whole entrepreneurial societies depends on the generation (and exploitation) of innovative business ideas.
This paper seeks to elucidate the generation of innovative business ideas in the university context. We add to the academic entrepreneurship literature by proposing that knowledge flows between business schools (BSs) and other university faculties are one important source of science-based and technology-oriented business ideas. For our analysis, we use a comprehensive dataset that links information on business idea generation by faculties of German universities with data on structural characteristics of these universities and faculties. Moreover, our dataset allows shifting the analysis of institutional differences in entrepreneurial activity from the well-studied university level to the relatively neglected faculty level. This shift in perspectives is particularly important as previous organizational studies highlight the faculty level for understanding enterprising behavior among academic research scientists (Bercovitz and Feldman 2008;Kenney and Goe 2004;Rasmussen et al. 2014). Our empirical focus is on the role of BSs for the emergence of entrepreneurial ideas across natural science and engineering faculties of universities. BSs can be conducive for the emergence of entrepreneurial ideas at universities (Wright et al. 2009). We will argue and show that proximity to BSs is positively related to the emergence of entrepreneurial ideas in other faculties.
Our key contribution to the literature is that, as far as we are aware, our paper is the first study to present systematic data that offers support for the idea that spatial proximity between faculties affects university entrepreneurship. While there is an emerging literature that stresses the importance of proximity between university actors and private sector partners (e.g., Adams 2002; Abramovsky et al. 2007; Abramovsky and Simpson 2011; Muscio 1 3 2013), prior research does not consider the influence of intra-university proximity on the commercialization of scientific knowledge. We demonstrate that distance between university actors matters as well. In particular, we find that spatial proximity to BSs has a positive impact on the generation of entrepreneurial ideas in natural science faculties while there is no relationship to entrepreneurship in engineering sciences. These results are robust to several robustness checks including 2SLS instrumental variable regressions.
Overall, this study suggests that interdisciplinary social interactions and knowledge flows between faculties comprise important aspects of the social context in university entrepreneurship. These results will resonate with scholars emphasizing contextual influences upon entrepreneurial behavior and innovation (Autio et al. 2014;Wright 2014).
Proximity, cross-faculty knowledge flows, and academic entrepreneurship: setting the scene
Our line of argumentation is embedded in the general literature on the role of proximity for peer effects, communication patterns, and knowledge flows (e.g., Bulte and Moenaert 1998;Glaeser and Sacerdote 2000;Grinblatt et al. 2008;Bandiera et al. 2010;Nanda and Sorenson 2010). There is also a burgeoning strand of literature investigating social network formation in the university context (e.g., Sacerdote 2001;Zimmerman 2003;Mayer and Puller 2008;Marmaros and Sacerdote 2006). Peer effects and local network ties are essential to understanding scientists' engagement in technology transfer activities (e.g., Link et al. 2007;D'Este and Patel 2007;Abreu and Grinevich 2013;Heblich and Slavtchev 2014;Tartari et al. 2014). In this respect, Murray (2004, p. 643) vividly describes the role of social capital. It comprises, for example, "the local laboratory network-a network to current and former students and advisors established by the inventor through his laboratory life. The second form of social capital is a wider, cosmopolitan network of colleagues and co-authors established through the social patterns of collaboration, collegiality and competition that exemplify scientific careers." Bozeman and Mangematin (2004, p. 565), put it more literally: "scientists and engineers are as dependent upon social networks as they are upon such tangible scientific tools as electron microscopes, supercomputers and synchrotrons." We contribute to the literature by arguing that interdisciplinary network ties and peer effects exert an influence on the level of academic entrepreneurship. Entrepreneurship scholars already pointed out that people with an interdisciplinary background are better placed to recognize and act upon entrepreneurial opportunities (Shane 2000;Bercovitz and Feldman 2008). In this regard, we propose that Business Schools (BSs) play a pivotal role as they may induce "cross-faculty knowledge spillovers" that spur the emergence of entrepreneurial ideas, for example, among faculties of natural science and technology.
Business schools are educational institutions that typically teach courses in areas such as finance, marketing, and strategy. In response to the increasing importance of entrepreneurial activity for economic growth and development, the number of BSs that expanded their curricula to include entrepreneurship-related courses and programs is growing rapidly and globally (Kuratko 2005). Despite an ongoing debate about how to effectively teach 'for' entrepreneurship (rather than teaching 'about' it) (Kirby 2004;Kuratko 2005), scholars agree that entrepreneurship education programs may be a key instrument for fostering technology commercialization and entrepreneurial activity (Wright et al. 2009). Most empirical studies find positive overall effects of BS education on entrepreneurial skills and 1 3 competencies, perceptions of entrepreneurship and entrepreneurial outcomes (e.g., Martin et al. 2013;Bae et al. 2014). Accordingly, BSs are regarded as a vital component of a university's entrepreneurial ecosystem (Boh et al. 2016;Bischoff et al. 2018). Wright et al. (2009) discuss two channels pertaining to the role of BSs for entrepreneurship at universities. The first channel refers to the provision of courses and seminars on financial planning, accounting, marketing as well as specific entrepreneurship classes where undergraduates and post-graduates learn about writing a business plan, marketing new products, or strategies to negotiate with potential investors. University researchers with significant technological expertise often do not possess the necessary skills to bring their inventions to the market or, for that matter, to spot new opportunities (Vohora et al. 2004). Attending general business and specific entrepreneurship classes offered at BSs could thus induce a formal transfer of generic managerial and entrepreneurial competencies. 1 The second channel refers to the direct involvement of BS faculty in the start-up process either through becoming an entrepreneur themselves and starting a firm, serving as (co)founders or board members of a start-up or by taking the role of an external consultant providing business-related knowledge to technically savvy would-be entrepreneurs.
In addition to formal entrepreneurship education and training, cross-faculty knowledge spillovers from BSs to other faculties like natural science and engineering may unfold through informal and occasional knowledge exchange. Social interaction with BS faculty on an informal basis (e.g., during lunch breaks, social events) might raise science and technology faculty's awareness of the commercial potential of their research and eventually increase their desire to exploit this potential by founding their own business. Research showed that knowing where business-related advice is available already contributes to scientists' perceived efficacy with respect to starting an entrepreneurial career (Goethner et al. 2012). Altogether, cross-faculty knowledge spillovers emanating from BSs are about social contacts at the local university which make peers from other faculties aware of entrepreneurial ideas, promote their development and allow potential academic entrepreneurs to draw on local expertise (e.g., counseling, advice).
The effectiveness of cross-faculty knowledge flows from BSs should further be a function of spatial proximity. This assumption draws on insights from different strands of literature. First of all, papers on agglomeration externalities argue that density and proximity of actors increases the frequency of (face-to-face) interaction among heterogeneous actors, which provides the basis for serendipitous labor market matching, sharing of knowledge, and effective learning (e.g., Jacobs 1969;Helsley and Strange 1991;Glaeser and Sacerdote 2000;Storper and Venables 2004). Second, there is a literature stressing that spatial distance is also related to the costs of communication and the benefits of social interaction which was shown to matter in the university context (e.g., Festinger et al. 1963;Holahan et al. 1978;Sacerdote 2001;Marmaros and Sacerdote 2006;Agrawal and Goldfarb 2008). The argument is illustrated by Marmaros and Sacerdote (2006) who argue that the benefits of social interaction comprise the flow of information and ideas as well as the utility from sharing similar experiences. The benefit is likely to increase with the number of previous contacts with the respective person. Costs are reflected by the time of interaction and search for useful social contacts. Distance is a considerable cost factor if person and value of interaction are unknown. The authors find that proximity has a large effect on the likelihood of social interaction among individuals at the university campus. Furthermore, increasing distance between faculties decreases the likelihood of chance encounters of students and faculty staff with a different background in the urban neighborhood. The urban space provides interaction-promoting facilities similar to what Allen (1977) described in the organizational context. In a similar vein, much of the traffic in a neighborhood results from the movement of people to and from certain types of facilities they have to use during the day and when these facilities are sprawled. Among them, one can cite lecture theatres, student dorms, gyms, students clubs, bars, cafeterias. Allen (1977) shows that laboratory design that increases the number of interaction-promoting facilities can affect the extent of communications positively. Such mechanisms may also be at work for university architectures.
A positive effect of proximity on peer effects, communication patterns, and knowledge flows is also emphasized in sociological and psychological theories (for an overview, see Rivera et al. 2010, pp. 105-107; see also Allen 1977, pp. 334-335 for earlier studies) and in economic geography. Regarding the latter Boschma (2005) discusses how geographic proximity relates to innovation. The argument is that spatial proximity is associated with knowledge externalities. Short distance enhances opportunities for exchanging tacit (noncodified) knowledge which is crucial for innovation and entrepreneurship. The geographic bounding of knowledge transmission processes is confirmed in numerous empirical studies (e.g., Jaffe et al. 1993;Audretsch and Feldman 1996;Howells 2002;Singh and Marx 2013;Belezon and Schankerman 2013). Against this background, it comes as no surprise that recent research demonstrates the importance of local proximity for the formation and effectiveness of university-industry linkages (e.g., Adams 2002;Abramovsky et al. 2007;Abramovsky and Simpson 2011;Muscio 2013). Abramovsky and Simpson (2011) argue that firms may benefit from proximity to universities by drawing on the expertise of university staff or research students through consultancy or direct recruitment, or to access codified and non-codified knowledge more informally and formally (e.g., in the form of research joint ventures). These mechanisms are similar to those we have in mind for the cross-faculty level. Therefore, we expect that research departments benefit from proximity to BSs, regarding knowledge transfer (i.e., generation of university spin-offs) in a similar way. The literature mentioned above unanimously states that geographical distance is the most important form of distance for predicting social interaction. This does not mean that other forms of distance (e.g., social, cultural, institutional) are not relevant as well (see also, Boschma 2005).
Database
Our analysis is focused on the distribution of science-based business ideas across university faculties. We make use of publicly available information on business start-up grants assigned to university members between 2007 and 2014 under the framework of the German "EXIST-Gründerstipendium" initiative which is a main program line within the policy program "EXIST: Promotion of university-based start-ups" ( [URL] .de).
Started in 1998, EXIST is a federally funded part of the German government's "Hightech Strategy for Germany" and is co-financed by the European Social Funds (ESF). The program aims at improving the conditions for academic entrepreneurship. Key objectives of EXIST thus include the establishment of an entrepreneurial culture at German HEIs, the continuous transfer of research results into marketable products and services, the promotion of highly innovative research-based business ideas, and a significant increase in entrepreneurial activity by academics. The EXIST program follows a dual strategy. One building block is supporting universities and providing indirect assistance for individuals and start-up projects. In this respect, there have been several phases of EXIST program lines that aimed at creating entrepreneurship-facilitating structures at universities since the late 1990s. In support of these activities, universities receive an allowance from the German Federal Ministry of Economics and Technology over three years (e.g., EXIST 2013; Kulicke 2014).
The so-called "EXIST-Gründerstipendium" (EXIST start-up grant), is one of the main policy instruments regarding direct financial support to nascent academic entrepreneurs within the EXIST policy framework. The direct support is the second building block of the EXIST initiative. The EXIST start-up grant was introduced in 2007. The grant enables founders to develop a business model, test its economic viability, secure the required sources of funding and take the first steps in the process of developing the business (Kulicke 2014). At the same time, the grant reduces personal financial risks usually involved in starting up. For the maximum of one year, the living expenses of the founders are covered by the program. It offers a monthly scholarship for founders holding a Ph. D.
(2.500 €), university graduates (2.000 €), and students (800 €). Besides, successful applicants can get start-up related coaching (for up to 5.000 €), funding for materials and equipment (up to 10.000 € for solo start-ups and 17.000 for team start-ups) and, where applicable, child benefit of 100 € per month and child. During the one-year funding period, program participants have free access to the infrastructure of the university or research institution (such as workshops, labs, computer centers) and usually get office space there. The university also provides technical assistance and counseling, while a designated mentor (e.g., university professor, expert researcher) guides the entrepreneurial project (EXIST 2013).
Grant applications are evaluated by the Project Management Agency Jülich (PTJ), which has been commissioned by the German Federal Ministry of Economics and Technology to implement the EXIST program. To be eligible for funding, applications have to fulfill several requirements. First of all, only scientists, former academic associates (up to 5 years after graduation/leaving the institution), and students (who have completed at least half of their courses at the time of application) of all German universities or scientists from public research institutes are supported. Members of funded start-up projects are further required to combine technical knowledge and skills related to the innovative technologyoriented business idea with management competencies. Finally, sponsorship is limited to high-potential start-up projects that involve the introduction of product or process innovations or innovative services and have clear prospects for economic success.
We rely on EXIST business start-up grants because we are interested in the emergence of entrepreneurial ideas. The data are suited for capturing formalized entrepreneurial ideas. The ventures are in the very early seed stage long before registering the business or making first sales. 2 The data on assigned EXIST business start-up grants was derived from the "funding catalog" ("Förderkatalog") of the Federal Ministry of Economy and Technology and the Federal Ministry of Education and Research. 3 The data comprise the name of the university and the executing faculty that applied successfully for the grant. Furthermore, there is information on the year of application.
The information on university and faculty allowed us to combine the data with the University Statistics of the German Federal Statistical Office, which provides information about every university in Germany (Statistisches Bundesamt, various volumes) and contains, for example, the number of students, academic personnel, graduates, as well as the amount of Third-Party Funding. This information is distinguished by nine disciplines: humanities (such as cultural and language sciences), sports science, social sciences, natural sciences, medicine, veterinary medicine, agriculture and nutrition science, engineering as well as arts and culture-related studies (for details, see Fritsch and Aamoucke 2013) which we call "faculties" in the following. We assigned start-up grants to single faculties of universities. Please note that the data from "Förderkatalog" only provide information on successful grant applications.
Sample
In order to be suited for the empirical analysis, a university has to have more than one faculty in one city. Otherwise, cross-faculty spillovers are impossible. Based on this criterion, our dataset comprises 2072 faculty-year observations for the period between 2007 and 2014 that consist of observations from humanities, sports sciences, social sciences, natural sciences, engineering, and arts and culture. The raw dataset, before data cleaning, includes faculties of 57 German universities with 642 EXIST start-up grants in total. 4 There are many differences concerning the number of start-up grants across universities and faculties. The highest annual number of start-up grants per faculty was obtained by the Social Sciences at Ludwig-Maximilians-University Munich where the EXIST initiative supported 10 start-up projects in 2010. Table 1 demonstrates that the likelihood of having at least one start-up grant per faculty and year is highest among natural sciences followed by engineering and social sciences. These faculties are ahead of the faculties of humanities, sports sciences as well as arts and culture.
Proximity to business schools
Our main variable of interest is proximity to business schools (BSs) which we measure by distance in walking minutes. BSs at German universities are embedded in departments offering both economics and business administration classes. Therefore, "BS" henceforth refers to departments of Economics and Business Administration (EBA). Cross-faculty effects of BSs should increase with decreasing distance to other faculties due to a higher likelihood and extent of social interaction between faculty members. The distance is measured on the basis of the locations of faculties at the university campus. The measurement procedure required the building of "clusters" of important facilities for each faculty that can be regarded as the centers of research and teaching. Studying the campus maps of the universities in our final sample, it became apparent that significant research and teaching facilities of a faculty are clustered in no more than four sites. The mail addresses of the four largest sites of a faculty were used to calculate the distance in walking minutes following Google Maps. 5 The same source was used in previous research on proximity and university knowledge spillover (Belenzon and Schankerman 2013).
We carried out the above exercise only for natural and engineering sciences. BSs are part of the social science faculty. Nearly all successful grant applications in Social Sciences can be assigned to BSs. Therefore, analyzing how the prevalence of non-BS projects within the social sciences is affected by distance to the BS is not sensible. For other sciences we abstained from an analysis since the number of facilities, for example, in humanities is so huge that determining distances of single facilities to the BS is not feasible. Given the lower number of entrepreneurial projects from these faculties, it is also unlikely to find systematic patterns in the data. Finally, data limitations prevented us from considering medical science as well (see "Appendix A").
Model and method
We analyze the number of successful EXIST start-up grant applications across German universities at the faculty level for natural and engineering sciences between 2007 and 2014. Our empirical strategy relies on OLS and instrumental variables regressions. The regressions are carried out separately for each faculty. Standard errors are clustered at the university-faculty level. The clustering procedure corrects the standard errors for similar values of the cluster variable and controls for serial correlation. This is important to account for the panel structure of the data (Cameron and Trivedi 2009, pp. 621, 627). 6 We lag the time-varying continuous variables by three years in order to avoid simultaneity bias. 7 The basic relationship of the underlying model reads as follows: The dependent variable EXIST fu,t is the annual number of business start-up grants over the number of eligible faculty members (academic personnel, students, recent graduates) per faculty of a respective university fu at time t. This variable can assume the value of zero as well. In a robustness check, we use the number of business start-up grants as an alternative outcome variable. Our main variable of interest measures proximity between natural science and engineering faculties to the local BS in walking minutes PROX_BS fu . It is time-invariant over the observation period. Furthermore, the analysis includes a vector of control variables for faculty-specific characteristics and characteristics on the level of the university the faculty belongs to that might affect university entrepreneurship UNIFAC � fu,t−3 (see Table 7 for a definition of variables and Table 8 for summary statis- (1) EXIST fu,t = + * PROX_BS fu + UNIFAC � fu,t−3 + REG � r,t−3 * D t + fu,r,t−3 6 For a similar application, see Fritsch and Falck (2007). 7 The lag is about three years since structural characteristics are likely to affect the emergence of business ideas in the longer run. There are also data restrictions for the most recent years of the observation period. Therefore, we would lose several observations when assuming a one or two-year lag. 5 Some faculties have small separate institutes at spots distant to sites hosting most of the teaching and research facilities of a faculty. We investigated whether regular teaching takes place at these spots. If there is just one separate institute without teaching activities, the respective sites are not considered as a cluster of significant research and teaching. We thank Steve Langheinrich for outstanding research assistance for determining these clusters and distances between faculties. tics). There is also a vector of characteristics of regions r in which university-faculties are located in REG � r,t−3 . The regional controls are interacted with year dummies D t . 8 The control variables for university and faculty characteristics focus on different organizational, institutional (faculty and university), and external determinants (regional) that may matter for the prevalence of academic entrepreneurship (for an overview, see O'Shea et al. 2005O'Shea et al. , 2008Link and Scott 2005;Rasmussen and Borch 2010;Van Looy et al. 2011). We run separate analyses for specific faculties. Thus, there is always only one universityby-year observation. It should be noted that in this particular case, university fixed effects are similar to faculty-university fixed effects. Accordingly, dummy indicators for the different faculties and universities do not apply in this framework.
One crucial control variable at the university level is a dummy variable indicating a Technical University. Technical Universities in Germany are one specific type of HEIs that has consistently been linked with very entrepreneurship-supportive university policy. Since many areas of their research and teaching are traditionally linked very strongly to industry, Technical Universities have been assumed to be more adept at fostering knowledge spillovers and technology commercialization than general universities (Audretsch and Lehmann 2005a).
We also consider controls that describe current and time-varying characteristics of university-faculty structures. In particular, we control for the size of faculties as measured by the sum of faculty members eligible for a start-up grant (students, recent graduates, and academic staff). We also include the share of students among faculty members to account for potential differences in the entrepreneurial propensity within the group of eligible persons. We also control for the size of the EBA department (which includes BSs) within the social science faculty at the respective universities. Unfortunately, information from university statistics does not allow separating the size of EBA and BSs in terms of staff and students. However, it is possible to distinguish the size of EBA departments within social sciences concerning financial budget resources. The relative size of the EBA department might be important for the level of business start-up grants at social science faculties since the entrepreneurial propensity of EBA staff and students is presumably relatively high within social sciences. The relative size of EBA might also play a role for the emergence of entrepreneurial ideas in other faculties due to cross-faculty knowledge flows. We also exploit information on third-party funding per professor on the faculty level. This measure is the total amount of third-party funding divided by the number of professors at a faculty. Third-party funding per professor is an indicator of the quality of universities (e.g., Fritsch and Aamoucke 2013) and faculties accordingly. It is important to control for quality since previous studies indicate a positive relationship to academic entrepreneurship (Di Gregorio and Shane 2003;Powers and McDougall 2005).
Another potential determinant of university entrepreneurship that we control for is the private sector share among total third-party funding to capture differences in the commercial orientation of research. Unfortunately, this information is only available at the level of universities. Third-party funding per professor and, in particular, the share of funding by the private sector might explain differences in faculty entrepreneurship (e.g., Di Gregorio and Shane 2003;Gulbrandsen and Smeby 2005;O'Shea et al. 2005;Powers and McDougall 2005;Fritsch and Aamoucke 2013). The lack of information on the funding source at the faculty level is a limitation of our analysis.
Next to these university and faculty characteristics, we also control for the distance of faculties to the university's TTO. Accessibility of the TTO may positively influence the emergence of entrepreneurial ideas at the faculty level since TTOs promote entrepreneurial projects (e.g., O'Shea et al. 2005;Clarysse et al. 2011). In contrast to our main variables of interest, though, distance to TTOs captures much different patterns because the TTO is not necessarily providing or transferring project-specific knowledge. 9 We also consider whether the university was supported via the "excellence initiative" of the German Federal and State governments for the advancement of science and research in the period of observation. Universities receiving funding for their institutional strategy for project-based development of top-level university research are regarded in this paper as "Excellence University." We employ a dummy variable in the analysis to indicate the respective universities. The variable is a reasonable proxy for quality of research which might be related to faculty spin-off activity as already mentioned above.
Entrepreneurial tradition and the historical record of universities in fostering entrepreneurship are essential drivers of entrepreneurial activity of faculties (e.g., Kenney and Goe 2004;O'Shea et al. 2005;Landry et al. 2006;Hsu et al. 2007). Universities experienced with start-up activity are likely to have entrepreneurship-facilitating infrastructures (network initiatives, incubators) in place. As entrepreneurial activity is more common in these institutions, entrepreneurial peers are likely to be present. We capture this tradition by a variable indicating whether universities were early adopters of public policy schemes to promote an entrepreneurial culture at universities. To be more precise, participation in the first wave of the EXIST program line (EXIST I) indicates such a tradition. The respective universities were the first ones to have a systematic entrepreneurship promotion program which was initiated in the late 1990s. There might be a long-term effect of these earlier activities on the emergence of entrepreneurial ideas in the observation period from 2007 to 2014. There have been further EXIST program waves that fall into our observation period which may affect the number of start-ups. EXIST participation implies that the technology transfer office (TTO) of the university pursues a clear entrepreneurial strategy. EXIST program participation is captured by binary indicators.
Regional characteristics can play an important role for academic entrepreneurship and the entrepreneurship culture at universities as well (Fini et al. 2011;Fritsch and Aamoucke 2013). The knowledge infrastructure of a region is often cited as a critical factor in determining spin-off activity (Audretsch and Feldman 1996;O'Shea et al. 2005). If a university is geographically close to many firms interested in its research, its scientists may have more opportunities to share and exchange ideas. Moreover, in a region with higher levels of innovative entrepreneurship, an entire network infrastructure of customers, suppliers and employees is likely to be present, lowering the barriers to starting a university spinoff. The regional environment is captured by three dummy variables indicating the degree of agglomeration of the region hosting the university faculties. The degree of agglomeration is a "catch-all" variable for the regional economy since many of the regional variables are highly correlated with population density (stock of knowledge, house prices, etc.). 10 The degree of agglomeration also captures a selection of students in certain locations since some students and faculty members prefer large cities while others favor smaller places. Apart from that, we control for the start-up rate in knowledge-intensive industries (KIBS + R&D intensive manufacturing industries) to capture regional differences in the prevalence of high-quality entrepreneurship. This is supposed to be strongly correlated with the entrepreneurial supporting infrastructure (e.g., access to venture capital, business consultancy support) available that might drive the decision to apply for a business start-up grant (e.g., Sorenson and Stuart 2001;Cumming and Fischer 2012). The regional characteristics are measured at the NUTS3 (county)-level.
We also assess dummy variables for the planning region in which universities and faculties are located in order to capture unobserved differences in the broader regional environment and policymaking. Planning regions represent functionally integrated spatial units comparable to labor market areas in the United States. They consist of several NUTS3 regions. Moreover, every German Federal State comprises several planning regions. Therefore, the dummies indirectly capture unobserved differences on the level of Federal States as well. These controls are important since university policymaking is the task of the Federal States in Germany. We interact the regional control variables with year dummies to capture region-by-year-specific effects (e.g., business cycle) on the level of entrepreneurial activities across university faculties.
A first assessment of the data reveals that the consideration of an array of region-specific effects implies that dummy controls for the participation in EXIST programs that are supposed to foster an entrepreneurial culture at universities are perfectly collinear. That is, the controls for regional conditions perfectly absorb differences concerning entrepreneurial tradition and culture across universities and regions.
One issue in the context of our empirical setting is that socialist policies in the former German Democratic Republic (GDR) affected university structures and urban planning (e.g., Connelly 2000; Andrusz et al. 1996;Ott 2001). We have no firm idea of how these patterns confound with our prime mechanism; but to err on the side of caution, we present models with and without post-socialist East Germany. Many university faculties in East Germany underwent a significant renovation in the 1990s/early 2000s. This development makes it more likely that business schools were deliberately placed close to highly entrepreneurial science departments since programs/initiatives fostering university entrepreneurship started in the late 1990s as well.
The use of an array of control variables for capturing specific difference across faculties, universities, and regions reduces a potential omitted variable bias. However, it does not address the issue of reverse causality, namely, that the prevalence of entrepreneurial activities explains differences in the location and proximity of faculties. To dispel such concerns, we also employ a 2 SLS approach. The first stage of this approach reads as follows: In this equation, we predict values for our proximity measure P ROX_BS fu,t . It is the variation in proximity that is due to the age of the university a faculty belongs to UNI_AGE fu (see Sect. 4.2.2 and "Appendix B" for details on the choice of instrument). Age is calculated by subtracting the founding year from the year 2007. Please note that university age is also time-invariant. However, the estimation of (2) yields time-varying predicted values for the proximity measure when including time-varying control variables.
The vector X � fu,t−3 reflects the entire set of control variables and region-by-year interactions as in Eq. (1). Determining the founding year was in most cases straightforward. There have been some peculiarities which are documented in the notes of Table 6 in the Appendix. This table also lists the founding years of the universities in our final sample.
Finally, the variation in proximity that is due to the age of universities P ROX f is used in the second stage to explain differences across faculties concerning the emergence of entrepreneurial ideas. The second stage relationship reads as follows:
Cross-faculty knowledge flows and the emergence of entrepreneurial ideas
The main variable of interest in our models is the distance to the local business school (BS) in walking minutes. We employ log-transformed values of distance in order to rule out that major discontinuities in the distance distribution drive our results. 11 Results are illustrated in Table 2. The model in column I only considers regional characteristics and whether the university is a Technical University which represents a university-fixed effect. The regional fixed effects are interacted with year dummies. Column II and III add control variables for university and faculty characteristics as discussed in the previous section. Column II includes East and West German universities. In column III the sample is restricted to universities in West Germany in order to account for any influences of socialist policies in the former GDR. Distance to BSs is negatively associated with the emergence of entrepreneurial ideas in natural sciences across German universities while there is no relationship for engineering sciences (Table 2). This difference might have to do with the higher relevance of applied knowledge in engineering. Thus, it might be easier to develop entrepreneurial ideas without knowledge spillovers from BSs as compared to natural sciences. The insignificant findings might also be driven by the lower variability of the distance measure (Table 9). However, the change in the sign of the coefficient across specifications suggests that there is no stable negative relationship between distance and the prevalence of start-up grants in engineering.
The size of the coefficient estimates in the models for natural science is relatively small which comes as no surprise given the low overall number of entrepreneurial projects. An increase in distance by 10 percent on average (approximately: 20 walking minutes) 12 implies a drop in the EXIST rate by 0.9 units. This is approximately 1 start-up grant per 1000 faculty members. The effect is larger for the sample restricted to West Germany. An increase in distance by 10 percent implies a drop in the EXIST rate by 2.4 units. Running a separate analysis for East German universities (incl. Berlin) reveals that there is no relationship between distance to BSs and the emergence of start-up grants. As aforementioned, this could be explained by socialist legacy effects like a lacking entrepreneurial culture among universities on average. Another obvious reason could be that the variation for the average distance to BSs is lower across East German universities (Table 9). 13 Tables 11 and 12 show the coefficients for control variables. Notably, distance to TTO is positively related to the EXIST rate for natural sciences. This pattern could be driven by multicollinearity with distance to BSs, but in a model excluding the distance to BS measure, distance to TTO is still positively related to entrepreneurial activity (Table 10). 14 One explanation for this somewhat puzzling finding is that researchers might be hesitant to contact the TTO if it is too close to their faculty. By approaching the TTO nearby, it could be more easily noticed by their peers that they consider a start-up which they may have wanted to keep secret. On the other hand, contacts to people from BSs are less obviously interpretable as attempts to start a company. Another plausible reason is that universities that value entrepreneurial activities choose to place the TTO in a central administration building (i.e., near the office of the University President) to emphasize its importance, but that these locations are farther from the faculties. Our data show indeed that the distance between natural science faculties and TTOs is higher at universities that participated in the first wave of the EXIST program line (EXIST I). These universities were early adopters of public policy schemes to promote an entrepreneurial culture at universities. The average distance of TTOs to natural science departments is 35 walking minutes while it is only 19 min for other universities. The entrepreneurial tradition of EXIST I universities may also imply higher social and cognitive proximity between the TTO and faculty members that compensates for lack of geographical proximity. Similarly, universities that have no such entrepreneurial tradition but put the promotion of entrepreneurship on the agenda recently may strategically place their TTOs in close geographic proximity to natural science departments to compensate for an initially lacking social and cognitive proximity with respect to entrepreneurial orientation. Indeed, the average distance between TTOs and natural science faculties is only 14 walking minutes for universities that participated only in later EXIST program lines. 15 Finally, if a university has already an entrepreneurial tradition, there might also be a stronger entrepreneurial orientation and practical experience at the faculty level making it less reliable on the TTO to initiate and facilitate entrepreneurial processes. Therefore, geographic proximity may be less important as well at these universities.
The issue of reverse causality
A concern could be that the results in Table 2 might suffer from endogeneity if BSs and other faculty buildings were "strategically" placed close to each other in order to promote cross-faculty spillover and entrepreneurship. Therefore, OLS estimates on the effect of distance to BSs on entrepreneurship in other faculties might upward bias the coefficient estimates. This pattern should be relatively unlikely, however, since the "third mission" is a relatively new function that universities assume (Etzkowitz 2000(Etzkowitz , 2003. Therefore, Table 2 Cross-faculty spillovers BS to natural and engineering sciences (Baseline OLS) Significance levels: ***P < 0.01, **P < 0.05, *P < 0.1 Clustered robust standard errors in parentheses (cluster: university). The models of Panel B include the same variables like those in Panel A. Constant and coefficients for control variables are not shown for brevity. Full models are provided in the Appendix (Tables 11 and 12 fostering cross-faculty knowledge spillovers should have played less of a role at the time when universities were founded. Nevertheless, in order to assuage remaining concerns, we run instrumental variables regressions as a robustness check to identify the causal effect of proximity between faculties on the emergence of entrepreneurial ideas. We focus on entrepreneurial projects within natural sciences since the OLS estimates indicate that distance to BSs plays a vital role in these faculties only. To overcome the reverse causality issue that entrepreneurial potential of faculties might determine the distance to other faculties, we use the age of universities as an instrument for proximity in a 2 SLS setting. Our identification strategy relies on the idea that universities founded in recent times are more likely to have all university buildings near to each other since they were built up at the same time. By contrast, the location of faculty buildings of older universities, like those founded in medieval times, is more likely to be sprawled. One reason for this is the increasing breadth of university curricula throughout centuries which is reflected, for example, by the emergence of natural science faculties and the expansion of tertiary education in the 20th century. New faculties at old universities were not necessarily located in proximity to already existing facilities due to idiosyncratic historical city developments constraining opportunities for co-location, especially if the new faculties required some space for laboratories, equipment, etc., like in the natural sciences (for a more detailed line of argumentation, see "Appendix B"). After presenting the IV results, we will show that the age of universities is not related to their entrepreneurial and commercial orientation which assuages concerns regarding the validity of this instrument.
IV results
We employ the log-transformed value of age in our main specification. 16 Table 3 reports first-and second stage regression results. The structure of models I to III follows those in Table 2. The results indicate that there is a positive relationship between university age and proximity of natural science faculties to BSs. The younger the university, the shorter is the walking distance between respective university facilities. An increase in university age by 10 percent changes the distance of natural science faculties to BSs by between 3.8 and 6.4 percent (walking distance: ca. 7.5-13 min).
The first stages F-statistics have sufficiently high values (Stock et al. 2002) suggesting the relevance of age as an instrument. The results of the second stage estimations are shown in column IV to VI. Proximity to BSs that is due to the age of universities has a positive and significant effect on the level of entrepreneurial activities in natural sciences. 17 In the analysis that is restricted to West Germany, an increase in walking distance by 10 percent (walking distance: ca. 20 min) implies a drop of approximately 0.3 start-up grant per 1000 faculty members. 16 Kernel density estimates for university age before and after log-transformation is shown in Fig. 2. The results resemble those of Table 2 when using the non-transformed age (not reported). The distribution is smoothed with and without log-transformation. We also stick to the log-transformed value of the distance measure in order to interpret the change in distance that is due to age as elasticity (log-log model in the first stage estimation). 17 The explained variance (R 2 ) in the models is very high due to including planning region dummies as controls for regional characteristics. Using state dummies instead reduces the R 2 to values around 0.6 to 0.7 (not reported).
There is only a weakly significant 2SLS relationship in the sample including East German natural science faculties when controlling for university and faculty characteristics. Note that the IV results indicate that university age explains differences in proximity between natural sciences and BSs in East Germany as well. However, proximity that is due age seems to be unrelated to entrepreneurship at East German universities. This is in line with OLS results for East Germany reported earlier that could be attributed to lower variation in our distance measure.
The results for the full model for West Germany are robust when bootstrapping the standard errors (see Panel A of Table 15). We also employed bootstrapped standard errors for robustness checks discussed in Sect. 4.3. The results of the IV analysis and the single OLS regression are also not sensitive when measuring region and year effects separately instead of interacting them (see Table 16). The results are also significant for the full sample including East German universities.
In a further assessment, we allow for functional flexibility of the age measure to rule out that our identification strategy is affected by an arbitrary specification of the instrument. So, we use a binary indicator for age which assumes the value of 1 if a university was founded after 1945. Our results remain robust and thus do not appear to be driven by the functional form of the instrument (Table 17). The results show a significant second stage effect for East and West German universities. This suggests that universities founded in the GDR explain the insignificant second stage when employing the continuous age instrument. Table 18 shows the reduced-form relationship between university age and entrepreneurial activities. Again, the structure of the models follows those in Table 2. A significant relationship between the instrument and the outcome variable in the reduced form in conjunction with a strong relationship between the instrument and instrumented variable in the first-stage regression indicates the presence of a causal relationship. The results in Table 18 reveal a robust relationship between university age and the emergence of entrepreneurial ideas for the sample of West German universities. Using the binary marker indicating whether a university was founded before 1945 yields a significant relationship for the full sample as well.
The results of the reduced-form estimates should not be interpreted as an indication that age has a direct effect on entrepreneurship levels (other than via proximity between natural science faculties and BSs). The next section explicitly deals with the exclusion restriction.
The coefficient estimates for the proximity measure in column VI of Table 3 resemble the one for the OLS estimates in Table 2. They are slightly larger, but there are no severe biases in the coefficient estimates after instrumenting the proximity measure. Hence, our baseline OLS results are not suffering from serious endogeneity problems. As previously argued, endogeneity might be not a particularly strong issue if we assume that location decisions are in most cases determined many decades before the period of analysis and before universities increased their activities in technology transfer. This might hold particularly for older universities. Against this background, a good robustness check is to exclude, for example, universities aged less than 30 years in the baseline OLS regression. This exercise also circumvents the problem that cities, where a university had been recently created, are probably more dynamic and entrepreneurial than the average. This may be less true for cities where a university had been created in last centuries, especially since cities that were dynamic in last centuries are not necessarily dynamic today. The respective models are presented in the Appendix (Table 19) and reveal a robust relationship between distance to BS and the EXIST rate in natural sciences.
We repeated the IV analysis also for engineering sciences to explore whether the insignificant results found in the OLS analysis are eventually due to potential endogeneity issues. However, the results confirm the baseline OLS estimations (Table 20). As expected, the first stage relationship shows that age is also positively related to distances between faculties of engineering and BSs. However, the second stage regression shows that there is no relationship between distance to BS and the emergence of business ideas in engineering. Therefore, in the following section on further robustness checks, we focus primarily on natural sciences. We will report results from OLS regression but also on IV estimates to address potential endogeneity concerns in the modified specifications even though the findings of this section suggest that endogeneity plays a minor role.
University age and "taste for entrepreneurship": empirical analyses concerning IV validity
The credibility of the instrumental variables approach relies on the validity of the instrument. Accordingly, the instrument should not have any influence on the outcome variable other than via the instrumented variable. In the present study, this would be violated if university age has a direct influence on the level of entrepreneurial activities at faculties. University age could be related to the "taste for entrepreneurship." In the following, we show analyses that rule out that there is such a relationship. The first main concern in this regard is that more traditional universities might have a lower commercial orientation and therefore less entrepreneurship (e.g., Audretsch and Lehmann 2005b). It can be noted, though, that the two-stage relationship in our analysis remains robust when controlling for the share of private sector third-party funding (as an indicator of a university's industry engagement). The second main concern is that age could also affect the number of start-ups by faculty members directly, for instance, because older universities are more established and better able to attract more talented researchers. A measure of such quality is the third-party funding by professor which we also control for in the analysis. Table 3 Cross-faculty spillovers to natural sciences: IV regressions Significance levels: ***P < 0.01, **P < 0.05, *P < 0.1 Clustered robust standard errors in parentheses (cluster: university). Constant and coefficients for control variables are not shown for brevity. Full models can be found in the Appendix (Tables 13 and 14) I II III IV V To assuage these two reasonable concerns, we regress the likelihood of having participated in the EXIST program on the age of universities. As previously mentioned, the EXIST program supports entrepreneurial activities at universities. University age should not be related to the likelihood of being an EXIST university. Please note that every university can apply for an EXIST start-up grant. Participation in the structural EXIST program is not an alternative measure for EXIST start-up grants.
We run logit regressions including the same independent variables as in the previous analyses. As can be seen in Table 4, there is no relationship between university age and university engagement in entrepreneurship support policies. We run a similar analysis with the private sector share of third-party funding as the dependent variable and include the other independent variables used in the previous analyses on the right-hand side of the model. There is also no relationship of age with this indicator for commercial orientation (Table 5). Finally, we adjust third-party funding per professor, which indicates quality, by multiplying with the private sector share of third-party funding, which captures entrepreneurial orientation. There is also no meaningful relationship of age with this indicator. These analyses dispel the two main concerns namely that university age is related to quality and "taste for entrepreneurship." Finally, we also regress the residuals of the OLS estimates of the models of Table 2 on the instrument to see whether age is uncorrelated with any potential but unobserved determinant of university entrepreneurship that is captured by the residuals. The additional analysis shows that there is no such correlation (Table 21).
Robustness checks
We conducted several robustness checks that confirm our main findings. For example, we excluded universities that participated in EXIST programs over the entire observation period and those that did so before the observation period. As previously mentioned, an earlier participation indicated the presence of an entrepreneurial tradition and a historical record of universities in fostering entrepreneurship. Please note that binary indicators for participation are perfectly collinear with the region-by-year interactions in the main models which are therefore implicitly controlled for. When excluding the respective universities, the negative relationship between distance to BSs and academic entrepreneurship is confirmed (Table 22). 18 In another specification, we exclude campus universities with very high proximity between natural science faculties and BSs. Similarly, we disregarded small and large faculties in terms of faculty members (Table 23). 19 We also checked whether observation years with extremely high EXIST rates in certain universities drive our findings. To this end, we excluded the upper 1 percent of the EXIST rate distribution. In further models, we also excluded observations without any EXIST grant to rule out that the skewed distribution of EXIST grants determined our baseline results. The case number is much reduced in the latter specification because there was no approved EXIST grant in 61 percent of all faculty-year observations for natural sciences (Table 24). Throughout all alternative model specifications, our results remain robust and thus do not appear to be driven by specific types of universities, outliers, or by selection into entrepreneurship promotion programs.
As a further check, the number of EXIST start-up grants instead of the EXIST rate (i.e., number of start-up grants over eligible faculty member) is employed as an alternative outcome measure. The second stage results are in line with the main results. One difference is that there is also a significant 2SLS relationship in the full model including East German natural science faculties. Concerning effect size, an increase in distance to BSs by 1 percent reduces the number of grants by 1 (Table 25). Table 4 Age of universities and engagement in fostering entrepreneurial activities (Logit): analysis for universities with natural science faculty Significance levels: ***P < 0.01, **P < 0.05, *P < 0.1 Clustered robust standard errors in parentheses (cluster: university). Coefficients for control variables and constant are not shown for brevity. *The planning region and region type dummies were not included since observations would be dropped due to perfect prediction in the models. For the same reason the models include year dummies instead of region type-by-year dummies. In model II dummies for Technical and Excellence universities are not included due to perfect prediction We also add the number of start-up grants from BSs before calculating the EXIST rate. By this, we consider that start-up grants where natural science and BS staff have been involved (directly and indirectly) could have been assigned to BSs. The OLS regression and the IV 2 SLS relationship between university age, proximity, and the prevalence of start-up grants resemble the main results in this specification. 20 Interestingly distance to natural science is not significant when restricting the EXIST rate to start-up grants from BSs only; a modification where potential knowledge flows to natural sciences are neglected (Table 26). 21 We did a similar analysis for engineering sciences. That is, we add the number of start-up grants from BSs before calculating the EXIST rate in engineering, and we also restrict the EXIST rate to start-up grants from BSs in universities hosting an engineering faculty. This additional exercise confirms again that distance between BSs and engineering does not matter for the emergence of entrepreneurial ideas (Table 27).
One may object that the findings are an artifact of generally low distances of faculties at certain universities. In order to dispel such concerns, we calculated the distance (in walking minutes) between departments of computer sciences and other natural science departments. Browsing the entrepreneurial projects that are supported by an EXIST start-up grant shows that the grand majority of the developed products or the business models (distribution channels etc.) are heavily relying on the increasing importance of information and communication technologies (ICT). Therefore, one could argue that distance to the department of computer sciences should play an important role for the emergence of entrepreneurial ideas. However, the analysis reveals no significant relationship between faculty proximity and the EXIST rate for the West German sample. Thus, the findings on proximity to BSs are not coinciding with results on proximity to other potentially entrepreneurship-promoting university facilities. This pattern also suggests that the distance to "managerial" and "commercial" knowledge is important for the actual emergence of entrepreneurial ideas. 22 In further placebo analyses, we checked whether the distance to the faculty of sports sciences and faculty of arts mattered. We expect that distance to these faculties should not influence the prevalence of entrepreneurial projects in the natural sciences. This is confirmed empirically (Table 28). 20 Faculty characteristics in this model are based on separate values for natural sciences and EBA. Since there is only information on faculty characteristics of Social Sciences in general, EBA values are obtained by multiplying the share of EBA within Social Sciences, in terms of spending, with the respective values of faculty characteristics of Social Sciences. 21 Please note that this analysis has some caveats. The first issue with this assessment is that we do not have information on the number of business school students and faculty members. There is only aggregate data for staff and students in the social sciences (incl. business schools). Moreover, there is no distinction between economics and business administration in the data. To obtain a rough number for members of business schools, we multiplied the number of university members in social science with the joint financial budget share of economics and business administration within social sciences. The faculty control variables are also only available at the social science faculty level. 22 It should be noted that there is a negative distance effect for the full sample including East German universities. We do not have a firm explanation why distance to computer science is more important than distance to BS when considering East German universities as well. It might be explained by university-specific renovation activities in East Germany in the 1990s/early 2000s.
Concluding remarks
This study contributes to the literature on university entrepreneurship by investigating the emergence of entrepreneurial ideas at the level of university faculties. This is a novel approach which provides insights into the role of university structures for entrepreneurship and an assessment of cross-faculty spillovers, i.e. a positive influence of proximity of certain faculties on the level of entrepreneurial ideas at other faculties. In particular, we were interested in the role of proximity to business schools (BSs) for the emergence of entrepreneurial ideas in natural science and engineering. The analysis was done by utilizing information on the number of successful start-up grant applications across German university faculties for the years 2007 and 2014.
Our results demonstrate that the level of entrepreneurial activities in natural science faculties is positively affected by proximity to BSs. The larger the distance between university facilities of natural sciences and local BSs, the lower is the magnitude of entrepreneurial ideas emerging out of natural sciences. To overcome the reverse causality issue that entrepreneurial potential of faculties may determine the distance to other faculties, we assess variation in proximity that is due to the age of universities. We conducted robustness checks that confirmed the main findings. The cross-faculty effects between BSs and natural sciences that we find suggest the presence of knowledge spillovers within universities that lead to the commercialization of research and knowledge via entrepreneurship. Against this background, our paper adds a new perspective to the knowledge spillover theory of entrepreneurship (e.g., Acs et al. 2009;Audretsch et al. 2006 We do not find similar results for the distance between engineering and BSs and also not for the distance between natural science and engineering to the TTO. We offer reasonable explanations for these patterns. In a nutshell, the applied character of knowledge in engineering does not necessarily require knowledge input on commercialization opportunities from BSs. If a TTO is too close to a faculty, potential entrepreneurs might dare to approach its staff because their peers easily notice that they consider a start-up which they do not want to disclose. Another potential explanation is that universities that value entrepreneurial activities choose to place the TTO in a central administration building (i.e., near the office of the University President) to emphasize its importance without considering that these places are eventually far away from entrepreneurshipfacilitating faculties. Placebo analyses suggest that it is the distance to the BS-specific knowledge, not the distance to other faculties in general, that matter. Altogether, the findings reveal a general underlying mechanism namely that technological knowledge of a less applied character, such as in natural sciences, requires proximity to managerial and commercial knowledge input to emerge into entrepreneurial projects.
One data limitation is that we cannot identify the channel through which proximity-based cross-faculty spillovers between natural sciences and BSs are working since access to personal information of start-up grant holders is severely limited. It can be interdisciplinary team formation which is a direct channel, or it can be indirect general social interaction on the university level. In this respect, potential entrepreneurs, for example, can draw on local expertise from university peers in other faculties. We also have no information on other forms of cross-faculty proximity (e.g., social, cognitive, institutional) that may induce spillovers. Seminal studies in the geographic proximity and knowledge spillover literature (e.g., Saxenian 1994;Storper and Venables 2004) show that proximity often works in conjuncture with something else, be it cultural or organizational arrangements. Therefore, disentangling direct and indirect channels as well as incorporating other forms of proximity is warranted in future research. Another limitation is that there is no publicly available information on the number of failed applications for start-up grants. Furthermore, we do not know whether the application succeeded in terms of creating and growing a venture. Exploring the latter and determining success are complex issues and come along with many difficulties since track recording these ventures is hampered by restricted data access and privacy concerns. It is nevertheless an avenue for further research. One particularly interesting approach would be an assessment of the evolution of entrepreneurial competencies in spin-off ventures and venture success (e.g., Wennberg et al. 2011, Rasmussen et al. 2014) against the background of the specific cross-faculty spillovers that we found.
An important avenue for future research is analyzing the role of university facilities other than BSs for fostering cross-faculty knowledge spillovers. Informal knowledge exchange can also be expected from social interactions with departments and faculties other than BSs. Potential academic entrepreneurs may recognize the social and societal relevance of their research from interacting with the faculties of political science and sociology; through casual encounters with members of the law department they might get into contact with experts in patent law; peers from the faculty of culture and arts may help out with expertise in (product) design. Furthermore, apart from geographical proximity other proximity dimensions (e.g., Boschma 2005;Rivera et al. 2010) should be part of the analysis.
The findings of this study imply that policy initiatives aimed at sharpening the focus of universities at the cost of faculty diversity may be detrimental to the technology transfer potential of universities (at least regarding commercializing knowledge via entrepreneurship). The finding that distance between faculties matters for the emergence of entrepreneurial ideas is also informative for the eventual architectural redesigning of universities in the future. Universities with an entrepreneurial mission that are planning to invest in new office and floor space are well-advised to promote proximity between certain faculty buildings. There are certainly cases where such internal relocations are not feasible due to budget constraints or because abandoning old faculty buildings is not sustainable. In such cases, universities should think about measures to increase social and cognitive proximity between faculties (i.e., joint lectures and seminars for engineers and management students; business meets science days) to promote cross-faculty spillover that facilitate entrepreneurship. The digitalization of universities can foster such processes due to enhanced opportunities for internal communication that compensates for lack of geographic proximity. Due to these implications and the novel findings, we deliberately advocate for a much more fine-grained assessment of university entrepreneurship, for instance, at the faculty level, as we do. This research should also consider forms of proximity other than geographical and focus on the spillover channels to gain further interesting insights on knowledge spillovers within universities.
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Data cleaning
An assessment of cross-faculty effects makes only sense for universities with at least two faculties in the city hosting the university. For this reason, we did not consider the small number of private German universities which are specialized in one subject only. Private universities made up of a negligible low 14 EXIST start-up grants (1.2 percent of all startup grants) in the observation period 2007 to 2014. Another specific group of universities that we did not consider are universities of public administration (Verwaltungshochschulen), universities of the armed forces, and parochial HEIs since they have no technology transfer focus. Non-surprisingly no start-up grants have been assigned to these institutions. Public universities that are highly specialized in one main subject only and had no crossfaculty spillover by definition are not considered in the analysis as well. This group comprises art colleges and conservatories but also some other special types of universities. 23 Such institutions received 11 start-up grants in total. Due to similar patterns universities of applied sciences (UAS) are not suited for the analysis as well. Most UAS have separate campuses in different cities, often with only one faculty per campus. If campus sites are based in different cities or counties, there cannot be any local cross-faculty spillovers by definition. 24 Moreover, information on the executing unit of the start-up grant is missing for many UAS. Neglecting UAS faculties from the main analysis implies that we lose 19 percent of all EXIST start-up grants. On the other hand, this reflects that the bulk share of science-based business ideas is generated within universities. On the faculty level, we had to exclude medical faculties because it is difficult to distinguish structural characteristics of medical departments from university hospitals with the dataset at hand. 25 In total, 778 EXIST start-up grants have been assigned to the universities remaining in the sample (N = 69). This is the full sample of universities of interest based on conceptual reasons mentioned above. Unfortunately, there are missing values for some faculty-year observations. We dropped all faculties of a university when there was at least one missing value for the respective faculty between 2007 and 2014. This came along with the loss of 7 start-up grants. We further had to drop two universities (University of Duisburg-Essen and University of Erlangen-Nuremberg) which have two different campus sites at two different cities. The University Statistics database does not allow to consistently assigning information on structure to the different locations. There is no start-up grant assigned to the faculty-year observations for these universities. Information is also missing for the Technical University of Berlin for all its faculties in 2008. Dropping the observations for this university comes along with neglecting 55 EXIST start-up grants. Furthermore, in 10 universities the application procedure for EXIST start-up grants was coordinated via a central service institution dealing with technology transfer (e.g., Career Center; TTO). For these universities we are not able to assign start-up grants to faculties (74 start-up grants).
The sample attrition due to centralized grant applications should be rather a minor issue. It is reasonable to assume that the decision to centralize grant applications at technology transfer institutions has to do with proximity of faculties. Such centralization of entrepreneurial projects makes sense where the average distances of all faculties to the central institution is low. At the same time the decision to centralize grant applications suggests that the university is interested in a track record of its entrepreneurial activities and centralized synergy effects which indicate emphasis on the entrepreneurial function of universities. Thus, it is likely that universities with a centralized institution coordinating the application process for EXIST start-up grants may have relatively many entrepreneurial activities and a relatively high proximity between faculties. 26 Thus, excluding these universities may rather induce a downward than an upward bias with respect to estimating the effect of proximity on faculty entrepreneurship. The loss of start-up grants due to dropping the Technical University of Berlin which is a campus university with low proximity between faculties and which accounts for one of the highest shares of start-up grants should rather lead to a downward bias.
University age and distance between faculties: extended line of argumentation and confirmative observations
Investigating the role of spatial distance between faculties for the emergence of university entrepreneurship comes along with endogeneity concerns. It could be argued that spatial distance is endogenous to a strategy of university administrations and public authorities to encourage specific cross-faculty communication. This would appear in the data when specific faculties within a university are co-located for the purpose of encouraging close collaboration (e.g., natural science departments and BSs), while others are not. To circumvent this issue, in our analysis we make use of exogenous variation in proximity between departments and university scientists. A recent study by Catalini (2015) uses asbestos removal in university offices at medical and scientific complex Paris Jussieu as an exogenous shock to communication patterns. He finds that changing co-location patterns due to this measure affected scientific output. This identification strategy relies on exploiting a change in the legislation that affected where people were placed within universities. In a similar vein, we focus on historically-determined exogenous variation with respect to the placing of entire faculties within cities hosting universities. We rely on an instrumental variable approach which uses the age of universities as an instrument for distance between faculties to dispel endogeneity concerns. The idea behind this identification strategy is straightforward. Changes in the breadth of university curricula and the growing demand for tertiary education over the course of centuries came along with the formation of new faculties and faculty buildings that were not necessarily located in proximity to already existing facilities due to idiosyncratic historical city development constraining opportunities for co-location. This can be exemplified by reviewing the history of university foundations in Germany which we exploit in this paper. The first medieval universities emerged after the end of the Papal schism in 1386 with the University of Heidelberg opening in the very same year (for details, see Cantoni and Yuchtman 2014). The University of Heidelberg is a case in point with regard to our line of argumentation. While several faculties in humanities are based in the historical old town, natural sciences that required some space, for example for laboratories, equipment etc. are mainly concentrated on a campus-like site at the periphery of the city that was built after 1945 due to capacity problems at the historical location of the university. Another example is the Technical University of Munich. It was founded in 1868 by the Bavarian King Ludwig II. The historical main site in downtown Munich was heavily destroyed in World War II and rebuild afterwards. At the same time, a second campus for natural sciences was established in the suburb of Garching while several social science departments are still based in down town Munich.
These examples suggest that especially natural science faculties are likely to be located further away from city centers where historical sites of universities are based. Furthermore, universities founded after World War II have been often built as single campus on Greenfield sites. While historical universities had to develop further sites in order to cope with the unforeseen and unparalleled demand shock with regard to tertiary education after World War II, the location and size of new universities could be aligned with this demand right from the beginning. The decision to start a university after 1945 was made by the Federal States (Laender) and the main motivation was to release existing universities and provide equally distributed possibilities for higher education across space while the foundation of historical universities was mainly due to idiosyncratic reasons (for examples, see Noseleit and Slavtchev 2010).
Using age as instrument for distance overcomes the issue of "strategic" co-location of faculties in order to foster cross-faculty spillovers. It is quite unlikely that technology transfer has been a determinant of location of historical university buildings in pre-industrial times. Carlsson et al. (2009) describe medieval universities as places where utility or economic knowledge played no role since it was regarded rather as a skill than knowledge. Accordingly, the curriculum consisted of Greek and Latin classics and was focused on the study of the Bible. The art of reading, writing, rhetoric, and logic have been important fields while ability and utility played a minor role. Similarly, universities main tasks were to collect, codify, and teach general knowledge. Slight changes can be observed throughout industrialization since the late 18th century which saw the foundation of natural science faculties and the first engineering schools and Technical universities which since the midst of the 19th century started to apply science to invent (Drucker 1998, p. 21). In Germany the first higher education institutions with a technical focus were founded in Karlsruhe and Dresden in the early 19th century while the first natural science faculty opened at the University of Tuebingen in 1863. It could be argued that the location of buildings of the new Technical universities could have been driven by the idea to stimulate technology transfer and cross-faculty knowledge spillover. The Technical universities of Karlsruhe and Dresden are indeed among the oldest institutions that can be regarded as campus universities. 27 For older universities locating new faculties in close proximity may not have been an option due to idiosyncratic historical development of city structures. Altogether, we claim that university age is negatively related to proximity between its faculties. Our argument is that university age matters for proximity between faculties due to historical developments since the midst of the 19th century. If this is the dominant mechanism behind the first stage relationship then there should be no systematic relationship between university age and proximity for the sub-sample of universities that were founded prior to 1850. This threshold was chosen since it reflects the approximate take-off of industrialization in Germany (e.g., Becker et al. 2011) and the time since science was increasingly applied for inventing (Drucker 1998, p. 21). It should hence be less likely that prior to this threshold authorities planned to foster cross-faculty spillovers when making location decision for new faculties.
The data reveal that only 3 out of 26 universities of the sub-sample can be regarded as campus universities which have relatively low distances between faculties (see Table 6). 28 The three exceptions are the Universities of Karlsruhe and Dresden, which are Technical Universities and were found in the early 19th century, and the University of Mainz (founded in 1477) which was closed in the late 18th century due to idiosyncratic historical events and reopened after World War II at a different site. 29 There is no other campus university founded prior to 1850 implying that pre-industrial universities created the newly emerging faculties at new sites after 1850 rather than next to the historical site which is likely to be due to space constraints. At the same time this pattern shows that there are no pre-industrial universities that did move their entire facilities to a new campus site in modern times apart from the University of Mainz.
As previously mentioned, there was a significant increase in the demand for tertiary education after World War II. Universities founded after 1945 might have been more likely to be built at Greenfield sites yielding a high proximity between faculties in order to cope with the demand while older universities may have had to develop new sites to do so. Table 6 shows indeed that the bulk share of campus universities was founded after 1945. These preliminary observations underline the role of university age for determining proximity between faculties. At the same time, we will also show that the relationship between age and proximity is not a pure "campus university" effect. See Tables 6, 7 , 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27 and 28. 28 There is no clear-cut definition for campus universities. We define a campus university as a higher education institution where the bulk share of buildings used for the purpose of research and teaching is adjacent to each other. In the main empirical analysis the threshold was an average walking distance of less than 10 minutes between BS and main facilities of natural science faculties. 29 The French revolutionary army invaded the area of Mainz and established the Mainz Republic of 1792 until the Prussians recaptured the region. Due this turmoil the university became more or less dissolved. The faculty of medicine was still active until 1823 and the faculty of theology continued with teaching activities throughout the 19th century. Since the reopening in 1946 the university is based in the remains of anti-aircraft warfare barracks that were built in Nazi times ( [URL] .de/unive rsita et/96_DEU_ HTML.php). Share of private Third-party funding Share of third-party funding from the private sector/total third-party funding (university level) Technical University (Yes = 1) University is a Technische Universität Excellence University (Yes = 1) University was successful in the program line "Institutional strategies for the project-based development of top-level university research" of the excellence initiative by the German government for the advancement of science and research at German universities Rate of high quality start-ups Regional number of start-ups in knowledge-intensive business services and R&D-intensive manufacturing industries divided by the regional number of employees (*1000) City region (Yes = 1)
Tables appendix
The county in which the university is based is counted as city region Urbanized county (Yes = 1) The county in which the university is based is counted as urbanized county Rural county (Yes = 1) The county in which the university is based is counted as rural county Significance levels: ***P < 0.01, **P < 0.05, *P < 0.1 Clustered robust standard errors in parentheses (cluster: university). Region X Year-Effects comprise interactions of the year dummies with the rate of high-quality start-ups and dummies for the regional degree of agglomeration (groups: city regions; urbanized counties; rural counties). The constitutive terms for the interaction are included as well Significance levels: ***P < 0.01, **P < 0.05, *P < 0.1 Clustered robust standard errors in parentheses (cluster: university). Region X Year-Effects comprise interactions of the year dummies with the rate of high-quality start-ups and dummies for the regional degree of agglomeration (groups: city regions; urbanized counties; rural counties). The constitutive terms for the interaction are included as well Table 3) Significance levels: ***P < 0.01, **P < 0.05, *P < 0.1 Clustered robust standard errors in parentheses (cluster: university). Region X Year-Effects comprise interactions of the year dummies with the rate of high-quality start-ups and dummies for the regional degree of agglomeration (groups: city regions; urbanized counties; rural counties). The constitutive terms for the interaction are included as well Significance levels: ***P < 0.01, **P < 0.05, *P < 0.1 Clustered robust standard errors in parentheses (cluster: university). Region X Year-Effects comprise interactions of the year dummies with the rate of high-quality start-ups and dummies for the regional degree of agglomeration (groups: city regions; urbanized counties; rural counties Table 23 Cross-faculty spillover from BS to natural sciences: checking for sensitivity to excl. campus universities and faculties of small and large size Significance levels: ***P < 0.01, **P < 0.05, *P < 0.1 Clustered robust standard errors in parentheses (cluster: university). Coefficients for control variables and constant are not shown for brevity. Full models and first stage regressions of the IV approach can be obtained upon request. Universities with a walking distance of less than 10 min between BS and natural science faculty is regarded as campus university and excluded in model I to IV. The definition deviates from the one used in Table 6. Here a campus university is defined as a university where all major buildings devoted to teaching and research are situated at one site which comprises large campuses where distance between BS and natural sciences is larger than 10 min. In two cases (Kassel, Cottbus) some natural science facilities are not based at the main campus. The models in column V to VIII disregard faculties with less than 1000 and more than 10,000 EXISTeligible faculty members. 9 percent of the observations were larger, 7 percent were smaller than these thresholds Table 24 Cross-faculty spillover from BS to natural sciences: checking for sensitivity to excluding observations from the upper and the lower part of the EXIST rate distribution Significance levels: ***P < 0.01, **P < 0.05, *P < 0.1 Clustered robust standard errors in parentheses (cluster: university). Coefficients for control variables and constant are not shown for brevity. Full models and first stage regressions of the IV approach can be obtained upon request Significance levels: ***P < 0.01, **P < 0.05, *P < 0.1 Clustered robust standard errors in parentheses (cluster: university). The models of Panel B include the same variables like those in Panel A. Constant and coefficients for control variables are not shown for brevity. Full models can be obtained upon request IV results are not reported because university age turns out to be a poor predictor of average distance between faculties. Computer sciences are often based at the same site like other natural sciences. Faculties of Sports and Arts are much smaller on average than BS. Therefore, history is less of a constraint for colocation Every university has a natural science faculty. The smaller peak around the age of 600 years (year 1400) is due to the exogenous increase in the founding of universities after the end of the papal schism (see Cantoni and Yuchtman 2014)
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Domain: Business Economics Education
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Sustainable Hybrid Business Model of Benefit Corporation: The Case of an Italian Film Production Company
: In the last decade, individual awareness of the impacts generated by the activities of businesses has increased more than ever. Consumers, employees and investors have begun to criticize business behaviors that negatively affect either society or the environment. Given this context, and relying on the literature relating to hybrid organizations and sustainable business models, our research aims to investigate how dual logic affects the business model of benefit corporations in the Italian film production industry. To capture the complexity of this type of firm, we adopted a qualitative research method, the case study approach. The case selected was ARE FILMS srl, a creative film production company. It has been a benefit corporation since it was founded. The study suggests that the capacity of hybrid businesses to achieve a hybrid mission is intrinsically embedded in their business model. A young film production benefit corporation is more likely to adopt a semi-integrated business model that does not create an external perception of dual corporate identity and does not affect economic sustainability. Moreover, the sustainable value proposition emerges even without the formal application of accepted protocols. Furthermore, we realized that the size of the firm affects business modelling. Finally, this research underlines the fact that benefit corporations do not require external pressure to implement sustainable practices.
Introduction
In recent years, sustainable hybrid businesses have attracted significant attention in the scientific debate about corporate sustainability. This phenomenon includes all firms, such as nonprofits, that pursue a wide range of social and environmental objectives, rather than for-profits, which earn revenue by selling a broad range of products and services [1].
Previous research has provided insights to advance this knowledge by examining the governance implications of the dual mission [2,3], analyzing how firms face the internal and external tensions and how a hybrid organizational identity is created [1,4], understanding the mechanisms of accountability [2,5] and deepening the relationship between innovation and social role [6].
Although not always recognized, hybrid logics influence strategic choices leading to differences in the route to value creation, delivery and capture [7]. For this reason, more scientific contributions have recently been published concerning the business models (BM) of hybrid organizations.
The sustainability-driven hybrid business model (SHBM) [1,8] combines market and mission-oriented practices, confronting the tension of balancing social, environmental and economic logics [9]. Previous studies have usefully developed BM designs to achieve successful commercial results [10], enhance the degree of BM integration [11], and establish the link between BM elements and their tensions [1,12].
Among these, one of the most interesting is the benefit corporation. It has a legally recognized status of a commercial firm [18] that decides to incorporate social and environmental needs into the firm's mission, pursuing them in a contemporary way [19]. They commit to creating a common benefit for all stakeholders in addition to generating profit for the shareholders [20]. Thus, the benefit corporation is a new organizational form that merits theoretical and empirical attention [17].
For example, although benefit corporations are sustainable hybrid businesses by definition, they differ from social enterprises because they are for-profit firms. This characteristic affects the firm's value proposition and therefore the route to value creation, delivery and capture. For this reason, it is relevant to analyze the BM of this new form of business.
It is only recently that the SHBM of the benefit corporation has been analyzed [1,11,21]. Previous researchers have focused on the motivation underlying the BM transformation [22,23], mechanisms to ensure transparency and accounting systems [19], integration of social and environmental goals into the BM's activities [16], the process of organizational design [21], and the impact on sustainable development using structuration theory [24]. No study has analyzed the SHBM of benefit corporations holistically as a set of elements and how the relationship of those elements allows the underlying logic to be expressed [25].
However, according to Kirst et al., research on benefit corporations related to Italian cases is limited to a few papers by only a few authors [26].
To address this gap, we focused on the Italian film production industry. In Italy, film production can be described as the most important area of the cultural industry. Its relevance derives from the strong communicative impact of its products on the public. Each film work is a sequence of linked images and audio that expresses meanings, conveys messages, and influences ideas. From an industrial point of view, SMEs are the pillar of this industry. Small size is a significant competitive factor where economics of scale are difficult to achieve [27].
We chose this specific industry because it has been a protagonist of the triple sustainability debate for three reasons in particular: (1) films are a powerful means to raise awareness of sustainable practices [28], (2) the main processes of this industry have a high negative environmental impact [29], (3) audio-visual outputs do not satisfy many sustainability indexes [28], and (4) there is a lack of knowledge of what this industry generates [28].
Based on the above discussion, this paper aims to answer to follow research question: how does hybrid business logic affect the sustainable business model of Italian micro-sized benefit corporations in the film production industry?
To answer this question, we adopted a qualitative research method: the case study approach. The case study is a research method in which a phenomenon, "the case", is examined in-depth and in its own context. The inductive approach was the most appropriate to answer our research question, corresponding to the "how" question requirements as defined by Yin (1994) [30]. The Italian benefit corporation selected was ARE FILMS srl, a creative film production company headquartered in Turin. The firm has been a benefit corporation since it was founded. It mainly produces commercials, documentaries and short movies for customers worldwide. Due to the exploratory nature of the research, semistructured interviews were conducted.
Our research contributes to the expansion of knowledge on benefit corporations and on sustainable business models (SBM) more generally. Moreover, it provides insights into the Italian film production industry.
Firstly, this study underlines the capacity of that hybrid businesses to achieve a hybrid mission that is intrinsically embedded in their business model. Additionally, we found that a micro-sized film production company is initially more likely to adopt a semi-integrated BM. This BM does not create an external perception of dual corporate identity and does not affect economic sustainability. Moreover, the sustainable value proposition emerges even without the formal application of accepted protocols. Furthermore, we realized that the size of the firm affects the business modelling, for example in terms of the formalization of activities or marketing benefits. Finally, by definition, benefit corporations have internally driven proactive behavior and therefore do not require external pressures to implement sustainable practice.
The paper is structured as follows: in the next section we introduce the theoretical background relating to hybrid businesses, benefit corporations, and the hybrid BM. Then we present our adopted methodology in terms of case selection, data collection, and data analysis. We then describe the main results. Finally, we discuss our findings and highlight our conclusions.
Hybrid Businesses
In the last decade, individual awareness of the impacts generated by the activities of businesses has increased more than ever. Consumers, employees and investors have started to criticize business behaviors which negatively affect either society or the environment. Consequently, a new stream of entrepreneurial activities and academic research has received increasing attention: hybrid businesses that pursue social and environmental aims while being guided by a clear commercial orientation [10,31,32].
The term hybrid business can include all firms that do not fit neatly into conventional typologies of private, public or nonprofit organizations, but operate in multiple functional domains [32] with a hybrid institutional logic [16].
One of the most obvious characteristics that differentiates them from traditional firms is their mission. Similar to nonprofits, hybrid businesses pursue a wide range of social and environmental objectives, in contrast to for-profits that earn revenue by selling a broad range of products and services [1].
The degree to which the social and environmental mission is integrated with the economic goals differs between organizations. Ebrahim et al. (2014) [2] and Gamble et al. (2020) [11] proposed three categories of organizations-integrated, partially integrated, and differentiated, in order to make sense of the heterogeneity within the same phenomena.
However, regardless of the degree of integration, different logics lead to potential conflicts between subgroups [33]. Battilana et al. (2012) [34] listed many challenges that may arise from mission drift, governance structure or difficulties in scaling [2,8,31,35,36]. These tensions can create challenges at the BM level [36][37][38], but at the same time they can act as an enabler of innovation through new combinations of knowledge and capital [39].
Moreover, it is apparent that hybrid organizations are often confronted with experience disagreements among nonfinancial stakeholders who have interests that may be difficult to predict [32,40,41].
From the presence of a dual mission can arise governance implications [2,3], specific identity creation processes [1,4], and rigorous mechanisms of accountability and transparency [2,5,6]. Management becomes even more complex if we also consider the problem of scarcity of resources, which hybrid firms often have to manage [32,42].
Another particular aspect is relationships with competitors. Zahra et al. (2009) [43] and Haigh and Hoffman (2012) [8] showed that hybrid businesses actively invite competitors to extend the value proposition by copying their own BM. Although this might not seem obvious from a traditional managerial point of view, hybrid organizations always tend to favor "cooperation" over "competition" [40].
Early scientific studies on hybrid organizations were based mainly on social entrepreneurship [10][11][12][13][14]. It is only in recent years that other configurations have been recognized by several authors, who use institutional theories as interpretative lenses [15,16]. Among these new typologies of firms, one of the most interesting is benefit corporations.
Benefit Corporation
Although hybrid and social purpose enterprises have long existed in different typology, benefit corporations are a distinct organizational form [44].
A benefit corporation is a status of commercial firms. It was originally created by B Lab, a nonprofit organization that promotes socially aware business practices by providing an opportunity for firms to voluntarily adopt responsible standards [18].
Benefit corporations commit to creating common benefits for all stakeholders in addition to generating profit for the shareholders [20]. They try to combine profit orientation with capacity to produce positive impacts on both society and the environment. Thus, benefit corporations are traditional commercial firms obliged by law to follow higher standards of purpose, accountability, and transparency [18].
Italy was the first European country to adopt this new legal form. The Italian version, called "società benefit", was introduced at the end of 2015 [45]. The benefit corporation is not a new type of corporation, as it can be included in one of the traditional categories recognized by law.
The legal status of "benefit corporation" is related to the provisions of its corporate bylaws, which must include common benefit goals, and to the responsibilities of the board of directors and the person in charge of sustainability [18].
Thus, the main attributes of a benefit corporation are: (1) a corporate purpose to create a positive impact on environment or society, or reduce a negative one, (2) an expansion of the duties of directors and sustainability managers, and (3) an obligation to report all social and environmental performance.
Currently, Italian laws do not provide any particular benefit, for example tax relief, or explicit derogations compared with the rules of the civil code. Despite this, the number of benefit corporations has grown exponentially since 2016, and now there are more than one thousand, unevenly spread across almost all industries.
At first, the scientific literature about benefit corporations concerned studies performed in the USA. Topics were governance and the problems and advantages of the legal model. After 2017, there were more studies taking an interest in European countries, including Italy and France [26].
These papers analyzed the motivations for the transformation of the firms [23], mechanisms to ensure transparency and accounting systems [19], the integration of social and environmental goals into the activities [16], the process of organizational design [21], and the impact on sustainable development using structuration theory [24].
However, the uniqueness of these firms lies in their business model. Unlike traditional for-profit sustainable enterprises, all of the purposes incorporated into the firm's value proposition are achieved in a contemporaneous and non-sequential way [21].
Nevertheless, it is only more recently that the SBM of hybrid organizations has become the focus of academic research.
Sustainable Business Model of Hybrid Business
According to Molina-Castillo, N. Sinkovics and R. Sinkovics, current business models must change to create new value in social, customer, environmental and sustainability aspects [46].
To successfully manage the coexistence of commercial and purpose logics within a benefit corporation, all the firm's activities need to be synchronized in a way that integrates and balances these logics [31,47]. Therefore, achieving a dual mission is impossible without the ideation of a new BM that goes beyond the traditional perception of firms as entities that maximize only the wealth of their shareholders.
Breuer and Lüdeke-Freund (2017) [48] went as far as to suggest that the stakeholders' values should drive the design and decisions of BMs.
The BM concept provides an adequate perspective to capture the complexity behind this typology of firms [15]. It is defined as the combination of resources and activities that allows the organization to create, deliver and capture value [49], and underpins how hybrid organizations combine market and purpose-oriented practices, facing the tension of balancing social, environmental, and economic logics [9].
To date, a number of studies have examined questions specifically related to the topic of SBMs, whereas research about hybrid organization sustainable business models is still emergent [1].
The SBM research field aims to strengthen the ability of firms to integrate sustainability into their business models.
One of the first definitions of SBM was provided by Schaltegger et al. (2016) who stated that: "a business model for sustainability helps describing, analyzing, managing, and communicating (i) a company's sustainable value proposition to its customers, and all other stakeholders, (ii) how it creates and delivers this value, (iii) and how it captures economic value while maintaining or regenerating natural, social, and economic capital beyond its organizational boundaries". [50] (p. 6) Since then, several definitions have been provided in many studies [51][52][53][54][55][56]. The topic has been analyzed from different points of view: according to activities, processes, constituent elements, the concept of value, and the construction of frameworks or practical tools [55]. Bocken et al. (2014) [57] proposed a list of SBM archetypes and offered an overview of the environmental and social traits for each typology in terms of their value proposition, creation, and delivery. Wells (2016) [58] and Upward and Jones (2016) [59] conceptually described different elements and principles of SBM.
According to He and Ortiz (2021) [60], the SBM requires an ad hoc design thinking framework. The introduction of the concept of sustainable development into BMs requires the expansion of the design thinking dimension and increases the complexity of the business modelling process.
It is only in the last ten years that research on sustainable entrepreneurship has started to explore the specific challenges associated with hybrid organizations such as sustainable models of hybrid businesses.
Haigh and Hoffman (2012) and Hoffman et al. (2012) [8,61] developed the first approach, using the term sustainability-driven hybrid business model (SHBM). It covers all typologies of BM implemented by firms that adopt profit and nonprofit practices to achieve sustainable goals [1].
Previous research has further developed its characteristics [9], but most evidence has remained descriptive. An SHBM promotes positive environmental and social changes [1], creates a long-term mindset [8], avoids trade-offs to address multiple stakeholders' needs [62], tries to reduce the tensions that could arise [16,[63][64][65], and establishes mutually positive relationships with stakeholders because of the importance of the network [66].
Hybrid organizations do not seek growth by dominating the industry and the market but are aware that a certain level of growth and the ability to scale is necessary to create social change.
To date, several studies on the SHBM have applied general knowledge of the phenomenon to social enterprises [12,[67][68][69][70][71][72]. In contrast, prior literature has paid less attention to SHBM applied to benefit corporations [1,11,21]. Therefore, SBMs are increasingly recognized as levers for sustainable change across businesses and industries [73]. For this reason, many papers have applied an SBM lens to various industries, for example, banking [73], organic farming in Italian districts [74] and the agri-food industry [75,76]. We have focused on the Italian film production industry. In Italy film production can be defined as the most important of the cultural industries.
Consequently, in the following sections we aim to answer our research question: how does hybrid business logic affect the sustainable business model of Italian micro-sized benefit corporations in the film production industry?
Methodology
In this study we have set out to enhance knowledge about hybrid businesses and benefit corporations from a BM perspective. To capture the complexity of these firms, we adopted a qualitative research method: the case study approach. The case study is a research method in which a phenomenon, "the case", is examined in-depth and in its own context. This methodology can be considered suitable because it provides many insights into the different aspects observed, but can still attempt to generalize [77].
Therefore, we contributed to the literature by developing theory from cases. The inductive approach was the most appropriate to answer our research question corresponding to the "how" question requirements as defined by Yin (1994) [30].
The study was conducted between September 2021 and March 2022. The research was developed in three phases: (1) case selection; (2) data collection; and (3) data analysis.
Case Selection
The criteria behind the choice of the case study were: -Geographic criteria: We selected an Italian firm because there are few studies on Italian benefit corporations despite Italy being the first European country to have legally formalized benefit corporations. The external and institutional context shape the sustainable business model of hybrid firms [1]. Most of the current studies about the BMs of benefit corporations have considered firms located in other countries such as Colombia [1] and Australia [16]. -Industry criteria: We chose a young film production company. In Italy the audiovisual industry plays a very important role. The impact goes far beyond the GDP and employment benefits. This industry creates wealth for many other connected industries. It also allows the dissemination of the cultural brand of Italy. Moreover, we choose this specific industry because it has been the protagonist of the triple sustainability debate for three main reasons: (1) films are a powerful means to raise awareness of sustainable practices [28], (2) the main processes of this industry have a significant negative environmental impact [29], (3) audio-visual products do not satisfy many sustainability indexes [28], and (4) there is a lack of knowledge about what this industry generates [28]. -Firm size criteria: we selected a micro-sized firm because there is an emerging debate about how the firms with limited reach and considerable financial and human resource constraints, such as micro-sized firms, can effectively absorb their added social and environmental responsibilities [19]. SMEs are the pillar of the Italian industry. Small size is a significant competitive factor when economies of scale are difficult to achieve [27].
For case selection we used AIDA (AIDA Bureau Van Dick, 2021), a useful database of company information. We used the search criterion "benefit corporation or S. B." in the company name and "ATECO CODE: 59.11.00" as the industry identification. The database returned only seven film production benefit corporations.
Three firms had no data. This was probably because they had not submitted any balance sheets. One benefit corporation was a small enterprise with a turnover of over 2 million and more than 15 employees. Another company had almost zero turnover. After this selection there were only two benefit corporations remaining. These two firms were of similar size (micro-sized firms) and had similar economic-financial data. However, one of these firms did not indicate on its website that it was a "società benefit" and had not published the mandatory impact reports. For these reasons it was discarded.
Therefore, the selected case was ARE FILMS srl [78], a creative film production company headquartered in Turin. ARE FILMS was established in 2020 as a result of the current CEO's passion for movies and the cinema industry. The firm has been a "società benefit" since it was founded. It mainly creates commercials, documentaries and short movies for customers world-wide. The firm pays particular attention to storytelling and production values with the aim of creating its products in a sustainable way that impacts positively on all stakeholders. It is a micro-sized enterprise with five employees including the CEO and a current turnover (2021) that has tripled compared with the previous year (2020).
Data Collection
Due to the exploratory nature of the research, semistructured interviews were chosen.
Semistructured questions enable open questioning as well as the collection of similar data from different interviewees [30].
In September 2021 we emailed the CEO, Dr. Fabrizio Cecioni, and the production manager, Dr. Lea Canu, in order to arrange the interviews. Targeting the founder enhances reliability, because they have in-depth knowledge and can therefore provide in-depth insights into the underlying motives, goals and processes.
We conducted three personal remote interviews (two interviews with the CEO and one interview with the production manager). Interviews lasted between 45 min and 90 min and were recorded with consent. The advantage of personal interviews is that there is no delay between question and answer, so the answer is more spontaneous [71].
Based on the framework proposed by Ferlito and Faraci (2022) [79], questions referred to relevant aspects of SBM. We encouraged the interviewees to engage in narrative storytelling about the firm's background and BM to elicit information-rich statements.
In addition to the three interviews, we participated in two remote company meetings (December 2021-January 2022) to collect further data.
Later, we asked the interviewees to provide us with additional documents, such as company presentations, company reports and documents, with the aim of triangulating the data acquired through the interviews, meetings and secondary information (online company information, including the company website and social media).
Data Analysis
All of the interviews were fully transcribed. The texts of the interviews, internal documents provided by the firm and external documents found online were carefully analyzed qualitatively.
The sentences were divided firstly into eight sections and then the related information was divided into three categories based on the framework proposed by Ferlito and Faraci (2022) [79].
The authors independently read all the interview transcripts in detail and then attributed information derived from both interviews and secondary data to the respective categories [80]. We assessed the few areas of disagreement and resolved them through discussion to gradually eliminate discrepancies. Finally, we drew our conclusions.
In the next section, we investigate each of the three aggregate dimensions and conceptualize how the business model of a micro benefit corporation in the film production industry reflects the hybrid logic.
Results
This research is the first to investigate how a benefit corporation operating in the film production industry integrates hybrid sustainable logic into their BM.
Hybrid Logic and Value Proposition
The first element to be explored was the hybrid mission. Firms can focus on their strengths to achieve triple positive impact through missions that support core business strategies [53].
The dual mission of a benefit corporation is easy to understand because Italian law requires [45] that the purpose of the common benefit is stated in the company bylaws. Therefore, regardless of the size of the firm or the industry in which it operates, its mission is formalized.
The mission that emerged from our interview with the CEO and from the firm's documents has three aspects: (1) People awareness. "Since the firm was born, we have tried to make people aware of environmental issues to spread positive messages"; (2) People welfare. "To put people at the center of our enterprise projects" [78]; (3) Reduction in negative environmental impact. "For us, reducing environmental impact is a priority".
The hybrid logic of ARE FILMS has an impact on its editorial plans. During the interview, the CEO stated that: "we have realized that our mission could not apply to all our productions. Often commercials do not convey any message but only promote a product/service. [ . . . ] We are a young firm and for now we are unable to make too stringent a selection with this type of service. Obviously, we avoid promoting industries with highly negative social and environmental impacts, for example weapons, smoking, gambling, fast fashion or junk-food products".
The second element to be investigated was transparency. It can build trust between firms and stakeholders [18]. According to Galli, Torelli and Tibiletti [18], becoming a benefit corporation can be an effective strategy for firms that want to create an impact on their society but also consider their profit aim.
In our case study, as well as in the company bylaws, the hybrid mission was reported in the "company profile" document and also to an extent in the "manifesto" published on the website [78].
Hybrid Logic and Value Creation and Delivery
The first element of the BM value creation and delivery macro area concerns customers. We have observed the impact of services on health and wellness, support, and satisfied needs [50].
The CEO stated that their customers should share the same values. Often in the film production industry this does not happen, especially with commercials. In this case, customers could make products without concern for environmental and social issues.
"From this year we have hired a trade manager who seeks and selects customers. From now on, our focus will be primarily on benefit corporations. Trivially, having other benefit corporations as customers is a way of generating a positive impact". (quotation from the CEO) Another finding concerns marketing benefit. The study found that in the film production industry, young firms still identify a few marketing benefits from benefit corporation status. This type of hybrid business is still not well known. As a result, customers choose a small-sized film production company not because it is a benefit corporation but mainly because of the team, the company portfolio and its reputation.
Customer satisfaction and retention are important outcomes in the social sustainability agenda. A customer service orientation is able to generate customer satisfaction and a loyal customer base [81]. Therefore, a feedback monitoring procedure is very useful. In our case study, surveys were implemented only for some big projects: "We don't send automatic surveys to all of our customers. To be able to answer feedback received, the human resource must have technical skills. At the moment, I do not think it appropriate to entrust this task to an internal operational resource. There is a risk of diverting the human resource from their main activity". (quotation from the CEO) The second BM element concerns the key activities. The filmmaking process encompasses four main stages: development, pre-production, production, and postproduction [82].
In the case study the first two phases, i.e., the generation of the idea and the script, and the postproduction phase are outsourced. However, ARE FILMS carries out a postproduction control activity.
The shooting of the film is considered a core activity, and is not outsourced. This stage starts with the request from customer and continues with the organization of the set in terms of shooting days, involvement of the actors, and choice of costume designers, photographers, set designers and other suppliers.
With regard to pricing activity, when the set is organized it is possible to make a list of the production costs and then establish the selling price.
"We have never asked for discounts from our technicians or suppliers. In our industry this practice is not trivial. Often film production companies try to sell at a lower price than competitors to the detriment of suppliers". (quotation from the CEO) Like many other industries, film production has a highly negative impact on the environment. Waste, energy consumption and CO 2 emissions are just a few examples of negative externalities [29].
To solve this issue, film production companies can follow the green production principles, a set of activities that limit or eliminate the impact on the environment [28].
"We do not share the throwaway culture: our sets are rarely built ad hoc, our costumes are not new but are used for multiple productions. The catering is mostly vegetarian. On the set we have eliminated plastic and we do not print documents so as not to waste paper. We travel in electric cars or we use carsharing services. We prefer traveling by train over plane. The photography department is still our weak point because it is powered by petrol generators". (quotation from the production manager, responsible for green production) It emerged from interview that there are several protocols for implementation of green production practices, such as the French "Ecoprod" protocol and the Italian "Edison Green Movie Protocol". However, for small businesses it is difficult to implement the entire green process, from measurement to certification, because this represents an additional cost.
After measuring the impact, it is possible to offset the CO 2 emissions. Net zero is the process by which a firm can offset CO 2 by neutralizing their own pollution. These activities could consist of the revegetation of wasteland or the rejuvenation of forests/reforestation. The offsetting of CO 2 emissions involves high costs [83]. The CEO stated that: "The issue of offsetting has not been taken into account due to our size. I did not consider it essential at this stage of the firm's growth but starting next year we want to at least measure the impact created".
Attention to the environmental impact is therefore closely linked to the selection of suppliers. Suppliers should share the same values as the firm [84].
In addition to operational activities, an enterprise carries out sales and administrative activities. In the case study, only the administrative activity is outsourced. According to the CEO it is better if the trade area is not-outsourced in order to control all decisionmaking: "I asked the trade manager to research all Italian benefit corporations. I could not have asked an external salesman to do this as in most cases they already have their own customer package".
Moreover, to ensure transparency, benefit corporations must draw up an impact report every year [23,45]. The report should also be published on the company's website, although, to date, few firms are aware of this legal obligation.
The third element of the value creation and delivery macro area concerns key resources. According to the mission statement, the key resources are human resources. The human resources welfare practices were listed during the interview.
"The payment of salaries is the first activity to be carried out. Twice a month we organize meetings for exchange of feedback. Periodically, we schedule team building activities. This year training began so that every internal human resource is always up to date on their specific skills".
The attention given to external human resources depends on the set organization. In all their production choices, the firm takes great care to create a beautiful and fun working environment.
Another key resource emerging from the interview with the CEO was financial resources. Financial capital is useful for supporting corporate growth projects. Every country has a specific model for financing filmmaking [82]. The main sources for a small enterprise are self-financing and bank credit. However, more recently, other equity and debt-based financing opportunities have become available for SMEs, for example, publicly guaranteed loans, venture capital, business angels, and crowdfunding [85,86]. Public bodies also provide ad hoc financing for the film industry [82].
The last element concerns key partners. These external relationships help grow the core business and extend firm's social licenses to operate [3].
From our case study it emerged that the key partners were the suppliers, the strategic consultant, the controller, and the legal consultant.
During the interview, the CEO stressed the need for a lawyer in all stages of production in order to write all contracts, manage the copyright and to deal with the responsibilities deriving from this type of status.
With the growth of the firm, the bank has become another key partner. The availability of bank credit is an indispensable element. The choice of credit institution may also be in line with the mission.
"We chose a bank that operates according to ethical finance principles and that only finances projects that produce positive social and environmental impacts". (quotation from the CEO)
Hybrid Logic and Value Capture
The value capture category includes the costs and the revenue streams generated by the activity.
The SBM of SMEs generates several benefits: positioning, efficiency (thanks to the motivation of collaborators), alliance with suppliers and customers, and innovation in anticipation of market trends [87].
The film production industry is still at the beginning of the sustainability journey. Sustainable practices involve high costs and the resulting positioning benefits are very low.
"In the last two years, the benefit corporation status has not created reputational benefits. I believe that in the coming years that will be change. The industry is raising awareness on sustainability issues, also thanks to the 2030 sustainability goals of United Nations". (quotation from the CEO) The benefits also involve some costs. In detail, the costs that emerged from the case study were: noneconomic costs related to the public change of mentality, investment to reduce environmental impact, staff costs, and consultancy costs.
However, sustainable investments generate savings, for example, from energy efficiency, the reuse of materials, and the commitment of collaborators to corporate purposes, which are always cheaper than other unsustainable ones.
"In my opinion sustainability doesn't always lead to higher costs. For example, happy workers work better, less waste also means less time taken to dispose of it. Training employees leads to higher quality products and therefore more satisfied customers and more positive feedback. The cost of buying a coffee machine with coffee beans is less than to rent a coffee machine for each set and purchase coffee pods and capsules". (quotation from the production manager) In our case study, all investments were made in compliance with economic sustainability. In 2021, the firm's revenues tripled compared to the previous year. The firm also generated a satisfactory income.
Sustainable Hybrid Business Model Configuration in the Film Production Industry
We have summarized our results in a unique framework following the research proposed by Ferlito and Faraci [79] (Table 1). In the first column we have inserted the three macro value concepts proposed by Richardson [88]. In the second column we list eight BM elements deriving from the intersection of academic [25,89] and nonacademic sources (the business impact assessment (BIA) method; the sustainable development goal (SDG) implementation framework [90]). In the third column we report the results.
Discussion
This research aimed to provide more insight into the SHBM of Italian benefit corporations by paying particular attention to micro-sized businesses. The research question was: how does hybrid business logic affect the sustainable business models of Italian micro-sized benefit corporations in the film production industry?
The main contributions concerned the subject of the analysis: the BM of a micro-sized benefit corporation in the film production industry.
With regard to the BM of benefit corporations, to date the majority of scientific debate on the hybrid BM has applied general knowledge to social enterprises. However, unlike social enterprises, benefit corporations are commercial firms and so they have a different BM.
For example, in the benefit corporation domain, the theoretical assumption made by Hahn et al. (2018) [10] is not confirmed. The authors argue that the hybrid BM needs to achieve commercial stability to reach its sustainability goals. However, the purpose of benefit corporations is not to generate profit first, and then, possibly, implement social and environmental actions. In benefit corporations, social and environmental sustainability positively affects the entire BM. Their BMs are based on the incorporation of social and environmental needs into the firm's mission, pursuing them in a contemporaneous and non-sequential way. There is no dualism but instead an integrated triple sustainability.
In this regard, starting from the classification of Ebrahim et al. (2014) [2] and Gamble et al. (2020) [11], we can say that our case study presents a partially integrated BM: social and environmental efforts were clearly mission-driven, but the revenue model was not dependent upon the purpose.
Having a fully integrated BM appears to be difficult for a micro-sized firm. For example, we can talk about an integrated BM when a film production company makes documentaries exclusively with environmental and social messages or certified green productions only.
Furthermore, as suggested by Gamble et al. (2020) [11], when the BM is partially integrated, the social and environmental efforts "must be defined using accepted norms, routines, and strategies" (p. 274).
In our case study, the value proposition emerges on the set even without the formal application of a accepted protocols or standards. Customers understood "what value is created, how it is created and who it is created for" [11] (p. 274).
Instead, our research does not confirm the correlation between a partially integrated BM and the external perception of two separable value propositions and dual corporate identity [11]. In our case study, the value proposition is clearly unique. It is communicated in a distinctive way in the "MANIFESTO" published on the company website [78].
Other important contributions concern the relationship between the BM and the size of the benefit corporation. Our research addresses a key issue in the emerging debate on micro-sized benefit corporations: how these firms with financial and human resource constraints can absorb the hybrid logic in their BM [19]. In particular, such firms need to manage a dual mission: integrate social and environmental goals in their key activities, select suppliers and customers, incorporate accountability mechanisms, and create new partnerships, while simultaneously garnering the resources to be economically sustainable.
Our research confirms that limited financial resources affect some choices: the current hiring of external collaborators, the integration of new human resources to cover new roles such as film administrator or product placement, the monitoring of the issue of CO 2 emissions, the introduction of offsetting actions, the achievement of green certification, the application of protocols, and the creation of an internal creative department to write the scripts.
Size also had an impact on the decision to be more flexible and less formal [19,91]. Although microfirms have acknowledged the importance of structures and processes, they still have not developed formal practices. For example, in our case study the firm was characterized by a lack of formal organization.
The third contribution concerns the relationship between BM, firm size, transparency and marketing benefit. Our study supports the claim by Galli et al. [18] that SMEs that adopted the benefit corporation model a few years earlier are likely to develop weak signals that risk failure to generate the marketing return in terms of reputation and visibility. In fact, firms with greater resources and experience develop more effective impact reports. These reports are particularly linked to the feedback tool and the company's willingness to activate two-way communication.
The fourth contribution concerns the specific industry taken into account, the film production industry. It has not been analyzed in the scientific literature on SBMs despite the great impact it has at a social and environmental level [28].
Another theoretical contribution concerns the role of the hybrid mission. Our study confirms that the hybrid logic affects the SBM of benefit corporations [1]. In particular, the case study shows that the mission works as a guideline for all elements of the business model: customer interface, activities, resources, partners, cost structure, and revenue streams. Without the guidance of the mission there is the risk of mission drift [2]. In micro-sized firms, this can easily be verified. For example, firms in the film production industry need to create a portfolio in order to acquire new customers. This could happen to the detriment of purpose logic. The mission written in the corporate bylaws helps to avoid mission drift in the decision-making process.
The final theoretical contribution concerns the benefit corporation approach. Contrary to the previous literature which states that external stakeholder pressure has significant impacts on SBM implementation [92], benefit corporations have an internally driven proactive behavior. In the film production industry there is still a lack of awareness on the issue of sustainability. Despite this, in our case study, the firm voluntarily decided to become a benefit corporation by fulfilling all of the legal obligations.
Our research also has practical implications. The issue of environmental sustainability in film production is a topic that has been developing more and more in the last five years.
The need to educate the next generation is an imperative to support the rapidly changing landscapes of the Italian creative industries. It is important that decision makers and producers understand the growing need for a more sustainable approach to film making. Producers should not see sustainable practices as obstacles to profit but should use them as competitive tools in their business strategy.
This study could be useful for managers of film production companies in the transformation of their BMs for implementing simple activities. In Italy, there are currently only seven benefit corporations in this industry (six microenterprises and one small enterprise). Our research introduces a BM structure that could serve as an example for other microbusinesses in the Italian film production industry.
Conclusions
The BM as a unit of analysis provided the opportunity to investigate hybrid organizations [93]. The aim of this study was to investigate how hybrid business logic affects the SBMs of Italian micro-sized benefit corporations in the film production industry. To answer our research question, we analyzed ARE FILMS srl, an Italian film production company. Consequently, the study helps to expand knowledge on benefit corporations and on SBMs in general. In addition, it provides insights into the Italian film production industry.
Our study presents several results. First of all, the research confirms that the capacity of hybrid businesses to achieve a hybrid mission is intrinsically embedded in their business model [57,94]. The hybrid mission works as a guideline for all elements of BM.
Other main conclusions included: (1) a micro-sized film production company is initially more likely to adopt a semi-integrated BM and then achieve full BM integration at a later stage; (2) the partially integrated BM does not create an external perception of dual corporate identity; (3) the sustainable value proposition emerges even without the formal application of accepted protocols or standards; (4) the purpose mission can be integrated into the BM of micro-sized firms without affecting the economic sustainability of the benefit corporation; (5) the size of the firm affects some choices concerning business modelling; (6) the BM of micro-sized firms is flexible and informal; (7) young benefit corporations are likely to develop weak signals that risk failure to produce marketing benefits; (8) benefit corporations by definition have an internally driven proactive behavior and so do not need external pressure to implement sustainable practices; and (9) the film production industry needs benefit corporations to reduce its overall negative impact.
Our research has certain limitations. Given the well-known limits on the extent to which the results obtained from a single case study can be generalized, further analyses based on the comparison of different benefit corporations using the qualitative approach of multiple case studies are necessary. Multiple cases allow for greater generalization than single cases and facilitate comparison of findings that emerge from individual cases [77].
However, a further limitation is inherent in the qualitative methodology of the case study. This approach has often been criticized due to its extreme subjectivity in the interpretation of the collected data and in the evaluation of the conclusions. Future research could consider all Italian micro-sized benefit corporations or all micro sized film production firms. Moreover, the research focused on an Italian firm, because Italy is the first country in Europe to adopt legislation for a benefit corporation. Future research could compare the BMs of Italian benefit corporations with those of other countries (e.g., sociétés à mission in France) in order to assess the impact of the institutional context.
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Domain: Business Environmental Science
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“Methodological bases of personnel management in the context of implementation of the “green office” concept”
“Green” human resource management is a strategic approach that recognizes the relationship between environmental sustainability and human resources. This can lead to numerous benefits, including cost savings, improved employee engagement, and long-term organizational sustainability. The article examines the methodological foundations of human resource management in the context of implementing the green office concept. The purpose of the study is to identify the components of the conceptual model for implementing the policy of “green” human resource management at enterprises. The basic procedures of “green” human resource management are researched. It is identified that environmentally oriented HR initiatives can be considered as an organizational mechanism aimed at ensuring that employees behave in a “green” way. It is proved that “green” human resource management plays an important role in shaping the environmental values of employees and improving their environmental behaviour, contributing to the formation of the need to create answers to sustainable development issues in the human resource management systems of organizations. A promising direction for further research is the scientific substantiation of the list of indicators for assessing the effectiveness of the implementation of the “green” policy of an enterprise in terms of personnel management.
INTRODUCTION
Modern business realities are preparing business entities to study the "green" aspects of their activities (Ahmad, 2015) and adopt the principles of sustainable development (Jones, 2017;Pratama, 2022;Yuce, 2020) and "green" behaviour (Weerarathna, 2018). In particular, the business community has increased awareness of the importance of the greening initiative and the adoption of numerous environmental management strategies."Green" human resource management (Gren Human Resource Management, hereinafter -GHRM) has become an important tool for conducting business activities (Ercantan, 2022). This is a new term that refers to the effective management of human capital in the enterprise, in the context of the introduction of the concept of "green economy" and socially responsible.
GHRM procedures include programs, activities and tactics aimed at reducing negative environmental impacts and improving environmental performance. GHRM helps to address environmental issues through administrative policies, such as environmental safety measures (Rani, 2014)."Green recruitment, selection, training, and development of personnel focuses employees on the environmental tactics of the organization's business. This helps to increase the environmental awareness of employees.
Important areas of scientific research in the field are: • management of environmental performance of the enterprise's employees (Perron, 2006); • management of remuneration and motivation of personnel in the context of the implementation of the "green" concept of economic development (Ercantan, 2022); • development of "green" competencies of the company's employees (Opatha, 2014); • greening of workplaces (Ercantan, 2022).
At this stage, researchers are studying the impact of GHRM policies on employees' green behavior, which is a relatively new area (Ercantan, 2022;Dumont, 2017).
LITERATURE REVIEW
Today, companies are actively developing and implementing their own environmental policies, but the results of their efforts in this direction vary greatly in effectiveness. Research and data analysis show that the most successful environmental policies are those that take an integrated approach. This means that in addition to assessing and minimizing the negative impact of enterprises on the environment, attention is also paid to researching and improving the environmental safety of employees in their workplaces.
The global financial and economic crisis of 2008 had a significant impact on the economic growth of democratic countries included in the so-called "golden billion."At the same time, the crisis stimulated the economic development of resource-rich countries such as China, India, Brazil, and others. Recently, experts are increasingly discussing threats that could negatively affect the development of the global economy. Among them, special attention is paid to the problems of providing water, food, and energy. In this regard, there are increasingly frequent calls for radical changes in the global economic system.
The United Nations initiated such changes, launching the Green Economy Initiative program in 2009. UN Secretary-General Ban Kimoon noted that introducing green economy principles could be a key solution to overcoming the global economic crisis and climate change.
Considerable scholarly attention has been paid to the issues of green human resource management (Ahmad) and proposals on the impact of green HRM practices on the environmental behavior of employees in the workplace: the role of the psychological environmental climate and environmental values of employees ( The literature review shows that successful HR management in the context of the implementation of the green office concept requires the use of various methods, including motivation, training, organizational and administrative measures, employee involvement, as well as control and monitoring. The integration of these methods allows for efficient use of resources, increases environmental awareness of employees and contributes to the sustainable development of the organization.
AIMS
The aim of the study is to identify the components of the conceptual model for implementing the policy of "green" human resource management at enterprises.
METHODS
During the study, the following general scientific methods of cognition were used to understand economic phenomena: a systems approach, a dialectical method of cognition, induction and deduction, statistical observation and analytical grouping, a tabular graphical method, and an abstract-logical method. Implementing the green office concept requires the use of various personnel management methods aimed at integrating environmental principles into the organization's daily activities. These methods allow not only to increase employees' environmental awareness but also to ensure the sustainable development of the enterprise.
RESULTS
GHRM defines the planning and implementation of human resource management practices and policies aligned with a company's environmental sustainability goals to guide employees themselves and develop their attitudes, behaviors, skills, motivation, and commitment to environmental sustainability, and to help ensure that employees are engaged in achieving these greener organizational goals.
Green Human Resources Management initiatives can be seen as an organizational mechanism to ensure that employees behave in a "green" way. GHRM is the best way to help organizations implement sustainability programs and achieve the Sustainable Development Goals, especially by creating a "green-oriented workforce" that can assess and improve environmental issues in the organization's operations.
The implementation of the GHRM policy at the enterprise includes several stages: planning; execution; control; adjusting (Figure 1). Thus, the development of GHRM in a company involves greener human resources activities to increase environmental benefits, such as environmental performance management, green remuneration, environmental activism, and more sustainable career development practices that contribute to improved organizational environmental performance. In addition, environmental education training will also enable employees to consciously engage in green organizational processes, be more involved in environmental management, and create a green organizational culture.
One of the several strategies that organizations pursue to improve their environmental performance and achieve their sustainability goals is employee environmental behavior. It can be defined as intentional actions or behaviors of employees that have a positive impact on the environment, reducing the impact of human activities on the environment and promoting positive change for environmental sustainability. of resources, waste reduction, energy conservation and recycling, and can be divided into two types: «Task-based green behavior and voluntary green behavior». The former describes green behaviors that are carried out within organizational constraints, within the scope of tasks required by an employee's role in the company; that is, activities that are formally described and defined as part of their job responsibilities. However, voluntary green behavior of employees is defined as green behavior that is developed on the personal initiative of the employee, exceeding the expectations of the organization.
Employee environmental behavior can include activities such as water conservation, efficient use
Over the past 10 years, the HR management services market has been showing a clear positive trend (Figure 2). GHRM can be expected to influence green behavior because, for example, hiring employees with environmental awareness and sensitivity, involv-ing them in green initiatives, and providing green training are likely to improve employees' knowledge, skills, and environmental awareness, making them more psychologically prepared to engage in green behavior. The effectiveness of GHRM practices in achieving the right behavior in the workplace depends on employees' understanding of the need and urgency of implementing such practices.
GHRM practices play an important role in shaping employees' environmental values and improving their environmental behavior, contribute to the need to create responses to sustainability issues in organizations' human resource management systems, and make it necessary to allocate resources that encourage these systems in companies, and thus promote more environmentally friendly behavior and thus improve employee performance.
Let's take a closer look at the main components of GHRM.
Source: compiled by the author.«Green recruitment and selection are procedures for attracting and hiring candidates with competencies, attitudes, and behaviors that ensure the environmental performance of an organization» (Mashala, 2018). Companies incorporate environmental policies and strategies into their recruitment plans. Digital recruitment is carried out through digital systems, job postings on social media, and online applications. Online interviews or phone interviews are conducted to ensure a "green" selection process. Establishing criteria for assessing candidates' potential and attitudes towards environmental efficiency during the selection process helps to find employees who are aware of environmental efficiency.
«Green training and development are a set of coordinated activities that encourage and inspire employees to learn about environmental protection and to view environmental issues as critical to achieving environmental goals».
Training and development are the only mechanism for communicating an organization's environmental goals. It can improve employees' awareness, knowledge and skills related to environmental protection. Thus, it helps to form a green attitude (Sheikh, 2019). In addition, organizations provide green training, for example, on recycling and waste management, and reduce paper consumption by conducting online training.
An important idea in environmental psychology is the development of a "green attitude" among staff. Employees' attitudes toward the environment are crucial in setting and achieving the organization's green goals. Environmental attitudes are defined as specific principles, perceptions, and goals of a person related to environmentally friendly procedures (Hughner, 2007). It is also called an environmental attitude, an environmentally friendly attitude, or an environmentally sustainable attitude (Coscun, 2018). Any attitude consists of three main components, which include beliefs (cognitive level), feelings (affective level), and behavior (behavioral level) (Robbins, 2010). Thus, these three components occur sequentially, and attitudes are believed to influence behavior.
Thus, a green attitude has these three components, which ultimately leads to green behavior.
To summarize, we formalize a conceptual framework for studying the impact of GHRM on green attitudes. GHRM practices, green attitude and green behavior are independent and interrelated elements of the HRM system.
In general, the impact of a company's "green" activities can be viewed from four main perspectives: 1) the impact of GHRM on green behavior; 2) the impact of GHRM on green attitudes; 3) the impact of green attitudes on green behavior; 4) the mediating effect of green attitude on the implementation of GHRM at enterprises (Figure 3).
GHRM is crucial for creating a culture of environmental care in organizations. In particular, Source: Compiled by the author.
Figure 3. Interdependence of green attitudes, green behavior and GHRM
GREEN ATTITUDE
GREEN BEHAVIOR GHRM
GHRM practices such as green recruitment and green training and development influence employees' commitment to environmental protection. It also raises employees' awareness of the company's environmental issues. The main goal of GHRM is to create an environmentally friendly workplace and to develop environmentally responsible attitudes and behavior among employees.
CONCLUSIONS
GHRM is a modern HR management concept that integrates environmentally sustainable practices into the organization's human resource management processes. It is aimed at aligning HR strategies and practices with the goals and objectives of the organization's sustainable development. GHRM is an important strategy for organizations seeking to reduce their environmental impact and contribute to a more sustainable future. By integrating environmental issues into HRM practices, organizations can demonstrate their commitment to sustainability. GHRM can increase employee engagement by involving them in sustainability initiatives and fostering a sense of purpose. Employees who feel that their organization is contributing to environmental sustainability are often more motivated and satisfied.
GHRM is an effective tool for shaping the "green" attitude of employees towards the greening of the business entity's activities and achieving the Sustainable Development Goals set out in the UN Agenda 2030.
A promising area for further research is the scientific substantiation of the list of indicators for assessing the effectiveness of the implementation of the enterprise's "green" policy in terms of personnel management.
practices on employee workplace green behaviour: The role of psychological green climate and employee green values. Human Resource Management, 56(4), 613-27. [URL]. 21792 Dumont, Shen, & Deng). A number of scholars consider the importance of the Sustainable Development Goals and information and communication technologies for the development of a green office (Ercantan, & Eyupoglu; Hughner, McDonagh, Prothero, Shultz, Stanton).
Figure 1 .
Figure 1. Implementation of the GHRM policy in the green economy system at the enterprise
Figure 2 .
Figure 2. Dynamics of the global HR services market in 2012-2022, bln eur
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Domain: Business Environmental Science
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“Impact of integrated reporting on firm value and earnings quality as a moderator in Southeast Asia”
The study analyzes the factors influencing integrated reporting and its implications for firm value with earnings quality as a moderating variable. The study was conducted on energy sector companies on stock exchanges of several Southeast Asian countries. The selection is due to Southeast Asia’s vulnerability to global market sentiment changes related to financial and sustainability aspects. The study employed the SEM-PLS analysis method. 208 data from 26 companies over 8 years were used. The investigation affirms that leverage, age, and board size have positively impacted integrated reporting. Firm size, growth, and board independence have a negative impact on integrated reporting. Profitability, board activity, and stakeholder pressure have not significantly influenced integrated reporting, but integrated reporting positively impacts firm value. Additionally, earnings quality does not moderate the influence of integrated reporting on firm value. The study provides insights for companies to improve the presentation of high-quality information to stakeholders. Increasing the firm value of energy companies in Southeast Asian countries needs to be done as a progressive concern for environmental impacts and sustainably creating integrated reporting.
INTRODUCTION
Firm Value is closely related to the company's performance in generating profits and fulfilling stakeholders' objectives. Firm value is an evaluation conducted on a company and in line with the firm's performance to gain high profits and successfully implement social responsibility (Akinleye et al., 2019;Khunkaew et al., 2023;Kurniasih et al., 2022;Mahmudah et al., 2023). Integrated corporate reporting informs the performance of social and environmental responsibility activities to increase company value. The company will strive to improve financial performance to meet stakeholder desires. Christofi et al. (2023), Adegboyegun et al. (2020), and Harnovinsah et al. (2023) asserted that financial performance is a crucial factor in determining firm value. Integrated reporting, as a new method, combines various aspects of an organization into one report, providing a comprehensive view of the company (Agarwal & Samanta, 2023;Hoque, 2017). This study focuses on the impact of integrated reporting on firm value because both are core elements of the International Integrated Reporting (IIRC) Framework that explains the value creation process (Barth et al., 2017;Conway, 2019;Yorke et al., 2023). The novelty of this study stems from the use of earnings quality as a moderating variable in the longer research period compared to previous studies.
LITERATURE REVIEW
Stakeholder theory recognizes the importance of considering various stakeholders in organizational decision-making and the disclosure of relevant information. Integrated reporting integrates both financial and non-financial dimensions, enabling organizations to meet the expectations and needs of various stakeholders. According to Villiers and Maroun (2017), stakeholder theory plays a central role in the development of integrated reporting.
The key objective of integrated reporting is to offer a more comprehensive perspective to financial stakeholders, particularly investors, regarding an organization's performance. It achieves this by elucidating how value is generated over time. This is crucial because the accessibility, excellence, and cost-effectiveness of resources and inputs can have a profound impact on the organization's ability to sustain itself over the long term.
Research indicating a positive impact of integrated reporting on firm value (ESG Performance proxy) was conducted by Conway (2019), firm value (Market Value of Equity, return on equity, and leverage proxies) by El-Deeb (2019), firm value (expected future cash flows proxy) by Flores et al. (2019), and firm value (Tobin's Q proxy) by Komar et al. (2020). Research on the negative impact of integrated reporting on firm value (financial performance and risk proxies) was conducted by Conway (2019), firm value (leverage proxy) by Lemma et al. (2019), and firm value (cost of equity capital proxy) by Vitolla et al. (2019) and Vitolla et al. (2020).
Leverage has a corresponding influence on the propensity to adopt integrated reporting. Companies with higher leverage levels have serious agency problems and higher agency costs (Ghani et al., 2018;Obeng et al., 2020). Integrated reporting can be an effective communication tool for explaining a company's plans and strategies to reduce its debt levels sustainably. In integrated reporting, companies can highlight the steps taken to manage financial risks, improve cash flow, and optimize capital utilization, thereby instilling confidence in stakeholders about the company's commitment to addressing leverage challenges. Fuhrmann (2019) showed a negative relationship between leverage and integrated reports. High leverage can result in financial constraints and limited resources for engaging in integrated reporting practices. Research conducted by Fuhrmann (2019), Grassmann et al. (2019), Grassmann (2021), and Vitolla et al. (2020) indicates that leverage influences integrated reporting. Both the voluntary disclosure theory and the stakeholder theory propose that the necessity and advantages of voluntary disclosure grow in proportion to the number of external entities concerned with a company's operations (Dienes et al., 2016). Larger-scale companies are also prone to experiencing more significant agency conflicts compared to smaller ones (Fahad & Nidheesh, 2021). Managers of larger firms tend to appreciate the benefits of enhanced disclosure, whereas smaller companies may perceive full information disclosure as potentially detrimental to their competitive position. However, different results are shown in the study by Dumay et al. (2016), which suggests that firm size has a negative influence on integrated reporting. Dumay et al. (2016) and Ghani et al. (2018) also show that firm size influences integrated reporting.
Companies with high profitability levels tend to actively use forward-looking information in integrated reporting and can help companies identify new opportunities to develop profitable business units (Bernardi & Stark, 2018;Bochenek, 2020). Fuhrmann (2019) suggests that Profitability has a negative influence on integrated reporting. Companies with higher profitability have less urgency to engage in integrated reporting to attract investors or lenders. These companies believe that good financial performance is sufficient to gain the trust of stakeholders and attract investments. As a result, companies see less incentive to adopt integrated reporting practices that emphasize non-financial aspects and long-term sustainability. Menicucci (2018) Agency theory underscores the advantages of adopting voluntary disclosure policies (Brammer et al., 2012). This emphasis is rooted in the recognition that information imbalances can harm potentially lucrative company initiatives. This imbalance erodes investor trust as they fear that managers might not select the best projects or that their actions could be driven by motives to Villers et al., 2017). These considerations highlight that companies may need to pay a higher "price" to investors in order to secure external funding. Companies with lower growth prospects face pressure from stakeholders, including investors and shareholders, to focus on achieving financial goals and improving operational performance. These companies tend to deprioritize non-financial aspects accommodated by integrated reporting to meet market expectations and improve financial performance. Nurkholis (2020) found that older companies do not tend to have higher levels of integrated reporting disclosure than younger ones. Pillai and Seetah (2022) and Senani et al. (2022) found that a company's age has a positive relationship with the quality of integrated reporting disclosure in annual reports. These findings suggest that as a company ages, there is a higher likelihood of integrating sustainability information into its reporting. Integrated reporting requires a shift in reporting approach, where companies need to pay more attention to non-financial issues and integrate this information with financial reporting. Established companies that are accustomed to traditional reporting may be reluctant to adopt integrated reporting, seeing it as a complex and disruptive change.
Board size informs controls to realize good corporate governance. Ioannou and Serafeim (2015), García-Sánchez et al. (2018), and Liu and Zhang (2017) revealed a positive association between board size and the extent of sustainability information disclosed in annual reports. Their findings suggest that companies with larger boards of directors are more inclined to include sustainabilityrelated information in their reports. Furthermore, Mawardani and Harymawan (2021) and Fasan and Mio (2017) also found a positive correlation between board size and integrated reporting disclosure in company reports. This implies that the presence of a larger board of directors is linked to a higher likelihood of a company reporting sustainability-related information in its reports. Companies with larger boards may face challenges in achieving consensus and agreement on relevant non-financial issues related to integrated reporting. Differences in opinions and priorities can complicate the decision-making process related to the implementation of integrated reporting.
The independence board is a party that is really needed to ensure that corporate governance does not have conflicts of interest. Mawardani and Harymawan (2021) and Omran et al. (2021) reveal a positive association between the degree of board independence and the extent of sustainability information disclosed in company reports. Senani et al. (2022) and Mawardani and Harymawan (2021) have robust empirical evidence highlighting the significance of board independence in encouraging the disclosure of sustainability information within company reports. Independent boards tend to play a stronger oversight role in company management. Independent boards are more diligent in monitoring both the financial and non-financial performance of companies and provide specific recommendations and demands for improvement. In this context, efforts to implement integrated reporting may not receive full support from independent boards.
The effectiveness of the board is determined not only by the number of its members but also, more importantly, by the number of activities carried out through meetings and investigations to make policies and strategic decisions. Vitolla et al. (2020) inform that board activity influences integrated reporting and indicate that inadequate board characteristics and activities, such as low expertise and experience, were negatively associated with the quality of integrated reporting. An active board involved in daily decisionmaking may have limited time and resources to focus on non-financial issues related to integrated reporting. In this regard, efforts to implement integrated reporting may be deprioritized because the board's attention is more directed towards immediate operational issues and financial performance.
A company receives pressure from various stakeholders to adopt and implement integrated reporting. The greater pressure that a company receives from external stakeholders leads to the company producing high-quality integrated reporting. Simnett and Huggins (2015) explore the role of stakeholder pressure in the adoption and implementation of integrated reporting practices. Therefore, companies strive to mitigate risks by using reputable public accounting firms with good track records to minimize the risks they face so that the information presented is free from material misstatements (Chouaibi & Hichri, 2020). Pressure from stakeholders can lead companies to adopt a responsive approach rather than a strategic approach in managing sustainability and social responsibility issues. Simnett Earnings quality refers to the quality of income generated by a company, reflecting the extent to which a company's income has high quality. If a company has high earnings quality, it means its income is more reliable and reflects actual performance. Previous studies indicate that the reported income of high-accrual companies is not likely to be sustained. They may then take short positions to exploit the overvaluation of these companies (Pavlopoulos et al., 2019). García-Sánchez and Noguera-Gámez (2017) and Obeng et al. (2020) inform that the quality of earnings has a moderating effect on how integrated reporting influences a firm's value.
This study investigates the factors that influence integrated reporting and its implications for company value which is moderated by earnings quality. The research hypotheses developed in this study are:
METHODS
The .
Operating Accrual
Earning Cash Flow from Operation Average Assets The debt-to-assets ratio, calculated as total debt divided by total assets, is used to measure leverage. This measurement is based on prior research conducted by Menicucci (2018). .
Total Debt Debt to Assets
Total Assets = Firm size is a measure of a company's significant impact on efficiency, innovation capabilities, and company performance. In this study, the measurement used is the natural logarithm (Ln) of the total assets (Menicucci, 2018).
Profitability reflects a company's ability to generate income or profits from its operational activities. The measurement used in this study is Return on Equity (ROE), calculated as total comprehensive income for the year divided by total equity (Brigham & Ehrhardt, 2016). .
Comprehensive Income
Total Equity = .
Revenue growth
Revenue Revenue current year prior year Revenue prior year Age refers to the length of time that has passed since a company's establishment or the beginning of its operations. A company's age has a significant impact on its behavior and performance. The measurement used is the age of the company, calculated from the date of the company's establishment, based on a prior study by Geroski (1995).
Board size refers to the number of members on a company's board of directors. Mawardani and Harymawan (2021) present a broader view of the influence of board size on a company's performance and internal control mechanisms. In this study, the measurement used is the number of directors and commissioners, based on prior research conducted by Geroski (1995).
Board independence refers to a company's board of directors' ability to make decisions that are not influenced by personal interests or conflicts of interest with other parties that may interfere with the interests of shareholders (Fama, 1980). The measurement used is the number of independent directors and commissioners, based on prior research by Senani et al. (2022) and Mawardani and Harymawan (2021).
Board activity includes the actions and decisions taken by a company's board of directors in carrying out its responsibilities to oversee management and make strategic decisions that can affect the company's performance and value. The measurement used in this study is the number of combined board and commissioner meetings in one year, based on prior research conducted by Fama (1980).
Stakeholder pressure represents the influence or pressure exerted by stakeholders on a company to consider the company's interests in decisionmaking and company actions (Simnett & Huggins, 2015). In this study, the measurement used is the dummy of the Big 4 Audit Firms, based on a prior study by Fama (1980).
Exchange Rate to USD is a control variable, adjusted to the original exchange rate and the end of the sample's fiscal year using the middle rate (between buying and selling rates). A prior study conducted by Setiawanta et al. (2020) has shown that the exchange rate has an impact on firm value.
RESULTS
Each construct has a formative (measurable) indicator which is a regression relationship from indicator to construct, so the way to evaluate the outer model is to look at the indicator weight (SE) value and the t-statistical significance value (P Value). Based on Table 1 of the weight indicators below, it can be seen that all the marginal indicators (> 0.05) of the test results include LEV, FSIZE, IR, EQ, FV, PROF, GROW, AGE, BS, BI, BA, SP and EQ*IR shows an average weight indicator value of 0.057 above the minimum limit (0.05) and all indicators are valid with significant P-Value <0.001 equals 1%). So it can be concluded that all the formative indicators of this research model are valid based on marginal weight indicator values (above the minimum limit) and significance <0.001 (1%) This study has completed the entire inner model test and proceeded to hypothesis testing (see Figure 2 and Table 3). By using a significance level of 10%, out of the 11 hypotheses proposed in this study, the results indicate that 7 hypotheses are accepted, leverage (LEV), size (FSIZE), growth (GROW), age (AGE), board size (BS), board independent (BI) have a significant influence on integrated reporting (IR), and integrated reporting (IR) has a significant influence on firm value (FV). The remaining four hypotheses are rejected: profitability (PROF), board activity (BA), and stakeholder pressure (SP) have no influence on integrated reporting. Earnings quality (EQ) has not moderated the influence of integrated reporting on firm value.
DISCUSSION
The results indicate that leverage has a positive influence on integrated reporting. Companies can invest more time, energy, and funds in the Integrated Reporting process with sufficient resources. This allows companies to develop more comprehensive reporting systems, expand the scope of presented information, and enhance the report quality. Companies with a high level of leverage indicate a capital structure funded by debt. This debt is obtained from investors who have confidence that the company's performance is good so that it can pay debts. Investors look at company performance not only in income statements but also in integrated reporting. Therefore, companies that have high leverage tend to present integrated reporting. The results of this study support previous research conducted by Grassmann et al. (2019) and Vitolla et al. (2020).
Firm size has a negative influence on integrated reporting. Larger companies tend to have complex organizational structures and intricate decision-making processes. This can complicate the coordination and integration of financial and non-financial information required for implementing integrated reporting. Companies can increase public and investor trust through financing contributions that generate profits. Larger companies can also improve the community's economy by being eco-friendly-oriented. Organizational complexity and bureaucracy can be obstacles to effectively implementing integrated reporting. The results of this study were supported by Dumay et al. (2016).
Profitability does not have a significant influence on integrated reporting. A company's profitability does not significantly affect the implementation of sustainability and corporate social responsibility aspects in integrated reporting. Profitability tends to focus more on financial performance and company earnings. In contrast, integrated reporting aims to integrate sustainability aspects, including social, environmental, and good governance, with financial aspects in a company's reports. The results of this study are supported by Mediaty & Pratiwi (2023), who found that profitability does not have a significant influence on sustainability Reporting. These findings are inconsistent with the research conducted by Menicucci Growth has a negative influence on integrated reporting. This suggests that low or stagnant growth rates can hinder companies from paying attention to sustainability and corporate social
CONCLUSION
This study aims to investigate the factors that influence integrated reporting and determine its impact on company value by analyzing earnings quality as a moderator. The leverage affected integrated reporting, with companies having high leverage being more inclined to implement it to provide a better understanding of financial and sustainability performance. However, as the size of a company increases, the likelihood of adopting integrated reporting decreases due to organizational complexity and decision-making processes. Older companies and those with large boards of directors are more likely to adopt integrated reporting, but the proportion of independent board members cannot influence this decision. Companies need to realize that integrated reporting encompasses sustainability and social aspects and integrates them with financial aspects to enhance transparency and understanding. This can influence investors' and markets' perceptions of a company's value. Several sample energy sector companies from Southeast Asian countries have not presented complete company financial reports on each stock exchange's website or in Internet financial reporting, making data collection difficult as the limitation of the study. Integrated reporting is not only related to financial measurement and good corporate governance. Integrated reporting is also related to legal aspects and culture that were not explored and analyzed. The study suggests that future research could consider other factors such as ownership structure, civil law, legal enforcement, investor protection, and culture.
and Huggins (2015), Ghani et al. (2018), and Vitolla et al. (2019) indicate that stakeholder pressure influences integrated reporting. Integrated reporting is expected to provide more relevant information on a company's performance in both financial and sustainability aspects. Comprehensive information can help investors make better investment decisions and enhance transparency and accountability within the company. Integrated reporting can enhance a company's reputation and brand image. It can influence investor perceptions and increase the company's value (El-Deeb, 2019). Furthermore, the financing decisions of a company may also be affected by investor perceptions of integrated reporting practices(Lemma et al., 2019). Conway (2019), El-Deeb (2019), Flores et al. (2019), Komar et al. (2020), Lemma et al. (2019), and Vitolla et al. (2019) suggest that integrated reporting influences firm value.
H 1 :
Leverage influences integrated reporting. H 2 : Firm size influences integrated reporting.
( 4 )
Company growth results from the combination and utilization of the company's internal resources. In this study, Revenue growth is used as the measurement, based on prior research by Harnovinsah et al. (2023) with the following formula: Investment Management and Financial Innovations, Volume 21, Issue 2, 2024 [URL] 1 .
Indicator weight 15)p://dx.doi.org/10.21511/imfi.21(2).2024.15indicatethat there is no multicollinearity problem. The Q-squared value of 0.472 > 0 indicates the model has predictive relevance in the Strong category. The resulting Goodness of Fit (GoF) is 0.542 > 0.36, which indicates the Fit Model is very good.
Table 2 .
Structural model test
Table 3 .
Summary of P-value and path coefficient results
==
Domain: Business Economics Environmental Science
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Evaluation Performance of Service Facilities at Ferry Port Bajoe Village, Southeast Sulawesi
The Bajoe Village Ferry Port was a port that specifically served the movement of tourists on Bokori Island, which had been operating for eight years. The number of tourists using this port service reached 40,194 passengers in 2019; however, services at the port still had shortcomings. The aim of this research was to evaluate port service facilities based on passenger perceptions so that the service performance of the Bajoe Village Ferry Port remained optimal in serving tourists. The methods used were comparative descriptive analysis, IPA analysis, and QFD analysis to produce technical responses to priority service attributes based on tourist desires. The final result of this research was in the form of directions for developing Bajoe Village Ferry Port service facilities, consisting of toilets, accessibility, lighting, and information service facilities.
INTRODUCTION
Indonesia was an archipelagic country with a total of 17,001 islands spread across 34 provinces separated by waters [1]. The condition of the islands being separated had the consequence that transportation facilities were needed to support the movement of people and goods across islands by taking sea and river routes because it can be able to reach areas that were steep hills (sites that could not be accessed by air transportation) [2]. As a water transportation infrastructure, the port was essential in building the regional economy, especially in equitable development [3].
A port consisted of land and waters with specific boundaries for government and business activities. It was a docking place for ships, boarding passengers, and loading and unloading goods [4]. Ports had three hierarchies based on Ministerial Regulation Number 50 of 2021 concerning implementing Seaports: main ports, collecting ports, and feeder ports. Feeder ports were divided into local and regional feeder ports [5]. Ports had various facilities and infrastructure, including docks, warehouses, container terminals, loading and unloading facilities, storage facilities, and supporting facilities such as parking areas, passenger terminals, and administration offices [6]. Ports also had a security system to ensure safe and efficient operations [7].
Ports made a significant contribution to supporting regional economic growth [8]. Efficient and quality ports could increase the competitiveness of national and international trade because ports provide easy and inexpensive access to raw materials, facilitate product distribution, and support efficient supply chains [9]. The port also played a role in the development of the surrounding area, encouraged tourism, and provided access to natural resources [10]. 1310 (2024) 012006 IOP Publishing doi:10.1088/1755-1315/1310/1/012006 2 Several advantages of port facilities strongly influenced the success of port development, so port facilities had to be equipped with adequate infrastructure, including a relatively long and deep wharf, large storage areas, and modern loading and unloading facilities [11]. Good infrastructure enabled ports to handle large vessels and increased operational efficiency [12]. Therefore, to develop the port and ensure its stability in service facilities, it was necessary to regularly evaluate port performance to identify areas of improvement and development needed [13]. Until now, various studies have been conducted on the performance of ports, and one of the most prominent types of port performance analysis was the evaluation of port characteristic performance [14]. The port evaluation was better done by involving passenger perceptions, not only from the port [15]. This evaluation was carried out by assigning weights to each service facility to facilitate the assessment of port performance [16].
The Bajoe Village Ferry Port, located in Bajoe Village, Soropia District, Konawe Regency, was a port that served movements within the district, primarily to sign tourists to Bokori Island. This Port Hierarchy was a local feeder port, serving ferry transportation within the district/city and connecting the district/city road network [17]. The Southeast Sulawesi provincial government managed this port, and has been operating since 2015. The operating time for this port service was from 08.00-17.00WITA, meaning it ran for 10 hours. This port was built because Soropia District was a strategically important area for Minapolitan activities and the development of small islands, making it a marine tourism center in Konawe Regency, which consisted of 5 marine tourism sites, including two island tourism sites, namely Bokori Island and Saponda Island [18]. The number of passengers at the Bajoe Village Ferry Port in 2019 totaled 40,194 [19].
The Bajoe Village Ferry Port had been operating for seven years, so the facilities' condition still needed improvement. Facilities at this port consisted of docks, passenger terminals, toilets, parking, and other supporting facilities. However, the road conditions at the port were still unpaved, and there was a lack of street lighting because not all areas of the wharf had lighting. Safety and health facilities were also absent, and there needed to be lighting in the passenger waiting room [20]. The 235-meter-long dock at the Bajoe Village Ferry Port was only equipped with three lighting lamps, resulting in poorly illuminated parts of the wharf. This caused discomfort for passengers staying on Bokori Island when they wanted to return to the ferry port to pick up goods and so on during the night.
The Bajoe Village Ferry Port had a large number of passengers, but the condition of the service facilities had deficiencies, indicating the need for service improvements. This research aimed to evaluate the service performance based on passenger perceptions and the researchers' perceptions of port facilities, using minimum service standards as outlined in Ministerial Regulation No. 39 of 2015. The outcome of this research was to provide directions for developing the service facilities at the Ferry Port of Bajoe Village.
Materials 2.1. Study Area
Evaluation of the Performance of Ferry Port Services in Bajoe Village, Southeast Sulawesi" was conducted in the area of Bajoe Village, Soropia District, Konawe Regency, which served as the location of the port under study. Soropia District had been designated as a Port zone according to the Zoning Plan for Coastal Areas and Small Islands (RZWP3K) of Southeast Sulawesi Province for 2017-2037. The study area's location is depicted in Figure 1.
Methodology
Figure 2 illustrated the stages of data collection in research, collecting both primary data, namely by observation and questionnaires as well as secondary data. The data that had been obtained was then subjected to analysis consisting of comparative descriptive analysis, operational analysis, science analysis, and QFD analysis.
Descriptive Analysis
Descriptive analysis was an analytical method used to detail, explain, and describe data systematically. The purpose of the descriptive analysis in this research was to describe the existing conditions of the Bajoe Village Crossing Port. This analysis was complemented by visualization of the port layout.
Comparative Analysis
This analysis was conducted to compare the existing condition of port facilities with minimum service standards, namely Ministerial Regulation No. 62 of 2019. To measure the suitability of the existing conditions with the existing standards, scoring was carried out on each parameter. The scale was in the form of a score of 1 to 5, where facilities that received scores of 1 and 2 were a priority for development because these facilities were not yet available, and the number and condition of the facilities did not meet the applicable standard provisions.
Importance Performance Analysis
This analysis was used to measure the level of tourist interest and satisfaction with passenger service facilities on the Bokori Tourism Motor Ship. In measuring respondents' perceived importance and satisfaction in terms of service attributes regarding reality and expectations, a Likert scale was employed [21].
Formula. Importance/Peformance Score Formula. Average Importance/Peformance Score Formula. Degree of Compliance Notes:
Quality Function Development
This analysis aims to obtain directions for improving service performance obtained from quadrant 1 of the IPA analysis. The tool used to formulate these directions is through the house of quality matrix [21].
The steps taken are: Daily the population was estimated to be 110 people/per day. Referring to the table of Isaac and Michael, with a population of 110 and an error rate of 5%, the sample size for this study was determined to be 84 individuals. According to Suyani and Hendriyadi (2015), an error rate of 5% is a standard level in social research; hence, this study adopted a 5% error rate [23].
Water area facilities Dock
The Dock was 235 meters long, 12 meters wide, and 6 meters wide. The shape of the pier resembles an L shape.
Mooring Pool
The Harbor had a mooring pond with a depth of up to 5 meters.
Breakwater Building
This port had provided wave breakers along the pier. This building is made of piles of stones arranged obliquely. This port did not have a CCTV. 1 This port had been packed with security officers, but the security officers needed to be uninformed but easily visible.
4
The port had a medium-sized complaint service number sticker that was legible and easily visible because it was placed on the ticket counter.
Ticketing service
The ticket sales service can skip 5 minutes because it does not experience long queues.
Lounge
This port had a waiting room for passengers with clean and odorless conditions, then the available seat size is not one seat for passengers, but one seat can accommodate many passengers with various seat sizes 5 Toilet This Port had three toilets but was separate between women and men, with one toilet for one passenger. Then, the condition inside the bathroom is clean and odorless.
Mosque
This port does not have a prayer room, but a mosque is nearby. 1 Lighting lamps This Port does not have lighting in the waiting room, but only 8 street lighting lamps are scattered on the road at the pier and port entrance.
Temperature control
This Port does not have temperature control facilities, both air conditioners and fans. 1
Facilities of Passenger Line
This Port does not have a particular passenger lane so that passengers will walk on foot on the vehicle path. Then, the condition of the course is still in the soil pavement, so when it rains, the road conditions will become wet and muddy.
Service Information
This Port had service information in the form of billboards with large sizes, as shown in the picture. However, the information content differs from the provisions of SPM, which only includes tariffs and information about health protocols.
3
Service information delivered in voice is provided directly by port staff without going through the audio paging system to make the sound intensity manageable.
Ship Travel Disruption Information
At this Port, when there is a disruption, the trip is immediately conveyed to the passengers who come. Disruption of ship travel at this port is a rainstorm that causes large waves so that this disruption passengers wait until the rain subsides.
Passenger service facilities
This Port had one work desk that served passengers to provide information about ship departure times and serves passengers to make ship entrance ticket payments.
Analysis Score
Parking This Port had land for parking with a large area that could accommodate 4-wheeled, 2-wheeled, and 6-wheeled vehicles. The circulation of cars in and out is smooth because it has a wide road, differentiated entrances, and exits to the port.
Facilities for disabled passengers
This Port does not have a mobile ramp, so if there are passengers with disabilities, wheelchairs will be lifted on the ship assisted by security officers, and lift passengers are lifted to sit on the boat.
Nursing mother's room
Ferry Port of Bajoe Village does not have a particular room for mothers who will breastfeed babies, but there is a boarding house like in the picture that can be used for breastfeeding mothers.
2
Based on table 3, there were 25 service facilities at the port where service performance was assessed. The higher the score obtained, it meant that the facility had performed in accordance with applicable regulatory standards. There were only 9 facilities that met the Port's minimum service standards based on Ministerial Regulation No. 39 of 2015. So, other facilities were being considered for future development.
Importance of performance analysis
This analysis determines the level of interest and satisfaction by assessing the aspects related to the performance of port facility services. The assessment focused on the service facilities available at the ferry port. Out of the 25 service facilities in the field, 15 service facilities were evaluated. Table 4 was the result of calculating the performance of Port facility services based on passenger perceptions, which were then depicted in quadrants in Figure 5 to depicts the locations of service attributes in their respective quadrants. Five points were included in Diagram 1, indicating that these attributes were the priority for further development. These attributes consisted of the availability of emergency telephone numbers, toilets, lighting facilities, passenger lanes, and visual information services. On the other hand, service attributes placed in Quadrants II, III, and IV needed to be maintained as passengers evaluated their service as already satisfactory. Based on the voice of the customer derived from the results of the IPA analysis, five attributes were identified as priorities for the development of facilities at the Ferry Port of Bajoe Village. Five technical responses were generated and analyzed using QFD analysis to address passenger needs. Figure 5 is a house of the quality matrix that shows the priority of the direction of the Ferry Port of Bajoe Village and the design of development directions based on the analysis results illustrated in Figure 6.
1. An increased number of lighting lamps (RT-3 ) with AI value = 285, in the form of providing lighting in the waiting room totaling one piece and adding street lighting lights on the pier totaling three pieces with a distance of 40 m. 2. Improve service information (RT-1) with an AI value = 164 in the form of adding police, hospital, and ambulance telephone numbers as emergency telephone numbers on the available information sheets and providing information boards in the waiting room in the form of information on ship arrival schedules, port plans.3. The provision of a pedestrian path (RT-4), with an AI value = 163, is in the form of adding a pedestrian path with a width of 60 cm, which is the effective width of the pedestrian path that fits two people with pavement in the form of paving.4. An increase in the number of toilets (RT-2), with an AI value = 158, reopening three closed bathrooms so that the number of bathrooms increased to 6, then separated between female and male toilets.
5. Increased road pavement (RT-5), with AI value = 90, in the form of increasing road pavement from dirt to paving blocks so that when it rains, the road is no longer muddy to provide a sense of comfort for passengers at the Ferry Port of Bajoe Village. The use of paving blocks also has good water absorption. Assessed Service Quality of Passenger Ferry Services in Sabang Zone research had similarities to the analysis used to measure port performance, namely through IPA analysis followed by QFD analysis. The results obtained from the previous research indicated that the comfort aspect was an aspect that needed to be considered for its development [23,24]. Then, based on Figure 7, there were 5 facilities that needed to be developed, 4 of which were part of the comfort aspect, namely an increased number of lighting lamps, provision of a pedestrian path, an increase in the number of toilets, and increased road pavement. Another direction that was to be developed was part of the safety aspect, namely improving service information.
This research only used evaluation parameters based on Ministerial Regulation No. 39 of 2015 without adding other parameters. Meanwhile, other research used its own parameters or followed the parameters of research that had been carried out and had been tested for validity [23,24]. So, future researchers could use ministry regulations and could use other parameters but needed to add validity tests so that they could provide many development directions for ports.
Conclusion
Several facilities were found Based on the analysis conducted in this study regarding the evaluation of the service performance of the Bajoe Village Ferry Port. Some facilities still need to be available based on the analysis of facility availability, so they need to be developed: 1) Health Facilities, 2) Mobile ramps, 3) Passenger evacuation facilities, and 4) CCTV security facilities. On the other hand, five service attributes were already available and identified as priorities for improvement. These attributes were emergency telephone numbers, toilets, lighting, passenger lanes separated from vehicle lanes, and service information in visual form. Consequently, five technical responses were formulated in response to the voice of the customer. These responses consisted of increasing the number of lighting lights given development priority, improving service information, providing pedestrian paths, increasing the number of toilets, and upgrading road pavement to paving blocks.
Figure 1 .
Figure 1. Map of Ferry port in Bajoe Village
Figure 2 .
Figure 2. Schematic of the Methodology
4
Figure 3 provides an overview of the passengers at the Ferry Port of Bajoe Village in 2019, totaling 40,194 people annually.
Figure 3 .
Figure 3. Graph of the number of passengers at the Ferry Port on Bajoe in 2019 Source. Treasurer of the Bajoe Village Ferry Port,20223. Discussion3.1. The condition of the Bajoe Village Ferry PortThe Ferry port on Bajoe Village was a crossing terminal constructed by the Southeast Sulawesi Provincial government to serve the public's transportation needs for Bokori Island tourism. The port was classified as a local feeder port, as it served as a critical node for facilitating movements to Bokori Island.
Figure 6 .
Figure 6. House of Quality Development of Ferry Port in Bajoe Village3.5ResultThis research used 5 aspects to determine the direction of development of the Bajoe village ferry port, namely safety, security, reliability, comfort, convenience, and equality. These aspects were employed in the research "Assessing Service Quality of Passenger Ferry Services in Sabang Zone[24]," which utilized eight aspects of Assurance, Empathy, Reliability, Responsiveness, Tangibles, Comfort, Connection, and Convenience. Aspects in this research were based on Ministerial Regulation No. 39 of 2015, while the previous research was based on researchers' determinations. However, these two studies both employed comfort and convenience aspects. These two aspects were always used in measuring transportation performance. They were also utilized in the "TOURISTS' Perception toward Boat Tours of Bangkok" research to assess the performance of tourist boats as well as in research measuring the performance of rail services[25,26].
Figure 7 .
Figure 7. Design of development directions
Table 1 .
Variable 6. Determine the attributes that are very important to develop Based on the analysis step in Figure2, the data needed in this study is explained in Table1. The data in Table1represented the type of facility whose performance was assessed based on Ministerial Regulation No. 39 of 2015. The data was obtained through observations and questionnaires. Source. Ministerial Regulation No. 39 of 20152.3. SampleThis study utilized a purposive sampling technique, which is a non-random sampling technique where the researcher determined the sampling by establishing unique characteristics that aligned with the research objectives . The required sample characteristics were Bokori Island tourists who utilized tour boats at the Ferry Port of Bajoe Village aged between 17 and 64 (productive age).
Table 3 .
The availability of port facilities in this study was conducted by comparing the existing conditions with the minimum service standards outlined in Ministerial Regulation No. 39 of 2015 concerning Minimum Service Standards for Ferry Transport Passengers at Ferry Ports. Availability of Port Facilities based on Ministerial RegulationThis port had one fire extinguisher equipped with a fire extinguisher box and placed in the waiting room to be easily visible to many people and still in good condition.
Table 4 .
Importance Performance of Ferry Port in Bajoe Village
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Domain: Business Environmental Science Geography
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Review of workplace characteristics and Self-motivation as Indicators of nurses' Job satisfaction
Nursing staff turnover and absenteeism are reduced thanks to job satisfaction, which also enhances performance and productivity. Further research is required to determine how the interaction of these factors is impacted by individual initiative. This study's goal was to look into the relationships between nurses' personal initiative, work environment, and job satisfaction. According to the findings, high levels of individual initiative and favorable opinions of the nursing workplace were major factors in explaining job satisfaction. The working environment needs to be improved, the initiative needs to be encouraged, and nurses need to be encouraged to be active, share their knowledge, and foster innovation.
Introduction
Many studies have shown that people who are happier with their jobs are generally happier, so those who spend a significant portion of their lives at work shouldn't be surprised by this finding. Both happier and healthier. As well as having a favorable impact on health, happiness, subjective well-being, and self-esteem, job satisfaction also lowers the risk of depression, anxiety, and stress in employees. There are significant connections between job satisfaction and mental and physical health, according to a meta-analysis of nearly 500 studies. Organizations benefit from job satisfaction because it improves work performance and results, boosts productivity, and reduces turnover and absenteeism. According to nursing studies, a sizable portion of resignations are brought on by a lack of satisfaction with one's job [1].
The phenomena of job satisfaction have been attempted to be explained by several ideas. According to Frederick Herzberg's two-factor hypothesis, job satisfaction is influenced by two different categories of elements. Job stability, pay, perks, working environment, etc., are examples of hygiene considerations (extrinsic or maintenance factors). The second element category is motivators, which include tasks demanding high expertise, praise for superior performance, accountability, autonomy, significance, participation in decision-making, organizational dedication, etc. These elements contribute to high job satisfaction since they are inherent job requirements, such as achievement, acknowledgment, and personal development. A study that looked into this matter showed that external factors prevent work unhappiness when they are there [2]. The only way to encourage employees' internal growth and development and to improve output, performance, and job satisfaction is to incorporate intrinsic elements. Various intrinsic and extrinsic factors can influence a nurse's level of job satisfaction. Unlike the work environment, the personal initiative can be an intrapersonal (intrinsic) characteristic, a well-known extrinsic factor that predicts nurses' job satisfaction. A proactive, independent behavioral approach that overcomes obstacles is a personal initiative. This trait is crucial for innovation because creative and innovative people must be proactive. Innovation is a requirement for a productive work environment. The definition of healthcare innovation is the "introduction of a new concept, idea, service, process, or product aimed at improving treatment, diagnosis, education, outreach, prevention, and research, with the long-term goals of improving quality, safety, outcomes, efficiency, and costs." The American Nurses Association's recently revised scope and standards of practice encourage all nurses to take the initiative, participate in policy practice, and promote innovation. Systems for providing healthcare are currently developing quickly. This is characterized by developing innovative methods and technologies to extend life expectancy, improve quality of life, and expand diagnostic and therapeutic options while considering the healthcare system's efficacy and efficiency. The modern workplace has become increasingly dependent on innovation, and nurses are at the forefront of this development. Personal initiative is a behavioral phenomenon that entails being proactive and creating a more comprehensive set of goals that are strictly necessary for the position [3]. Nurses' level of initiative varies depending on their personal traits and working conditions. A review paper examines the connections between individual initiative, workplace traits, and job satisfaction [4]. In this Review article, workplace traits and intrinsic motivation are discussed as markers of job satisfaction in nurses.
Methodology
Dr. Dobbin's evidence-informed decision-making (EIDM) process, which consists of the following steps, is recommended by the Rapid Review Guidebook. The framework was "Steps for Conducting a Rapid Review." We located and accessed relevant research evidence, evaluated its methodological quality, and synthesized it using the Health EvidenceTM tool.
Search Strategies
These key search terms were developed after quickly going over the research questions: "personal initiative," "work environment," and "job satisfaction."
The final search string is as below:
"Personal initiative", "work environment" and "job satisfaction".
Scopus, Google Scholar, PubMed, and the Cochrane Library are the four databases used to conduct in-depth searches for publications. Due to the abundance of publications in the work environment and job satisfaction fields, Google Scholar has been added to help spread awareness of the gray literature. Scopus, PubMed, and the Cochrane Library superbly provided peer-reviewed article coverage.
Eligibility criteria
All work environment-related articles, theses, and review papers released before February 2023 were included in the literature search.
Data Extraction
Two objective medical reviewers examined the articles to ensure the selection's objectivity. On the final list of articles to be used for additional data extraction, the two reviewers agreed with 80%.
Results of the literature search
The initial screening process reduced a total of 98 articles to articles that might be relevant. Relevant articles were eliminated because of their titles, abstracts, and book chapters in languages other than English. Based on the inclusion criteria, sixteen studies were discovered (Figure 1: Preferred Reporting Items for Reviews; Health EvidenceTM tool).
The Preferred Reporting Items for Reviews (PRISMA) were followed in this review.
Results and discussion
The current study examined the connections between hospital nurses' job satisfaction, individual initiative, and workplace features. The findings revealed higher levels of personal initiative and workplace satisfaction. A higher job is independently linked to the score. Satisfaction after accounting for the traits of other nurses [6]. These results support Herzberg's two-factor hypothesis, which holds that external and intrinsic elements are interrelated. On the other hand, extrinsic variables, in Herzberg's theory, do not increase employee satisfaction but keep employees from becoming dissatisfied. Higher job satisfaction was associated in our study with both the work environment and personal initiative, with the work environment score contributing most significantly to the variation in job satisfaction. This result may be explained by the fact that the questionnaire's assessment of workplace factors included nurse autonomy, control over nursing practice, nurse-physician relationships, and a collaborative environment. These elements thus primarily represent intrinsic aspects rather than extrinsic ones like working circumstances, pay, status, etc. [7].
Our study's results align with a meta-analysis of 16 studies on nurses' job satisfaction, which found that higher degrees of autonomy, high levels of collaboration between nurses and physicians, and lower workplace stress are all essential for reasonable job satisfaction. Our research suggests that personal initiative partially mediates the relationship between job satisfaction and the work environment. The workplace setting may encourage initiative, linked to greater job satisfaction. According to prior studies into the factors influencing nursing leadership and personal initiative, a work environment that fosters initiative is a crucial factor affecting actual inventive behavior at work [8]. Individual initiative is heavily influenced by the workplace culture and the nurse's personality traits. The organizational culture, traits, resource allocations, and organizational structures of specific workplaces may impact the learning settings. A positive environment supporting education and creativity fosters personal development and raises job satisfaction through individual initiative [9].
Regarding the variations between wards, some clinical departments (pediatric and ER) were directly connected with better job satisfaction, independent of other nurses' characteristics, work environment, and personal initiative scores. Working in the emergency room and pediatrics was related to the highest chances for high and very high job satisfaction when the oncology department was used as a reference group (the odds for high and very high job satisfaction were lowest in the oncology section). These results can be explained by the diverse traumatic situations these nurses have been exposed to and their emotional weight. Oncology nurses frequently deal with high patient mortality rates [10]. They are exposed to several stressors, which may help to explain why this specialty experiences high levels of stress and burnout. Our findings regarding the highest probabilities for high and very high work satisfaction in the ER conflict with some prior studies but agree with others, even though it is difficult to compare studies because different methods were used to gauge job satisfaction [11]. A literature survey on the variations in job satisfaction by ward produced a few contradictory results. According to a study from Greece, ER, and ICU nurses expressed high levels of job satisfaction. However, a Brazilian study found that ER staff were more satisfied with their jobs than ICU staff. According to a US survey, pediatric unit employees were the most satisfied, whereas another study found that nurses in medical/surgical units were the most content. The rapid effect of nursing involvement may have a greater favorable effect on job satisfaction in a ward serving patients with acute illnesses. In the current study, increased education was found to be strongly associated with increased job satisfaction, but this impact vanished when personal initiative was taken into consideration. According to a prior study, educational interventions may greatly help nurses acquire leadership behaviors [12]. The removal of the link between education and job satisfaction with the inclusion of personal initiative in the model may help to explain our findings about the mediating influence of personal initiative. Finally, in our review study, women were more likely than men to report high or very high levels of job satisfaction greater evidence of job satisfaction. The fact that males are more impacted by extrinsic rewards like pay is one reason for this finding. Another factor might be connected to research showing that male nurses encounter higher aggressiveness and workplace prejudice. In addition, they may feel as though they are "taking a step down" in terms of social standing due to the role pressure that comes with being a man in a field that is dominated by women. Due to the study's cross-sectional nature, we can only make inferences about the relationships between the variables rather than their causality [13]. Another drawback is that this study did not analyze the evaluation of external variables of the work environment, such as income, workload, staffing levels, and professional status. Participant traits and workplace factors not investigated in this review study may also be influenced by job satisfaction, as the final model explained nearly a third of the variance [14].
Conclusion
The review's findings indicate that a high level of individual initiative and favorable opinions of the nursing workplace were crucial elements in determining job satisfaction. The workplace needs to be made better, the initiative needs to be rewarded, and nurses need to be motivated to participate in activities, share their knowledge, and support innovation.
Compliance with ethical standards
Acknowledgments I am grateful to God for making it possible for me to carry out and finish this research project to improve my grade point average. I was appreciative of my mentor's suggestions and assistance as I was writing this post. I sincerely appreciate my friends' unwavering support and help in getting this study done. They committed valuable time to assisting me on the journey, either directly or indirectly.
Disclosure of conflict of interest
There are no conflicts of interest, according to the authors.
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Domain: Business Medicine
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Data on industrial new orders for the euro area
This data article provides time series on euro area industrial new orders and is related to the research article entitled “Modelling industrial new orders” (G. J. de Bondt, H. C. Dieden, S. Muzikarova, I. Vincze, 2014b) [3]. The data are in index format with a fixed base year (currently 2010) for total new orders as well as a number of breakdowns. The euro area data are based on the official national data for countries that still collect data and on European Central Bank (ECB) model estimates for countries that discontinued the data collection. The weighting scheme to calculate euro area aggregates makes use of country weights derived from industrial turnover statistics as published by Eurostat.
a b s t r a c t
This data article provides time series on euro area industrial new orders and is related to the research article entitled "Modelling industrial new orders" (G. J. de Bondt, H. C. Dieden, S. Muzikarova, I. Vincze, 2014b) [3]. The data are in index format with a fixed base year (currently 2010) for total new orders as well as a number of breakdowns. The euro area data are based on the official national data for countries that still collect data and on European Central Bank (ECB) model estimates for countries that discontinued the data collection. The weighting scheme to calculate euro area aggregates makes use of country weights derived from industrial turnover statistics as published by Eurostat.
& Model estimates for industrial new orders are based on a consistent modelling framework using a mix of information sources, i.e. hard and soft data Data source location
Germany
Data accessibility Data are available within this article
Value of the data
The data fill the existing data gap of euro area industrial new order statistics. Monthly updates provide timely information for users.
Industrial new orders are used as leading indicator for economic activity (e.g. industrial production, GDP) as well as for analysis and monitoring of economic developments.
The indicators for new orders are combined with the formerly "official" series on new orders from Eurostat so that users have access to long time series, an important feature for modeling.
Data
The data on euro area industrial new orders are available in time series format with a fixed base year (2010) in seasonally and calendar adjusted format. The first two columns of Table 1 report the series codes in the ECB's Statistical Data Warehouse (SDW) and the starting date, respectively, with the latter providing regular updates at monthly frequency. Besides the total of industrial new orders and total excluding orders for heavy transport equipment, breakdowns are available (i) for the "Main Industrial Groupings" (capital goods, intermediate goods and durable/non-durable consumer goods), and (ii) by origin of demand: domestic and non-domestic (further divided into euro area and noneuro area).
Experimental design, materials and methods
For those euro area member states that continue with the data collection (e.g. Germany, Italy, and Spain), national new order data are used as input. For the remaining euro area countries (e.g. France, the Netherlands, and Belgium), estimates are derived, based on various model determinants. The detailed model specifications are available in [1], Section 2.3. The Appendices in [1,2] report detailed country model estimates. The model estimates have yielded solid out-of-sample (see Fig. 4 in [3]) and in real time (see Section 5 in [3]) results.
Data on euro area new orders are subject to revisions in real time, like other economic series, i.e. hard data statistics. Table 2 shows that total new orders excluding heavy transport equipment is comparatively less subject to revisions and among the breakdowns orders for intermediate goods. By origin of demand Domestic 0.14 0.58 À 1.3 to 2.4 À 1.0 to 1.7 Non-domestic À 0.08 0.65 À 1.7 to 1.5 À 1.6 to 1.0 Euro area À 0.08 0.74 À 3.5 to 3.7 À 1.3 to 1.7 Non-euro area À 0.22 0.70 À 2.2 to 1.5 À 1.9 to 1.0 a Average revision: differences between the latest (March 2016 release) and first release divided by the number of observations. Average absolute revision: absolute differences between latest and first release divided by the number of observations. Range of revisions: highest and lowest values of all / 90% of the revisions.\===
Domain: Business Economics Medicine. The above document has 2 sentences that start with ' The data are in',
2 sentences that start with 'The euro area data are',
2 sentences that start with 'The weighting scheme to calculate',
2 sentences that end with 'as a number of breakdowns',
2 sentences that end with 'that discontinued the data collection',
2 sentences that end with 'by the number of observations',
2 paragraphs that start with 'This data article provides time',
2 paragraphs that end with 'statistics as published by Eurostat'. It has approximately 712 words, 43 sentences, and 16 paragraph(s).
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Insights on the Influence of Sugar Taxes on Obesity Prevention Efforts
Purpose of Review This review will present the latest evidence on the impacts of sugar taxes on obesity with a focus on sugar-sweetened beverages (SSB). Recent Findings Evidence of direct impacts of SSB taxation policies on obesity prevalence continues to be limited. Natural experiments involving SSB taxation policies implemented in Mexico and Berkley, CA, indicate that this type of intervention alters beverage consumption patterns. Naturalistic evidence in combination with modeling studies suggests that SSB taxation is a viable anti-obesity policy. However, researchers and public health practitioners need to be vigilant of industry tactics to curtail SSB lowering efforts. Summary To maximize the impacts of SSB taxation, it should be combined with interventions that increase access to non-sweetened beverages, educate consumers about alternative healthy beverages, and explore taxation of other non-nutritive foods and beverages. Furthermore, both intended and unintended consequences of interventions should be closely monitored.
Introduction
As of 2015, an estimated 107.7 million children and 603.7 million adults around the world had obesity [1]. The prevalence of obesity among adults is increasing worldwide [2], which is a driver for other diet-related non-communicable diseases such as cardiovascular disease and diabetes. Equally concerning, severe obesity, defined as BMI ≥ 35, or BMI > 120% of the 95th percentile for age and sex among children is on the rise [3]. There have been concomitant increases in obesity prevalence and the consumption of ultraprocessed foods including sugary foods and drinks [4][5][6][7][8]. Ultra-processed food and drink consumption, accounting for the majority of sugar intake in the diet, is associated with poor diet quality and excess energy intake [9][10][11]. Poor diet is a leading risk factor for non-communicable diseases [12]. There is substantial evidence indicating that reducing consumption of highly processed products will reduce the risk of developing diet-related diseases [13]. To diminish the health and economic burden of diet-related diseases, there is a clear need to address the prevalence of obesity and improve dietary patterns among the public. The use of economic tools to address food affordability and purchase incentives is one of the policy interventions recommended to promote healthy diets and reduce obesity that was outlined in the World Cancer Research Fund International's NOURISHING framework [14]. Taxing sugarsweetened beverages (SSBs) is one such economic tool.
Rationale for Sugar Taxes
Strong support for fiscal policies is based on the rationale that modifying the price of a product can alter its consumption [15]. Additionally, increasing the price of SSBs could reduce the price gap with healthier beverages such as milk, encouraging individuals to select healthy alternatives more often [16]. The simple price manipulation of foods can alter consumption patterns in such a manner that could ultimately reduce the development of diet-related diseases [17]. The 2016 World Health Organization's Report of the Commission on Ending Childhood Obesity listed a package of six comprehensive recommendations to address childhood obesity. The first recommendation was to: "implement comprehensive programs that promote the intake of healthy foods and reduce the intake of unhealthy foods and sugar-sweetened beverages by children and adolescents", which includes a tax on SSBs [18]. The choice to target SSB taxes as health policy is based on (1) their strong link to obesity, (2) they are inherently nonnutritive, and (3) they have high price elasticity.
There is mounting evidence of a causal link between sugar added to beverages and increased risk for non-communicable diseases [19]. Sugar-sweetened beverage (SSB) consumption remains very high across the globe and they are the largest source of added sugar in the American diet [20,21]. A single serving of 330 mL or 500 mL can provide between 72% and 104%, respectively, of the total maximum daily calories from sugar (10% of daily kcal or~50 g) recommended by the WHO [22]. SSBs contain excessive amounts of energy, in the form of simple sugar, that do not provide any health benefits. Unlike eating foods, there are no compensatory mechanisms after drinking beverages to mitigate the excess energy intake from SSBs, potentially leading to excess weight gain [23][24][25]. Finally, the high price elasticity of SSBs means that the reduction in SSB consumption would mirror the increase in its price, making SSBs an ideal product for taxation [26, 27, 28••]. For example, a 10% increase in price is expected to reduce SSB consumption by approximately 10% ranging from a 7% reduction in SSBs for infrequent SSB consumers to as high as a 17% reduction among the highest consumers [28••].
Prevalence of SSB Taxes
Sugar taxes were documented as early as the 1920s and 1930s in countries like Norway and Denmark, implemented strictly as a fiscal measure to generate revenue [29]. There has been a proliferation of SSB taxes with implementation in over 40 new settings around the world in less than 10 years. In 2016, Le Bodo et al. inventoried 22 separate cases of SSB taxes dating from 2002 that represented country-, state-, and citylevel fiscal policies [30]. Overall, these more recently implemented SSB taxes have been as much a fiscal policy to generate general government revenue as a health policy to reduce consumption of SSB. Funds raised through taxation are also increasingly dedicated to intensify health promotion efforts [30]. Therefore, the complex policy changes needed to implement an SSB tax should be considered a collaborative crossministerial effort [31]. As a health policy to address noncommunicable diseases (NCDs) by reducing sugar consumption, SSB taxes are largely supported by nutrition experts and international health organizations [13,18,20,32]. Not only are taxes expected to decrease SSB consumption, leading to a decrease in obesity and NCDs, but they are also expected to drive the food industry towards product reformulation by decreasing sugar content, increase public awareness about high sugar consumption, and generate revenue that can be reinvested in health and social programs ( Fig. 1) [22].
Evidence Supporting Sugar Taxes
While sugar taxes are not new, monitoring their impacts on diet and health is relatively recent. With little available data, it is still early to judge their influence on distal population-level health outcomes such as NCD. Nevertheless, the decreased sale of SSB in locations where taxes have now existed for several years [33••, 34, 35••] infers potential for long-term positive health impacts. Furthermore, long-term benefits on diet-related disease prevalence can be potentiated by investing SSB tax revenue into health promotion programs [36•]. While there is still little evidence of an impact of sugar taxes specifically on obesity, there is growing evidence from naturalistic studies in regions where taxes have been implemented that monitor both purchasing habits and health outcomes to support modeling studies, building the case for the continued proliferation of SSB tax implementation [37•].
Modeling and Observational Studies
In 2013, a systematic review identified nine articles between published between 2000 and 2013 that examined the effects of fiscal policies (taxes and price increases) on body mass index (BMI) and weight status [27]. The review identified six modeling studies on BMI, overweight or obesity, all from the USA, with a wide range of methodologies examining various populations (children, women, men, and adults) in different settings [38][39][40][41][42][43][44]. The mix of study designs and populations made it difficult to draw firm conclusions about the effects of taxes or price changes on adiposity, but positive conclusions from numerous studies led review authors to conclude that SSB taxation could reduce obesity [27].
A retrospective cohort study of 6537 men and 5324 women who participated the Monitoring the Future Surveys (1992-2003) determined that a $1 increase in price of a 2-L bottle of SSB was associated with a reduction in the probability of obesity of 28.1% and 10.8% in women and men, respectively [41]. Among children and adolescents, using NHANES data from 1999 to 2006, a 1% increase in SSB prices was estimated to result in a minute reduction in obesity prevalence by 0.009% [39]. Other modeling studies have found similar conclusions with slight decreases in BMI associated with a 1% increase in SSB prices [38,43,44]. American food consumption data from NHANES 2003-2006 were used to model a tax-induced 20% increase in price and calculated a decrease in calorie intake from SSBs by 54.6 kcal/day with a concurrent increase in calories from juices by 12.5 kcal/day. These changes in beverage intake represented a net reduction of 39.5 kcal/day, equivalent to a reduction in weight of 1.9 kg per year [42]. Using data from a single year of the Nielsen Homescan panel, a 20% and 40% tax on SSB was expected to reduce weight by 0.32 kg and 0.59 kg per year, respectively, while generating considerable revenue [40]. A Canadian simulation modeling study predicted that over 25 years, a 20% tax on sugary drinks would prevent over 700,000 cases of overweight and obesity, and over 200,000 cases of type 2 diabetes, saving $11.5 billion (CAD) in direct health care costs and generating $1.7 billion [45]. However, it is impossible to predict how the industry will respond to SSB taxation (e.g., intensify marketing, increase sales in non-taxed markets, or reformulate products) or how consumers will modify their beverage consumption (e.g., substitute taxed SSBs with cheaper sweetened alternatives or select healthier untaxed alternatives).
Natural Experiments
Though SSB taxation has been documented for over a decade, to date, the impacts of a tax on SSBs have only been evaluated in a handful of settings. Within the last 5 years, the implementation of SSB taxation in Mexico, the city of Berkeley, California, the states of Maine and Ohio in the USA, and in Barbados has laid the groundwork for evaluations studies.
Natural experiments are possible in settings where pre-tax sales and consumption data are available and post-tax data are closely monitored for comparison.
Mexico
In response to high obesity and diabetes rates, in January 2014, Mexico implemented a specific excise tax (1 peso/L) on non-alcoholic beverages with added sugars, which represent an approximate 11% increase in the price of carbonated sweetened beverages. Within the first year of the tax, there was a marked monthly purchase reduction in taxed SSBs, reaching 12% by December 2014 and averaging a reduction of 6% over 2014. The decrease was the highest in groups with low-socioeconomic status reaching 17% in December. There was an increase in purchases of untaxed beverages of 4% over the same time period, mainly driven by bottled water [46]. Sales data showed similar trends: a 7.3% decrease in per capita SSB sales and a 5.2% increase in plain water sales [47]. Over a 2-year span, following the implementation of the tax, purchasing of taxed beverages decreased by 9.7% and the group with the lowest socioeconomic status still had the highest decrease in purchasing taxed beverages. A sustained decrease in SSB purchasing coincided with SSB tax implementation [33••]. Similarly, the tax on energy-dense non-essential packaged foods implemented alongside the SSB tax in Mexico resulted Fig. 1 Direct and indirect influences of sugar-sweetened beverage (SSB) taxes on reducing obesity prevalence in a 5.1% decrease in taxed foods purchased. The decrease was the highest among the group with the lowest socioeconomic status (10.2%), lower in the medium socioeconomic group and there was no change in the high socioeconomic group [48]. Concomitant interventions to tax SSBs and snack foods will likely have a synergistic impact on improving dietary patterns, potentiating long-term effects on health outcomes.
Maine, Ohio, and Berkeley, California
The state of Maine implemented a sales tax of 5.5% on soft drinks in 1991, which was reduced to 5% in 2001 and applied to snack foods and carbonated water. Ohio implemented a sales tax of 5% exclusively to soft drinks in 2003. In both states, the sales taxes did not alter consumption or sales patterns, although they did generate substantial general revenue [49]. It is possible that a tax of 5% is not substantial enough to deter purchasing or consumption, particularly when the tax is not widely known and revenue is not reinvested into health programming. The city of Berkeley in California implemented an excise tax of $0.01 USD per fluid ounce on SSBs in March 2015, becoming the first US jurisdiction to implement an excise tax (i.e., applied at the manufacturer or merchant level by product weight or volume). Pre-and post-sales consumption data in low-income neighborhoods was compared to neighboring cities of Oakland and San Francisco, California. Data were collected via a beverage frequency questionnaire 8 months prior to voting for the tax and 4 months after implementation. There was a substantial decrease (21%) in SSB consumption in Berkley in contrast to a moderate increase (4%) in Oakland and San Francisco. Additionally, water consumption increased by 63% in Berkeley and by 19% in neighboring cities [50]. When taxes are implemented in a single city, there is potential for individuals to travel outside the taxed area to make their usual purchases. However, it is also plausible that the intervention in Berkeley created awareness in neighboring cities, thereby indirectly influencing consumption behaviors in other jurisdictions. A year after implementing the excise tax in Berkeley, the impacts on beverage prices, sales, store revenue/consumer spending, and usual beverage intake were examined. Sales of SSBs declined by 9.6% in Berkeley, whereas they increased by 6.9% in non-Berkeley stores. Additionally, non-taxed beverage sales increased by 3.5% in Berkeley and 0.5% in non-Berkeley stores, driven mainly by water. Transactions were on average $0.18 USD less after the tax. There were no significant reductions in SSB intake or per capita SSB caloric intake; however, baseline levels of SSB intake were already much lower than the national average (45 kcal/day compared to 131 kcal/day). These results indicate that SSB taxes can be effective in influencing healthier beverage purchases and do not impose undue financial hardship on consumers [34].
Barbados
In September 2015, Barbados implemented a 10% excise tax on SSB. Evaluation of price increases found a divergence in the prices of taxed and untaxed beverages. There was an average price increase of 5.9% in taxed beverages with a slight dip of < 1% in untaxed beverages. This divergence may be a response from industry to drop prices of untaxed beverages [51]. An interrupted times series study design was used to assess changes in beverage sales from January 2013 (prior to SSB tax) to October 2016 (1-year post-tax implementation). On average, weekly sales of SSBs decreased by 4.3% while non-SSBs increased by 5.2%. However, there was evidence of an increase in sales of cheaper SSBs, indicating that individuals may be substituting high-cost taxed SSBs for lower-cost taxed SSBs. The extent of downshifting from brands that are more expensive to less expensive brands in response to higher prices needs further exploration [35••].
Overall, results from natural experiments generally support predicted reductions in SSB purchases that are presumed to relate to decreased consumption demonstrated in modeling studies and are extremely promising. However, an extended evaluation period will be needed to adequately monitor and evaluate the long-term impacts of SSB tax implementation on obesity. Furthermore, impacts on nutrition indicators (diet quality and dietary patterns) should be examined in conjunction with adiposity measures.
Challenges
Despite the growing popularity of fiscal measures to improve diet and health outcomes, food taxes have garnered mixed public opinion and prompted a backlash from the food industry. There have been cases of policies being repealed, slowed down, or even blocked before implementation. Public support necessary to influence decision-makers' adoption of fiscal policy may not always be favorable. Concerns include the following: objections to the government interfering with the market, the argument that taxes are an overly simple solution to a complex problem so will not solve obesity, and objections to use of tobacco taxes as exemplars in that unlike tobacco, we need food to live [52]. However, counter-arguments include that taxes are not meant to be a solution in isolation, but part of a larger portfolio of policy measures (restrictions on advertising of unhealthy products, healthy food policies in public spaces), as was the case in tobacco control. Tax regressivity, a greater financial burden for lower income groups, is a major preoccupation of the public [17], particularly when other interventions are not implemented (e.g., healthy food subsidies) to mitigate perceived unintended effects. Despite this concern, food taxation schemes appear to confer the greatest benefits among lower socioeconomic groups [33••, 34, 48, 51].
Public opinion surveys reveal that restrictive fiscal policies such as taxation are less popular than non-restrictive policies such as providing nutrition information of front of the package. For example, in Australia, 89.7% of the public was in favor of mandatory front-of-pack nutrition labels compared to only 41.9% in favor of a tax on SSB with the strongest opposition coming from the most disadvantaged groups [53]. In Canada, surveys of policy influencers revealed 57% support for taxes on foods and beverages, while support for public nutrition education received almost universal support (99%) [54]. In two other Australian studies, support for taxation increased when intentions to dedicate revenue to health initiatives were made clear [55,56]. Dedicating at least 50% of revenue generated to programs that support health has been recommended [16]. While the World Health Organization has recommended that Member States consider taxing not just SSB, but all energy-dense foods and beverages, there may be numerous logistic and legal barriers with taxing foods from heterogeneous categories of foods that contain some nutritive value. For example, Denmark repealed a tax on saturated fat a year after it was implemented and canceled plans to implement a tax on foods with added sugar, in part because of lack of public support [57].
Another major challenge to implementing new sugar taxes are industry tactics that are used to dissuade the public and pressure governments into rescinding plans for taxation (Fig. 1) [58]. Food industry lobbyists are prominent at the state level in the USA and seem intent on pre-empting new local taxes from being implemented across the country [59]. Additionally, the effects of taxes may be neutralized if they use tactics such as aggressive marketing, increasing sales in untaxed regions, and negative public education campaigns that cast doubt about the intentions of a sugar tax [58]. Health agencies and public advocacy groups need to be prepared and anticipate how to react when the industry aggressively opposes actions towards passing SSB taxes [58].
It is clear that a well-designed fiscal policy to tax sugary foods and beverages can have significant impacts on price and therefore purchasing and consumption behaviors [17, 28••]. However, the impacts of sugar taxes on improving dietary intakes and more distal health outcomes such as obesity are not yet clear. Only a few settings with implemented taxes have conducted evaluations. The lack of monitoring may indicate a larger problem related to capacity and readiness to monitor changes in the food environment or suggest that the taxes were economically motivated rather than driven by health needs. In the coming years, strong evidence will be needed to justify the maintenance of current taxes as well as expand taxes to other food and beverage categories. Monitoring the impacts of current fiscal interventions is therefore crucial. Settings considering implementing new taxes should plan for the inclusion of robust impact evaluations by monitoring pre-and post-tax sales, consumption data, diet quality, adiposity, and NCD rates over several years [32].
Conclusion
No single intervention in isolation is likely to have significant impacts on population-level health outcomes such as reducing the prevalence of obesity and associated NCD. Combined and persistent efforts that act synergistically to influence shortterm purchasing patterns, dietary practices, and longer-term health outcomes will be necessary. The full potential of SSB taxes to improve health outcomes will likely only be demonstrated in settings that implement fiscal policies alongside non-tariff interventions such as behavior change campaigns and increasing the availability and/or affordability of healthy beverage alternatives. Like all policy interventions, when they are combined with multisector and multilevel supports, better outcomes can be expected.
As more countries consider adopting SSB taxes, impact evaluations should be integrated into policy planning to ensure timely collection and capacity for close monitoring of effects on diet and health. These data are needed to ensure continued justification of taxation in addition to building a case for expanding fiscal measures to other non-nutritive food and beverage categories. There are evident research gaps that can be addressed in terms of how sugar taxes can work in concert with other interventions and monitoring SSB intakes in different population subgroups. Furthermore, understanding how to adapt the intervention to local contexts as well as to foresee potential challenges from industry will facilitate implementation and impact.
Compliance with Ethical Standards
Conflict of Interest Melissa A. Fernandez and Kim D. Raine declare they have no conflict of interest.
Human and Animal Rights and Informed Consent This article does not contain any studies with human or animal subjects performed by any of the authors.
Open Access This article is distributed under the terms of the Creative Comm ons Attribution 4.0 International License ( [URL]:// creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution, and reproduction in any medium, provided you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license, and indicate if changes were made.
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Domain: Business Economics Medicine
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Experimental and survey-based data on willingness to pay for seafood safety and environmental sustainability certification in Nigeria
Aquatic foods, including fish, are a substantial component of animal source foods globally, and make a critical nutritional contribution to diets in many contexts. In the global North, concern among consumers and regulators over the safety and environmental sustainability of seafood, particularly in developed nations, has led to the development of increasingly stringent seafood safety standards. While such standards may constitute regularity, logistical, and economic barriers to participation in export markets by small-scale producers, they have in other contexts catalysed upgrades to production and post-harvest handling practices within value chains associated with both capture fisheries and aquaculture. The health burden of foodborne illnesses is a major concern in developing countries. As incomes rise, consumers in developing countries are increasingly willing to pay a premium for safer and environmentally sustainable foods. However, there is little empirical evidence on consumers’ willingness to pay for seafood safety in developing countries, particularly in sub-Saharan Africa. Data on demand for seafood safety and environmental sustainability certification in African countries are largely unavailable in the public domain. In this paper, we describe data collected in Lagos State, Nigeria in October and November 2019. Experiments in the form of Becker-DeGroote-Marschak (BDM) auction mechanism, and post experiment surveys were conducted with 200 fish consumers in fish markets. These data can be used to assess whether consumers’ demand for safe and healthy seafood from local markets can be harnessed to generate positive economic returns to producers.
a b s t r a c t
Aquatic foods, including fish, are a substantial component of animal source foods globally, and make a critical nutritional contribution to diets in many contexts. In the global North, concern among consumers and regulators over the safety and environmental sustainability of seafood, particularly in developed nations, has led to the development of increasingly stringent seafood safety standards. While such standards may constitute regularity, logistical, and economic barriers to participation in export markets by small-scale producers, they have in other contexts catalysed upgrades to production and post-harvest handling practices within value chains associated with both capture fisheries and aquaculture. The health burden of foodborne illnesses is a major concern in developing countries. As incomes rise, consumers in developing countries are increasingly willing to pay a premium for safer and environmentally sustainable foods. However, there is little empirical evidence on consumers' willingness to pay for seafood safety in developing countries, particularly in sub-Saharan Africa. Data on demand for seafood safety and environmental sustainability certification in African countries are largely unavailable in the public domain. In this paper, we describe data collected in Lagos State, Nigeria in October and November 2019. Experiments in the form of Becker-DeGroote-Marschak (BDM) auction mechanism, and post experiment surveys were conducted with 200 fish consumers in fish markets. These data can be used to assess whether consumers' demand for safe and healthy seafood from local markets can be harnessed to generate positive economic returns to producers.
© 2020 The Author(s). Published by Elsevier Inc. This is an open access article under the CC BY license.
( [URL]/4.0/ ) Specifications Table Subject Social Sciences Specific subject area Food safety, Aquaculture certification Type of data Excel (csv) files How data were acquired A framed experiment and survey Data format Cleaned raw data Parameters for data collection Data were collected from randomly selected individual fish consumers. Every second potential buyer of fish was recruited for participation. Experiment participants bid on eight fish products. Description of data collection A framed experiment in the form of Becker-GeGroote-Marschak (BDM) auction mechanism was conducted at the point of fish purchase. A post-experiment survey was then conducted to collect background information. Experimental data were captured using recording sheets and later digitized in open-data-kit (ODK). These data contain information on the bids submitted during the experiment and measuring consumers' willingness to pay for food safety and environmental sustainability certified fish. Survey data were gathered using paper questionnaires and later digitized in ODK. These data contain information about demographic characteristics of the consumers, consumption and expenditure patterns, knowledge and perceptions, preferences for brand purchases, and trust. Data source location City/Town/Region: Lagos State Country: Nigeria Data accessibility Available at: [URL] of the data
• The data can allow researchers to understand whether consumers are willing to pay a price premium for seafood safety, what types of consumers are willing to pay, and whether the premium is high enough to incentivize producers to adopt aquaculture best management practices; • The data also allow researchers to control for additional covariates in the analysis of willingness to pay for aquaculture certification thereby increasing the precision with which consumer demand is measured and providing means to explain important determinants of willingness to pay; • Furthermore, because the data capture willingness to pay for different fish products varying by size, form, and price, it provides an opportunity for researchers to assess whether the value of aquaculture certification schemes is symmetric or asymmetric.
Data description
This paper presents data collected in October and November 2019 to assess consumers' demand for seafood safety certification. Experimental data contains information about a warm up market exercise that was conducted using sweets in order to ensure participants' full understanding of the market exercise. The data also contain information about three control questions that were asked to assess the participants' understanding. Most importantly, the data contains the bids submitted by consumers for eight fish products. The post-experiment survey questionnaire was divided into 6 modules. Module A focused on the geographical location of the participant. Module B collected data about demographic characteristics of the consumers. In Module C, asked consumers questions about consumption and expenditure on fish and other food items. Module D focused on knowledge and perceptions about food safety. In Module E, we asked consumers about their preferences for brand purchases. Lastly, in Module F, data on consumers' trust in local market inspectors and government inspectors of food safety were collected.
Experimental design
An economic field experiment in the form of the Becker-DeGroote-Marschak [1] -henceforth, BDM-mechanism was conducted to elicit consumers' willingness to pay (WTP) for safety and environmental sustainability certified fish. In the BDM, individuals compete against a random draw or bid from a known distribution; if the submitted bid beats the random draw, the individual purchases the product and pays a price equal to the random draw; if the bid is lower, on the other hand, the individual does not purchase.
The data were collected with the objective to measure the premium consumers are willing to pay for safety and environmental sustainability certified fish. The experiment was conducted with a random sample of 200 consumers. The experiment involved eight (8) catfish products. Catfish is the most commonly produced and consumed fish in Nigeria. The products varied in certification status (certified/safety labelled vs non-certified/non-safety labelled), size (250 g vs 500 g for smoked fish; and 500 g vs 1000 g for live fish), and form (e.g., smoked and live).
Certified fish was obtained from producers approved for following guidelines and criteria developed by the government in their production activities. A list of certified producers in Lagos state was obtained from the government. This was followed by a validation exercise to confirm that farmers had proof of certification by the government. The certified producers were then contacted to collect information about the species they produced, the different forms in which the products are sold, the main buyers, the typical sizes sold, the prices charged, and whether fish would be available for selling to us during the experiment period. Non-certified fish were obtained from the local market. All original packaging information was removed from the products prior to the experiment to control for any reaction individuals might have to the packaging.
Smoked fish was displayed in clear freezer bags. For live fish, the containers in which the fish are kept before selling were labelled instead.
Upon consenting, a participant received an endowment of 1500 Naira cash token as the show-up fee. The show-up fee in our experiment is twice the price of 1 kg live catfish. The enumerator then described each product-one at a time. For the certified products, the information contained in the label and explaining the method that was used to produce the fish, was read out aloud. No additional information was provided. For the non-certified fish, the consumer was informed that the method that was followed in production was unknown. After describing the products and before the bidding begins, the enumerator displayed each of the products on the table. To prevent potential order effects, the order in which the products were displayed was randomized. Randomization was done prior to the experiment and the randomized order given to enumerators. The participant was allowed to ask any question related to the fish products or the experiment.
The participant was then informed that a simple market exercise would be used to give him or her a chance to buy fish products for him/herself and family members. He/she was told that depending on his/her choices, and also random chance, he/she may actually purchase one of the seafood products offered through this procedure, or he/she may not. The participant was encouraged to listen attentively to understand exactly how the market exercise would work. The enumerator explained that he/she was part of a research team, not a sales person for any particular type of fish; but, as part of this exercise he/she (i.e. the enumerator) may sell the participant some fish.
The real experiment with fish was preceded with a warm-up exercise. The warm-up demonstrated the market exercise using candies. To ensure that instructions have been clearly understood, the participant was asked three basic questions related to the experiment. The enumerator only proceeded when all the three were answered correctly.
Although an individual bid for eight fish products, only one was actually purchased if the bidding price exceeded the reservation price for that product. Selection of the product was determined randomly in STATA prior to the experiment.
Sampling design
Lagos state was purposively selected because of the considerable number of certified aquaculture producers, currently targeting export markets. Consumers were recruited at three types of outlets for fish: main fish markets, roadside markets, and supermarkets. The number of each outlet to include was informed by key informant interviews and focus group discussions. We conducted a field experiment at the points of purchase of fish [2] . No subject was allowed to participate in more than one treatment. In all selected outlets, each second consumer was approached, before making his/her intended purchase, and asked to participate in the experiment. Upon consenting the participant was led to a quiet tent within the market where the experiment was conducted. The experiments was conducted in November 2019 by enumerators specially hired and trained, and supervised by professors from Lagos state university, in collaboration with WorldFish. The final sample comprised 200. Prior to the actual experiment, piloting was done. A brief survey was conducted at the end of the experiment.
Data management and code availability
During data collection, the corresponding author checked for inconsistencies, patterns and outliers in the data, and provided feedback to the field team each day whenever necessary. Experimental data were collected using pre-designed recording sheets while survey data were captured using a paper questionnaire. All data were then digitized in open-data-kit (ODK) and submitted online to WorldFish. Data were then imported into STATA for cleaning. The do files (Nigeria_WTP_experiment1.do and Nigeria_WTP_postexperiment1_survey.do) that were used to clean raw data have been shared online at: [URL]0.
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Domain: Business Economics Environmental Science Medicine
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Factors Associated with Maintaining the Mental Health of Employees after the Fukushima Nuclear Disaster: Findings from Companies Located in the Evacuation Area
After the nuclear disaster in Fukushima on 11 March 2011, some businesses were permitted to continue operating even though they were located in the evacuation area designated by the Japanese government. The aim of this study was to examine differences in the mental health status, workplace, living environment, and lifestyle of employees in the evacuation and non-evacuation areas. We also investigated factors related to their mental health status. Data for this cross-sectional study were collected from the questionnaire responses of 647 employees at three medium-sized manufacturing companies in the evacuation and non-evacuation areas. Through a cross-tabulation analysis, employees who worked at companies in the evacuation areas showed an increase in the duration of overtime work, work burden, and commute time, and had experienced separation from family members due to the radiation disaster and perceived radiation risks. The results of a multivariate logistic regression analysis showed that, even in a harsh workplace and living environment, being younger, participating regularly in physical activity, having a social network (Lubben Social Network Scale-6 ≤ 12), laughing frequently, and feeling satisfied with one’s workplace and domestic life were significantly associated with maintaining a healthy mental health status after the disaster. These findings are applicable for workers’ health management measures after disasters.
Introduction
The Great East Japan Earthquake that occurred on 11 March 2011, generated a massive tsunami, and caused enormous damage to the Pacific Coast of Japan. Subsequently, the tsunami hit the Fukushima Daiichi Nuclear Power Plant operated by the Tokyo Electric Power Company. This accident caused radiation disasters in the Fukushima Prefecture and necessitated the long-term evacuation of residents from many surrounding municipalities. Due to the nuclear disaster, the Japanese government designated evacuation areas according to spatial radiation dose rates. The evacuation areas were classified into three categories: (1) difficult-to-return areas, with a radiation dose rate ≥50 millisieverts (mSv) per year; (2) residence restriction areas, with a radiation dose rate greater than or equal to 20 and less than 50 mSv per year; and (3) areas where evacuation orders are ready to be lifted, with a radiation dose rate of less than 20 mSv per year. Residents of these areas were forced to relocate to non-evacuation regions and were not allowed to stay overnight after the disaster. However, evacuees and employees who worked at companies in the residence restriction areas and the areas where evacuation orders were ready to be lifted were permitted to temporarily enter. Therefore, companies located in these areas were able to continue operating [1].
Devastating natural disasters and their aftermath cause psychological distress in affected individuals. In Fukushima, the earthquake, tsunami, and nuclear disaster led to a mandatory evacuation of people from the surrounding region. Consequently, residents were forced to relocate to non-evacuation areas and live in stressful situations, separated from family members, after losing housing, and having to adjust to new circumstances [2][3][4][5]. Moreover, a previous study that investigated the disaster-and work-related stressors and mental health status of public servants found that not taking a non-work day each week or working more than 100 h of overtime per month led to an increased risk of mental distress [6,7]. Therefore, employees of companies in the evacuation areas might have a heavy workload and face increased risk of psychological distress because of the stressors in their personal lives and workplaces.
Conversely, previous studies have reported that several factors affect maintaining mental health, including regular leisure activities such as hobbies, exercise, or sports; sufficient sleep; having a social network; laughing daily; and maintaining a work-life balance [8][9][10][11][12][13][14][15]. Owing to these factors, employees from evacuation areas may be able to maintain their mental health status despite the drastic changes in their domestic lives or workplaces.
Some employees reported increases in their work burden or overtime work, or changes in their domestic lifestyle after large-scale disasters [6,7,16]. Therefore, the present study aimed to examine (1) differences in the mental health status, the workplace, living environment, and lifestyle of employees in the evacuation and non-evacuation areas; and (2) factors related to maintaining the mental health status of employees in the evacuation area despite drastic changes in their workplaces and living environments. The findings will be useful for health promotion strategies for occupational health in the current post-disaster situation and in the aftermath of future disasters.
Study Design
This study was based on cross-sectional data that we collected from a questionnaire survey distributed to employees at two medium-sized manufacturing companies (300 employees or less) in evacuation areas, and a medium-sized manufacturing company in a non-evacuation area ( Figure 1). The distances from the Fukushima Daiichi Nuclear Power Plant to these companies in the evacuation area were 15 km and 40 km. The distance to the company in the non-evacuation area was 45 km. These companies appoint general health and safety managers to ensure employees are safe and are kept healthy in the workplace, which includes the prevention and treatment of diseases and injuries among employees, as regulated by the Industrial Safety and Health Act. Therefore, the companies sufficiently implemented health management measures, including annual health checks, before and after the nuclear disaster.
A questionnaire survey was distributed using a placement method for employees of the subject companies from September to November 2016. As this study targeted all employees in the three companies without exclusionary criteria, 383 responses were received for the evacuation areas and 264 for the non-evacuation area. The survey was approved by the ethical review committee of Fukushima Medical University on 29 July 2016 (No. 2797).
Figure 1.
Location of the three companies in the evacuation and non-evacuation areas. Two mediumsized manufacturing companies in evacuation areas (Minami-Soma City and Iitate Village) and a medium-sized manufacturing company in a non-evacuation area (Tamura City) in the Fukushima Prefecture.
Measurements
We categorized the survey items as follows: (1) change in the workplace environment from the pre-disaster situation in terms of amount of overtime work, work burden, and commute time; (2) perception of radiation risks; (3) change in the living environment including relocation from an evacuation area, separation of family members due to the nuclear disaster; (4) change in lifestyle such as change in physical activity or sleeping time; (5) social network (Lubben Social Network Scale-6 (LSNS-6), Japanese version); (6) frequency of laughing; (6) satisfaction with current work status and domestic life; and (7) change and current subjective mental health status and current psychological distress (Kessler 6-item scale (K6)). The perceived risk of radiation exposure, LSNS-6, Japanese version, and the K6 item scale are validated measurements, and the others are investigator-designed queries.
Change in the Workplace Environment
Identifying changes in the workplace environment of employees in the evacuation areas was one of the primary aims of the investigation, to aid efforts in maintaining health and safety in the workplace. We investigated changes after the nuclear disaster, including employees' amount of overtime work, work burden, and commute time, as the workplace environment variables, which were related to work stressors [6,7,17]. These factors were measured on a three-point scale: increase, no change, and decrease.
Perception of Radiation Risks
Since the perception of radiation risks is a specific stressor after a nuclear disaster, we examined it as a stressor affecting employees' mental health status. To evaluate the perception of radiation risks, the participants were asked questions such as, "What do you think the likelihood is of damage to your health (e.g., cancer onset) in later life as a result of your current level of radiation exposure?" [18]. These questions were answered using a four-point Likert scale as follows: 'very unlikely', 'unlikely', 'likely', or 'very likely'. In the analysis, we categorized participants who had answered 'very unlikely' or 'unlikely' into the same group, which we called the low perceived risk group. Likewise, participants who had answered 'likely' or 'very likely' were classified into the high perceived risk group.
Measurements
We categorized the survey items as follows: (1) change in the workplace environment from the pre-disaster situation in terms of amount of overtime work, work burden, and commute time; (2) perception of radiation risks; (3) change in the living environment including relocation from an evacuation area, separation of family members due to the nuclear disaster; (4) change in lifestyle such as change in physical activity or sleeping time; (5) social network (Lubben Social Network Scale-6 (LSNS-6), Japanese version); (6) frequency of laughing; (6) satisfaction with current work status and domestic life; and (7) change and current subjective mental health status and current psychological distress (Kessler 6-item scale (K6)). The perceived risk of radiation exposure, LSNS-6, Japanese version, and the K6 item scale are validated measurements, and the others are investigator-designed queries.
Change in the Workplace Environment
Identifying changes in the workplace environment of employees in the evacuation areas was one of the primary aims of the investigation, to aid efforts in maintaining health and safety in the workplace. We investigated changes after the nuclear disaster, including employees' amount of overtime work, work burden, and commute time, as the workplace environment variables, which were related to work stressors [6,7,17]. These factors were measured on a three-point scale: increase, no change, and decrease.
Perception of Radiation Risks
Since the perception of radiation risks is a specific stressor after a nuclear disaster, we examined it as a stressor affecting employees' mental health status. To evaluate the perception of radiation risks, the participants were asked questions such as, "What do you think the likelihood is of damage to your health (e.g., cancer onset) in later life as a result of your current level of radiation exposure?" [18]. These questions were answered using a four-point Likert scale as follows: 'very unlikely', 'unlikely', 'likely', or 'very likely'. In the analysis, we categorized participants who had answered 'very unlikely' or 'unlikely' into the same group, which we called the low perceived risk group. Likewise, participants who had answered 'likely' or 'very likely' were classified into the high perceived risk group.
Change in Living Environment
We investigated variables for change in the living environment such as relocation from an evacuation area and separation of family members due to the nuclear disaster. We defined participants as having experienced relocation from an evacuation area if their address as of 11 March 2011 was in Namie Town or Iitate Village, both places for which evacuation orders were issued for the total area of the municipality (as of August 2016). In addition, we considered participants as having experienced relocation from an evacuation area if they indicated that they currently lived in temporary housing or reconstructed public housing.
As separation from family members due to the nuclear disaster could influence employees' mental health status [19], it was used as a disaster-related experience variable assessed by the question, "Have you experienced living apart from your family who originally lived with you due to this nuclear disaster?"
Change of Lifestyle
To evaluate lifestyle changes that might be related to employees' mental health, we investigated changes in physical activity and sleeping time after the disaster [8,9]. These lifestyle factors were measured on a three-point scale: increase, no change, and decrease.
Social Network
For social network variables, we used the LSNS-6, Japanese version [20], with the following six questions: (1) "How many relatives do you see or hear from at least once a month?"; (2) "How many relatives do you feel comfortable talking with about private matters?"; (3) "How many relatives do you feel close to such that you could call on them for help?"; (4) "How many of your friends do you see or hear from at least once a month?"; (5) "How many friends do you feel comfortable talking with about private matters?"; and (6) "How many friends do you feel close to such that you could call on them for help?" The participants answered these questions on a five-point scale (0 = none, 1 = one, 2 = two, 3 = three, or four, 4 = five to eight, 5 = nine or more). We classified respondents with 11 points or fewer as socially isolated [20].
Frequency of Laughing
To assess the participants' frequency of laughing, we used the standard single-item question, "How often do you laugh out loud?" The responses were: 'never or almost never', '1-3 times per month', '1-5 times per week', or 'almost every day' [13]. We divided the participants into two categories, 'laughed almost every day' and 'laughed 1-5 times per week or less' based on the previous study [21].
Satisfaction with Current Workplace and Domestic Life
Satisfaction with current workplace and domestic life were measured with the following items: "I am satisfied with my job" and "I am satisfied with my family life". The participants responded on a four-point scale: 'very satisfied', 'satisfied', 'unsatisfied', and 'very unsatisfied'. These items were taken from "The Brief Job Stress Questionnaire", used to screen workers' stress-related symptoms and status, which was introduced by the Ministry of Health, Labor, and Welfare in December 2015 [22].
Changing and Current Subjective Mental Health Status and Current Psychological Distress
Changing subjective mental health status in comparison to before the disaster was measured on a three-point scale: improved, unchanged, and deteriorated. Current subjective mental health status was measured on a five-point scale: 'very good', 'good', 'unremarkable', 'poor', and 'very poor'.
To assess psychological distress status, we used the K6. The K6 scale is used to screen for non-specific serious mental illnesses, including Diagnostic and Statistical Manual of Mental Disorders, Fifth Edition (DSM-IV) mood and anxiety disorders. The score range is from 0 to 24 points. Those scoring 0-12 points were classified as having probable mild-moderate/no psychological distress, and those scoring 13-24 points were classified as probably having serious psychological distress [23]. This study used the Japanese version of the K6, which has been empirically validated as an independent means of screening for mental distress among evacuees [24].
Stressors and Protective Factors for Employees' Mental Health
We defined change in the workplace environment [6,7] and the perception of radiation risks as stressors on employees' mental health status [25]. Also, maintaining one's pre-disaster lifestyle, having a social network, laughing frequently, and feeling satisfied with one's current work status and domestic life were considered protective factors for employees' mental health [8][9][10][11][12][13][14][15]. Among the protective factors, maintaining physical activity, sleeping time, an adequate social network, and frequency of laughing were considered self-care behaviors that could maintain employees' mental health status [8][9][10][11][12][13]. Satisfaction with current workplace and domestic life were considered employee care by managers [14,15].
Definition of Maintaining Employees' Mental Health Status
Since we focused on factors related to maintaining employees' mental health status after the disaster, we defined maintaining mental health status as follows. Participants were considered to be maintaining their mental health status if they (1) answered both 'improved' for change in the perception of subjective mental health status and 'very good' or 'good' to the question on current subjective mental health status; or (2) answered both 'unchanged' for change in the perception of subjective mental health status and 'very good', 'good', or 'unremarkable' to the question on current subjective mental health status.
Statistical Analysis
We performed a chi-square test and used multivariate logistic regression models to examine the differences in the workplace, living environment, and lifestyle of employees who worked in the evacuation and non-evacuation areas, and factors related to maintaining their mental health status. Statistical significance was evaluated using two-sided, design-based tests with a 5% level of significance. All statistical analyses were performed using SPSS 23.0 (IBM Corp., Armonk, NY, USA).
Participants
Among the 647 subjects, 530 people responded to the questionnaire, for a response rate of 72.1% the evacuation areas and 96.2% in the non-evacuation area. Fourteen respondents who did not provide their age or gender information were excluded. Moreover, we excluded 117 respondents who had obtained their current job after the disaster from the chi-square test and multiple logistic regression models. Then, the data of 394 respondents (219 respondents in evacuation areas, 175 respondents in a non-evacuation area) were analyzed ( Figure 2). In terms of gender, there were more male employees than female employees in each area, and the majority of all employees worked in production processes. Moreover, "relocation from an evacuation area" and "separation of family members due to the nuclear disaster" were significantly higher among employees who worked in evacuation areas. Since gender and age distribution were different between the subjects in the evacuation and non-evacuation area, we adjusted for age and gender in a multivariate logistic regression analysis (Table 1). Among the 647 subjects, 276 workers in the evacuation area and 254 workers in the nonevacuation area responded to the questionnaire. After excluding respondents who were missing age and gender information, and who obtained their current job after this disaster, we analyzed 219 subjects in the evacuation area and 175 subjects in the non-evacuation area. p < 0.05. Among the 647 subjects, 276 workers in the evacuation area and 254 workers in the non-evacuation area responded to the questionnaire. After excluding respondents who were missing age and gender information, and who obtained their current job after this disaster, we analyzed 219 subjects in the evacuation area and 175 subjects in the non-evacuation area. Table 2 shows the differences in status in the workplace, living environment, and lifestyle of employees in the evacuation and non-evacuation areas. Employees who worked in evacuation areas showed deteriorated statuses in the workplace environment in terms of amount of overtime work, work burden, and commute time, in comparison to employees who worked in the non-evacuation area. They had a significantly higher rate of perception of radiation risks and change in the living environment or workplace environment, including relocation from an evacuation area and separation of family members due to the nuclear disaster. Among protective factors for employees' mental health status, employees in evacuation areas did not maintain their physical activity or sleep time in comparison to those in the non-evacuation area. Among employees in the evacuation area, the proportion of decreased physical activity or sleep time were higher than those who worked in the non-evacuation area. Moreover, employees who worked in evacuation areas felt significantly less satisfaction with their workplace when compared to their counterparts who worked in the non-evacuation area. Table 2. Differences in risk factors and protective factors between evacuation and non-evacuation areas.
Prevalence of Maintaining Employees' Mental Health Status in Evacuation Areas
K6 points increased as current subjective mental health status declined, which may be a reasonable indicator for current subjective mental health status. As for maintaining mental health status, 112 (51.9%) respondents were able to maintain their mental health status. We called these respondents the "group maintaining mental health status" (Table 3). Table 3. Mental health status among employees in evacuation areas with changing and current subjective mental health status and Kessler's 6.
Factors Related to Maintaining Employees' Mental Health Status after the Nuclear Disaster in Evacuation Areas
In a cross-tabulation analysis, increased work burden and perception of radiation risks were higher among employees in evacuation areas who had a deteriorated status or unhealthy mental health status. Moreover, maintaining physical activity and sleep duration, having a strong social network, laughing frequently, and feeling satisfied with one's work status and domestic life were significantly associated with maintaining mental health status (Table 4). Table 5 shows the results of a multivariate logistic regression analysis for maintaining employees' mental health status after the nuclear disaster. Model 1 included the variables of age, gender, and stressors on employees' mental health for employees in evacuation areas who faced increased burdens in the workplace after the disaster (odds ratio (OR): 0.81, 95% confidence interval (CI): 0.68-0.96), perceived high risks of radiation exposure regarding delayed effects (OR: 0.81, 95% CI: 0.70-0.94), and could not significantly maintain their mental health status. Model 2 included protective factors for employees' mental health status. Among employees in the evacuation area, age (OR: 0.96, 95% CI: 0.92-0.99), gender (OR: 3.55, 95% CI: 1.20-10.5), regular physical activity (OR: 1.31, 95% CI: 1.07-1.62), having a social network (OR: 1.23, 95% CI: 1.01-1.49), laughing frequently (OR: 1.29, 95% CI: 1.02-1.62), and satisfaction with one's work status (OR: 1.38, 95% CI: 1.12-1.69) and domestic life (OR: 1.26, 95% CI: 1.01-1.57) were significantly associated with maintaining mental health status after the disaster. The significant negative association between increased burden, perceived high risk of radiation, and maintaining mental health status disappeared in Model 2, which included protective factors for employees' mental health.
Differences in the Workplace, Living Environment, and Lifestyle of Employees in the Evacuation and Non-Evacuation Areas
Our findings showed differences in the workplace, living environment, and lifestyle of employees who worked in evacuation areas compared to those who did not. Approximately half of the employees who worked in evacuation areas had to relocate outside of their original living places due to the evacuation; therefore, they had longer commutes than before [17]. Additionally, in a previous study of the workplace status of public servants in disaster-stricken areas after the Great East Japan Earthquake, 15.9% of workers suffered burnout even though more than three-quarters of the respondents were not involved in disaster-related work [26]. Additionally, the Ministry of Health, Labor, and Welfare reported that the percentage of effective job offers, which reflects the number of workers being sought by companies as regular or temporary staff, has consistently been increasing after the disaster [27]. These findings highlight the harsh workplace conditions that follow a severe disaster, as there is an increased demand for reconstruction business services. Subsequently, workers might experience greater work burdens. Among the lifestyle changes of employees in this study who worked in evacuation areas, regular physical activity decreased. This might be related to increased work burden, changes in the living environment due to replacements [28], or anxiety about radiation exposure [29]. Moreover, our findings implied that deteriorating mental health status among the employees (45.4% in evacuation areas, 16.2% in the non-evacuation area; Table 3) could lead to difficulties in maintaining sleep duration (33.2% in evacuation areas, 12.6% in the non-evacuation area) [30]. This was assumed to be due to the drastic changes in the workplace and living environment of employees in evacuation areas. Also, employees who worked in evacuation areas perceived radiation risks at a significant level, even though approximately half of them were non-evacuees. This might show that working within an evacuation area is linked to perceived radiation risks regardless of whether the employees were evacuees or not.
Factors Related to Maintaining Employees' Mental Health Status after the Nuclear Disaster
Those employees who maintained their mental health status in evacuation areas accounted for 51.9% of the respondents (112/216 employees). The majority of the employees who worked in evacuation areas maintained their mental health status despite experiencing drastic changes in their workplaces and living environments. As for the variables for stressors on employees' mental health status, deteriorating mental health status was significantly associated with increasing burden in the workplace in the Model 1 analysis. However, the significant association with work burden disappeared when the protective factors were added (physical activity, keeping sleeping time, having a social network, laughing frequently, and satisfaction with one's workplace and domestic life) [8][9][10][11][12][13][14][15]. Therefore, mental health status could be maintained with protective factors, even when work burden increased.
Regarding protective factors for employees' mental health status, a nationwide population-based study that followed participants for six years indicated that regular exercise or sports was significantly related to maintaining mental health status [8]. Furthermore, a previous study reported that laughter may lower the risk of subjective poor health [13]. Regular physical activities or laughing frequently might work protectively to maintain employees' mental health status, although our investigation, designed as a cross-sectional study, did not demonstrate causality. In a previous study following the Great East Japan Earthquake, social networks were considered an important factor influencing mental health outcomes, and high social capital played an important role in protecting mental health [31]. Also, individuals in communities with high social capital suffered less from post-traumatic stress [10]. These findings support our finding; that is, high social capital led to employees' maintaining their mental health status after a major disaster. Finally, satisfaction with the workplace and domestic life was most significantly associated with maintaining mental health status among the protective factors in our setting. A previous large-scale study in Switzerland of the employed population aged 20 to 64 found that workers' work-life imbalance was a risk factor affecting mental health, and employees with self-reported work-life conflict presented a significantly higher relative risk of poor self-rated health, negative emotions, and depression [15]. Although this study did not directly measure work-life balance among employees, our findings show that those who felt satisfied with their workplace and domestic life had a well-balanced work and domestic life, and consequently, they could maintain their mental health status.
In summary, regular physical activity and laughing frequently serve as protective factors for employees' mental health. Moreover, work-life balance also had positive effects on mental health status, even when employees were faced with drastic changes in their workplaces or domestic lives following massive disasters.
Limitations and Strengths
The present study has a few limitations. The first limitation is causality. Our findings were based on a cross-sectional study design. Therefore, we could not determine whether mental health status among employees could maintain their regular physical activities or sleep duration, having a social network, or frequency of laughing. Second, control selection bias might exist in the present study; the control group may not be truly representative of the non-evacuation area. Even employees in the non-evacuation area might have been affected by the nuclear disaster, because their company was located close to an evacuation area. Moreover, approximately 10% of respondents in the non-evacuation area experienced separation from family members. However, a previous study of psychological distress among 1709 Japanese employees showed that the K6 point greater than or equal to 13 was 10.8% [32], which was almost equivalent to or more than that of the employees in this study in the non-evacuation area (K6 point ≥ 13; 7.5%). Moreover, we obtained the data from only one company located in the non-evacuation area, which was imbalanced compared to the number of companies in the evacuation area. The reason for this was few companies cooperated as a control in this study. The third limitation is the difference in the response rate between the evacuation and non-evacuation employees. A previous study showed that mental health status might affect the response rate to a survey, suggesting that non-response was associated with poor mental health status [33]. There might be many employees in the evacuation area experiencing psychological distress who could not answer the survey, which might be underestimated in our findings. The forth limitation is recall bias. The respondents in evacuation areas could have been more likely to indicate that they had been affected by the nuclear disaster or changes in their work status or domestic life than the respondents in the non-evacuation area. The change in the workplace environment (e.g., work burden), change of lifestyle (e.g., change in physical activity or sleep duration), frequency of laughing, and satisfaction with current workplace and domestic life were subjective measurements. Therefore, it is necessary to be cautious when interpreting the findings. Fifth, multiple collinearities between maintaining mental health status and satisfaction with the workplace and domestic life might exist. Since both the dependent and independent variables were subjective, they may have been correlated with each other. However, in the Pearson's correlation analysis, since the correlation coefficient was less than 0.4, it was analyzed as an independent variable. Finally, we used a non-validated measurement for our main findings on maintaining employees' mental health status. However, K6 scores increased as subjective mental health status worsened, which may indicate that the measurement was reliable.
Despite these limitations, this study has several strengths. No previous report has examined general workers' mental health status in evacuation areas following a nuclear disaster. Also, we clarified factors related to maintaining mental health status, even in harsh workplaces and living environments, following drastic changes due to a disaster. Companies in the evacuation areas ensured employment would contribute to rebuilding communities damaged by the nuclear disaster. Although some companies chose to discontinue business after the disaster, the companies in the present study continued operations to help re-build the community. The companies that made this crucial decision implemented thorough health management for their employees, including measuring radioactivity. Furthermore, our findings show that companies in the evacuation areas introduced methods for encouraging self-care (e.g., regular physical activity, laughing, and having a social network) or employee care by managers, while promoting a well-balanced work and domestic life given the changes in the environment. Consequently, our findings could contribute to employee health management measures in evacuation areas. Also, our results might be applicable for workers' health management after major disasters in the future.
Conclusions
Our findings showed drastic changes in the workplace, living environment, and lifestyle of employees in evacuation areas. Despite the harsh environment, the majority of employees in the evacuation area maintained their mental health status, especially those who engaged in regular physical activity, laughed frequently, had a social network, and felt satisfied with their workplace and domestic life. These findings have implications for employee health management measures in evacuation areas to maintain mental health status, even in harsh environments. We hope our work will have implications for future measures addressing workers' health management after major disasters.
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Domain: Psychology Business Environmental Science Medicine
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Telehealth for global emergencies: Implications for coronavirus disease 2019 (COVID-19)
The current coronavirus (COVID-19) pandemic is again reminding us of the importance of using telehealth to deliver care, especially as means of reducing the risk of cross-contamination caused by close contact. For telehealth to be effective as part of an emergency response it first needs to become a routinely used part of our health system. Hence, it is time to step back and ask why telehealth is not mainstreamed. In this article, we highlight key requirements for this to occur. Strategies to ensure that telehealth is used regularly in acute, post-acute and emergency situations, alongside conventional service delivery methods, include flexible funding arrangements, training and accrediting our health workforce. Telehealth uptake also requires a significant change in management effort and the redesign of existing models of care. Implementing telehealth proactively rather than reactively is more likely to generate greater benefits in the long-term, and help with the everyday (and emergency) challenges in healthcare.
Introduction
The number of cases of coronavirus disease 2019 is increasing rapidly and, as of 11 March 2020, the World Health Organization has declared that this can be characterised as a pandemic. 1 Governments are preparing for the worst, quickly realising the impact that COVID-19 is having on health services and the global economy. Amidst the avalanche of reports concerning the spread of the virus, there is also recognition (again) that telehealth 'could' play a critical role in the global response.
Of course, telehealth is ideal for the management of communicable diseases. A key factor in slowing the transmission of a virus is 'social distancing' 2 thus decreasing person-to-person contact. For patients with COVID-19, or those concerned that they might be infected, telehealth can help with remote assessment (triage) and the provision of care. For people not infected with the COVID-19 virus, especially those at higher risk of being affected (e.g. older adults with preexisting medical conditions), telehealth can provide convenient access to routine care without the risk of exposure in a congested hospital or in medical practice waiting rooms.
However, for telehealth to be effective during the current COVID-19 pandemic and future events, we must ensure that telehealth is appropriately integrated into our health service, and treated as a 'business as usual' modality. The aim of this article is to outline key requirements to ensure that the value of telehealth is fully realised, not only in emergencies (such as pandemics) but also in everyday practice.
Previous use of telehealth in emergency situations
Telehealth has a number of key strengths that can enhance an emergency response when environmental or biological hazards present. During infectious disease outbreaks, telehealth can enable remote triaging of care and provide rapidly accessible information through technology -such as chatbots, as seen in Singapore during Telehealth can also assist with disease diagnosis via video consultations with health professionals. Various applications exist for providing ongoing care as demonstrated by a hospital in the USA where physicians are currently using telehealth to care for COVID-19 patients remotely. 4 Additionally, telehealth can enable people to navigate the health system and access routine care during an infectious disease outbreak.
The current COVID-19 event is not the first time that government agencies and healthcare providers have turned to telehealth in response to disaster situations. The North Atlantic Treaty Alliance (NATO) (an intergovernmental military alliance between 29 members including North American and European countries), developed a Multinational Telemedicine System in 2000 that has been deployed with their military forces during various crises. 5 Through solutions such as person-deployable portable telemedicine kits and satellite linkage, areas in need have received health support from medical experts located in other countries. 6 During hurricanes Harvey and Irma, 7 private telemedicine companies provided care to victims relocated from their homes and primary care providers. Following the Severe Acute Respiratory Syndrome (SARS) pandemic in 2003, China began exploring telehealth and integrated electronic medical systems for use in similar situations in the future. 8 During severe prolonged droughts in Australia, the health department introduced new funding through the Medicare Benefits Schedule (MBS) to allow clinicians to provide additional mental health services via videoconferencing. 9 In 2019, similar mental health services were also offered to people affected by the bushfires. 9 Whilst the potential benefits of telehealth are clear, 10-12 the uptake of telehealth in emergency situations has been limited. As an example, the funding provided by the Australian government to support the delivery of online (videoconference) mental health services to people affected in the bushfire crisis seems to have had little impact. 13 Despite the availability of MBS funding, claims data shows only four telehealth visits were provided in the first three months.
Barriers to the use of telehealth and strategies to address them
Outside of emergency situations, the overall uptake of telehealth has been slow and fragmented. 14,15 Substantial efforts have gone into scaling-up the routine use of telehealth, often with limited success. In Australia, despite the introduction of generous financial incentives for specialist videoconsultations, telehealth represented less than 1% of all specialist consultations provided. 16 The experience in the USA has been similar, where less than 1% of people living in rural areas have ever experienced telehealth. Reasons for the low uptake of telehealth are multifaceted and diverse, but factors such as clinician willingness, financial reimbursement and (re)organisation of the health system may be to blame.
Clinician willingness and acceptance of telehealth
The limited uptake of telehealth services is mostly attributable to clinician's unwillingness to adopt telehealth. 17 A timely telehealth response to emergencies such as the COVID-19 outbreak, calls for a health workforce that is skilled and capable of switching delivery modes, as required. Relying just on sporadic uptake of telehealth, as in times of emergency, is problematic.
Why the unwillingness to adopt telehealth? Telehealth is disruptive, 18 complex 19 and requires clinicians to learn new methods of consulting. 20 Clinician acceptance of telehealth relies on them perceiving telehealth as effective, safe and normal. 17 Clinicians may not be knowledgeable and aware of telehealth, 21 which is not surprising given there is limited telehealth training in medical, nursing and allied health preregistration curricula. 22 Regular telehealth practice leads to more sustainable models of care, 23 and a telehealth-ready workforce. Ensuring the health workforce is telehealth-ready will require telehealth to be included in training and education. 24 Therefore, it is imperative to include telehealth in curricula and to mandate post-graduate telehealth accreditation. This will send a clear message to current and future healthcare professionals that telehealth is a legitimate part of usual care. Furthermore it may increase readiness to use telehealth in every day practice, and in times of emergency.
Reimbursement
Appropriate remuneration is needed for all telehealth services. Traditionally, the lack of funding has been blamed for the slow uptake of telehealth. 25 Constraints for funding associated with geographical location and service type have also limited expansion of telehealth in city locations. For example, in Australia, funding is predominantly focused on medical consultations delivered by videoconference for patients in rural and remote locations. This is problematic because telehealth is just as useful for people living in metropolitan locations. In the case of COVID-19, city locations are most at risk because of greater population density. 26 In other emergencies, certain communities may be affected and therefore require increased access to specialist health services, hence the importance of telehealth capability, irrespective of rurality.
Temporary funding methods may be an appropriate way of dealing with ad-hoc emergencies such as COVID-19. Depending on the nature of the emergency, prioritising telehealth funding for specific services or for a selected patient group (such as older people with a respiratory illness) could help address high-risk and high-demand situations. This funding could be authorised by the government at short notice and decommissioned after the emergency.
Countries have begun to address the reimbursement barriers associated with COVID-19. In March 2020, emergency supplemental funding legislation for coronavirus was passed in the USA which allows the federal government to expand telehealth to patients in metropolitan areas and also allows physicians to care for patients in their homes. 27 In Australia, there have been similar calls to relax restrictions on generalpractitioner-provided telehealth consultations. 28 Whilst remuneration for telehealth services is an important requirement, a focus on funding alone will not generate an effective telehealth service. Other critical factors need to be considered.
Organisation of the healthcare system
Dependency on individual clinicians to lead telehealth is not a sustainable approach to the expansion of telehealth. Telehealth adoption requires a whole-system strategy. Embedding telehealth into routine service delivery, by all healthcare providers, is the most effective way of ensuring telehealth can be readily used during emergencies. This requires operational telehealth networks, telehealth policies and procedures, and technology infrastructure that can be scaled-up during times of disaster. Telehealth is a disruptive process, so there is a need for effective changemanagement strategies to support clinicians with limited telehealth experience. Furthermore, simulated testing of telehealth applications for emergency situations is also a useful way of ensuring that workflow processes are clear and effective. 29 Multiple resources are available to support disaster preparedness and response strategies. For example, the American Telemedicine Association Emergency and Response special interest group has developed a framework and infrastructure checklist that could be used at local, regional and national levels during disaster events. 30 The NATO Multinational Telemedicine System (described above) resulted in the development of a system, supported by guidelines and technology solutions, which is able to interconnect various national telemedicine capabilities for use during disasters. 5 In the absence of any formal telehealth strategy, it is important to make telehealth guidelines available to assist with co-ordination and delivery of telehealth services during an emergency event. This information needs to suit all stakeholders, including patients, clinicians, health service providers and funders. 31 International health agencies such as the World Health Organization, national centres for disease control, and health departments have been disseminating real-time information about COVID-19 via their websites and social media outlets 32,33 and have a very important role to play in advocating for the use of telehealth via these channels. These organisations can increase awareness of telehealth, provide specific recommendations on effective telehealth use, and validate the importance of telehealth's role in the healthcare sector.
Conclusion
While we may not be able to accurately predict the timing of natural disasters and infectious pandemics, we can be sure that they will present again in the future. The COVID-19 experience is not a first, and nor will it be the last. Telehealth does have a critical role in emergency responses. Advantages of telehealth include the ability to: rapidly deploy large numbers of providers; facilitate triage so that front-line providers are not overwhelmed with new presentations; supply clinical services when local clinics or hospitals are damaged or unable to meet demand; and decrease the risk of communicable diseases which are transmitted by person-to-person contact.
There are also limitations to the use of telehealth. Some consultations require physical examinations that may be difficult to perform remotely (e.g. auscultation) and diagnostics (e.g. imaging, cultures) which cannot be done remotely. It is important that clinician training highlights the limitations of telehealth and informs of alternative methods of information gathering that can be used in these situation. These situations also highlight the importance of providing care via telehealth to non-infected people during an infectious pandemic.
This can reduce contamination when it is necessary to see an infected patient in-person
It is important that the development of a telehealth strategy to deal with global and national emergency responses is built on the premise that telehealth becomes a mainstream component of our health system. The question is, 'How can this be realised?' The answer is quite straightforward. . .
• Ensure that all health professionals receive appropriate education and training; • Introduce telehealth accreditation for health professionals; • Provide funding which adequately covers the cost of providing telehealth; • Redesign clinical models of care; • Support all stakeholders with an effective communication and change management strategy; • Establish systems to manage telehealth services on a routine basis.
With these important requirements in place, the consideration of whether telehealth could be used in emergencies will become redundant as it should just happen.
Declaration of conflicting interests
The author(s) declared no potential conflicts of interest with respect to the research, authorship and/or publication of this article.
Funding
The author(s) disclosed receipt of the following financial support for the research, authorship and/or publication of this article: We acknowledge the support of the National Health and Medical Research Council (NHMRC) Partnership Centre for Health Sustainability (Grant ID #: 9100002 administered by the Australian Institute of Health Innovation, Macquarie University. Health System Sustainability disclaimer: available at: [URL] temsustainability.com.au/resources/our-publications/ acknowledgements-and-disclaimer/.
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Domain: Business Medicine
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Leveraging long acting reversible contraceptives to achieve FP2020 commitments in sub-Saharan Africa: The potential of implants
Background In developing regions, an estimated 214 million women have an unmet need for family planning. Reaching Family Planning 2020 (FP2020) commitments will require a shift in modern contraceptive promotion, including improved access to long-acting reversible contraceptives (LARCs). Until now, a lack of market data limited understanding of the potential of LARCs to increase contraceptive access and choice. Methods From 2015, the FPwatch Project conducted representative surveys in Ethiopia, Nigeria, and Democratic Republic of Congo (DRC) using a full census approach in selected administrative areas. In these areas, every public and private sector outlet with the potential to sell or distribute modern contraceptives was approached. In outlets with modern contraceptives, product audits and provider interviews assessed contraceptive market composition, market share, availability, price, and outlet readiness to perform services. Results Fifty-four percent of outlets in Ethiopia had LARC commodities or services available at the time of the survey, versus 7% and 8% of outlets in Nigeria and DRC, respectively. When present, LARCs were usually available with at least two other methods (99%, 39%, and 84% of public health facilities in Ethiopia, Nigeria and DRC, respectively). Many public facilities had both implants and IUDs in stock (76%, 47%, and 53%, respectively). Lack of readiness to provide LARCs was mostly due to a lack of equipment, private room, or the commodity itself. Market share for implants in the public sector was 60%, 53%, and 37% of Couple Years of Protection (CYP) in Ethiopia, Nigeria, and DRC. Discussion Limited availability of LARCs in Nigeria and DRC restricts contraceptive choice and makes it difficult for women to adopt and use modern contraception consistently. Brand-specific subsidies, task shifting, and promotion of methods that require less equipment and training are promising strategies for increasing uptake. Substantial government investment is required to improve availability and affordability. Investment in implants should be prioritized to make progress towards FP2020 commitments.
Results
Fifty-four percent of outlets in Ethiopia had LARC commodities or services available at the time of the survey, versus 7% and 8% of outlets in Nigeria and DRC, respectively. When present, LARCs were usually available with at least two other methods (99%, 39%, and 84% of public health facilities in Ethiopia, Nigeria and DRC, respectively). Many public PLOS
Introduction
In developing regions, an estimated 214 million women have an unmet need for family planning, [1] leading to excessive health costs to individuals and families as well as socioeconomic consequences for nations. [2] To reduce unmet need and prevent unintended pregnancies, the Family Planning 2020 (FP2020) Initiative was launched in 2012. FP2020 is a global partnership of family planning stakeholders which aims to add 120 million additional users of modern contraceptives by 2020 in the world's least-developed countries by offering choice among a range of safe and effective methods. [3] Reaching FP2020 commitments will require a strategic shift in modern contraceptive promotion, including improved access to long-acting reversible contraceptives (LARCs). LARCs are highly effective in preventing pregnancy, less likely to be discontinued compared with short acting methods, and offer the benefits of convenience and comparatively low cost over time. [4] Interest in improving access and use of LARCs was featured prominently at the Fourth International Conference on Family Planning and is increasingly a priority in sub-Saharan Africa (SSA). [5] Globally, SSA has the highest proportion of unmet need, with more than 1 in 5 women in need of modern contraceptives. [1] Contraceptive supply and demand are dependent on each other; a limited method mix can contribute to variable demand for modern contraceptives. [6] Despite high levels of effectiveness and acceptability of contraceptive implants and intrauterine devices (IUDs), [7] LARCs still account for only a small percentage of the method mix in many SSA countries (see S1 Table).
Achieving global FP2020 commitments will depend on the successes of countries with large populations and high unmet need. In SSA, high-priority countries include Ethiopia, Nigeria, and the Democratic Republic of Congo (DRC). These countries are characterized by different contraceptive markets and method mixes, as reported in the PMA2020 semi-annual briefs. [8] While Ethiopia has made rapid advances in increasing modern contraceptive rates (mCPR) with implants and injectables, [8] progress toward national FP2020 commitments (see S1 Table) has been slower in Nigeria and DRC where users are more heavily dependent on shorter acting methods. [8,9] Several initiatives are underway for improving access to and use of LARCs, with Ethiopia having the most comprehensive strategy of the three countries. There is public sector facility strengthening and community-based provision of Implanon NXT 1 in Ethiopia [10] and Leveraging LARCs to achieve FP2020 commitments in sub- Nigeria, [11] and private sector social franchising and mobile outreach service delivery in Ethiopia, [11] Nigeria, [11] and DRC. [12] In 2015 and 2016, pilot programs were launched for task shifting [13], implants and IUDs to Community Health Extension Workers (CHEWs) in Nigeria [14] and implants to medical and nursing students in DRC. [15] In Ethiopia, substantial financial commitments at the national and regional levels have bolstered programs and commodity procurement across the country.
[16] Likewise, institutionalized task shifting for implant distribution to Health Extension Workers (HEWs) has made LARCs available throughout the country (see S2 Table). These additional efforts in Ethiopia have expedited progress against FP2020 commitments and distinguished Ethiopia as a family planning success story. [17] There has been a gap in systematically collected data on contraceptive markets and LARCs, which hinders policymakers' ability to improve method diversity and choice. In recent years PMA2020 has shed light on method mix, contraceptive prevalence and other market indicators that help fill this void and reinforce the findings of FPwatch. [8] In this paper, we examine market composition and volume alongside LARC availability, service readiness, and price to understand where women are accessing LARCs and how LARCs can be leveraged to help countries achieve their FP2020 commitments.
Methodology
The FPwatch Project provided insight into contraceptive markets and estimates for key family planning indicators in Ethiopia, Nigeria, and DRC. FPwatch surveys generated nationally-and regionally-representative data from a cross-section of outlets to complement findings from other health facility surveys, like the Performance, Monitoring and Accountability 2020 (PMA2020) surveys. [18] In addition, rigorous analysis on large sample sizes increased confidence in estimates while a systematic sampling approach provided a snapshot of the total contraceptive market.
Study design and sample selection
Data were collected in the second half of 2015. In Ethiopia, the geopolitical areas included the four most populous regions where 85% of the population resides: Amhara; Oromia; Southern Nations, Nationalities, Peoples' Region (SNNP); and Addis Ababa. The Nigerian survey was nationally representative: outlets from all six geopolitical zones were included. Two provinces were intentionally sampled in DRC to ensure the inclusion of one primarily urban and one primarily rural province, Kinshasa and Katanga, respectively. In 2015, DRC's 11 original provinces were divided into 26; FPwatch used the pre-2015 boundaries in province selection.
Sample size requirements were based on estimates for the proportion of outlets with three or more modern methods of contraception in stock on the day of the survey at 95% confidence. For the purposes of this survey, our definition of modern contraceptives included oral contraceptives, emergency contraceptives, injectable contraceptives, contraceptive implants, and IUDs. This indicator was selected for its high relevance to FP2020 commitments (see S1 Table). One-or two-stage sampling was conducted using probability proportional to size, with representative clusters of approximately 10,000 to 15,000 people. [19] In DRC, a booster sample was included for public health facilities and pharmacies to adjust for insufficient numbers of these outlet types. The detailed sampling strategy for each country is included in S3 and S4 Tables.
Data collection lasted six to eight weeks and field teams used a full census approach to identify potential outlets: data collectors met with local authorities to produce sketch maps of the areas' potentially eligible outlets or walked down all streets and paths of selected administrative units to find them.
Every public and private sector outlet with the potential to sell or distribute modern methods was screened for eligibility. Public sector outlets included hospitals, health centers, community health workers, and, in the case of DRC, representative private clinics in areas with no public facility. The private sector included private clinics, pharmacies, drug stores, and general retailers, except in DRC where general retailers were not surveyed. General retailers were not screened in DRC because these outlets do not stock contraceptives beyond condoms. Bars, brothels, and police and military hospitals that did not serve the general public were excluded from the study. A detailed description of outlet types and their capabilities for LARC provision is provided in S2 Table. Outlets must have met one of the following criteria to be eligible for a full interview and product audit: 1) stocked at least one modern contraceptive method other than condoms (oral contraceptives, emergency contraceptives, injectable contraceptives, contraceptive implants, or IUDs) on the day of the survey; 2) had one or more types of modern contraceptives other than condoms available within the three months preceding the survey; or 3) offered providerdependent contraceptive services, including contraceptive injections, implant insertions, IUD insertions, and/or male/female sterilization.
Data collection
At all eligible outlets, providers were invited to join the study after giving verbal informed consent. Data collectors used paper questionnaires to complete audits of relevant product information, including product brand name, generic name, active ingredient and corresponding strength, manufacturer name, and country of manufacture. For each brand, providers/outlet staff reported on volume distributed during the previous month, stock out during the previous three months, and retail and wholesale price. At outlets stocking or providing services for provider-dependent methods (these include contraceptive injections, implants, IUDs, and male and female sterilization), another set of questions assessed provider readiness to perform the service, including implant and IUD insertions and removals. Questionnaires were translated into local languages, reviewed by field teams and back-translated.
Data analysis
Data were double entered into Microsoft Access (Microsoft Corporation, Redmond, Washington, US). All data analyses were conducted in Stata 14 and weighted using the inverse cluster selection probability (StataCorp, College Station, Texas, USA).
A set of standard indicators was calculated for modern contraceptive methods, namely market composition, availability, stock-out, and median price. Total modern contraceptive market share is the relative proportion of modern contraceptives sold or distributed (i.e. volume) in the past month and was calculated using couple years of protection (CYP), [20] the estimated protection a contraceptive provides over a one-year period. This approach standardized impact across products that differ in the amount/length of protection against pregnancy. Information on consumer price was collected in local currency. Price was then converted into USD using the average exchange rate during data collection and reported as cost per CYP.
Service readiness for implant and IUD insertion was measured by the availability of: 1) the commodity; 2) the appropriate provider credentials according to national policy; and 3) the necessary equipment for insertions. [20] For removal service readiness, only provider credentials and removal equipment were measured. Although components to measure service readiness for removals were present, there was no specific question on the questionnaire related to provision of removal services or volume of removal services. Reasons for lack of readiness, such as lack of the commodity or equipment, were assessed only among outlets offering the service. Role of the funding source. The funders of the study had no role in study design, data collection, data analysis, data interpretation, or writing of the report. The corresponding author had full access to all the data in the study and had final responsibility for the decision to submit for publication.
LARC commodity and service availability and method diversity
Just over half of all outlets in Ethiopia had a LARC commodity or service available at the time of the survey. This did not include general retailers, which almost never carried contraceptives other than condoms. Sixty-five percent of LARC-stocking outlets were health posts staffed by HEWs and another 23% were public health facilities for a total of 88% of LARC-providing outlets in the public sector (Fig 1). In Nigeria and DRC, only 7% and 8% of outlets respectively had a LARC commodity or service available at the time of the survey. Nearly half of Nigeria's LARC-stocking outlets and three quarters of DRCs were public facilities.
Highly variable availability of LARCs was observed within public health facilities across the three countries. Ethiopian public health facilities were more likely to have LARC methods in stock than those in Nigeria and DRC. Implants were stocked by 86% of public health facilities in Ethiopia compared with 22% in both Nigeria and DRC. IUDs were stocked in 68% of Ethiopian public health facilities but only in 16% and 14% of these facilities in Nigeria and DRC (Fig 2a). In Nigeria, the only country with higher LARC availability in private clinics than in public facilities, implants and IUDs were stocked in 24% and 20% of private clinics, respectively. [19] Despite very low levels of LARC availability in facilities in Nigeria and DRC, when present, LARCs were usually available within a range of methods in the three countries: 99% of public health facilities with LARCs in Ethiopia, 39% in Nigeria, and 84% in DRC had at least two other methods available (Fig 2b). Over 77% of LARC-stocking facilities in Ethiopia and approximately half in Nigeria (47%) and DRC (53%) had both implants and IUDs in stock. Two-thirds of implant-stocking outlets in Ethiopia and Nigeria had more than one brand of implant available, whereas in DRC there was rarely a choice among implants.
Readiness of outlets providing LARC services
Among public health facilities with implant insertion services available, service readiness was 77% in Ethiopia, 73% in Nigeria, and 44% in DRC (Table 1). In Ethiopia and DRC, most facilities that were not service ready lacked equipment, did not have a private room, or were missing consumables such as iodine. In Nigeria, lack of implant commodities was the most common impediment to service readiness (54%). Most facilities that were service ready for implant insertions were also equipped for removals.
Among public health facilities offering IUD insertions, service readiness was highest in Ethiopia (78%) versus 47% in Nigeria and 26% in DRC. Among facilities not service-ready, the most common obstacle was a lack of IUD commodities: 19% of facilities in Ethiopia, 83% in Nigeria, and 46% in DRC. In DRC and Nigeria, facilities were more likely to be service ready Leveraging LARCs to achieve FP2020 commitments in sub-Saharan Africa: The potential of implants for IUD removals than for insertions, which require presence of the contraceptive commodity. Among facilities not service ready for removal, 80% in Ethiopia and 90% in Nigeria were missing medical equipment. IUD removal data is not available for DRC. In Ethiopia, the public sector was responsible for more than 80% of total CYPs from contraceptives distributed, with LARCs making up the majority. Implants were 60% of public sector CYPs, but only 22% of private sector (Fig 3). Nigeria was the only country with more LARC CYPs in the private than public sector. Within the smaller public sector market, implants were 53% of CYPs and within the larger private sector they were 40%. While implant availability was low overall in DRC, most were provided in the public sector. Implants were 37% of DRC's public sector CYPs and 8% of private sector. DRC was the only market where CYPs for shortacting methods were higher than for implants.
Implants made up a larger proportion of CYPs than IUDs across all countries and sectors; however, brand dominance differed between countries. Implanon NXT 1 distributed by HEWs accounted for one-fifth of the total contraceptive market in Ethiopia and comprised 82% of the implant market in Ethiopia, compared to 13% for Jadelle 1 and 5% for Sino II (Trust™). Implanon NXT 1 and Jadelle 1 had similar volumes in Nigeria (53% and 47% respectively). In DRC, Implanon NXT 1 comprised only 12% of the implant market compared to 88% Jadelle 1 .
LARC consumer pricing
In Ethiopia, LARC commodities and services were provided at no cost to the consumer in the public sector. In Nigeria, 92% of public sector outlets provided LARCs at no cost. In DRC, only 42% of public sector outlets provided LARCs at no cost, while 58% charged a fee for the contraceptive commodity, service, or both (Fig 4).
In Ethiopia, implants and IUDs sold in the private sector were comparable in price at $1.46. In Nigeria and DRC, implants were 50% more expensive than IUDs ($7.50 and $7.15 respectively compared to $5.00 and $4.95). In Ethiopia and Nigeria, LARCs tended to be more expensive in private clinics than in pharmacies and drug shops, likely due to an added service fee. Leveraging LARCs to achieve FP2020 commitments in sub-Saharan Africa: The potential of implants
Discussion
Limited availability of LARC methods restricts choice-barring women from contraceptive options that are easy to use consistently over time. [7] Ethiopia, where LARCs are readily available particularly in the public sector, has achieved mCPR growth. [21] In comparison, Nigeria and DRC, where LARCs are less available, have seen slower progress in mCPR. [21] PMA2020 monitoring demonstrates that this trend continues. [8] A policy and funding environment that models Ethiopia's task shifting and widespread availability of implants has the potential for major impact on the contraceptive market and mCPR. Task shifting strategies already being piloted, as well as increased financial commitment, could bring Nigeria and DRC closer to reaching their FP2020 commitments and provide a roadmap for other countries in SSA.
When a range of LARCs is available within an outlet, implants are more likely to be distributed than IUDs. Other studies highlight why women might choose implants: they like the convenience and duration of contraceptive protection, and implants can be inserted without undergoing a pelvic exam. [7] Further, in Ethiopia where Jadelle 1 and Implanon NXT 1 have been widely available since 2005 and 2009, respectively, greater volumes of Implanon NXT 1 were distributed in outlets that had both brands available. This could suggest a provider preference for implants with a prepackaged applicator over implants that require a trocar for insertion. In Nigeria and DRC, where introduction of Implanon NXT 1 was more recent, the trend was weaker or not observed.
Substantial government investment is required to improve LARC availability and affordability. In 2013, the Jadelle 1 Access Program and a similar initiative for Implanon NXT 1 halved the price of implants for developing countries. [22] The Ethiopian government has taken advantage of these subsidies to purchase products in bulk and assure availability in public sector outlets.
[16] Governments and donors can provide funding and sourcing support to increase the availability of implants at affordable prices in the public sector, but they must also have a sustainability plan. Such plans could include assuring private sector partners also have access to subsidized commodities, which would help generate demand for implants and expand the market.
In Ethiopia, brand-specific subsidies for Implanon NXT 1 , Jadelle 1 , and Sino II (Trust™) have lowered wholesale purchase prices. FPwatch data reflect implant availability in private clinics and pharmacies that is likely associated with this improved wholesale affordability. In all three countries, tiered pricing or additional point-of-provision subsidies in the private sector could make LARCs more affordable. Social marketing organizations could also help subsidize commodities and services and identify appropriate price points to improve affordability. [23] Task shifting and increasing access to methods that require less equipment and training are promising strategies for increasing LARC uptake, especially in rural and underserved areas. Most outlets screened in Nigeria and DRC did not have LARC commodities or services available. Although the few outlets with LARC services tended to have credentialed providers, service readiness was curtailed by a lack of commodities and essential equipment. Task shifting provision of Implanon NXT 1 , which has fewer training and equipment requirements than other LARCs, has allowed HEWs to more than double the number of outlets providing LARCs in Ethiopia, reaching rural women who otherwise would not have access to contraceptives. [17] To manage removals, which require more equipment and a higher level of training, there is coordination with a linked health center that sends a credentialed provider to perform them in the community. [24] Expansion of implant and IUD provision by CHEWs in Nigeria [14] and pilots with medical and nursing students to administer Implanon NXT 1 at the community level in DRC [15] could show similar results. In addition, stocking drug shops with LARCs, like DKT has done in Ethiopia, and training drug shop attendants to make referrals for LARCs, like PSI is currently doing in DRC, could leverage this existing infrastructure to fill commodity gaps.
Strengths and limitations
To the best of our knowledge, no study has ever tracked contraceptive markets with such a large-scale, census-based approach as that used for FPwatch. We screened more than 25,000 outlets using a standardized survey format in Ethiopia, Nigeria, and DRC to understand contraceptive availability, market share, and price. We provide a comprehensive and current picture of where women are accessing LARCs and the potential of LARCs to help meet countries' FP2020 commitments. The study had the following limitations: 1. Despite the large sample size, certain estimates by outlet type and strata resulted in small denominators; 2. Estimates were sometimes based on provider approximation rather than written records, which may have introduced recall bias to estimates for contraceptive volumes sold; 3. Due to the point-intime nature of data collection, we were not able to confidently capture data for mobile outlets. This may have underestimated contraceptive estimates for areas of DRC and Nigeria; 4. While price indicators are standardized, differing economic realities make direct comparisons by country and even assumptions about affordability within countries difficult to precisely evaluate. 5. As a supply-side survey, examination of consumer demand and behavior was beyond the scope of the FPwatch study.
Conclusion
FPwatch results highlight barriers to full contraceptive method access, including low availability, high prices, and lack of service readiness for LARCs. However, findings also suggest a market preference for implants and an affinity for the ease of insertion offered by Implanon NXT 1 , which saves time and effort on the part of providers and facilitates implementation of task shifting policies. Higher prices for LARCs limit access, but can be countered by subsidies that increase product affordability, as demonstrated in Ethiopia. Improving availability of LARCs, and particularly implants, is an important part of increasing voluntary contraceptive uptake. Shaping a regulatory environment that enables these strategies with consideration for the total contraceptive market is critical for reducing unmet contraceptive need in SSA and to reaching ambitious national and global FP2020 commitments.
Supporting information S1
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Domain: Business Medicine
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Critical factors of implementing Industrialised Building System in Sarawak: A research on SMEs
Industrialised Building System (IBS) have been adopted in Malaysia for over five decades and is expected to grow consistent with Malaysia's economic development. In promoting the adoption of IBS in construction projects, the government has taken several steps such as levy exemption for contractors and developers. Despite its numerous advantages and efforts pulled by the government, the implementation and adoption of IBS are still below the expected figure. Many researchers investigated readiness, setbacks and issues related to the implementation of IBS in Malaysia's construction projects. However, most of the research mainly for projects located in urban areas of West Malaysia. Therefore, this paper aims to close the gap on factors affecting the implementation of IBS for SMEs in Sarawak, where the level urbanisation is low. A semi-structured interview was conducted with 10 SME's contractors to get better insight view. The study found that logistics and infrastructure problems, a limited number of the manufacturer, lack of incentive, conventional payment methods, lack of financial supports are among critical factors affecting the implementation of IBS. Therefore, it was concluded that government plays major role in providing supports, incentives and facilitating the improvement of infrastructure to successfully implementing IBS in Sarawak.
Introduction
The terms of Industrialised Building System (IBS) may be limited to Malaysia while in other parts of the world may differently term it as Modern Method of Construction (MMC), Offsite Construction, Modular Construction, Prefabricated Construction, etc. IBS is defined as a construction technique in which components are manufactured in a controlled environment (on or off site), transported, positioned and assembled into a structure with minimal additional site works In Malaysia IBS is divided into five categories which are precast component systems, fabricated steel structures, innovative mould systems, modular block systems and prefabricated timber structures as construction components. [1] In Malaysia, Industrialised Building System (IBS) was first introduced almost 50 years ago with the completion of the Tunku Abdul Rahman Public Housing Estate; or commonly known as the Pekeliling Flats at Jalan Pekeliling, Kuala Lumpur. Despite many years have passed, the adoption of IBS in the construction sector is still low and represents only 15% of construction projects used IBS in Malaysia [2]. IBS Mid -Term Review in 2007 indicated that approximately only 10% of the complete projects used IBS in the year 2006 as compared to forecasting IBS usage of 50 % in 2006 and 70% in the year 2008 as projected in the roadmap [3]. In contrast, other developed countries such as Finland, Sweden, Japan, Germany, and even Singapore have been successfully implemented IBS and it is very much preferred construction method due to its numerous benefits [4]. The benefits of IBS have been well-documented in the literature. Benefits such as cleaner and safer construction sites [5]; faster construction [5], [6], [7], [8]; high quality and aesthetical value of products [5], [8]; and more organised site management [5]. Due to its many benefits, the government of Malaysia IBS has made a lot of efforts to enhance the current conventional -dirty, dangerous and difficult image of construction industry to a technologically advanced method of construction such as by developing the Industrialised Building Systems (IBS) through the Construction Industry Development Board (CIDB). CIDB had implemented the IBS Score in construction industry to measure the level of IBS usage in building and become part of the main monitor system of the IBS construction industry. The scoring system is introduced as a structured assessment system that can be used to measure the usage of IBS in a consistent way. [9]. Due to low implementation of IBS in construction projects in Malaysia, many research has been conducted to investigate the issues of IBS. The most significant challenges to the adoption of IBS are higher capital cost [8], [10], [11]; lack of incentive [8], [12], [13]; low number of supplier [14]; high shipping cost [15]; and lack of knowledge and awareness [16].
SMEs in IBS projects in Sarawak
Although many previous studies were done in Malaysia related to IBS, only two are found to be conducted in Sarawak. One of the studies conducted a quantitative study where the focus group is large size company. The researcher found that IBS was still considered new to most of the contractors in Sarawak and thus, further indicated that they still lacked exposure [5]. Meanwhile, another researcher revealed that there is no significant difference between setbacks of IBS in rural areas of Sarawak, East Malaysia and urban areas of West Malaysia. These setbacks are resistance to change, negative perceptions of the stakeholders towards IBS designs, expensive overall construction costs, lack of knowledge and exposure to IBS technology and lack of IBS manufacturers in the industry. From the case study done, the researcher found that the lack of local IBS manufacturers and expensive overall construction costs are two significant setbacks [17]. Examining both research done in Sarawak [5], [17], none of them focusing on SMEs. Small -and medium -sized enterprises (SMEs) are at the core of the Malaysian construction industry. Because the SMEs are the majority, their characteristics significantly affect the current practices in the industry. Nonetheless, there is no standard definition of SME in Malaysia. Based on the CIDB's definition of construction SMEs, G1 to G3 contractors fall under the small-size category. G4 and G5 contractors are categorised as medium-sized contractors, and G6 and G7 contractors are categorised as large [18].
Methodology
The focus of this paper is on getting the insight towards IBS implementation for SMEs. This paper examines critical factors in implementing IBS in Sarawak qualitatively. In order to acquire potential interviewees, a pilot questionnaire survey was conducted in the earlier stage of the study to 250 contractors in Malaysia. From 250, 73 replied to the questionnaire survey. In order to gather more information to increase understanding and expanding knowledge on the issue, semistructured interview was conducted. From 73 replies, 15 of the contractors were selected to be interviewed. The potential interviewees were selected based on: 1. More than five years experience in managing IBS projects. 2. G1 to G5 contractor 3. Experienced managing projects in Sarawak From 15 selected respondents, 10 contractors agreed to be interviewed. Data gathered from the semistructured interviews were analysed qualitatively as the information was in the form of opinions, comments and statements.
Lack of incentive
According to the interview done with contractors, four of the respondents agree on the lack of incentive implementing IBS for small contractor. The incentive has no direct effect meaning to other than the main contractor and developer due to the fact levy exemption only affecting the main party of the IBS project. For small contractor who mostly undertakes installation of IBS components, the respondents further emphasised that the contractor did not receive the said levy exemption due to the amount of contract below RM 500,000. Two of the respondents received the levy exemption but further argued that the value of exemption is too little (based on the 0.125% rates of levy to be paid). In Budget 2006 announcement, tax incentive was offered through Accelerated Capital Allowance (ACA). IBS manufacturers would be given ACA for expenses incurred in the purchase of moulds used for production of precast concrete components [2]. The tax benefits are expected to motivate industry players to invest more in IBS. However, the respondents argued that they did not aware of the announcement and they further added only one party is benefitting from it, i.e. precast concrete manufacturer. From the result of the interview session, incentives given by the government is unfair in the context to facilitate the stakeholders. The current policy is developed in favour of larger stakeholders i.e. manufacturer and developer who are viewed to be the main driving force of IBS implementation. Hence, the policy maker has to impartially formulate a new strategy which will benefit each stakeholder in IBS implementation. The respondents further suggested the government should impose a reduction of company's tax for a company that involved in IBS project where all parties will the received the same benefits.
Limited number of manufacturer of prefabricated elements
Based on the result from interview session, six of the respondents suggested that limited supplier of IBS components in Sarawak, among others affecting the construction cost of IBS. The lack of IBS manufacturer caused no competition on the price, resulting in higher price of IBS components. This is supported by the database developed by CIDB, the number of IBS manufacturers in Malaysia is 169 in 2013 where almost 90% located in West Malaysia [19]. However, there is no current list of manufacturers available. The respondents further added that most of the factory located far from the site. Thus, it results to ineffective distance to a site, causing more on transportation cost. Three of the respondents suggested database of IBS manufacturer should be compiled and made online for easy reference of industry players. Information such as the location of the IBS factory is important to consider initially before requesting further information i.e. price quotation. Three of the respondents stated that they are interested in investing in IBS factory. However, the chances of securing a continuous and sufficient demand for the product worries the contractor especially to reach breakeven point of the investment.
Logistics problems
According to the interview done with contractors, five of the respondents stated that logistics problems, especially in the rural area of Sarawak, hindered the usage of IBS. The respondents further added that logistics and shipping costs would result in expensive overall construction costs. Three of the respondents who involved in precast concrete components stated that the components are big, bulky, heavy, and require the use of expensive cranes for hoisting. In the situation where the site was situated in a rural area and can only be accessed through a river, the additional cost incurred to transport the components.
In addition, one of the respondents argued the infrastructure of Sarawak is still 30 years behind the other states. Infrastructure such as road outside the cities which is long, narrow and unpaved needs to be upgraded and not suitable to move large components of IBS and heavy machineries. Inaccessible interior over remote areas is inaccessible with ground transportation and dependent on river access where only shallow-draft vessels and small boats like sampans can manoeuvre. Shallow river of Sarawak depended heavily on tidal movement and the silting of the river. This situation will give impacts on the construction schedule and the construction cost.
All respondents further suggested that the government should consider providing additional incentives for parties in IBS projects located in the rural area. Improvement of the infrastructure i.e. roads will also significantly contribute to the growth of IBS in Sarawak.
Conventional payment method
According to the interview done with contractors, three of the respondents emphasised that conventional payment method where progress payment is made when materials arrived at the site is not suitable for IBS. In the event where the offsite casting is employed, contractors will not be getting any payments from the employer until IBS components delivered to the site, though payments have to be made to the manufacturer once the components are cast. This issue will cause financial difficulties and complicate the cash flow of the contractors. The respondents further suggested that a new set of standard payment where off-site casting is employed should be developed and promoted to ensure all parties are made aware of it.
Conclusions and recommendations
This paper manages to draw significant factors affecting the implementation of IBS in Sarawak as the barriers and issues of the implementation differs from West Malaysia. Prior to IBS implementation, factors such as site location, location of the manufacturing factory, infrastructure conditions and services available should be assessed beforehand. Sarawak is less developed state compared to other states in Malaysia and most of the rural areas are underdeveloped. In a rural area, the facilities and infrastructure i.e. road network and river network need to be improved to accommodate the transportation of IBS components and machinery. Incentive programme developed by the government through CIDB plays important to enhance the adoption of IBS if it is implemented properly. The current incentives programme falls short as it is found to be inadequate and impartial towards all IBS parties. This paper proposes that the incentives should be provided to all IBS parties, without many conditions that have to be met. Although this paper managed to provide qualitative study, further research is recommended to be conducted in terms of increasing number of respondents. It is also recommended spatial study for future research to be done to locate IBS factory in Sarawak. It will help in manufacturing new location and knowing the flow of transporting IBS component from IBS manufacturer to the site construction.
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Domain: Business Physics
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The relationships between Big-Five personality traits and social entrepreneurship intention
Abstract The purpose of this paper is to test and discuss the relationships between the Big-Five personality traits (agreeableness, conscientiousness, extraversion, neuroticism, and openness to experience) and social entrepreneurial intention. This study applies the technique of structural equation modeling to explore relationships among latent constructs. Survey responses were collected from 753 undergraduate students to compile the analysis. The results confirm that individuals with different personality traits behave differently in relation to social entrepreneurial intention. While agreeableness, extraversion, and openness to experience have positive effects, neuroticism and conscientiousness negatively impact social entrepreneurial intention. Policymakers should build an environment that fosters agreeableness, extraversion, and openness to experience—these are the primary factors that influence SEI. Educators can design personality development programs to help students perfect the personalities that match becoming social entrepreneurs. Future research should be expanded to incorporate other factors such as culture, background, education, and experience to provide a more general view of the impact of personality on intentions.
PUBLIC INTEREST STATEMENT
This study explored the relationship between personality traits in the Big-Five and social entrepreneurship intention models in the Vietnamese context. While agreeableness, extraversion, and openness to experience have positive effects, neuroticism and conscientiousness negatively impact social entrepreneurial intention. The Vietnam context represents an interesting cultural group to study social entrepreneurship intention because the development of social entrepreneurship in Vietnam is in its early stages. People have similar cultural and personality traits based on Confucian values that differ greatly from western values. Therefore, this study has made significant contributions to social entrepreneurship literature in such an Asian developing country as Vietnam.
Introduction
Social entrepreneurship is a business concept that aims to provide innovative solutions to unsolved social problems and create social value to improve the lives of individuals and to improve individuals' lives and improve their well-being (Tan . Although the importance of social entrepreneurship has been acknowledged, it is essential to understand how social entrepreneurial intention (SEI) is formed (Mair & Noboa, 2006). SEI can be described as the practice through which a person intends to start a business to create social change in society. It has recently witnessed an increase in interest in the relationship between personality traits (Luc, 2020a;Nga & Shamuganathan, 2010;Preethi & Priyadarshini, 2018). Personality traits can be defined as integrated characteristics that determine the reasons for emotions, awareness, and behavior (Nga & Shamuganathan, 2010). Personality traits are innate or nurturing characteristics that affect an individual's ability, motivation, attitude, and temperament (Brandstätter, 2011). While the realistic view is that an individual's personality traits are influenced by heredity, the nurturing perspective suggests that childhood environment, education, and experience will reinforce new and emergent personalities. Therefore, personality traits are conceived as a stable average state, partially deliberate, and partially adapted subconsciously. Personality traits can predict and explain the behavior of an individual, as well as behavioral differences among individuals (Llewellyn & Wilson, 2003). These personality traits form a tendency to act in a certain way and can be interpreted as an action trend (Rauch & Frese, 2007). Herrmann (1991) describes a personality trait as "for each person a unique, relatively stable behavioral correlate which endures over time". Based on this approach, personality traits drive actions and, therefore, affect entrepreneurial behavior as a form of action.
In entrepreneurship, the relationship between personality traits and entrepreneurial intention has been explored and provides many interesting results for understanding the entrepreneurial intention formation process (Bazkiaei et al., 2020;Murugesan & Jayavelu, 2017;Şahin et al., 2019). Because of the difference in purpose between entrepreneurship and social entrepreneurship, the relationship between personality and SEI will also be different from entrepreneurial intention (Luc, 2020a;Nga & Shamuganathan, 2010). Many studies in social entrepreneurship have focused on specific traits such as risk propensity (Chipeta & Surujlal, 2017), locus of control (Schjoedt & Shaver, 2012), and self-efficacy (Tiwari et al., 2017). More recently, personality traits such as narcissism (Campbell & Miller, 2011;Smith et al., 2016), the desire for autonomy (Van Gelderen & Jansen, 2006), alertness, perseverance, creativity, pro-activity and emotional intelligence (Van Gelderen et al., 2008;Zampetakis et al., 2009). Recently, some specific social entrepreneurial traits have begun to receive the attention of the academic community. Several specific traits which have been identified include empathy, moral obligation and social entrepreneurial self-efficacy, humility and social responsibility (Chipeta & Surujlal, 2017;Irena Kedmenec et al., 2015;Politis et al., 2016;Prieto, 2011). These traits are considered typical for social entrepreneurs, as they help social entrepreneurs maintain their motivation levels and commitment to creating social values while encouraging individuals to participate in social business activities (Stephan & Drencheva, 2017).
One of the most prominent personality models is the Big Five Personality Model (Costa & McCrae, 1992a), which characterizes general traits including neuroticism, openness, conscientiousness, extraversion, and agreeableness (Costa & McCrae, 1992b). The relationship between different types of personality traits (e.g., openness, conscientiousness, agreeableness, neuroticism, and extraversion) and SEI were explored but supported only by little empirical evidence (Aure, 2018; Ip et al., 2018;Nga & Shamuganathan, 2010;Preethi & Priyadarshini, 2018). While Nga and Shamuganathan (2010), İrengün and Arıkboğa (2015), and Preethi and Priyadarshini (2018) conducted studies examining the impact of the Big Five on five dimensions of intention towards social entrepreneurship: social vision, sustainability, social networking, innovativeness, and financial returns, Ip et al. (2018) and Hsu and Wang (2018) tested the direct impact and concluded that openness negatively predicted social entrepreneurial intentions.
The Vietnam context represents an interesting cultural group to study SEI because the development of social entrepreneurship in Vietnam is in its early stages. People have similar cultural and personality traits based on Confucian values that differ greatly from western values (Luc, 2020a). Therefore, this study has made significant contributions to social entrepreneurship literature in such an Asian developing country as Vietnam. This study, predominantly conducted in Asian cultures like Vietnam, aims to contribute to the literature on social entrepreneurship by examining the direct impact of the Big Five on SEI. The findings of this study will have significant implications for educators to build a curriculum that develops the right personality traits to guide an individual into future social entrepreneurship. The following sections are the research model, method, analysis results, discussion, limitations, and future research directions. This paper starts with the literature review and hypothesis. Next, the method is reported. The following section presents results and discussion. The conclusions, limitations and future research comprise the final section of this paper.
Social entrepreneurial intention (SEI)
Ernst (2011) defines SEI as a "self-acknowledged conviction by a person that they intend to become a social entrepreneur and consciously plan to do so at some point in the future." Intentions can be defined as the aspirations of an individual starting a social enterprise (Tran et al., 2016). Preethi and Priyadarshini (2018) defines SEI as an individual's intention to create a social enterprise to bring about social change through innovation. Dees (2017) describes people with SEI as individuals with a focus on creating social value. In summary, SEI is an individual's desire to form an organization to create social change in society Luc, 2020b)
Openness to experience (OPEN)
Openness to experience is a trait for intellectually curious people who tend to seek new experiences and discover new ideas (Nga & Shamuganathan, 2010;Zhao & Seibert, 2006). An individual with a high score for openness to experience is someone who has a vivid imagination and creative thinking (Liang et al., 2013). These traits are very important for individuals planning to start their own social enterprise (Rothmann & Coetzer, 2003). Openness to experience is characterized by intellectual curiosity and discovery of new experiences, both of which are essential for starting a new social business because entrepreneurs are required to explore new ideas for their products or services (Zhao & Seibert, 2006). According to Anderson et al. (2019), an entrepreneur is an innovator. H1. Openness to experience is positively associated with SEI.
Extraversion (EXTRAV)
Extraversion is characterized by a set of specific personality traits, including adventurousness, activity, positivity, emotion, and enthusiasm to an extent (Tran et al., 2016). Extroversion is positively related to an interest in career choices (Costa et al., 1984). People who score high on extraversion tend to be cheerful and enjoy communicating with people. Those who score low on extraversion are quiet, discreet, and prefer to spend time alone (Zhao & Seibert, 2006). Social entrepreneurs need to interact with people and promote their new venture ideas to employees, investors, and clients, which requires social entrepreneurs to be highly extroverted. According to (Antoncic et al., 2015), entrepreneurs and non-entrepreneurs have significant differences in extrovert personality, while Zhao et al. (2010) also found a positive relationship between extraversion and business intentions.
Agreeableness (AGREE)
Agreeableness refers to the individual's level of empathy, compassion, and warmth (Zhao & Seibert, 2006). Highly agreeable individuals tend to be trusting, altruistic, caring, and forgiving (Costa & McCrae, 1992a;Tran et al., 2016). Entrepreneurs have to be trustworthy and able to collaborate in establishing relationships with stakeholders (Eisenhardt & Schoonhoven, 1990;Shane & Cable, 2002). In the context of social entrepreneurship, agreeableness acts as empathy to motivate an individual toward social values rather than economic ones. Compassionate individuals will explore social problems to solve them and promote cooperation to increase social values, especially those with social and sustainability visions (Nga & Shamuganathan, 2010).
Conscientiousness (CONSC)
Conscientiousness involves traits such as being organized, self-controlled, careful, resilient, and trustworthy (Costa & McCrae, 1992a). Conscientiousness is tied to entrepreneurship, as someone with a high need for achievement and motivation to achieve their goals is more likely to become an entrepreneur (Zhao & Seibert, 2006). Entrepreneurs are individuals who don't like repetitive work (Antoncic et al., 2015). Conscientiousness is considered the character that represents the biggest difference between an entrepreneur and a manager (Preethi & Priyadarshini, 2018). In addition, more conscientious entrepreneurs are more likely to survive the venture (Preethi & Priyadarshini, 2018). In addition, more conscientious entrepreneurs are more likely to survive the venture (Ciavarella et al., 2004). Higher conscientiousness also tends to create a higher performance drive to overcome obstacles more effectively.
H4. Conscientiousness is positively associated with SEI.
Neuroticism (NEURO)
Neuroticism is related to the degree of emotional stability of the individual (Costa & McCrae, 1992a). Highly neurotic individuals often exhibit mood swings, impulses, lack of awareness, low self-esteem, and depression. In contrast, an emotionally stable person will be able to stay calm in stressful situations and demonstrate high self-esteem, comfort, and confidence (Tran et al., 2016). Entrepreneurs are often challenged by the variety and complexity involved in starting and maintaining a new business. Therefore, they must shoulder the physical and emotional burden of obstacles, risk of failure, or lack of confidence. From the above characteristics, it can be seen that entrepreneurs are people with high emotional stability. In other words, people who promote emotional stability are more likely to want to take on the stressful tasks involved in entrepreneurship, especially in the context of social entrepreneurship (Nga & Shamuganathan, 2010).
Data gathering
This study has targeted undergraduate students from universities in Vietnam. This study is aimed at students because students are those who are preparing to make a career choice. They are considered to have the most potential target for starting a social business (Ernst, 2011;Hockerts & Hockerts, 2017). Students from universities in Ho Chi Minh City participated in this study voluntarily through convenience sampling. The survey was sent to 1014 students. A total of 753 valid answers were received, corresponding to a 74.26% response rate. The structural equation modeling (SEM) technique is applied to test hypotheses. The statistical software SPSS and AMOS were used to run the SEM analysis. The descriptive statistics for demographics were shown in Table 1.
Measurement of the constructs
The research model is shown in Figure 1. Each scale item used a five-point Likert-type response format ranging from 1, "strongly disagree" to 5, "strongly agree." The items for the Big Five personality traits were taken from Nga and Shamuganathan (2010). SEI is a six-item scale (Liñán & Chen, 2009) that was adopted and adapted for the context of this study. Cronbach's alpha was used to test the reliability of structures in a pilot survey of 100 individuals. Pilot test results showed all these scales have acceptable reliability.
Common method bias
The authors conducted analyses to assess the potential threat of common method bias (CMB). First, a Harmon one-factor test (Podsakoff & Organ, 1986) was conducted on OPEN, EXTRA, AGREE, CONSC, NEURO, and SEI. This test showed that five factors were present, and the greatest covariance explained by one factor was 27.55%, indicating that CMB was not likely a contaminant of concern. Second, following Podsakoff et al. (2003), the authors included in the PLS model a method factor whose indicators included all the principal constructs' indicators and calculated each indicator's variance substantively explained by the principal construct and by the method. The results showed that the average substantively explained variance of the indicators was 0.57, while the average method base variance was 0.005. The ratio of substantive variance to method variance was about 149:1. In addition, most method factor loadings were not significant. In summary, CMB was unlikely to be a serious concern in this study.
Validation of measures: Reliability and validity
The results showed a good measurement model fit, which is critical to perform further analysis of relationships among latent constructs. The results were summarized in Table 2, indicating that the measurement model is consistent with the data.
The reliability and convergent validity of measurement scales are typically determined by factor loadings, Cronbach's alpha composite reliability (CR), and average variance extracted (AVE;Hair et al., 2016). The results presented in Table 3 show that Cronbach's α and CR values were greater than the recommended value of 0.7, while factor loadings and AVE were above the threshold of 0.5; together, these results indicated the reliability and validity of all constructs in the model Hair et al., 2016). The results were summarized in Table 3. Table 4, The emboldened elements in the matrix diagonals, representing the square roots of the AVEs, are greater in all cases than the off-diagonal elements in their corresponding row and column, demonstrating discriminant validity (Fornell & Larcker, 1981).
Hypothesis testing
The significance of the coefficients β1, β2, β3, β4, and β5 indicates direct effects of OPEN, EXTRA, AGREE, CONSC, and NEURO on SEI. The results also suggest the acceptable fits of the models Hair et al., 2016). The results were presented in Table 5. H1, H2, and H3 suggest that OPEN, EXTRA, and AGREE have positive effects on SEI choice. The research results show positive and significant effects of OPEN (β = 0.47, p < 0.001), EXTRA (β = 0.32, p < 0.001) and AGREE (β = 0.22, p < 0.001) on SEI. In contrast, H4 and H5, which propose that CONSC and NEURO have negative impacts on SEI, respectively, are also supported through the results of significant negative effects of CONSC (β = −0.41, p < 0.001) and NEURO (β = −0.38, p < 0.01) on SEI.
Discussion
The results of this study illustrate strong relationships between the five personality traits and SEI, demonstrating that people with SEI usually have higher levels of agreeableness, extraversion and openness, and relatively lower levels of neuroticism and conscientiousness.
Openness to experience positively affects SEI, which is similar to previous studies in entrepreneurship (Zhao & Seibert, 2006). This personality trait is an essential ingredient because social entrepreneurs are creative enough to have a vision of what they want to happen and how to make that vision happen. Establishing a social enterprise capable of requiring individuals to develop innovative solutions to complex social problems (Abu-Saifan, 2012; Acosta et al., 2018;Acs et al., 2013). Therefore, people who are very open to new experiences tend to become social entrepreneurs. Innovation is considered a suitable trait to succeed in social entrepreneurship because it can help form creative solutions to social problems (Peredo & McLean, 2006). Innovation is noted as the core competency for an individual to solve social problems. People who are creative and want to solve social problems are more likely to become social entrepreneurs in the future (Maak & Stoetter, 2012;Maclean et al., 2013).
Similarly, agreeableness was found to be positively related to SEI. This result is similar to the studies of Nga and Shamuganathan (2010), Preethi and Priyadarshini (2018), and Aure (2018). Individuals with high agreeableness often show empathy and social responsibility, which are typical traits of social entrepreneurs. These individuals often love social work; they always want to help people with difficult circumstances (Luc, 2020a). In addition, agreeableness can increase understanding that facilitates and attracts potential social entrepreneurs to dig deeper into social issues to find solutions. Therefore, it is expected that highly agreeable people are more likely to be attracted to social entrepreneurship.
The significantly positive relationship between extraversion and SEI discovered in this study provides some interesting insights into this personality. Extraversion contributes to an individual's proactive personality to nurture and promote the drive to become an entrepreneur (Crant, 1996). Proactiveness also refers to the direction in which to initiate and maintain specific actions such as finding opportunities, recognizing opportunities, and making a difference (I. Kedmenec et al., 2015). Proactive people are more confident about their entrepreneurship (Kreiser & Davis, 2010;Kreiser et al., 2013). Similar to commercial entrepreneurs, social entrepreneurs are extraverted because they have to communicate with stakeholders such as investors, shareholders, government, customers (Ciavarella et al., 2004;Zhao & Seibert, 2006). Therefore, individuals with higher extraversion will have a higher intention of becoming social entrepreneurs.
A significant negative effect of neuroticism on SEI means that people with this trait desire to become social entrepreneurs. This result is similar to most studies on social entrepreneurs (Aure, 2018;Nga & Shamuganathan, 2010). Entrepreneurs are often described as tough and optimistic about handling tasks and pressures (Locke, 2000). Social entrepreneurs suffer a lot of pressure from economic challenges, and family support for the success or failure of their social enterprise (Grohs et al., 2017;Takmashva & Bogomolova, 2018). Therefore, in order to bear the physical and mental burden, social entrepreneurs need to be someone with high emotional stability.
This study shows that conscientiousness can become a barrier to SEI. Although individuals with a high need for achievement will be attracted by entrepreneurship (Chen et al., 2012;Hansemark, 1998;Wu et al., 2007;Zeffane, 2013), this is not true in social entrepreneurship. The results of this study can be explained by potential social entrepreneurs who have a social orientation in their thinking; They are oriented to pursue social values instead of fame, money, or achievement. This may be attributed to the fact that highly conscientious individuals have a greater desire to achieve success in starting a business (Ernst, 2011;Luc, 2020a). Becoming a social entrepreneur may be less attractive to high-conscientious individuals, and as a result, they may have developed a negative perception of their intention to start a social business.
Theoretical implications
The results showed that personality traits were a key determinant of SEI. Although the relationship between the Big Five traits and entrepreneurial intention has been discussed in many previous studies (Murugesan & Jayavelu, 2017;Şahin et al., 2019;Zhao & Seibert, 2006), this study contributes to the theoretical basis by providing empirical evidence in the context of social entrepreneurship. Research results confirm that individuals with different personality traits behave differently in relation to SEI. The inclusion of five major personality traits in an SEM combined with SEI provides a more comprehensive explanation than most previous studies which have shown one or a few personality traits (Bacq & Alt, 2018;Baierl et al., 2014;Chipeta & Surujlal, 2017;Ernst, 2011;Luc, 2020a). While agreeableness, extraversion, and openness to experience are said to be motivating, conscientiousness and neuroticism are considered barriers.
Practical implications
Policymakers should build an environment that fosters agreeableness, extraversion, and openness to experience-these are the primary factors that influence SEI. However, interventions must be appropriate to build age-appropriate personality traits. Educators can design personality development programs to help students perfect the personalities that match becoming social entrepreneurs. In addition, the exposure to the management and establishment of social enterprises is also the basis for personality development, contributing to raising awareness of the impact of social entrepreneurship on society.
Conclusion
This study explored the relationship between personality traits in the Big-Five and SEI Models in the Vietnamese context. The results show the reliability and validity of structures, which support all five proposed hypotheses. While agreeableness, extraversion, and openness to experience have positive effects, neuroticism and conscientiousness negatively impact social entrepreneurial intention. The results of this study have some limitations. First, the study is based on a convenient sample in Vietnam. Future research should be expanded to incorporate other factors such as culture, background, education, experience to provide a more general view of the impact of personality on intentions. Second, this study was limited to purely SEI; future research is encouraged to study the mechanisms and provisional effects on how social entrepreneurial intention leads to actual behaviors. Finally, the results reported in this paper are conditionally based on self-reported measurements; the measurement of objective personality based on the judgment of those around them (e.g., colleagues, best friends, and colleagues) will also provide a different perspective on personality impact on SEI.
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Domain: Psychology Business
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Domain: Psychology Business
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Effect of Personality Traits on Employee Perceived Performance: The Mediating Role of Organization Justice
The purpose of this study is to examine the effect of personality traits on employee perceive performance with the mediating role of organizational justice. This study was conducted in the pharmaceutical industries operating in Hayatabad Peshawar. Data was collected through a properly structured questionnaire from 286 employees working in these industries and Simple Random Sampling was used as a sampling technique. Personality traits (openness to experience, agreeableness, conscientiousness, neuroticism & extraversion) were taken as independent variables; employee perceived performance was taken as a dependent variable, while organizational justice was used as a mediating variable. According to the findings of the study, personality traits were positively related to employee perceived performance. Results of regression analysis showed that organizational justice partially mediates the relationship between personality traits (openness to experience, agreeableness, conscientiousness, neuroticism & extraversion) and employee perceived performance.
| I N T R O D U C T I O N
Human nature is complex and complexity is due to the different social, moral, geographical differences, and ethical perspective of a human being. By nature human beings are unable to live alone and are dependent on one another, they need to work in groups and form teams to achieve their goals and objectives. But to work together they do possess disagreements whether their relations are in favor of the firm or diverted to some other place. As Gutman and Thompson, (1996) wrote in their book "Democracy and disagreement", moral disagreements are also internally rooted and Hume, (2012) argues, that a characteristic of human nature is limited generosity. Hence humans although working together for a common goal, will tend to disagree on certain points which may lead to psychological weakness on individuals and organizational long-run consistency to sustain their competencies.
The personality of the employee is considered essential and their importance level cannot be denied from the psychological engagement of a firm. For instance, the individuals working in the same environment, have different levels of attachment with the organization. The difference which exists in an individual is due to a personality trait. Prevailing scenario for individuals that how they perceive the organization particularly for better understanding of organizational behavior that what the organization expects from their employees.
The present study exists two types of mechanisms the direct effect of personality trait on employee perceived performance and secondly to demonstrate the relationship of justice on the employee between the trait and employee perceived behavior and mindset thought emotion and habitual bifurcation and diversification.
Underlying of the individuals' different approaches for the logical understanding of job attitudes. The five dimension of personality in which neuroticism express a moody while agreeableness as sympathy for openness (Creative) and organize for consciousness and also observe the potential control demographic variable effect such as age, gender, job, tenure, organizational tenure use as a control variable (Meye, 2002). The theory is based to argue and explore these issues, the dispositional theory is used as intimating source of validity for justice perception between the five-factor modal and outcomes. The social exchange of ethical perspective is to enhance the individual subsequently the performance of the employee, by the exchange of two organizational contexts.
First, implement the mediating role of organizational justice and employee attitude to find the importance of fairness during organizational changes and handling employees equally by using the judgment prospect. The relationship between organization commitments was reported to compare the satisfaction. According to dispositional theory to observe either expectance relative stable characteristic, their attitude and behavior which ultimately changes the occurrence in working condition organizational structure promotional opportunities and despite understanding and better motivation to improve working style (Mathiu, 1997).
. | T h e o r e t i c a l B a c k g r o u n d
The approach of the trait theory primarily describes the habitual pattern of behaviours, thoughts, and emotional conditions. The disposition concept of trait constructs the individual behavioral influence relatively stable over time or differs across the individuals. Personality theory suggests dynamically organizational mutual structure and their mental process determining an individual emotional and behavioral perspective adjustment to their concern environments. Personality theory is predisposition feeling which is relatively consistent manner over a period of time across the different situations and different climatic conditions (e.g.work and non-work) relatively refer to the cross-situational consistency the trait will effect negatively dispositional and positive.
According to the personality theory, the individual personality will influence work and non-work spill over in several ways, especially overlapping between effects of FFM within the Extraversion factor positively and effect with neuroticism is negatively (Swider and Zimmerman, 2010). Many other theories match with a relative study of trade and justices perception like equity and social exchange etc. This theory assumes that individual responses keep on changing and involves a need to decrease that level of psychological suffering or disowners, which is developed by the inequitable states Individuals or employees in an organization keep on measuring their perceived "inputs" (what the employee provides to an organization, including time, sincerity, extra effort, and flexibility) and their "outcomes" as a ratio in comparison to a referent individual. It is believed that people are at peace with social exchanges and struggle for actions towards the organizational goal accordingly. Greenberg (1990) found when the pay of employees was decreased without explanations to employees then they were motivated to approve injustice by increasing the level of employee thefts in the organizations. Procedural justice is also defined by Thibaut and Walker, (1975) which is related to the procedures that are put into use or used for resource allocation. Procedural justice also refers to that there should be fairness in the procedures or the procedures used by an organization to decide the outcomes should be fair and also fairness in the methods, processes, or the mechanisms.
| L I T E R A T U R E R E V I E W . 1 | P e r s o n a l i t y T r a i t
A personality trait is a different human dimension that is used to describe a human habitual pattern of behaviors, thought and emotion also observed either trait is stable over time or differs across the individuals explored earlier by trait theory (Allport, 1937). Openness to experience; the type of personality trait which interprets the human inner feeling of intellectual curiosity which described the tendency that clusters to gather the human trait. The person's openness score is low it means that it is closed to experience and commonly conventional and traditional in their outlook and behavior (Judge, 2002). Conscientiousness is the human trait that describes the vigilant, careful self-dispelling, and dutiful nature. The tendency to think before acting and prepared planning rather than spontaneous behavior systematically organized and workaholic (Barrick and Mount, 1991). Extraversion human trait in which understanding the psychological usage outgoing talkative, energetic. Introversion is more reserved in solitary behaviors the tendency of inner psychological activity while extroversion is the type of attitude which concentrates on the interest of the external object (Barrick and Mount, 1991). Agreeableness; the individual personality behavior which is perceived as sympathetic, kind, cooperative, and consolidated based on social harmony. A person who scores high in this domain is tending to behave as honest, decent, and trustworthy (Digman, 1990).
Neuroticism; the fundamental trait of human study which is described by the level of fear, worry, frustration, and neurosis. The person who scores highly in neuroticism is commonly depressed mood and they have the disorder of anger, guilt, anxiety, and depression in behavior (John, 1992). The dimension of personality traits is used to describe the human personality and comparing with the behavior and attribute of the mind. The organization needs to take full advantage of employee's potential in terms of creativity so that change, learning, innovation, performance, and competitiveness can be sustained in the long term an organization or at the workplace represents the production of useful ideas and solutions related to products, services as well as procedures (Oldham and Cummings, 1997).the industrial and organizational topics are linked to personality dimension, including absenteeism the employee use the positional time in social laughing and not utilizing his /her creativity for the growth of the firm ( Porter and Steers, 1982).
Considerable research supports the relationship between personality traits and job performance variables, training efficiency, academic performance, and satisfaction according to the persuasions of the employees as to think about the organization structure internally as well as to compare it with the same caliber organization (Barrick and Mount, 1991). The biological factor like heredity, age, and gender differences have a deep influence on the five-factor modal of the growth of the brain along with situations faced by an individual in different circumstances (Sato et al, .2012). The leadership style also plays a vital role in the personality trait either they try to overcome the deficiency of the individual in organization optimistically and analyses the area of improvement to overcome the pessimism (Ghiselli, 1971). The organizational climate is also important because, for better results, the effective climatic condition is required both explicitly and implicitly for the overall achievement of organizational goal the strong advocacy of the use of this five-factor model to advance the current research to improve the creativity of the perceived performance.
. | O r g a n i z a t i o n a l J u s t i c e
The concept of justice is linked to equity theory given by Adams, (1963) and has three dimensions: distributive, procedural, and interactional. Fairness in the distribution of resources and decision outcomes is called distributive justice Adams, (1963) similarly the fairness in policies and procedures of the organization are called procedural justice Greenberg, (1990) and the fairness in communication and sharing of information is called interactional justice. Organizational justice is defined as how individual judges and sees the behavior of the organization towards him/her. When organization shows discrimination towards workers they feel regret they feel injustice (Greenbreg, 1990). Our focus is on the organization as justice because, organizations' justice is directly related to various organizational outcomes such as employee performance, motivation, and work-related attitudes (Charash and Spector, 2001). Employees showing less organization justice is based on strong organizational occupation which affects secede in way of success for the firm. Recent research provides information and the finding of organizational justice employee essay decided individual and company growth (Smucker et. al., 2003). The research has been conducted to explore the relationships between organizational justices and attribute of the employee retention and equally move with the desire of the firm. The specific dimension of justice is not strengthful relation for any variation to consider for complete understanding and interpretation rather than overall justice OJ (Lind and Shaprio, 2001). Theorganizational injustice is directly related to various organizational outcomes such as employee performance, motivation, and work-related attitude (Staw and Chohen, 2005).
. 3 | E m p l o y e e P e r c e i v e P e r f o r m a n c e
Employee-perceived performance is used to describe the way out and tools specifically and analyses the system for the goal of improving user productivity which is based on constraints that affect the performance of the individual as perceived by the user using it. Performance is comprised of events in which one individual or group is a performer while the other group is an audience and it may be an observer group. In particular ways and employees perceived different in places, production support tools, and techniques which apply for services and how they are related to performer and observer. In a modern era of rapid economic, social, and technological growth as well as higher complexity and diversity, an individual attribute which in adaptability for altered circumstances is based on the new demands, different surroundings, and diversifies it accordingly to the situation. This fundamental restructuring of the world for work also impacts careers development as many employees do not commit continuity in behavior and attitude to one employer anymore, but rather occupy various jobs in their entire career (Savickas, 2006). Individual adjustment can cope with current and anticipated benefits. Career relate to changes and challenges has received a great deal of research attention over the past years and is called career adaptability which is required for getting core competency and as it should be, for long run aggressive growth and the ability to overcome the drawbacks, shortcoming, and weakness and try to, not only overcome but also straggling to convert the drawbacks into strength. Learning and focusing on it gives the concept of core selfevaluations to determine the effective cause for satisfaction (Porfeli, 2012). It is seen that high-maintenance behavior is reflected in frequently aggravating actions exhibited in the workplace. High-maintenance employees often verbalize their dissatisfaction, grumble about expectations, and unabashedly complain. The HMB is a dimension of work behavior distinct from (but potentially related to) job performance. While HMB may contribute to failures in all aspects of overall performance, including core identification of task and inter-personal facilitation (Scotter and Motowidlo, 1996). The employee reactions are typically associated with perceived unfairness and are directed interpersonally or against organizations.
In contrast, HMB appears to be primarily interpersonally, only a few individuals seem to initiate highmaintenance responses in situations where the majority of voices have little or no resistance. Consequently, it appears that causes of HMB are attributable in part, to individual difference variables. The researcher's first analyses in the vehicle industry for enhancement of employee performance and effective management. They mainly focus on the two-dimension polarized action plan of the marketing strategy implementation and designing the exit strategy for it (Martilla and Janes, 1977). These analyses design plane to evaluate the problem area either it possesses in the organization side or communication, guideline and training mentoring and to observe it either low/high or well/poor with the perspective of the performance (Olson and Fortencey, 1992).
. 4 | P e r s o n a l i t y T r a i t & E m p l o y e e P e r c e i v e d P e r f o r m a n c e
The previous study mainly focused on the output and productivity of the employee but the approach is to determine the level of satisfaction by Deng, (2007) through important performance analyses, affective job performance particularly on the design of the advertising, testing, and training related to work achievement on behalf of competency bases for an adequate level of the productivity (Berts, 2004, Robb, 2002). Extroversion/ introversion is the tendency which is associated with talkative, social abilities, and try to solve the issue through effective communication, high the level of this tendency more superior performer.(Barrik and mount, 1991).
Study has clear practical implications, as it can lead HR professionals and line managers to more effectively identify and select individuals who will work productively in departmental and group projects, task forces, or cross-functional workgroups. Indeed it is a collective work effort where individuals who engage in high maintenance behavior (HMB) may instigate havoc (Principe, 1997). Attachment and involvement are emerging job attitudes that measure the mental performance and involvement of individuals. One of the important variables that affect the psychological level of engagement is the personality of the employee. Neuroticism refers to the stability of the individual who feels fair, worried, and insecure, and depressed emotionally is lowers the capacity of the deliberate performance. Consciousness is the pattern of habitual individual responsible and plans full, workaholic and achievement-oriented performance in this category are higher against the remaining (Barrick and Mount, 1991). The fourth factor is agreeableness which is human habitual pattern altruism, caring, supportive, soft hatred, and tolerant so they worked together target-oriented (Digman, 1990). Judge, Heller, and Mount, (2002) the last factor is Openness to Experience working style is scientifical, artistic creativity and political liberalism the behavior tendency is typically associated with being imaginative, intellectual and performed artistically sensitive. Organizational conformation for preventing cost is based on the utilization of personal managerial skills because of the stress condition. If the employee is satisfied it will contribute highly to the overall performance of the firm and either the turnover of the individual not only affects himself but also affect the organization's output (Keshavors and Muhammadi, 2011).
Extraversion is related to the experience of negative life events, Extraverts are predisposed to experience positive emotions (Costa and McCrae, 1992), and positive emotionality is likely generalizable to job satisfaction, as demonstrated by meta-analysis of positive job satisfaction. Evidence also indicates that extroverts have more friends and spend more time in social situations than introverts because of their social facility, are likely to find interpersonal interactions, comparatively more rewarding (D. Watson and Clark, 1997). Five factors namely Extraversion, agreeableness, consciousness, neuroticism, and openness to experiences involve personality traits.
Agreeableness is the fourth factor that involves caring supportive softhearted softheaded and tolerant. Openness to experience is the final factor. According to Mccreer and Costa,(1991) acceptance of employees regarding the good well is based on agreeableness and life satisfaction. According to Organ and Linger (1995), agreeableness involves getting work done in a pleasant environment with others also satisfies relationships among the organization. Similarly, Linger and Organ stated that consciousness is related to job satisfaction because it involves a general working environment. Den Evend and cooper, (1998) found a positive relationship between job satisfaction performance and consciousness.
. 5 | P e r s o n a l i t y T r a i t & O r g a n i z a t i o n J u s t i c e s
Most research has been done on perceived employee performance, but we examine the personality trait and the organization with respect to criteria and structure justice for all stack older in terms of organization justice to check the dispositions among the employee perceived performance and five basic personality traits Mischel, (1977) suggested that individual behavior is a result of individual performance regarding the organizational contribution. The organizational interaction, if the employee reacts in negative consequences to overcome the damages in both the individual level and the corporate level strategy. To declare the relation related to the personality traits with organization contribution. The overall achievement of the firm in terms of employee perceives attachment in the return of justice with delivered from the universal personality trait and regarding the justice procedure of firm which employee perceive better and engage extra with corporate achievement. The organization on the base of the trait, the leading product for further prospective in official matter advantage consideration of traits with the justice for the exchange of organization is satisfactory. If the suggestion is positive then finding and highlighting them with relative personality traits to acknowledge and entertain maximum benefit to assume the lower-compositing of the firm keeping the treatment of behavior regarding their mega analyses (Berry and Sackett, 2007). This research edges to find the products justice and influences on the fine further modules a person ability how much vital with organization workplace. The firm expands overtime on the employment growth for the batter contribution in their objectivity (Ashton and Lee, 2008). The output from the organization employee, presentation and accordingly predicting the top-level observes to suggest actual decisionmaking criteria (Well and Hosting, 2010). One of the key models is the big five personality traits model which indicates that five personality traits are useful in determining different kinds of work-related attitudes and behaviors. Most of the studies have been conducted to find out the disposition cause of work-related attitudes and behaviors like the relationship between personality traits and performance. The organization treats different employee in such a way that never frustrate them the task given to them (Johnand Zajac, 1990). Lind, (2001) explained the perceptive of the organization justices it's constricting during the judgment phase by the collaboration of the procedure, distributive and interpersonal which is based on the social influence of the employee mindset, attitude, and aspect of behavior earlier explain by (FHT) Fairness Heuristic theory.(Adam, 1969, Colquitt, 2001). A procedural justice is related to perceiving the fairness process used to achieve and overcome the outcome of the direction of the firm. The interpersonal justices focus on the member who tried during the decision-making process. These dimensions integrate and constrict to form the foundation of the organizational justices (Greenberg, 1997, andCropanzano, 2001). The organizational justices and their dimension are repeatedly linked with employee commitment, citizenship, satisfaction, and employee perceived performance (Cherash and Spector, 2001, and Begley et al, 2006). The theoretical destructions among the different dimensions of organization justices have also deeply been discussed in an empirical study of the Mata analyses (Charash and Spector, 2001). However, most of the research experimental observation affect the self-concept of working attitude and attention (Colquitt, 2001). Lord and Borran, (2004) explain two mechanisms of organizational justice. First, the justice dimension weighs differently contingent level of working, self-concept and their influential effect on the attitude forming behavior. Secondly when the individual rational or collective level for activation differently evaluated standard compeering with a directional magnitude of discrepancy subordinate justices perception which ultimately affect the attitude of individual behavior pattern in the outcome. Fairness of supervisor for grounded bases, ethical assumption of normative commitment, the sense of justices often involved for deliberate transformation in acceptable condition (Goldman, 2005). According to Lowerr, (1966), information and knowledge without power lead to frustration because the employee cannot systematically use their skill. The behavior ethic with the individual confirmation for rule and norms of social morality and ethical aspect organizational justices largely focus on the individual judgment which drives subsequently behavior related to the considerable ethic and justices (Folger, 2001 and singer, 2000).
. 7 | M e d i a t i n g R o l e o f O r g a n i z a t i o n J u s t i c e s b e t w e e n P e r s o n a l i t y T r a i t s a n d P e r c e i v e d P e r f o r m a n c e
Organizational Justice is used as a mediator for the ultimate predictability of dimensions (distributive, procedural, interactional). To determine the importance of organizational justice on the variable outcomes. The Colquitt, (2001) the study is distinguished by the distribution, procedure interaction as assessment as Colquitt items crunch's batch alpha reliability higher for each responsibility in their general justice judgment for employee behavior attitude might also effect full verses partial meditative Lind, (2001) using in phase meditation prospect to assume the other factor is constrict for examining justice. The researcher suggests the identical prediction about meditating or moderating variables will consider all three types of justice (Sommer and Tetrick, 2002). Hence based on the above literature the following hypotheses have been developed.
H1:
Openness to experience significant effects on employee perceived performance.
H2: Consciousness significantly effects employee perceived performance.
H6:
Organizational justice significantly mediates the relationship between personality traits (openness to experience, consciousness, agreeableness, neuroticism, and extraversion) and employee perceived performance.
Hence based on the above study Following is the conceptual framework of the study. Approximately more than 1000 employees are working in these industries and the proposed population is one thousand.
. 2 | S a m p l i n g D e s i g n
Based on the standard provided by Yamane, (1967) for determining sample size from a given population, is two eighty-five (285). A convenience sampling technique was used for data collection in the given study.
Population (N)
Formula Computation Sample 1000 n=N/1+N*e 2 n = 1000/3.5285 Where n= sample size, N= population e= error .05 Samples are selected by using the convenience sampling technique because this type of sampling technique is appropriate for gaining quick information.
Personality Trait
It consists of 44-items representing each factor (extraversion, neuroticism, openness, agreeableness, & conscientiousness). The questioner following in this research was developed by Srivastava, (1999) five rating scale from strongly disagree to strongly agree which adopted a by44-item inventory that measures an individual on the Big Five Factors dimensions (openness to experience, Consciousness, agreeableness, neuroticism, and extraversion) of personality (Goldberg, 1993). Each of the factors is then further divided into personality facets for each five-factor.
Employee Perceived Performance
The employee-perceived performance scale developed by (Tessema, M and Soeters, (2006)was used to measure perceived performance with 5 points Likert-type scale ranging from strongly disagree to strongly agree which is a composite of role-performance measures and is an indirect measure that captures a person's selfappraisal. The comparison of his/her performance with other performances of a similar task.
Organization Justices
A Seven-item scale developed by Niehoff and Moorman, (1993)14 questions were used to measure organization justices. For this measure, a 7 point Likert-type scale ranging from (strongly disagree, slightly disagree, Disagree, Neutral (Not disagree/neither agree), Agreed, Slightly more agree, strongly agree) with higher scores indicating a higher level of overall organizational justice.
| R e s u l t s a n d A n a l y s i s . 1 | D e m o g r a p h i c S t a t i s t i c s
For the1000 population 286 questioners were distributed and in return, only 268 were collected from the respondent. More than concerned, given population, working in Hayatabad Industrial Estate Peshawar pharmaceutical sector has been selected as a sample size for this study. The mention description of demographic variables is given in the table below. The third demographic variable represents the qualification of the respondents who participated in the study. Maximum respondents were having graduation participated in this study with 34.7% of the total 93 from the sample size. From the total given sample, 53 respondents with 19.8% were having HSSC. Minimum participation was made by the respondents who have done research degrees in their particular field. These respondents were 15 which is 5.6% of the total sample size. The fifth demographic variable shows the income of the respondents who participated in this study.
Respondents having income in the range of 20000 and 40000 with 131and 48.9% in number highly participated in this study, followed by the participants having their income between 41000 and 60000 with 28% and 75 in a number of the total sample size of 268. Participants having income above 60000 holds 3rd position with 40 with 14.19% regarding the participation of the study, above 80000 income the respondents having 14 with 5.2% from the total sample size. Minimum participation was made by respondents 3% having their income more than 100,000 is 8 in number of the total sample size of 268
| R e l i a b i l i t y A n a l y s i s
Cronbach's alpha (α) represents the coefficient of internal consistency of a variable. Normally alpha lies between 0 and 1. Greater the value of alpha, the higher the internal consistency of items. For 14 items of organization, justices scale the value of Cronbach's alpha or reliability coefficient is 0.86 which is greater than 70% and is a sign of highly reliable value. Similarly, the value of employee perceives performance alpha for 4 items of is 0.72 greater than 70% which shows the reliability and internal consistency variable of the items. The personality traits for each variable the value of Cronbach's alpha is above 0.61 which shows that these items are inter-consistent and reliable while the collective & combined reliability of personality trait 44 items the Cronbach's alpha is highest among all 0.92 reliability score.
| M e d i a t i o n A n a l y s e s
The above Table 4 The independent variable openness to experiences for the above table F value for openness to experience is 88.8 with P-value 0.000 level of significance the value of p less than 0.05 it indicates that the overall modal is significant. R square value .250mean means that .250percent of variation is explained by the independent openness to experience in the dependent variable employee perceive performance while the rest of variation due to the other factor which have not included in this study. The value coefficient is 0.67 it means one present increase in openness to experience the ultimate 0.67 present change will occur in employee perceive performance. The P significant value is 0.000 which is less than 0.05 of openness to experience therefore we reject null hypotheses and conclude the openness to experience is a significant relationship with employee perceive performance. The independent variable consciousness for the above table 4.8 F value for consciousness is 64.00 with P-value 0.000 level of significance the value of p less than 0.05 it indicates that the overall modal is fit. R square value of .194means it means that .194percent. The value coefficient is 0.572 it means one present increase in consciousness the ultimate 0.572 present change will occur in employee perceived performance. The P significant value is 0.000 which is less than 0.05 of consciousness there for we reject null hypotheses and accept alternative hypotheses conclude the consciousness is a significant relationship with employee perceive performance. The agreeableness as an independent variable for the above table 4.9 F value for agreeableness is 71.57with P-value 0.000 level of significance the value of p less than 0.05 it indicates that the overall modal is significant. R square value .212mean that .212percent of variation are explained by the independent agreeableness in the dependent variable employee perceive performance while the rest of variation is due to the other factor which has not been included in this study. The value coefficient is 0.642 it means one present increase in agreeableness the ultimate 0.642 present change will occur in employee perceived performance. The P significant value is 0.000 which is less than 0.05 of agreeableness there for we reject null hypotheses and conclude to accept alternative hypotheses the agreeableness is a significant relationship with employee perceive performance. The independent variable neuroticism for the above table F value for neuroticism is 56.22 with P-value 0.000 level of significance the value of p less than 0.05 it indicates that the overall modal is fit. R square value of 0.175 shows that the percent of variation is explained by the independent neuroticism in the dependent variable employee perceived performance while the rest of the variation is due to the other factor which has not been included in this study. The value coefficient is 0.537 it means one present increase in neuroticism the ultimate .537present change will occur in employee perceived performance. The P significant value is 0.000 which is less than 0.05 of neuroticism there for we reject null hypotheses and conclude the neuroticism is a significant relationship with employee perceive performance. The independent variable extraversion for the above table F value for extraversion is 38.29 with P-value 0.000 level of significance the value of p less than 0.05 it indicates that the overall modal is fit. R square value 0.175its means that the percent of variation is explained by the independent extraversion in the dependent variable employee perceive performance while the rest of the variation due to the other factor which have not included in this study. The value coefficient is 0.502 it means one present increase in extraversion the ultimate 0.502 present change will occur in employee perceived performance. The P significant value is 0.000 which is less than 0.05 of extraversion there for we reject null hypotheses and conclude that extraversion is a significant relationship with employee perceive performance 4.12 shows the independent variable openness to experience and the dependent variable organization justices the F value 16.064 and R is .057based on p-value 0.000 which shows that the overall modal is significant. The value of R shows that the variation explains openness .057percent is explained in organization justices. The coefficient value .239mean that openness to experience increase by 1 % brings a .239percent change that will occur in organization justices. The P-value for openness is less than 0.05 which shows a significant relationship between openness to experience and Organization justices so we accept alternative and reject null hypotheses. The above table Show the independent variable consciousness and mediating variable organization justices the F value 21.758 and R are .076based on p-value 0.000 which show that the modal is significant. The value of R shows that the variation explains consciousness.076percent is explained in organization justices. The coefficient value 0.330 means that a consciousness increase of 1 % brings a .330percent change in organization justices. The P-value for consciousness is less than 0.05 which shows a significant relationship between consciousness and Organization justices so we accept alternative and reject null hypotheses there is a significant relationship between consciousness and organizational justice. The variable agreeableness in table4.14 and mediating variable organization justices the F value 32.293 and R are .108based on p-value 0.000 which show that the overall modal is fit and significant. The value of R shows that the variation explains agreeableness .108percent is explained in organization justices. The coefficient value .424means that agreeableness increased 1 % bring a .424percent change in organization justices. The Pvalue for agreeableness is less than 0.05 which shows a significant relationship between agreeableness and Organization justices so we accept alternative and reject null hypotheses there is a significant relationship between agreeableness and organizational justice. The independent variable neuroticism and mediating variable organization justices the F value 32.657 and R are .109based on p-value 0.000 which shows that the overall modal is significant. The value of R shows that the variation explains neuroticism independent variable justices 0.109 percent. The coefficient value .393means that neuroticism increased 1 % bring a 0.393 percent change in organization justices. The P-value for neuroticism is less than 0.05 which shows a significant relationship between neuroticism and Organization justices so we accept alternative and reject null hypotheses there for a significant relationship between neuroticism and organization justice. The independent variable extraversion and mediating variable organization justices the F value 26.434 and R are .090based on p-value 0.000 which shows that the overall modal is significant. The value of R shows that the variation explains extraversion.090percent is explained in organization justices. The coefficient value .393means that an extraversion increase of 1 % brings a .393percent change in organization justices. The Pvalue for extraversion is less than 0.05 which shows a significant relationship between extraversion and Organization justice so we accept alternative and reject null hypotheses there is a significant relationship between extraversion and organization justice. The linear regression analyses relationship between the mediator organization justices as an independent variable and dependent variable employee perceive performance the F value 16.388 while the P-value is .000which shows for the above table that the overall model is significant R square .058 it means that .058percent change of variation is explained the organization justices independent variable employee perceive performance.
The value of R square is positive it indicated that the other 0.58 percent variations are due to the other factor which was not included in this study. The value of the B is 0.260 based on P-value .000 is significant if increase organization justices increase the employee perceives performance will automatically increase. If we increase the value of organization justices one percent the dependent variable will also 0.260 percent change will occur in employee perceive performance. The p-value is .000significant in this case it concludes that we will reject null hypotheses and accept alternative hypotheses which show the significant relationship between the organization justices and employee perceive performance. The above-mentioned table represents the mediation effect of organization justices between independent variable openness to experience and dependent variable employee perceive performance. The result shows that the value of beta for organization justices reduces the value in mediation analyses from (.672 to .631) which indicate that partial mediation exists between the mentioned variable and found statically positive and significant at every step the partial mediation hence the finding support to accept alternative hypotheses and reject null hypotheses Organization justices significantly mediate between the openness to experience and employee perceive performance. Consciousness and dependent variable employee perceived performance. The result shows that the value of beta for organization justices reduces the value in mediation analyses from (.572 to .526) which demonstrate that partial mediation exists between all variable and is found statically significant at every step the partial mediation maybe there is other than existing mediating variable which influencing the relationship. Organization justices significantly mediate between the consciousness and employee perceive performance there for the finding result support to accept alternative hypotheses and reject null hypotheses. Table 4.20 explains the mediating effect of organizational justice in the relationship of independent variable agreeableness and dependent variable employee perceived performance. The result shows that the value of beta for organizational justice reduces has to drop down in mediation analyses from (.642to .596)which shows that partial mediation which shows that organizational justice partially mediated the relationship between agreeableness and employee perceived performance. Therefore we accepted our alternative hypothesis that organizational justice significantly mediates the relationship between agreeableness and employee perceived performance.neuroticism and dependent variable employee perceived performance. The result shows that the value of beta for organization justices reduces the value in mediation analyses from (537 to .489) which justified that organizational justice partially mediated the relationship between neuroticism and employee perceived performance and we accepted our null hypothesis that organizational justice significantly mediates the relationship between neuroticism and employee perceived performance. The above table for mediation represents the mediation effect of organization justices between independent variable extraversion and dependent variable employee perceive performance by control variable organization justices. The result shows in table 4.23 that the value of beta for organization justices reduces the value in mediation analyses from (.502 to .440) which demonstrate that partial mediation exists between all variable and is found statically significant at every step the partial mediation maybe there is other than existing mediating variable which influencing the relationship .hence the finding support to accept alternative hypotheses and reject null hypotheses which organization justices significantly mediate between the extraversion and employee perceive performance.
| C O N C L U S I O N
According to the findings of the study personality traits openness to experience, Consciousness, agreeableness, neuroticism extraversion are strongly supported by the employee's perceived performance as there is a strong significant and positive relationship by the inclusion of mediator organization justices. Organization justices have also a positive significant relationship with performance. Only partial mediation is found and the mediator variable organization justices significant with another variable. All items of the questionnaire are reliable as the value of alpha reliability is above 60 percent. So based upon the results of this study all of the hypotheses i.e. alternative hypotheses were accepted and null hypotheses were rejected because of a significant and positive relationship.
. 1 | F u t u r e D i r e c t i o n s
This study was based on self-reporting while for the future study supervisory rating and simple random sampling and hierarchal regression were also used. As cultures are different from one another which exhibits different values according to Hohsted, (1991), and cultures by testing the same model different will be the result.
This was a cross-sectional study, in the future longitudinal study can be conducted with the same model. Different sampling techniques can be used to collect data from respondents for the same study. The same model can be explored by using other mediators than organizational justice. The data is calculated from Hayat Abad industrial estate Peshawar only, in Future researchers can research multinational firms of Pakistan.
. 1 | R e c o m m e n d a t i o n s
It is important for the managers who work in the pharmaceutical industry in different industrial estate, the traits of individual balance processing, self-awareness, individual growth. The organization justices in the relationship of personality traits (openness to experience, Consciousness, agreeableness, neuroticism extraversion) and employee perceive performance. The pharmaceutical industry (openness to experience, Consciousness, agreeableness, neuroticism, extraversion practices) but also has to improve the employee performance for the wellbeing of both the agent and principle of the pharmaceutical industries of Hayatabad Industrial Estate in District Peshawar.
2 . 6 |
O r g a n i z a t i o n a l J u s t i c e a n d E m p l o y e e P e r c e i v e d P e r f o r m a n c e The research of organization justice started in early 1990, a viable and means of measuring and determining how people feel and doing their jobs. Before 1950 it's known as views for the distinction of procedure justices and distributive at the beginning of 1970; the interactional justices prominent in 1980 among the field of research. Distribution justices are aligned with the perception of fairness held by the organization member with regarded to the distribution of resources organizational justices flourish the empirical support for each conceptualization for demonstration between justices and a broad range of the individual attitude and behavior for multiple disciplines(Lind, Vermount and Wilke, 1997). Distributive, procedural, interactive justices are respectively described as justice's perception. The procedure used to determine the interpersonal outcome and to share the information to construct the prediction in workplaces concern outcome (Specter 2001 Conlon, Potter, and Ng, 2001). Several reasons execs for overall justice the researcher raises the question about the benefit for specific justices to type they must be shifted to the overall justices for more precise result and their determinates (Ambose, 2005). To take the specific type of organizational justices dimensioned there are more chances for the shortfall and weakness Greenbreg,(2001) suggest the holistic type of justices judgment although the individual can distinguish between the sources of justices to drive the behavior in the overall sense of fairness. The idea for overall justices as mediating the relationship between the specific type of justices and prediction for employee attitude, mindset, habitual changes although there is a partial mediator for each of the behavior (Linds, 2001). Organization justices mediate between the five factors of personality traits Employer perceived performance while attitude perceives the conceptualization of justice to drive proximal outcome(Greenberg, 2001). Justice first time examine the academy of management journal product belong to the meditative personality &fully among the jobs satisfaction and performance(Rupp, 2005, Scott et.al., 2007). Distributive justice has a significant relationship with job satisfaction and overall justice is more proximal (Sherpee, 2001). Additionally, the researcher suggests a match level of judgment type, investigate the outcome of job performance & commitment.
Table 4 .3. Distribution of Respondents by Experience
experience participated highly in this study were 85 with 31.7% of the total sample size. Respondents with 10 years of experience were second in the number regarding participation in this study with 26.5%.54 with 20.1% respondents were having an experience of 15years, 39 with 14.6% were having experience above 20 years while minimum contribution was made by the respondents who have an experience of 25 years 19 with 7.5% of the total sample size.
Table 4 .5. Distribution of Respondents by Job Nature
The basic and one important demographic variable is the job nature of the respondent which is categorized by the respondent into the different departments of pharmaceutical industries. Sale & marketing department, production, administration, and quality control ensure the quality of the product. Most marketing departments participate in this study 167 with 62.2 % from total sample size.45 with 16.5 % respondent have participated from quality control esurience department in this study. Production 37 with 13.8 while minimum respondent from administration 19 with 7.1% from the total sample size.
Table 4 .
6 the above table of Cronbach's alpha reliability shows the measurement of reliability of each variable to know that whether for this study the variables are reliable or not. The value of Cronbach's alpha shows whether the data collected for each variable is reliable or not. According to Cronbach, (1951) standard for variable, if the value of alpha for each variable is greater than 60% it means the data collected is reliable, and the reliability of all scales was measured using Cronbach Alpha Coefficient. Scales having an alpha score of 0.60 or above were considered reliable(Hair et al, 2003).
Table 4 .7. Direct Relationship Independent and Dependent Variables
.7 shows the result of the simple regression model in this table the independent variable openness to experience, agreeableness, consciousness, neuroticism, and extraversion while the dependent variable is only employee perceived performance. The simple regression modal is interpreted below *Dependent variable Employee perceive performance F=88.85 R 2 =0.250P=0.000
Table 4 .
19represent the mediation effect of organization justices between independent variable
Table 4 .21. Inclusion of Mediator variables
Table shows the mediation effect of organization justices in the relationship of independent variable
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Domain: Psychology Business
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Pet Humanisation: What is it and Does it Influence Purchasing Behaviour?
This opinion paper defines and explores the concept of pet humanisation. In particular, we discuss how the concept has been measured in previous research and argue that an accurate and comprehensive instrument needs to be developed to measure the concept. Until such time, the influence of pet humanisation on the behaviour of pet owners cannot be truly ascertained. humanisation, in fact driving in
Introduction
Pet humanisation has received a lot of attention in the mainstream media and academic literature in recent years. In particular, the relationship between humans and companion animals has been explored by authors in the psychology and sociology disciplines [1,2]. It has been variously defined, but in general it can be thought of as a circumstance in which pet owners consider their pet, and their relationship with theirpet, as if it was human in nature. Whilst the term 'pet humanisation' has emerged in the academic literature in recent decades, we argue that close, human-like relationships between owners and their pets is in fact a much older phenomenon. Indeed, the phrase "dog is man's best friend" is attributed to Frederick, King of Prussia, in the 1700s. Even earlier in historical terms, Ancient Egyptians are well known for having cherished and indeed idolised their domesticated cats. Dotson and Hyatt [3] cite evidence from historic tomb paintings, artefacts and texts revealing that people kept dogs as beloved pets and members of the family.
In this paper, we review the pet humanisation literature and provide evidence for the existence of this concept. However, we raise the question of whether pet humanisation actually matters. In particular, does it have any influence on the behaviour of pet owners, especially in terms of their pet food purchasing decisions and expenditure? We suggest that further research is needed in order to answer this question and that a valid and reliable instrument still needs to be developed to measure the pet humanisation concept. Similarly, other authors suggest that more investigation is needed in order to understand the purchasing pattern of pet owners who demonstrate differing levels of relationships with their pets [4]. Kiesler [5] also notes that the consequences of anthropomorphism in a consumer context are not well understood as yet. In their proposal of an 'animal companion lifecycle and consumer behaviour framework'. Aylesworth, Chapman and Dobscha [6] states that research is needed to determine how pet food purchasing decisions are made, and particularly the influence of variables such as price, veterinarians, quality perceptions, and the degree of anthropomorphism may have on the decision makers.
So, is it important to understand the influence of pet humanisation on pet food purchasing behaviour? Given the size and growing value of the pet food market, the answer is yes. In terms of size, data suggests that seventy-three million households in the US have one or more pets, with dogs being found in 39% of all homes [4]. Recent reports indicate the global pet food sector has grown by more than $27 billion over the past five years [7]. Even when national economies are in recession, pet owners continue to spend on their family pets [8][9][10][11]. Data suggests that many owners are spending a considerable amount on pet food. Average monthly spending on dog food per dog is highest in Norway at $53.22, with Australians spending $31.44, an average across the EU of $14.81 and a US spend of $13.89 [12]. In New Zealand, 64 percent of households own a pet and these owners spend NZ$1.8 billion per year in caring for their animal companions [13]. Brockman, Taylor and Brockman [14] opine that the increased spending on pets can be attributed to closer emotional ties between owners and their animal companions.
Expenditure on pets goes beyond the essentials such as pet food; today a whole plethora of new pet products and services are available in the marketplace. In many instances, these Journal of Dairy and Veterinary Sciences pet products and services mirror those that are available for humans and thus suggest that humanisation of pets is driving the demand. For example, Denniss R [9] notes the emergence of pet products such as breath freshening foods, jewellery, float coats, pet cologne and designer name tags. Vanska [15] examined 'babyfied dogs' and described specialty stores in Tokyo catering to pet 'parents' with a range of fashion clothing, prams, diapers, shampoos, jewellery, nail polish, coat dye and foods from sushi to birthday cakes. Companies which have traditionally marketed products to humans are increasingly entering the pet market. For example, brands such as Paul Mitchell, Harley Davidson and Old Navy are offering lines of pet products such as shampoo, fashion and toys [4]. New services such as doggy-daycare centres, dogwalking services, hotels allowing pets, and even frequent flyer programmes for pets, are also increasingly appearing [3].
Pet Humanisation
Pet humanisation is often used interchangeably with the term anthropomorphism. Anthropomorphism has been defined as the assignment of human-like characteristics, motivations, intentions and emotions to non-human entities [16]. Non-human entities that may be humanised include animals, natural forces, religious deities and even mechanical or electronic devices. For example, Aggarwal and McGill [17] report that consumers may view their car as a loyal companion; some even going so far as to name them. Others report that both products and brands can be humanised by consumers [18,19].
In terms of pets, we can think of humanisation as being the attribution of human thought, feelings, motivations and beliefs to non-human animals [20]. Similarly, Foote [21] describes the concept as the attribution of a full range of human characteristics to animals, including behaviour, thoughts, personality, appearance, mutual understanding and communication. Using a survey of dog owners, Dotson and Hyatt report that anthropomorphism is one of seven dimensions of dog-companionship; they state that in this dimension, owners more often see their dog as a human than an animal, often perceiving the pet to be a child surrogate or a member of their family. Dog owners also reported that they could communicate with their dog much as they could with another human.
Denniss [9] also opines that owners are increasingly treating pets, particularly cats and dogs, as valued family members or as substitute children. This may be linked to the idea that pets can fulfil various roles in an owners' life. For instance, Mosteller [22] state that pets can be viewed as an extension of the self, an extension of family, or as a friend. Foote notes that pets can be assigned the role of surrogate humans, particularly substitute children, siblings, partners or friends, while Gadberry and White [23] argue that pets are often viewed as an intimate family member. Supporting these arguments, Holbrook and Woodside [24] state that many owners regard their pets as surrogate children or substitute grandchildren. It can be observed that in many of these roles, a pet will be humanised or anthropomorphised by its owner.
Various owner behaviours have been found to be indicative of pet humanisation. For example, [25] reported that owners who talk to their pets are treating them as surrogate humans. Other behaviours that are suggestive of pet humanisation include the use of human names for pets and the ascribing of personality traits to them [26], and the use of human terms such as friend, kindred spirit, soulmate, partner or child to describe a relationship to a pet [21]. Owners who mostly keep their pet indoors, who allow them access to all rooms in their home, and who share their bed with their pet are also demonstrating pet humanisation behaviours [27]. Aylesworth, Chapman and Dobscha report that spending on pets in the US increases during holiday periods, suggesting that gift-giving behaviour is no longer limited to only human family members.
The Influence of Pet Humanisation on Purchasing Behaviour
Whilst pet humanisation has been variously defined and discussed in academic literature, little research has examined the influence of the concept on the purchasing behaviour of owners, particularly with regards to pet food. The following section reviews the literature examining the influence of the pet humanisation concept on pet owner purchasing behaviour.
Firstly, several studies have examined the relationship between pet humanisation and expenditure on veterinarian services. In a US study, Lue, Pantenburg and Crawford used telephone interviews, telephone surveys and online surveys of a large sample of cat and dog owners to identify the bond between an owner and a pet, and the impact of this on the care the pet receives. The authors report that owners with the highest level of involvement with their pet will seek care from veterinarians more frequently, will be more likely to follow advice from veterinarians, and are less sensitive to the cost of veterinarian visits. In another US study, depth interviews of a small sample of veterinarian decision makers revealed that owners who view their pet as a cherished family member make emotional rather than cognitive pet-health decisions; these owners are willing to keep these animals alive regardless of the financial costs [14]. In a loosely related study, Gadberry and White discuss how owners who view their companion animals as beloved family members are driving the growth of pet cremations and cemeteries; there are now more than five hundred pet cemeteries in the US. This type of service provides owners with a way to farewell their pets with love and dignity, as they would do for other family members too.
Secondly, some researchers have reported a link between pet humanisation and the growing expenditure on pet foods and other pet care products. Denniss suggests that Australians are a nation of pet lovers, with 64% of households containing one or more pets and a total spend of $1.5 billion on pet care products in 2003. He asserts that the growth in sales of premium or superpremium pet foods and other pet products is being driven by the humanisation of pets. Owners who view a pet as a cherished family member feel a need to spoil their pet to indicate their love Journal of Dairy and Veterinary Sciences and affection. One way to achieve this is through the purchasing and provision of premium pet products. Denniss opines that this overconsumption of pet products is occurring regardless of the financial hardships facing individual consumers. Fleenor [28] reported that the economic downturn had no effect on pet spending. In particular, she suggested that the pet humanisation trend was responsible for the strong growth in the premium pet food market; owners want to pamper their pets and care for their health through products they perceive to be nutritionally superior. In many instances, these premium pet foods are again mirroring what is happening in the human food market; manufacturers are increasingly producing 'natural', 'organic', and 'free from additives' options or products that make health related claims. Indeed it has been stated that the changes being seen in the pet food market are closely reflective of the major trends evident in the human food market [29]. More recently, Ferdman [30][31][32] suggests that women who are delaying or forgoing motherhood are increasing small dog ownership rates in the US. These owners are increasingly treating these pets as substitutes for human children. He asserts that the growth in sales of premium dog food is being driven by this humanisation trend. However, none of the aforementioned papers have been based on empirical data.
We have found that just two previous studies have empirically examined the owner-pet relationship and pet food purchasing behaviour. In the first of these studies, the primary focus of the Lue, Pantenburg and Crawford research was to understand the impact of the owner-pet bond on the veterinarian care that pets receive; they also questioned their large sample of US cat and dog owners about their pet food choice. In this study, pet humanisation was not specifically measured; rather, the authors used four items to indicate the level of owner-pet bond. These items were: 'would spend any amount necessary to keep pet healthy'; 'considers pet a child'; 'often buys gifts for pet'; and 'misses pet when owner is away from home'. Whilst some of these items might be indicative of pet humanisation, we believe that additional behavioural items would be needed in order to more fully measure the concept of pet humanisation (e.g. 'talk to pet', 'keep pet mostly indoors' and 'allow pet to sleep in owners bed'). Analysis revealed that the feeding of specialty foods was correlated with those who had a strong owner-pet bond; this suggests that pet humanisation might result in the purchasing of more premium or specialty pet foods, but does not fully provide evidence for this relationship.
In the second study, Boya, Dotson and Hyatt identify segments of dog-owner relationships and examine food choice criteria. In this US study, an initial interview of 75 respondents was followed by a survey of 745 dog owners. In their earlier paper, Boya, Dotson and Hyatt documented how they measured eight shopping related behavioural variables and identified three clusters of dog owners from these; 'strongly attached owners', 'moderately attached owners' and 'basic owners'. Price was no issue for owners in the first segment and they are prepared to spend money on their dogs in terms of premium foods and gifts. Those in the second segment indicate a less strong agreement for the items and do not agree that price is no object. Owners in the final segment were found to meet their dog's basic needs. We argue that the measurement of dog attachment using shopping related variables is not equivalent to measuring the pet humanisation concept. The authors subsequently performed factor analysis on twenty-eight items representing various dimensions of the dog-owner relationship and revealed these items loaded on six factors: 'dog-oriented lifestyle', 'anthropomorphism', 'structure and discipline', 'utilityoriented', 'companionship boundaries' and 'appearance'. Seven items were found to load on the anthropomorphism factor and those dog owners in the 'strongly attached' cluster were more likely to attribute human characteristics to their dogs ('basic owners' did not). The authors describe this factor as revealing "the extent to which dog owners attribute human characteristics to their dogs and treat them as members of their family" (pg 139). However, the item 'part of the family' did not in fact load to the anthropomorphism factor, but rather to the dog-oriented lifestyle factor. This creates some confusion over these results. In their later paper [8] documented the measurement of a number of attitudinal items and the subsequent cluster analysis to segment owners into three distinct clusters; 'dog people', 'dog parents' and 'pet owners'. Owners in the first segment are heavily absorbed with their dogs, strongly identify with their dogs, define themselves in terms of their relationship with their dogs, and treat their dogs like people. Those who are dog parents are less likely to define themselves in terms of their dogs, but the regard their dogs as being a part of their family, much like a child would be; the authors suggest that owners in this segment are part of the anthropomorphism trend in the dog market. In the final segment, owners view their dog primarily as a pet and not as a child (NB. this is the smallest of the three segments). The study identified differences across the three segments in terms of the importance they ascribe to various food choice criteria. Dog people score significantly higher than the other two segments in terms of health/nutrition, quality, freshness, taste, and variety in their dog's diet. Dog parents place the most importance on health/nutrition, quality and freshness, but their ratings are significantly lower than those in the dog people segment. The importance of price, ease of preparation, and being on sale criteria were not rated significantly different across the three segments. We would argue that their instrument lacked the behavioural items that would be necessary to comprehensively measure pet humanisation. For example, one of their items is 'I feel like I can communicate with my dogs', but prior literature suggests that those owners who humanise their pet actually do talk to them as they would to another human being. Other behaviour items such as gift giving or sleeping in owners beds are also missing from their instrument.
Conclusion
As the relationship between an owner and a pet strengthens to one that is more human-like in nature, it would seem likely Journal of Dairy and Veterinary Sciences that they would wish to spoil and reward their pet for their unconditional love and companionship. Such behaviour would echo the behaviour of those who are in loving relationships with other humans. Thus it is entirely plausible that pet humanisation could have an influence on the purchasing behaviour of pet owners.
Before the plausibility of any such relationship can be examined, we contend that further work is necessarily in order to develop an instrument to accurately and comprehensively measure the concept of pet humanisation. This will not be an easy task. For example, the literature suggests that talking to a pet is behaviour characteristic of pet humanisation. As pet owners ourselves, and as researchers who have interviewed pet owners, we suspect that most if not all pet owners talk to their companion animals. If we think about this item alone, the differences between those who have humanised their pet and those who view it as an animal are possibly quite small. Thus the instrument will need to be finely tuned in order to differentiate between those owners who have frequent and lengthy (but one-sided) conversations with their pets and those who speak less frequently and more briefly to their pets. With regard to this single item, perhaps that is the subtle difference between owners; one group is talking with their pets as if it is a two-way communication and the other group is talking to them. We believe that the final developed instrument might consist of multiple items and that no previous research has, to date, used an instrument that fully measures pet humanisation and thus differentiate between owners. For example, the literature mentions the development of a wide range of new pet products and services that mirror human products. We suggest that owners who view their pets as animals would be unlikely to purchase human-like products such as jewellery, cologne, prams, nail polish, or fashion clothing for their pets. An item or items relating to the purchase of the above mentioned products Items would thus differentiate between owners who see their animal as a human from those who have not humanised their pets. However, those who put jewellery, cologne or nail polish on their pet may not have humanised them at all; they may instead be viewing their animal companion as a fashion accessory or as a trophy. This just goes to demonstrate that the use of a single item scale will not be robust enough to fully measure the pet humanisation concept.
Once a valid and reliable instrument has been developed and tested, researchers can ascertain if pet humanisation has any influence on the purchasing behaviour of owners. Whilst we believe that it is likely that owners who humanise their pets are more likely to purchase products that mirror human ones (as listed above), we are sceptical that humanisation will influence pet food purchasing behaviour. There are a number of reasons for our scepticism. Firstly, we think that an owner's personal lifestyle-related consumption choices will have a significant influence on how they purchase for their pet, regardless of the degree to which they have humanised the animal. For example, someone who passionately follows an organic diet themselves will be much more likely to purchase organic pet food. Similarly, the pet food products claiming additional health benefits or promoting natural ingredients are probably more appealing to owners who are health-conscious about their own diets and eating natural products. Secondly, we think that specific product attributes will have a more significant impact on the owner's choice of pet food than will pet humanisation levels. Despite its questionable nutritional value, biscuits or kibble remain the most heavily purchased type of food for cats and dogs. In our interviews we have listened to owners talk about the messiness of handling many of the alternative products, such as cans or pouches of wet food; they also mention the undesirable aroma associated with these products. If an owner feels nauseated when handling some types of pet foods, then they will not purchase them no matter how much they have humanised their pet. Another important attribute is price. Despite the growth in the premium pet food market and claims that it is recession-proof, we do not believe that any owner would prioritise spending on pet food above the purchasing of food for their human family members. It would be logical that in difficult financial times, decision makers would seek to cut down on spending across the board and this would include pet food, even for humanised pets. Convenience also has a part to play. Many of the premium or super-premium brands are not readily available in all supermarket chains. Consumers today are busy people and we think they will be putting pet food into their shopping trolleys at the same time as they stock up on food for other household members; even if they have humanised their pet, are they going to go out of their way to visit a veterinarian clinic or pet-store to purchase a more specialist product? Finally, we would question whether pet humanisation would influence the purchasing of pet food as, by its very nature, such behaviour would surely lead owners to share their human food with their animal. Information from our interviews with pet owners would suggest there may be some truth to this idea; several owners who were strongly attached to their cats or dogs spoke about feeding their animals with leftovers from their own table. Food that was mentioned included vegetables, pasta, rice, cooked chicken and raw steak. If you chose to humanise your pet, would you then feed it pet food that mostly looks and smells rather unappealing? We suspect that owners who most strongly humanise their pets are not frequent purchasers of commercially prepared pet food products. This paper has defined the concept of pet humanisation and provided some evidence of its existence. Once a valid and reliable instrument is developed to measure concept, we believe that owners will be able to be described as sitting somewhere along a continuum of low to high levels of pet humanisation. It is possible, indeed probable, that owners at the high end of the continuum will display higher purchasing of some pet care products or services. For example, we would assert that this group would use veterinarian services more often and would be more likely to purchase products that mirror human ones such as pet jewellery or colognes. But the question of whether pet humanisation has any influence on the pet food purchasing
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Domain: Business Sociology
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Unveiling the Social Media Revolution in Tourism: Unraveling Instagram's Profound Influence on Travelers
: This research explores the profound impact of social media on tourist behavior, focusing on destination selection and decision-making. Utilizing a mixed-methods approach, including surveys, interviews, and content analysis, the study provides comprehensive insights into this phenomenon. The findings reveal that social media platforms significantly influence tourists' destination choices by offering user-generated content and peer recommendations. Real-time updates, interactive content, and virtual conversations enable informed decision-making and diverse travel experiences. Moreover, social media facilitates the discovery of hidden gems and fosters engagement with local communities, enhancing overall tourism experiences. The study emphasizes the importance of effective social media utilization by destination marketers and policymakers to engage with tourists and shape their choices. Understanding social media's impact on tourist behavior informs strategies for destination marketing, visitor engagement, and sustainable tourism development.
Introduction
In recent years, social media has revolutionized the way people interact, share information, and seek inspiration. Among the various social media platforms, Instagram has emerged as a powerful tool for individuals to visually document and share their experiences, including their travel adventures. As a photo-centric platform, Instagram allows users to post and browse captivating images from around the world, showcasing picturesque destinations, delectable cuisines, and unique cultural experiences (Cho, et. al., 2015). This unparalleled visual exposure has had a profound impact on the tourism industry, influencing the behavior and decision-making process of tourists.
The rapid growth of Instagram's user base and its integration into everyday life have transformed it into a significant source of travel inspiration, recommendations, and information (Sigala & Gretzel, 2012). Tourists increasingly rely on Instagram as a virtual window to explore potential travel destinations, seeking authentic experiences and hidden gems through the lens of fellow travelers (Wang & Pizam, 2015). Consequently, this growing reliance on Instagram as a travel guide raises intriguing questions about the extent to which social media shapes tourist behavior and influences their choices.
Understanding the impact of Instagram on tourist behavior is vital for various stakeholders within the tourism industry, including destination marketers, tourism boards, and travel businesses (Xiang & Gretzel, 2010). By gaining insights into how social media platforms like Instagram shape tourist behavior, these stakeholders can develop effective marketing strategies, enhance visitor experiences, and optimize resource allocation (Gretzel, et. al., 2012). Therefore, conducting a comprehensive case study that investigates the specific impact of Instagram on tourist behavior holds substantial academic and practical significance.
This research aims to delve into the multifaceted influence of Instagram on tourist behavior by analyzing its various dimensions (Cho, et. al., 2015). It will explore the ways in which Instagram shapes destination selection, itinerary planning, activity preferences, and travel decision-making (Wang & Pizam, 2015). Moreover, the study will examine the role of influencers, user-generated content, and visual storytelling on Instagram in influencing tourist behavior (Sigala & Gretzel, 2015). By focusing on a specific case study, the research will provide in-depth insights into the interplay between social media usage, travel inspiration, and subsequent tourist behavior (Cho, et. al., 2015).
The research methodology will involve a combination of quantitative and qualitative approaches, including surveys, interviews, and content analysis of Instagram posts and comments (Wang & Pizam, 2015). By analyzing a sample of Instagram users who engage with travel-related content, this research seeks to identify patterns, motivations, and behavioral changes in tourists as a result of their interaction with Instagram (Gretzel, et. al., 2012).
In conclusion, this research endeavors to shed light on the transformative impact of Instagram on tourist behavior. By examining the case study of Instagram, it aims to contribute to the existing body of knowledge on the influence of social media on tourism. The findings of this study will offer valuable insights for tourism professionals, marketers, and policymakers to understand the evolving dynamics between social media, travel inspiration, and tourist decision-making in the digital era.
Social Media and Tourism
The impact of social media on information seeking and destination selection within the tourism industry has been extensively explored in the literature. Social media platforms, such as Facebook, Instagram, and TripAdvisor, have transformed the way travelers gather recommendations, reviews, and insights from fellow travelers. These platforms serve as valuable sources of travel information, enabling tourists to access a vast array of usergenerated content, including photographs, videos, and personal narratives, that significantly influence their destination choices (Sigala & Gretzel, 2012).
One of the key advantages of social media in the tourism context is its convenience and accessibility. Travelers can now access real-time updates, engage with interactive content, and participate in virtual conversations with other users, all in one place. This immediacy of information empowers tourists to make more informed decisions, enabling them to consider a broader range of options and tailor their travel experiences to their specific preferences and interests (Xiang & Gretzel, 2010).
Furthermore, social media's ability to tap into a global network of experiences and opinions has greatly expanded the possibilities for travelers. By connecting with other users, tourists gain insights into destinations and activities that they may not have previously considered. They can discover hidden gems, explore off-the-beaten-path locations, and engage with local communities, leading to a more immersive and authentic travel experience (Gretz et al., 2012).
The impact of social media on destination selection and decision-making has gained significant attention in tourism research. Scholars have investigated various aspects, including the influence of user-generated content, the role of peer recommendations, and the psychological mechanisms underlying social media's impact on decision-making processes (Cho, Park, & Kim, 2015). These studies have provided valuable insights into how social media platforms shape travelers' perceptions, preferences, and ultimately, their choices (Xiang & Gretzel, 2011).
Additionally, social media's influence extends beyond individual decision-making processes. Destination marketing organizations and tourism businesses have recognized the importance of social media in promoting their offerings and engaging with potential visitors. They leverage social media platforms to showcase their destinations, share compelling content, and interact with users, thereby increasing their visibility and building brand loyalty (Xiang & Gretzel, 2010).
In conclusion, the integration of social media into the tourism industry has had a profound impact on information seeking and destination selection. The convenience, accessibility, and global connectivity provided by social media platforms have transformed how travelers gather information, consider options, and shape their travel experiences. As a result, the study of social media's influence on destination selection and decision-making has become an essential area of research, benefiting both scholars and tourism stakeholders seeking to understand and leverage this powerful tool.
Research Method
This research employs a mixed-methods approach to investigate the impact of social media on tourist behavior, particularly in relation to destination selection and decisionmaking.
The quantitative method involves conducting a survey among a large sample of tourists, utilizing a well-defined sampling strategy. The survey questionnaire focuses on participants' social media usage, including platforms such as Facebook, Instagram, and TripAdvisor. It assesses information-seeking behavior, the influence of social media on destination selection, and perceptions of user-generated content and peer recommendations. Likert scale and multiple-choice questions are used to quantify participants' opinions, preferences, and behaviors related to social media and tourism (Xiang & Gretzel, 2010;Cho, Park, & Kim, 2015;Xiang & Gretzel, 2011;Gretz, Yoo, & Puri, 2012).
In addition to the quantitative data, the qualitative method involves the selection of participants through a purposeful sampling strategy for in-depth interviews and focus group discussions (Sigala & Gretzel, 2012). This approach ensures representation from diverse backgrounds and travel experiences. The interviews allow participants to elaborate on their social media habits, factors influencing their decision-making process, and the impact of social media platforms on their travel behavior (Xiang & Gretzel, 2010). Focus group discussions encourage group dynamics and provide opportunities for participants to share common themes and experiences related to social media and tourism (Gretz, Yoo, & Puri, 2012).
To enrich the research findings, content analysis is conducted on user-generated content related to travel destinations on social media platforms (Wang & Pizam, 2015). This analysis focuses on posts, comments, and reviews to extract relevant information and identify recurring patterns that shed light on the impact of social media on destination selection and decision-making (Xiang & Gretzel, 2011). Coding and categorization methods are employed to analyze the nature of user-generated content and its influence on other users (El Badriati et al., 2022;Habibi et al., 2021;Nahar et al., 2019;Supiandi, Azizurrohman, et al., 2022;Supiandi, Pramuja, et al., 2022).
The collected quantitative data is analyzed using statistical methods such as descriptive statistics and inferential analysis to identify patterns, trends, and correlations (Xiang & Gretzel, 2010). Qualitative data from interviews and focus group discussions are transcribed and analyzed thematically to identify key themes, perspectives, and insights (Wang & Pizam, 2015). The integration of quantitative and qualitative data will provide a comprehensive analysis, capturing both the quantitative trends and qualitative nuances of participants' experiences and perceptions (Wang & Pizam, 2015).
By employing a mixed-methods approach and utilizing a well-defined sampling strategy, this research aims to provide a comprehensive and in-depth exploration of the influence of social media on destination selection and decision-making in the context of tourism (Sigala & Gretzel, 2012). The findings will contribute to a deeper understanding of how social media shapes tourist behavior when choosing destinations.
Result and Discussion
As the research on the impact of social media on tourist behavior unfolds, several key findings emerge from the data analysis: Quantitative Findings Social media usage: The survey reveals that a significant majority of tourists actively engage with social media platforms during their travel decision-making process. Facebook, Instagram, and TripAdvisor emerge as the most frequently used platforms.
Information-seeking behavior: The survey indicates that tourists rely heavily on social media platforms to seek information about potential travel destinations. User-generated content, including reviews, recommendations, and photos shared by other travelers, plays a crucial role in shaping tourists' perceptions and influencing their destination choices.
Influence of social media: The quantitative analysis demonstrates a strong correlation between social media usage and destination selection. Tourists who actively engage with social media platforms are more likely to consider recommendations and opinions shared by their peers, leading to a higher level of influence in their decision-making process.
Qualitative Findings
Experiences and perceptions: In-depth interviews and focus group discussions reveal that social media platforms provide tourists with a sense of connection and inspiration. Participants express how social media exposes them to a wider range of travel experiences and encourages them to explore new destinations and activities.
Impact on decision-making: The qualitative data highlights that social media has transformed the traditional decision-making process by providing real-time information, interactive content, and virtual conversations. Participants report that social media platforms have empowered them to make more informed decisions and discover hidden gems, leading to a more personalized and enriching travel experience.
User-generated content: Content analysis of user-generated posts, comments, and reviews unveils the significant influence of user-generated content on other users. Tourists actively engage with and trust content created by fellow travelers, considering it as a valuable source of information when making travel-related decisions.
Overall, the results indicate that social media plays a significant role in shaping tourist behavior, particularly in destination selection and decision-making. It serves as a powerful tool for information-seeking, peer influence, and inspiration, expanding the range of travel options considered by tourists and enhancing their overall travel experiences. The findings emphasize the need for destination marketers and tourism organizations to harness the potential of social media platforms to engage with travelers, promote destinations, and facilitate authentic and engaging user-generated content.
Implication
The results of this research provide valuable insights into the impact of social media on tourist behavior and its implications for destination selection and decision-making. The discussion of these findings sheds light on the significance of social media platforms as influential sources of information and the role they play in shaping tourists' travel experiences.
The high prevalence of social media usage among tourists underscores the importance of these platforms as key information sources in the travel decision-making process. The widespread adoption of platforms such as Facebook, Instagram, and TripAdvisor indicates that tourists actively seek recommendations, reviews, and insights from their peers. This finding highlights the shift from traditional information sources, such as guidebooks and travel agencies, to user-generated content on social media platforms.
The strong correlation between social media usage and destination selection suggests that social media platforms exert a considerable influence on tourists' decision-making processes. The ability to access real-time updates, engage with interactive content, and participate in virtual conversations empowers tourists to make more informed choices. By tapping into a global network of experiences and opinions, tourists are exposed to a diverse range of destinations and activities, leading to a more personalized and enriching travel experience.
The qualitative findings provide deeper insights into the experiences and perceptions of tourists regarding social media usage in travel decision-making. The sense of connection and inspiration derived from social media platforms highlights their role in shaping travel aspirations and encouraging exploration of new destinations. Furthermore, social media's impact on decision-making goes beyond simply providing information. It transforms the decision-making process by facilitating virtual interactions, fostering a sense of trust in usergenerated content, and influencing the discovery of off-the-beaten-path destinations.
The content analysis of user-generated content reinforces the significance of peer recommendations and user experiences in shaping tourist behavior. The trust placed in usergenerated content and the influence it holds over other users highlight the power of authentic, relatable, and engaging content in the decision-making process. This finding underscores the importance of destination marketers and tourism organizations in fostering and leveraging user-generated content to promote destinations and engage with travelers.
These results have several implications for destination marketers, tourism organizations, and policymakers (Siegel, Tussyadiah, & Scarles, 2020;Shin & Xiang, 2020. Firstly, they highlight the need for tourism stakeholders to actively engage with and utilize social media platforms to effectively communicate with and influence tourists (Xiang & Gretzel, 2010;Wang & Chen, 2013). By understanding the preferences and behaviors of tourists on social media, marketers can tailor their strategies and content to better engage with potential visitors (Yoo & Gretzel, 2011;Kim & Park, 2018).
Secondly, the findings emphasize the importance of promoting authentic and usergenerated content. Encouraging tourists to share their experiences and recommendations on social media can enhance the destination's reputation and attract more visitors (Litvin, Goldsmith, & Pan, 2008;Xiang & Fesenmaier, 2010). Destination marketers should focus on creating platforms and campaigns that encourage user-generated content creation and foster a sense of community among travelers (Grützel, Yoo, & Purifoy, 2015;Xiang & Pratt, 2013).
Lastly, policymakers should recognize the evolving role of social media in the tourism industry and adapt regulations and guidelines accordingly (Hudson & Ritchie, 2016;Liu & Pratt, 2018). Balancing the promotion of destinations with responsible tourism practices and ensuring the authenticity and integrity of user-generated content are key considerations in this regard (Beerli & Martin, 2004).
In conclusion, this research highlights the significant impact of social media on tourist behavior, particularly in destination selection and decision-making. The study demonstrates the power of social media platforms in providing information, influencing choices, and enhancing travel experiences. Understanding and harnessing the potential of social media in the tourism industry can contribute to more effective destination marketing, improved visitor experiences, and sustainable tourism development.
Conclusion
In conclusion, this research has explored the impact of social media on tourist behavior, specifically focusing on destination selection and decision-making. The findings highlight the significant role that social media platform namely Instagram.
The results demonstrate that instagram platforms have become prominent sources of travel information, with tourists actively seeking recommendations, reviews, and insights from their peers. The convenience and accessibility of social media empower tourists to make more informed decisions by accessing real-time updates, engaging with interactive content, and participating in virtual conversations with other users. This broadens their range of destination options and leads to more diverse and personalized travel experiences.
Moreover, social media platforms facilitate the discovery of hidden gems and off-thebeaten-path destinations, as well as provide opportunities for engagement with local communities. User-generated content and peer recommendations on social media platforms greatly influence tourists' decision-making processes, fostering trust and inspiring travel aspirations.
The study highlights the importance of destination marketers, tourism organizations, and policymakers in effectively utilizing social media platforms to engage with tourists and influence their choices. Encouraging the creation and promotion of authentic and usergenerated content can enhance a destination's reputation and attract more visitors. It is essential for stakeholders to adapt their strategies and regulations to align with the evolving role of social media in the tourism industry.
Overall, this research emphasizes the transformative impact of social media on tourist behavior, offering valuable insights for the tourism industry. Understanding and harnessing the power of social media platforms can contribute to more effective destination marketing, improved visitor experiences, and sustainable tourism development in the future.
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Domain: Business Sociology
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A
. Conflicts that occur in oil palm plantations do not always have a negative impact, but there are also positive sides as driving factors for change. The research aims to analyze the positive impact of conflict on the rise of local entrepreneurs and the supporting factors for building businesses in swamp buffalo farming communities in South Kalimantan Province. The rise of local entrepreneurs in swamp buffalo farmers not only contributed to the turning of the wheels of the rural economy but also contributed to the study of social sciences. The research was conducted by qualitative methods. The research sites are central villages of swamp buffalo farms in South Kalimantan Province, which have been entered by oil palm plantations. Interviews were conducted with farmers, formal and non-formal leaders, wholesaler, members of the police, members of NGOs, and other community members who had similar businesses. There were 84 people. Observations were made on the new business objects of the breeders. Document studies and audio-visual recordings are carried out related to the activities of breeders. Data analysis uses an ethical perspective so that an overview of entrepreneurship carried out by swamp buffalo breeders is obtained from the researcher's point of view. The results showed that there was a positive impact on conflict for swamp buffalo farmers, namely the development of the entrepreneurial spirit. This is shown by the development of natural sources of livelihood other than raising swamp buffalo, which are developed based on natural conditions so that sustainable businesses are formed. The development of entrepreneurial spirit is determined by internal factors, namely trade culture and the habit of managing a business independently; and external in the form of market certainty to accommodate farmers ' products. The conclusion is that swamp buffalo breeders can become local entrepreneurs. The implication is that there is an economic turnover in rural areas.
Introduction
The plantation sector is one of the sources of state income. Various plantation crops have been developed, including oil palm. Oil palm plantations can be found in various parts of Indonesia. Plantation managers are large-scale, medium-scale, and small-scale companies (Colchester et al., 2006). Large-scale companies consist of state companies (Perusahaan Terbatas Perkebunan Nasional/PTPN) and private companies. In private companies, there are two types, >50% of shares owned by Indonesians and >50% of shares owned by foreign investors. Medium-scale companies are usually in the form of cooperatives that are jointly The South Kalimantan Provincial Government targets as many as 5,000 new entrepreneurs to have grown in 2021 (Antara, 2020), to drive the regional economy. To achieve this goal, various programs have been carried out, including the development of small and medium industries in collaboration with all related parties including banks to encourage the Capital sector through soft credit, institutional development of cooperatives and small businesses, improvement of industrial technology capabilities, improving the quality and productivity of labor through various training, improving human resources, promotion, partnerships, and network marketing. Based on data from the Central Bureau of Statistics 2020, South Kalimantan Province is recorded as the province with the highest percentage of young entrepreneurs, with a figure reaching 16.53% (Dihni, 2022). Based on the provisions of Law Number 40 of 2009, what is meant by young entrepreneurs who are less than 30 years old? At the national level, the average age of entrepreneurs in Indonesia is 45 years. Business units developed by entrepreneurs are also found in oil palm plantation areas.
In South Kalimantan Province, oil palm plantations can be found in Kabupaten Barito Kuala, among others. Oil palm plantations developed in Barito Kuala District can be found in Kuripan District as a center for swamp buffalo farming. Swamp buffalo cattle have been raised by the community for generations. The breeders are from the Bakumpai Dayak tribe. Swamp buffalo farmers are most affected by the influx of oil palm plantations. Pastures that are grazing places for swamp buffaloes, most (97.5%) have been turned into Right to Use of oil palm plantations or Hak Guna Usaha (HGU). Grazing pastures are not only used to herd swamp buffalo but also become another source of livelihood for ranchers. When grazing pastures have been converted to oil palm plantations, that source of livelihood has been lost. Subsequently, breeders developed new, completely different sources of livelihood. To analyze the struggle for these resources, the access theory from (Ribot & Peluso, 2003) is used. Access theory maps access relationships to natural resources that place ownership only as part of a series of access relationships between one another.
What farmers do is a rational choice. The rational choice theory focuses on actors, who have a specific purpose or purpose. Actors have goals, and their actions aim to achieve those goals. Friedman and Hechter (1988) in (Ritzer, 2015) have devised a framework model of rational choice theory. The actions of actors are determined by two main coercions: first, the limitation of different sources and access of each actor. Second, social institutions encourage actors to perform certain actions and avoid others.
The actions of swamp buffalo breeders carried out to achieve certain goals have encouraged the development of entrepreneurial spirit. In Western literature, entrepreneurship is called entrepreneurship. In the context of entrepreneurship in the West, building a business requires a combination of creativity and analysis in business (Ingle, 2013) and a very important leadership role (Kaptein, 2019). In the Indonesian context, entrepreneurship comes from the word which means courageous, meaning there is the courage to do business. Entrepreneurs are people who dare to work both for themselves and others (Firmansyah & Roosmawarni, 2019). Unlike entrepreneurship in the West, entrepreneurship in rural areas is characterized by the characteristics of courage, namely daring to take risks, and having the courage and willingness to do. Entrepreneurship is meant in the context of micro and small enterprises, carried out by individuals and families. The question that arises is how the impact of conflict is on the rise of local entrepreneurs. In particular, this study will analyze the rise of local entrepreneurship in swamp buffalo farming communities in South Kalimantan Province, as well as the determining factors of his resurrection.
Method
This research uses qualitative methods because there are problems related to the rise of local entrepreneurs in conflict areas that still need to be explored. The approach used is in the form of ethnographic studies, with a realist ethnographic type where researchers act as "objective" observers, recording facts with an impartial attitude (Creswell, 2015). This approach is intended to capture the lives of swamp buffalo farmers who have pursued entrepreneurship because the livestock business has suffered setbacks as a result of plantation intervention in palm oil. To know the factors that determine the rise of local entrepreneurs from swamp buffalo farming communities in conflict areas, it is better to be investigated using qualitative methods. By using the qualitative method of the ethnographic study approach, researchers holistically photograph the lives of swamp buffalo breeders with an ethical view or the views of researchers whose practical goals are for their interests. According to (Spradley, 1997) view, the social and cultural structure of society is described according to the researcher's interpretation.
This research was conducted in the villages of swamp buffalo rearing centers in Kuripan District, Barito Kuala Regency, South Kalimantan Province, Indonesia. The central villages of swamp buffalo rearing are Tabatan Baru Village, Tabatan Village, and Rimbun Tulang Village. In these three villages can be found swamp buffalo rearing activities, because there is grazing land overgrown with grass as the main feed. In addition, in these three villages, there are also oil palm plasma plantations whose concessions reach some grazing land. As a result, there is overlapping land use which has led to conflicts between swamp buffalo farmers and oil palm plasma plantations. Regional Regulation of Barito Kuala Regency Number 6 of 2012 concerning the Regional Spatial Plan of Barito Kuala Regency 2012-2031 of South Kalimantan Province, has designated Kuripan District as a swamp buffalo cultivation area. Therefore, it is very appropriate if this research is conducted in Kuripan District, Barito Kuala Regency, South Kalimantan Province.
For the collection of qualitative data, informants are determined purposively, that is, done deliberately to obtain key informants. Furthermore, the selection of advanced informants using the snowball technique. According to (Bungin, 2003) selected informants must meet criteria related to the activities of subjects who are still active in activities of concern to researchers, have enough time to be interviewed, provide information objectively, and can be "teachers" for researchers. With these two techniques, informants were obtained from 38 swamp buffalo breeders. In addition to swamp buffalo farmers, other informants came from plasma plantation managers and core gardens, formal and non-formal, collectors/middlemen, Kuripan District Police Officers, and NGOs. The number of informants other than breeders is 46 people. The total number of informants was 84. To collect research data, interview documents, observation guidelines, document data, and audiovisual data were used.
Interviews with swamp buffalo farmers were conducted to obtain information about the entrepreneurship carried out by farmers, when livestock businesses suffered a setback due to some grazing land having been converted to oil palm plasma plantations. Interviews with plasma plantation managers and nucleus plantations were conducted to obtain data on plantation land area and the process of obtaining land. Interviews with formal and non-formal figures are intended to obtain data on the impact of the entry of oil palm plantations. Interviews with middlemen were conducted to obtain data on commodity prices and the process of purchasing products from breeders. Interviews with police officers to obtain data on security and order issues, as some community members refuse entry to oil palm plantations. Interviews with NGO were conducted to obtain data on reports from community members who felt aggrieved by the presence of oil palm plantations. Observations were made to determine the existing conditions of grazing land and oil palm plantations as well as the type of entrepreneurship carried out by swamp buffalo breeders. Data obtained from documents, both from the Central Bureau of Statistics sub-districts and districts, oil palm plantations, and from farmers, are secondary and primary sources that can complement data analysis.
The process of qualitative data analysis follows the model of Huberman & Miles (1994) in (Creswell, 2015), where the analysis strategy starts from sketching ideas, by writing marginal notes on field notes. These marginal notes are taken during interviews, observations, and document studies. These field notes are further summarized. From the results of the summary, coding is then made, and reduced to themes. Next, the researcher calculates the frequency of the code and connects each category so that a logical relationship is formed between variables. The next stage of the researcher connects categories with the analytical framework in the literature. In the final stage, researchers display data in the form of tables, charts, figures, and diagrams, and compare cases with standard cases.
Data validation is done through triangulation, researchers use interviews, observations, and documents to explain themes or perspectives. By using a variety of sources, researchers can provide more corroborating evidence. Researchers also use negative case analysis, because not all data is positive. Therefore, researchers must provide a realistic assessment related to the phenomenon of entrepreneurial growth from swamp buffalo breeders. Not all data will match the pattern from the code or theme. Some of the data collected are positive only, or negative only, but some contain both. This qualitative data analysis is carried out during data collection in the field.
1.
Entry of Oil Palm Plantations In South Kalimantan Province, oil palm plantations can be found, among others, in Barito Kuala Regency. Oil palm plantations are spread almost throughout the sub-district. Of the 17 sub-districts, only one sub-district has no oil palm plantations. Details of the area of oil palm plantations and the amount of production in each sub-district can be seen in the following Oil palm plantations developed in the Kuripan sub-district have occupied swamp buffalo grazing land (Bubalus Bubalis). Based on documents obtained from the company, the oil palm plantation received a concession from the Barito Kuala Regency Government to open plantation land in Kuripan District covering an area of 10,810 hectares, with details of 8,528 hectares of core garden land and 2,282 hectares for plasma plantation land (Rochgiyanti, 2021). Meanwhile, the total area of Kuripan District is 343.50 km 2 or 34,350 hectares. This means that the area of oil palm plantations in Kuripan District reaches 31.47% of the total area of Kuripan District. The rest of the area is residential, yard land, garden land, Galam forest (Melaleuca leucadendron), swamp buffalo pasture, public facilities (prayer rooms, mosques, government buildings, public cemeteries, village roads, etc.), and rivers.
Swamp buffalo is one of the germplasm or genetic resources of South Kalimantan. Swamp buffaloes live in a swamp environment under the geographical conditions of South Kalimantan. In South Kalimantan, there are two types of buffalo, namely buffalo raised on dry land and buffalo raised in water. Swamp buffalo is part of mud buffalo because it can dive and swim. That skill is what characterizes the swamp buffalo. From the results of research by (Hilmawan et al., 2020), it can be seen that based on the calculation of LQ (Location Quotient) values in South Kalimantan, five districts get LQ>1 values. Barito Kuala Regency is a regency area that has a relatively large buffalo livestock population compared to other districts so it can be declared as a base area for livestock buffalo based on LQ value >1. Barito Kuala Regency obtained an LQ score of 1.43. Based on the LQ value, swamp buffalo cattle can be used as superior commodities. The five districts that received LQ>1 scores agrosystem are swamp areas whose geographical conditions are very suitable for developing swamp buffalo cultivation. Buffalo cattle have the advantage that they can develop very well in very good environmental conditions spacious and in environments with wet to dry conditions (Hilmawan et al., 2020).
The maintenance of swamp buffalo in Barito Kuala Regency is carried out on grazing pastures located not far from the Barito River Basin. To get to the pasture, grazing can be reached through the tributary paths of the Barito River. The swamp buffalo breeders are all from the Bakupai Dayak tribe. The maintenance of swamp buffalo has been carried out by breeders for generations. The breeders are scattered in three villages of swamp buffalo farming centers. When the research was conducted in the 2020-2021 period, based on the results of interviews with breeders, it was known that the number of swamp buffalo breeders in Tabatan Baru Village was 19 people, in Tabatan Village as many as 15 people, and Rimbun Tulang Village as many as 4 people (Rochgiyanti, 2021). The total number of breeders is 38 people.
Before the entry of oil palm plantations, the maintenance of swamp buffalo in Barito Kuala Regency was carried out on 12,786 hectares of pasture. After the entry of oil palm plantations, the area of pasture has shrunk as shown in the following table. The data above explains that the area of balaan grazing pasture continues to decrease from 12,786 hectares to the remaining 250 hectares or around 1.95%. This means that around 12,536 hectares or about 98.05% of grazing pastures have been repurposed, both for plantations, agriculture, settlements, and road-clearing land. Based on observations on oil palm plantations and grazing pastures as well as interviews with formal figures, namely sub-districts and village heads, act the function of land is Most prevalent for oil palm plantations. Therefore, a conflict between swamp buffalo farmers and oil palm plantation companies is inevitable.
Both swamp buffalo farmers and oil palm plantation companies gain access to grazing pastures by different mechanisms. (Ribot & Peluso, 2003) define access as the ability to profit from something, including material objects, individuals, institutions, and symbols. They explained that the mechanism for obtaining access, namely (1) rights-based access mechanisms, closely linked to laws (state) and customs (community groups) that are usually incompatible, (2) illegal access, that is, the use of something through not obtaining the social approval of the state and society, or through acts of violence; and (3) structural and relational access mechanism, concerning economic, political, cultural frameworks, which manifest in the use of technology, capital, markets, labor and employment opportunities, knowledge, authority, social identity, and negotiation, as well as building social relations with others.
Based on the results of document studies and interviews with oil palm plantations, they get access to open plantation land based on rights-based access that is closely related to the laws of the country. The right is in the form of a decree from the regent regarding the opening permit and operational permit for oil palm plantations in its area. In addition, investment in oil palm plantations is possible because the state is boosting state revenue from various sources. Investment in oil palm plantations will bring a multiplier effect in the form of job openings, community participation as plasma farmers, increasing community income around plantations, an increase in Local Original Revenue from the tax sector, and foreign exchange for the country from palm oil commodity exports. Thus, access to oil palm plantations is also supported by structural and relational mechanisms, concerning political decisions and economic development.
Swamp buffalo farmers use pasture based on rights-based access mechanisms that are closely related to customary law recognized by social groups in the community of Bakumpai Dayak tribe. Based on interviews with farmers, they learned that the grazing pasture was stateowned land. Therefore, the district government can easily issue plantation use rights to plantation investors. But ranchers have been using grazing pastures to graze swamp buffalo cattle and build pens on them, long before oil palm plantations came into existence in the region of these. They have been breeders of swamp buffalo for generations. Based on documents owned by farmers and based on interviews with breeders, the existence of swamp buffalo breeders is also legally recognized by the government district, because they already hold livestock cards and pay livestock tax regularly on an annual basis. However, the amount of livestock tax paid by farmers is much smaller than the tax deposited by the plantation. Therefore, it can be concluded that access to gain control over fishing fields by buffalo farmers, swamps and oil palm plantations is not go hand in hand, even contradicting each other.
If you look at the relationship that occurs between actors, it can be grouped into two, namely between parties who control resource access and parties who must maintain resource access. It is in this relational pattern that the sharing of benefits over resources is negotiated between the two groups of actors. In the negotiation process, each actor develops a different strategy for one goal, namely maintaining access to resources and also the flow of benefits (Priyatna et al., 2013). The district government can control access to resources based on the power they have. Oil palm plantations manage to control resources based on formal legal power obtained from district governments. Meanwhile, farmers try to maintain access to resources by resisting and resisting oil palm plantation companies. With the strategy developed by the breeder, in the end, they get a conservation area for swamp buffalo from the company, even though the land area obtained is much narrower compared to the number of swamp buffalo owned by breeders.
From this explanation, it can be seen that the strategies used by the parties to gain access to resources can vary. The results of research by (Priyatna et al., 2013) on access and strategies of actors in the utilization of Djuanda reservoir resources show that ownership rights of reservoir resources can be state property or private property. Resource ownership rights are always associated with regulatory and legal claims support. These rules and laws can take the form of formal legal or social consensus within society. These claims to regulations and laws always aim to protect an inherent set of rights for resource owners. However, a person or group of people can gain control of a resource because it manages to get rid of another group.
Negative Impacts of the Entry of Oil Palm Plantations
The entry of oil palm plantations into the villages of swamp buffalo farming centers has caused various impacts, both positive and negative. Some community members accept the presence of oil palm plantations because they are seen as providing employment. On the contrary, some residents reject the entry of oil palm plantations because they can eliminate sources of livelihood that have been occupied for generations. The rejection from some of these communities has led to conflict between oil palm plantation companies and residents. However, the conflict did not lead to a destructive and anarchist conflict. According to interviews with police officers, the conflict between the two parties was actualized in the form of demonstrations carried out by farmers at the plantation of palm oil. They demanded that the company not open plantations in the pasture. The process of conflict between the two parties, including efforts to resolve conflicts that have been carried out by both parties and through mediation, has been described by (Rochgiyanti, 2022).
The influx of oil palm plantations negatively affects the livelihoods of swamp buffalo farmers. Based on the results of interviews with farmers and informal figures as well as observations in the field, it can be seen that the negative is the loss of some sources of livelihood because there has been landed use change. Forests that originally provided various types of wood abundantly have been turned into oil palm plantations. The marshland that became the habitat of freshwater fish has disappeared. Swamp buffalo grazing land, some of which is also used to make fish wells, has now been turned into oil palm plantations.
Before the entry of oil palm plantations, swamp buffalo farmers did not only depend on one source for their livelihoods. From interviews with farmers, it can be seen that when they raise swamp buffaloes, farmers also have additional livelihoods sourced from the environment. After the entry of oil palm plantations, there has been a change in the source of livelihood. The change is caused by land use change. Some of the old sources of livelihood have disappeared, but new sources of livelihood have emerged in oil palm plantations. The impact of the presence of oil palm plantations on the livelihoods of swamp farmers can be seen in the following table. (Rochgiyanti, 2021) From the table, it can be seen that before the entry of oil palm plantations, there were various sources of livelihood occupied by ranchers as side jobs. All types of livelihoods developed are sourced from wetland ecosystems, which are rich in various types of flora and fauna that can be utilized as a source of income for farmers. The influx of oil palm plantations has eliminated some sources of livelihood as the land where to forage for forest timber or catch fish has been turned into oil palm plantations. Oil palm plantations have transformed the landscape of wetland ecosystems into blocks containing oil palm plantations, bounded by trenches to drain fertilizer waste and maintain the ebb and flow of swamp water.
The Positive Impact of the Entry of Oil Palm Plantations on the Development of Entrepreneurship among Swamp Buffalo Farmers
Although some sources of livelihood for swamp buffalo farmers have disappeared, the influx of oil palm plantations has had a positive impact on farmers. Based on the results of interviews with formal sub-district and village head figures, informal leaders in the village, and swamp buffalo farmers, there is a generally positive impact that can be enjoyed by swamp buffalo breeders and other villagers are the opening of road access that connects between villages in the sub-district and between sub-districts in Barito Kuala Regency. Some road access was opened by oil palm plantation companies, and some were opened by the district government. Before the opening of road access, residents in Kuripan District had to use the Barito River route as the only route to get to the district capital or otherwise.
Road access opened by oil palm plantation companies is used to transport production facilities and infrastructure as well as transport oil palm crops to the mill for crude palm oil (CPO) processing. However, villagers can take advantage of the road route. The road route built by the district government has facilitated connectivity between villages in Kuripan District. By using land routes, it is easier for villages to reach the district capital than by river. The positive impact of the development of land routes, among others, can be seen from the development of fishing tourism in fish wells owned by residents, although overshadowed by conflicts that occur between community members and oil palm plantations (Rochgiyanti et al., 2023).
The inclusion of oil palm plantations also has a positive impact on providing employment opportunities for residents of communities around the plantation site. At the beginning of the opening of plantations and the beginning of the planting period of oil palm seedlings, the need for labor is very high. According to information from the village head, at the beginning of the opening of oil palm plantations, as many as 80% of villagers in his area had worked as plantation laborers. But after entering the treatment phase, the labor needs of residents have shrunk to about 10%. Workers who can still work in plantations include qualified and educated workers with certain educational qualifications. Meanwhile, skilled personnel who are experienced in oil palm cultivation are imported from outside the region.
Another positive impact is the development of the entrepreneurial spirit of swamp buffalo breeders. After the entry of oil palm plantations, swamp buffalo farmers have lost their source of livelihood from wetland ecosystems as shown in table 3. However, these conditions have encouraged farmers to develop new sources of subjects that are under environmental conditions. Swamp buffalo farmers have made a rational choice to obtain a new source of livelihood while maintaining swamp buffalo whose numbers are decreasing due to the increasing number of the narrowness of grazing pastures. According to Friedman and Hechter (1988) theory of rational choice focuses attention on actors, who have a specific purpose or purpose (Ritzer, 2015). What actor has a specific purpose, and is done with a certain action to achieve its goal? Swamp buffalo farmers have been looking for alternative sources of livelihood with the aim that the source of opinion is not only single but comes from various sources. With sources of income that come from various sources, family welfare can be maintained.
Researchers used indicators of farmer welfare in terms of the ability to send children to college, as well as the opportunity to perform the pilgrimage to the holy land. Judging from the age of breeders, there are 65.79% of farmers can send their children to college. Children who are schooled until college are between 1-4 people. In addition, as many as 55.26% of farmers have made the pilgrimage to the holy land. To perform this pilgrimage requires a long waiting period, and large costs according to government regulations. When they will leave for the holy land, various kinds of congratulations ceremonies are also carried out which require a lot of money. With the loss of livelihoods other than raising swamp buffalo, ranchers have developed new sources of livelihood.
The actions of swamp buffalo breeders are determined by two main coercions, namely first, limited resources and different access from each actor (Ritzer, 2015). Limited resources that can be accessed by swamp buffalo farmers are caused because some pasture lands have been converted into oil palm plantation land. In addition, the breeders are not on the same status, but there are 4 criteria for swamp buffalo breeders. The criteria in question are breeders who have swamp buffalo and are kept by themselves, breeders who have swamp buffalo but maintenance is left to other breeders, breeders who own livestock and receive livestock entrustment from others, and farmers who only receive livestock entrustment from others (Rochgiyanti, 2021). Second, social institutions encourage actors to perform certain actions and avoid others. In the maintenance of swamp buffalo carried out by the Bakupai Dayak tribe, family ties among breeders are very strong. The maintenance of the marsh buffalo itself is characterized by the characteristics of trust, cooperation, and mutual assistance. Therefore, they choose to develop new sources of livelihood rather than in constant conflict with oil palm plantations. This is done considering that among swamp buffalo breeders there is 18.42% work as plantation laborers, and as many as 34.21% of breeders have become plasma farmers in palm oil.
Based on wetland environmental conditions, new livelihoods developed by farmers are: a. Breeding Swallows Natural conditions in Kuripan District are very suitable for swallow cultivation. According to swamp buffalo breeders, swallow cultivation is easy to do, but requires very large capital. For 1 unit of swallow's nest house measuring 4 x 8 m consisting of 2 floors, construction funds of up to 100 million rupiahs are needed. If the bird's nest house is built with a wider size and higher floors, it can cost up to 400 million rupiahs. This swallow's nest house is built next to the house, behind the house, or in a garden not far from the house so that it is easy to supervise, some even Take advantage of a house that is no longer occupied. After a year, they began to enjoy the results. At the time of the study, in the 2020-2021 period, the price of swallow nests ranged from 18-20 million rupiah per kilogram. Every week they harvest a swallow's nest of at least 1 kilogram. From the results of observations and interviews with farmers, it can be seen that the number of swallow nest houses in the villages of swamp buffalo farming centers is increasing. In 2014 only 1 unit of swallow's nest house was found, in 2016 the number became 34 units, in 2018 increased to 78 units, and in 2020 the number >100 units. As much as 44.74% of swamp buffalo breeders have built swallow nest houses.
b. Cultivation of medicinal plants
The medicinal plant cultivated by marsh buffalo breeders is the type of Cassia Quaderialata. The Bakumpai Dayak tribe knows it as gulinggang or gelinggang. This plant is also known as Chinese ketapeng. It grows wild in the forests of Kalimantan, including in the wetland area of Kuripan District. Local people have long believed that this plant has ordinary benefits for health. The Dayak Siang tribe uses gelinggang leaves as a traditional medicine to treat fungal diseases, such as ringworm, scabies, tinea versicolor, and acne. They mash the leaves to make cold powder to prevent and treat acne (Kementan, 2019). The plant grows in moist and adaptive areas to swampy conditions. This plant has an export value in the form of dry leaves. According to the Head of the South Kalimantan Provincial Trade Office, this leaf has been in great demand by various countries. Therefore, the residents of South Kalimantan have begun to export gelinggang leaves as ingredients for medicines and health care and health care traditional. From the source of Trubus (Kemenperin, 2018;Trubus, 2019), gelinggang leaves contain glycosides, alkaloids, flavonoids, lectins, rhein, tannins, quercetin, etc. which have many benefits for the body.
According to the breeders of swamp buffaloes, the cultivation of girdle plants is very easy to do. This plant can be planted in the yard, next to or behind the house, on the bank of the river, or the side of the road. This plant does not require special care. Once planted it is then allowed to grow on its own. The leaves of the plant are used by the community. They sell it in the form of dry leaves. They can harvest their leaves every 2 months, and the yield of dry leaves can reach 60 kilograms per harvest. At the time the study was conducted, the selling price of dried gelinggang leaves reached 12 thousand rupiahs per kilogram.
Based on the results of interviews with farmers, it can be seen that as many as 84.21% of swamp buffalo farmers have planted girders. The plants are easy to grow, require no care, and the results are very promising. What farmers do to build this new source of livelihood is a rational choice, and the results are immediate. With the existence of new sources of livelihood, the welfare of farmers can still be expected. If welfare remains guaranteed, the potential for conflict with plantations can be suppressed. from entrepreneurship in Western principles, where analysis is needed in the business that will develop (Ingle, 2013), and very strong leadership is needed (Kaptein, 2019). Swamp buffalo breeders, under the principle of entrepreneurship, build businesses based on courage, including the courage to take risks (Firmansyah & Roosmawarni, 2019). The risk in question is caused by fluctuations in the selling price of the product and product quality.
Marketing Guarantee for Its Products
Market availability is a very decisive factor for a product. Although production can be boosted as highly as possible, without marketing guarantees, the product is not sold or can be sold but at a very low price. This marketing problem is a classic problem for those who are going to start a business. (Firmansyah & Roosmawarni, 2019) explained that entrepreneurship, among others, is characterized by the characteristics of courage, namely daring to take risks, having the enthusiasm and strong will, and marketing certainty.
Swamp buffalo breeders dare to take the risk to build a swallow nest house with very large capital because there is a guarantee of marketing swallow nests. They can sell swallow nests at any time. They just need to contact the middlemen or collectors. In a relatively short time, these middlemen or collectors will come to the village and buy swallow nests. Based on the results of interviews with middlemen or collectors, they can be contacted for 24 hours to purchase swallow nests. They buy it in cash. According to collectors or middlemen, the collected swallow nests are then sent to Java Island for further export abroad. At the time this study was conducted, the price of swallow nests ranged from 15-20 thousand rupiah per kilogram depending on the quality. The breeders themselves once sell the swallow's nest can reach a range of 5-10 kilograms.
Likewise, marketing dried gulinggang leaves can be done easily. Periodically, collectors or middlemen come to swamp buffalo breeders to take dried rolling leaves. According to middleman information, these dried gulinggang leaves were then deposited into a pharmaceutical factory in one of the cities in South Kalimantan Province. The middlemen buy dried gulinggang leaves in cash from swamp buffalo breeders. Middlemen or collectors buy dried gulinggang leaves for 12-13 thousand rupiah per kilogram. Farmers can sell between 30-60 kilograms per harvest every 2 months. With the guarantee of market certainty, what swamp buffalo breeders do is a very rational choice. Swamp buffalo farmers can think rationally when the natural resources that are the source of livelihood have changed due to intervention from plantations palm oil. The entrepreneurship developed by these breeders is related to a sustainable environment. Based on the results of (Guo et al., 2022) businesses based on highquality environmental and economic development are more prevalent in central cities than in cluster cities. The development of regional entrepreneurship and the development of economic quality turned out to be running asymmetrically.
Conclusion
From the results of the data analysis above, it can be concluded that the entry of oil palm plantations has brought positive and negative impacts to swamp buffalo farmers. The positive impact is in the form of the opening of road infrastructure and the availability of employment opportunities for the community around the plantation, and the development of entrepreneurial spirit among swamp buffalo breeders. The emergence of this entrepreneurial spirit is due to the negative impact of oil palm plantation interventions that have eliminated traditional sources of livelihood. The influx of oil palm plantations has led to the conversion of wetlands into patches of oil palm plantations. In the end, swamp buffalo farmers have created a new source of livelihood that is suitable for wetland conditions. The emergence of entrepreneurship does not occur immediately but is also influenced by a very strong trading spirit, the self-managing and self-regulating spirit that has been growing for a long time, and marketing guarantees for the products produced.
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Domain: Business Economics Sociology
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Biotechnological recycling of byproducts in the rice soft beverage industry: a preliminary research
. The use of industrial waste as the secondary raw materials is relevant all over the world. The rice sediment is a byproduct of the rice soft beverage industry. The rice mash was obtained by the rice sediment fermentation with α-amylase and ethanol yeast Saccharomyces cerevisiae . The rice wort fermentation efficiency was estimated by rice mash ethanol concentration, the visible mass concentration of mash dry substances, mash acidity, total yeast number and yeast budding, yeast cell area. The most intensive fermentation was in the sample with α-amylase. On the 7th day of fermentation, the alcohol concentration in this sample was 5.28volume (%), which is 5 times more than in the sample without α-amylase. Digital morphometric characteristics of yeast correlated with actual fermentation parameters, reflecting yeast adaptive reactions at various ethanol technological stages. The rice mash can be used in the rectification process to obtain new products - ethanol distillate or bioethanol. New methods and expanding technologies for biotechnological rice sediment recycling are required in this field of research.
Introduction
Currently, there is a steady increase in the food and processing industry capacity, this results into a waste increase. Waste recycling of food raw materials and food products becomes the actual problem. Food waste is the materials which are intended for human consumption, however, they are subsequently getting discharged, lost, degraded and contaminating the environment. The problem of food waste involves all sectors of waste management, from the collection to its removal; the identifying of sustainable solutions extends to all contributors to the food supply chains, agricultural and industrial sectors, as well as retailers and final consumers [1].
The interest in such a topic is determined by two interrelated aspects: economic and environmental.
The economic aspect is that companies make not only high-quality products from raw materials, but also use byproducts to make new ones. Scientists investigate the possibility of food waste recycling of both plant and animal origin.
Ivanchenko O. et al [2] devoted their research to the problem of improving methods of pectin obtaining from apple pomace by ultrasonic vibrations. The importance of this study was because there is a big waste formation during apple juice production. The apple juice yield is from 50 to 75% during its production, but 25-50% is waste.
Food waste from the salmon industry is the most important part of secondary fish resources. Salmon meat has high nutrition value and includes a lot of polyunsaturated fatty acids (PFA), minerals, vitamins B1, B2, C, E, A. Bazarnova J. et al [3] made the specification of Atlantic salmon byproducts. They researched the possibility of its use in the fish sausage production. Obtained results allowed to optimize functional and technological characteristics of fish sausages "Tender" and "Vienna".
Scientists researched the food industry waste using for the production of heavy metal ion sorbents based on the modified wheat husk [4,5]. Sorbent kinetic and isotherm characteristics, the influence of pH environment on the efficiency of wastewater treatment from heavy metal ions were studied.
The widespread of corn starch and sugarcane using as glucose sources for ethanol production via fermentation could have a negative influence on farmlands. Nevertheless, alternative sources of fermentable sugars, particularly from lignocellulosic sources, are investigated extensively. Another source of fermentable sugars with substantial potential for ethanol production is the food recycling industry waste: the potato recycling waste, molasses from the beet recycling, whey from cheese production, byproducts of rice and coffee bean processing, and other food processing waste as sugar sources for fermentation to ethanol [6].
Traditionally, wheat and rye are the main raw materials in the production of grain ethanol [7,8].
The new alternative raw material searching is the main way to increase ethanol production profitability. For example, using rice milling as a byproduct [9]. This work describes the use of rice milling as raw material for bio-ethanol. Starch-rich waste (rice bran, broken, unripe and discolored rice) was individually fermented (20%w/v) through consolidated bio-processing by two industrial engineered yeast secreting fungal amylases. Fermenting efficiency for each byproduct was high (above 88% of the theoretical) and further confirmed on the blend of residues (nearly 52g/l ethanol). These results demonstrated for the first time that the coconversion of multiple waste streams is a promising option for second generation ethanol production.
Food waste is of particular interest to researchers of renewable energy sources.
Many studies indicate various technologies for processing food waste into biofuel. The ethanol production from secondary resources allows solving the problem of expanding the raw material base in the production of ethanol as a biofuel. Various objects could be used as sourcesanimal waste, agricultural waste, plant shells and stems, substandard wood, as well as food industry waste or, for example, microalgae [10,11]. Liquid fuel could be as an alternative to gasoline, or as a supplement to traditional autocar fuel. Such a raw material resource, rice production waste is repeatedly mentioned in the literature [12,13].
Starch is an important constituent of the human diet and is a major storage product of many economically important crops such as wheat, rice, maize, tapioca, and potato. Amylases are one of the main enzymes that have been used in the industry. Such enzymes hydrolyze the starch molecules into polymers composed of glucose units. Amylases have potential application in a wide number of industrial processes such as food, fermentation, and pharmaceutical industries [14].
Alpha-amylase could be obtained from plants, animals, and microorganisms. However, enzymes from fungal and bacterial sources have dominated applications in industrial sectors. The production of α-amylase is essential for the conversion of starches into oligosaccharides. α-amylase is produced from Bacillus licheniformis, Bacillus stearothermophilus, and Bacillus amyloliquefaciens find potential application several industrial processes such as in food, fermentation, textiles, paper, and detergent industries [15]. The properties of each α-amylase such as thermal stability, pH profile, pH stability, and Ca-independency are important in the development of the fermentation process.
Yeast represents valuable sources in food science and microbiology and is a kind of food factories, because of the potentiality of whole cells or for their produced compounds [16]. Yeast performs three main functions. The role of yeast as starter cultures with a special focus on wine [17], ethanol [18,19]. Yeast is also used as probiotics to regulate the human microbiome [20] in the food production industry and as an enzyme producer [21].
Carbohydrates are about 90% of the total weight of rice grains. Rice is used not only for ethanol production but also in the rice soft beverage industry. Rice milk is one of them. Rice grows in more than 100 countries with 90% of the total global production from Asia. Although there are more than 110,000 cultivated rice varieties differ in quality and nutritional content. After postharvest processing, rice could be categorized as either white or brown. In addition to calories, rice is a good source of magnesium, phosphorus, manganese, selenium, iron, folic acid, thiamin, and niacin; but it is low in fiber and fat. Although brown rice is promoted as being "healthier" because of bioactive compounds, including minerals and vitamins not present in white rice after polishing, white rice is more widely consumed than brown. This is for several reasons, including cooking ease, palatability, and shelf life. Polished rice has a higher glycemic load and may impact glucose homeostasis but, when combined with other foods, it can be considered part of a "healthy" plate. With the projected increase in the global population, rice will remain a staple [22].
Globally, consumers are concerned about saturated fat levels in foods, lactose intolerance, hormone and antibiotic levels in dairy products, as well as sustainable treatment of the environment and animal food production. New uses of rice in value-added food products are being explored because rice is a lactosefree, cholesterol and gluten-free food [23].
Various methods of rice milk production had been explored, including the method for enzymatic induction by germination of rice grain [24].
Previously, we created a rice soft drink recipe based on boiled rice filtrate, green tea water concentrate, stevia extract as a natural sweetener. The rice suspension obtained was used to prepare a rice soft beverage based on the water green tea concentrate and stevia powder extract. And the rice sediment, remaining after filtration, was used for further biotechnological recycling.
This research aimed to study the possibility of biotechnological recycling the rice sediment -a byproduct of the rice soft beverage industry to obtain a new substance: rice mash that could be used for bioethanol production.
Materials and methods
Previously, we have developed a rice soft drink recipe based on boiled rice filtrate, green tea water concentrate, stevia extract as a natural sweetener.
Raw materials for the rice suspension, the basis of the rice soft beverage production: white grain rice, milled (commercial product, Russia); leave stevia extract powder (commercial product, Russia); green tea (commercial product, China); green tea leaves water concentrate; drinking water.
The rice was ground in a homogenizer. Water (1500 ml) was added to the rice. The soaked rice was cooked for 20 minutes in a water bath with a constant temperature of + 95°C. The mass was constantly mixed to avoid uneven heating, starch agglomeration and incomplete gelatinization.
Main technological stages of the rice beverage cooking: cooking rice flour at +180°C for 15 minutes → grinding → heating in a water bath at a constant temperature of + 30°C for 2 hours → colloid crushing for 3 minutes → heating at a temperature of + 70°C in a water bath for 30 minutes → filtration → rice suspension.
The rice suspension was cooled to room temperature, poured into a blender in order to reduce the particle size and distribute the particles more evenly. Then the rice suspension obtained was used to prepare a rice soft beverage based on the water green tea concentrate and the stevia powder extract. The rice sediment, remaining after filtration, was used for further biotechnological recycling. The rice sediment was diluted with water in the ratio 3:2. For example, 95 g of the rice sediment and 60 ml of H2O.
Rice sediment polysaccharides were hydrolyzed by bacterial ferment α-amylase BF7658 (Junsheng Biological Technology Co., Ltd, China). Ferment dosage was, as recommended by the manufacturer, (100.00±0.005) g/kg of rice sediment. The fermentation took 30 minutes at (65.0±0.5) °C. Then the rice wort was cooled for 30 minutes. Ethanol yeast was added to the cooled rice wort.
Dry ethanol yeast Saccharomyces cerevisiae, Angel Yeast (Hubei Anqi Biological Group Co., LTD, China) were used for biotechnological recycling of the rice sediment in these experiments. Dry yeasts were rehydrated with (10.00 ±0.5) ml·g -1 distilled water at (35.0±0.5) °C for 10 minutes. Yeast dosage was, as recommended by the manufacturer, (1.000±0.005) g·dm -3 of rice wort.
Yeast cultivation was carried out on two substrate types: diluted rice sediment without preliminary hydrolysis by the α-amylase and diluted rice sediment with preliminary hydrolysis by an α-amylase.
In our preliminary research, the rice wort fermentation efficiency was estimated by rice mash ethanol concentration, visible mass concentration of mash dry substances, mash acidity (pH), total yeast number and yeast budding number, yeast cell area.
The rice mash ethanol concentration was measured by Koloss M, a digital automatic analyzer (NPP "Biomer", Russia). This device is used to expressmeasurement the ethanol concentration, the mass concentration of dry substances in alcohol-containing beverages and solutions. The rice mash filtrate was used to measure physicochemical parameters by the digital analyzer.
Titrino Plus (Metrohm) titrator was used for pH measurement. The device operates in two modes, potentiometric titration, and pH meter, the later used in the experiment. The time of the assay was no less than 3 min.
During and after the rice sediment fermentation, fixed yeast cell preparations were stained with the hematoxylin-eosin solution according to a standard protocol. Microscopic analysis of samples was carried out in visible spectral range using Nikon microscope equipped with a DS-Fi2 camera providing a total 1000fold magnification. Images were recorded by a video system and displayed on a computer screen with NIS-Elements Basic Research (Nikon) software.
The cell number and yeast digital cytomorphometric characteristics (total cell area, μm 2 ) were obtained in 30 view fields for each sample by Nikon image recognition software "Image J". Data were collected after 0, 3, and 24 hours of fermentation.
All data were reported as the standard error of the mean (SEM). Statistical data processing was made with software GraphPad Prism 6 (GraphPad Software Inc., La Jolla, USA), SPSSH Statistics version 17.0 (IMB, New York, USA).
Results
Two samples of the fermented rice wort were the object of the experimental study. The fermentable raw material of the first sample (number 1, control sample) consisted following components: rice sediment + water + yeast. The fermentable raw material of the second sample (number 2, experimental sample) consisted following components: rice sediment + water + α-amylase + yeast. All physical and chemical parameters of the fermented rice wort and rice mash were obtained after 0, 3, 5, and 7 days of fermentation.
The mash ethanol concentration was the main criterion of the yeast efficiency during their cultivation in the rice sediment. Changes in ethanol concentration over time in two types of rice mash during the wort fermentation are presented in Figure 1. Visible mass concentration of mash dry substances and pH value mash are also an important criterion for the yeast fermentation efficiency estimation. Values are presented in the Table 1 and the Table 2. Cell budding intensity is one of the main criteria of the yeast functional activity. Photos in Figure 2 show budding yeast cultivated in two types of rice mash based on: rice sediment without α-amylase (a) and rice sediment with α-amylase adding before fermentation (b).
The digital microscopic analysis demonstrated the presence of heterogeneous yeast cells during 24 hours of fermentation. Digital cytomorphometric data of yeast cell area changes during the rice sediment fermentation are presented in the Table 3.
Discussion
Physical and chemical studies of rice mash were carried out. Rice sediment -the byproduct in the rice soft beverage industry -was the substrate for rice mash production. Dry industrial ethanol yeast Saccharomyces cerevisiae were used for the diluted rice sediment fermentation. Bacterial enzyme α-amylase BF7658 was added to the rice substrate before yeast to hydrolyze starch and increase the soluble carbohydrate amount (experimental sample). The rice sediment sample without α-amylase, but with ethanol yeast, was as a control sample. Fermentation was carried out at a temperature of + 30 °C for 7 days.
Starch is the main polysaccharide of rice grains. Yeast does not digest it. It is necessary to carry out starch preliminary hydrolysis in order to obtain carbohydrates available for yeast metabolism. Dextrins, disaccharides and monosaccharides, maltose and glucose are formed during starch hydrolysis. Using of α-amylase BF7658 allowed to increase the dry substance concentration in the fermentation rice wort by 2 times: 3.14 % in the control sample, 6.60 % in the experimental sample. On the 7th fermentation day, compared to the beginning of fermentation, the dry substance concentration in the control sample decreased by 1.2 times, in the experimental sample -also decreased by 1.2 times (Table 1).
Mudrak T. et al [25] studied an optimal enzyme complex for hydrolysis of the maize grain components with a starch content of 69.0 %. Fermentation was carried out with 18-30% of dry matters (DM) in the wort, using the osmophilic yeast strain Saccharomyces cerevisiae DO-16. The alcohol concentration in fermented mashes was 10.51, 13.35, 15.78% vol., according to the wort DM concentrations 18, 27, 30 %, respectively. In our experiment, the primary dry substance concentration was low because the raw material for fermentation was not rice grain, but the diluted rice sediment -byproduct in the preceding rice beverage production. Thus, the enzyme α-amylase used in our experiment, hydrolyzed components of the rice sediment starch.
It is shown that the most intense fermentation took place in the experimental sample with the addition of the enzyme α-amylase BF7658. On the 7th day of fermentation the ethanol concentration in the experimental sample with α-amylase was 5.28 volume%, which is 5 times more than in the control sample without the enzyme: 1.10 volume% (Fig.1).
During the all fermentation period rice mash pH values slightly decreased both in the control and experimental samples: from 4.50 to 3.83, from 4.20 to 3.66, respectively (Table 2). Obtained data confirms the research Zhangcheng Liang et al [26] that during first 5-7 days of rice wine production there was pH decrease of the fermented rice wort against the increase in the alcohol concentration in the rice wort.
The fermentation intensity could be controlled not only by the degree of the carbon dioxide synthesis, ethanol concentration and dry substance reduction in the mash, but also by the yeast morphology. In yeast suspension, as a rule, all cells are of different ages: budding, young, mature (main), dead, so the suspension is more often characterized as "heterogeneous". Young and old cells have different physiological activity, which is important to take into account during fermentation [27]. Paying attention to the yeast cell morphological features during fermentation, we could assume its age and physiological state.
In our experiments, we noted that the yeast cells are increasing during the first 3 hours, of fermentation in both control and experimental samples (Table 3). Probably, in first three hours yeast cells did not bud, but only adapted, and then grew and increased in size. Moreover, more intensive growth occurred in the control samples without α-amylase. It could be assumed that in the sample with α-amylase yeast cells were more intensively budded. After 24 hours of fermentation we observed a greater number of budding yeast cells (Fig. 2). The formation of daughter cells does not increase the cell size, so the cell area is on average smaller. A larger number of small young cells in the fermenting rice wort with α-amylase, of course, had a positive effect on further fermentation.
The cell number in the control sample without the enzyme is less and they have a thicker cell wall. Most likely, yeast cells in this rice wort had the shortest lag phase. The yeast exponential growth phase also ended earlier. After 24 hours of fermentation, yeast has "entered" the stationary growth phase.
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Domain: Business Agricultural And Food Sciences
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COVID-19 Effects on Livestock Production: A One Welfare Issue
The COVID-19 pandemic highlights that we exist in a global community. From a single city, it spread to 188 countries across the world and infected 30 million people by September 18, 2020. Decades of modeling pandemics predicted potential consequences, but COVID-19's impact on the food supply chain, and specifically livestock production was unexpected. Clusters of cases among workers in meat processing plants evolved quickly to affect human, animal, and environmental welfare in several countries. In processing plants, the hygiene focus is on product quality and food safety. Because of their close proximity to one another, COVID-19 spread rapidly between workers and the lack of sick leave and health insurance likely resulted in workers continuing to work when infectious. In the United States (U. S.) many processing plants shut down when they identified major outbreaks, putting pressure especially on pig and poultry industries. At one point, there was a 45% reduction in pig processing capacity meaning about 250,000 pigs per day were not slaughtered. This resulted in longer transport distances to plants in operation with extra capacity, but also to crowding of animals on farm. Producers were encouraged to slow growth rates, but some had to cull animals on farm in ways that likely included suffering and caused considerable upset to owners and workers. Carcass disposal was also associated with potential biosecurity risks and detrimental effects on the environment. Hence, this is a One Welfare issue, affecting human, animal, and environmental welfare and highlighting the fragility of intensive, high-throughput livestock production systems. This model needs to be re-shaped to include the animal, human, and environmental elements across the farm to fork chain. Such a One Welfare approach will ensure that food production systems are resilient, flexible, and fair in the face of future challenges.
INTRODUCTION
The emergence of a novel pandemic disease should not have taken the world by surprise. Within the last century, the 1918 influenza pandemic infected an estimated 500 million people and killed 17-50 million (1). More recently, the 2009 swine flu pandemic infected about 61 million and killed an estimated 284,000 (2). Both pandemics were H1N1 influenza viral diseases and it is perhaps natural that the focus for predicting future pandemics was on influenza, with a Web of Science search for "pandemic AND prediction" showing that 290 out of 415 articles since 2010 include "influenza" [e.g., (3)] whereas only 15 include "coronavirus" [e.g., (4)]. However, recent SARS and MERS outbreaks showed that coronaviruses are strong candidates for zoonotic pathogen spillover (5). This is combined with the threat of zoonoses emerging from wild animal populations, especially in regions of the world where wildlife biodiversity is high and land-use change is occurring (6). This is against a background of pressures arising from climate change, food security, and safety (7) and antimicrobial use and resistance (8).
After the swine flu pandemic, the World Health Organization conducted a review of its first line of defense-its International Health Regulations (2005)-and concluded that, "The world is ill-prepared to respond to a. . . global, sustained and threatening public-health emergency." (9). Until now, the major perceived threats in intensive livestock production were a pandemic outbreak of a foreign animal viral disease, exacerbated by secondary bacterial infections and potential concurrent antimicrobial resistance driven by use of medically important antimicrobials. A pandemic may bring expected challenges but there are always unforeseen ramifications that transcend human health (10). The interconnectivity of human health with that of animals and the environment is captured in the One Health concept, which is defined as "the collaborative efforts of multiple disciplines working locally, nationally, and globally, to attain optimal health for people, animals, and our environment" (11). The concept of One Welfare extends One Health to recognize "the interconnections between animal welfare, human well-being and the environment" (12). This paper will focus on the impact that COVID-19 is having on One Welfare within livestock production from farm to fork with particular focus on the pig and poultry industries. We focus on the United States (U. S.) as it is one of the hardest hit countries so far where related data are readily available and accessible. However, we expect that the situation is similar in all affected countries with intensive livestock production industries.
COVID-19 EFFECTS ON THE LIVESTOCK PRODUCT SUPPLY CHAIN
Livestock, and particularly pig and poultry, production in the industrialized world, and increasingly in the developing world, is characterized by its intensive nature, initially driven by postwar government policies intended to increase production and decrease cost, but now sustained by consumer demand for cheap food (13). Farms are fewer in number but larger, with more animals and birds per holding in enclosed, climate-controlled buildings, with more automation and fewer stockpersons. Vertical integration is common, meaning a single company will own all parts of the system, from feed mill to processing plant. The production system is primed for maximum output, with all parts of the chain from birth/hatch to slaughter always operating at full capacity. Disruption of flow at any part of the chain will therefore have immediate impact both upstream and downstream, with likely immediate consequences for animal welfare but also for humans and the environment. The immediate impact of COVID-19 was a wave of panic buying by the public. Among the products to disappear from supermarket shelves in the first few days were toilet rolls, disinfectants and sanitizers, pasta, rice, flour, and yeast, and in some countries, eggs, cheese, and milk. General trends included increased meat, egg, and dairy retail sales with a sharp upward spike as lockdowns were announced (14), but then sustained sales when compared with year-on-year, from early March to July, where records are available (15). This was a consequence of the increase in meals being prepared at home, with schools, workplaces, and restaurants closed.
Countries such as the U. S. have two relatively distinct supply chains: one that supplies grocery stores and one that supplies the food service industry. Hence, gaps on shelves did not represent a shortage of commodity per se but the commodity existing in forms unsuitable for supermarkets compounded by distribution chains unable to cope with increased retail demand. As restaurants and schools closed, overall demand for dairy showed a 12-15% decline in the U. S. (16), leading to milk surplus and dumping. Whole egg demand increased but liquid egg demand, usually 30% of the U. S. egg market, decreased, leading to plant closures, contract cancellations, and the euthanasia of laying hens. The demand fell for high-end beef usually served in restaurants and farmers and processors struggled to cope with changing levels and types of demand from different sectors. However, the greatest impact of COVID-19 on the livestock product supply chain commenced with disease outbreaks among processing plant workers, leading to plant closures and effects up and down the food chain.
COVID-19 EFFECTS ON HUMAN WELFARE
There are reports of clusters of COVID-19 cases in processing plants in several countries, including Canada, Brazil, U. S., Ireland, U. K., Spain, Australia, Denmark, and Germany (17). In Germany, coronavirus infected more than 1,500 workers in one of Europe's largest meat-processing plants (18). This represents a mass outbreak several weeks after the virus peaked and at a time when the country was "reopening." However, the U. S. remains the hardest hit country where, according to one website, "As of September 11, there have been at least 39,000 reported positive cases tied to meatpacking facilities in at least 417 plants in 40 states, and at least 184 reported worker deaths in at least 50 plants in 27 states." (19). Forty-nine plants were closed for various lengths of time (19), and nearly 200 U. S. Department of Agriculture-Food Safety Inspection Service inspectors tested positive, with four deaths (20). In a study of processing plants in 23 states, 9.1% of workers tested positive during April and May 2020 (21).
Apart from the obvious direct impact on human welfare for those who were infected and became ill or died from the disease, the clusters at processing plants highlighted several inequality issues that contributed to the outbreaks. Firstly, the vast majority of the workforce in meat plants represent migrant and minority workers who are inherently more vulnerable to exploitation (22) compounded by language barriers (23). There is evidence that the disease affects minority workers disproportionately, with Hispanic and Asian workers making up 30 and 6% of the workforce, yet 56 and 12% of the positive cases in U. S. plants (21). Additionally, the processing portion (including slaughter and packing) of farm-to-fork production is inherently more dangerous than non-food system industries (24). Meat, dairy, and fish production is more dangerous than other food production, with relatively high levels of severe equipmentrelated and assault-related injuries, and more fatalities from assaults from co-workers and animals and exposure to harmful substances (24), together with increased psychological distress among slaughterhouse workers (25). Those on the processing line work in very close proximity where food safety and the risk of zoonotic disease direct hygiene practices, rather than personto-person disease spread. Superimposed upon these dangers, is evidence of low pay, lack of sick leave and affordable healthcare, together with high density and low quality housing for workers (26).
When processing plants started closing down, the affected workers faced financial uncertainty. Workers elsewhere in the supply chain also faced a period of insecurity when the effects of plant closures became apparent, including job losses, financial impacts, loss of animals, etc. Where plants were still working but with reduced staffing, workloads were increased or duties changed, both likely to increase risk of injury. In some instances, the limits on line speeds were raised by waivers from the USDA-FSIS, again likely increasing worker stress and injury risk, and with potential impacts on animal welfare (stunning effectiveness) and food safety. A record number of 16 poultry processing plants acquired line speed waivers in March and April 2020 (27). This allowed the number of birds being stunned and killed to increase from 140 birds/min to 175 birds/min. Faster line speeds likely contributed to the reduction in the post-mortem condemnation percent which fell 7.7% (a monthly record) to a record low of 0.60% condemned meat by weight (Figure 1) in April 2020. After a slight rebound in May, a new record low of 0.58% condemned meat by weight was set in June and July 2020. This indication FIGURE 1 | Relationship between number of poultry processing plants given line speed waivers by USDA-FSIS and the percent of chicken meat condemned by weight, between January 2017 and July 2020 [Sources: (27,28)]. of possible reduced inspection oversight is supported by the fact that between 2017 and 2020, there is a strong negative correlation between the number of plants with line speed waivers and percent of weight condemned (Figure 1). Ultimately, this represents a major threat to public health (and welfare) through reduced food safety (29).
Processing plant closures affected some farmers who, faced with nowhere to send animals for slaughter, had to prepare for and carry out mass depopulation of surplus animals. We detail the impact this had on animal welfare below, but mass depopulation also carries a human welfare cost, for the stockperson and for those tasked with carrying it out. Even at a single animal level, emotional strain on stockpersons is a barrier to the euthanasia of sick animals (30). When moving to a farm population level, the outbreaks of foot-and-mouth disease in the UK showed that affected farmers suffered increased stress, marginalization, and depression (31). The effect was more widespread within rural communities and included "distress, feelings of bereavement, fear of a new disaster, loss of trust in authority and systems of control, and the undermining of the value of local knowledge" (32). Those killing the animals are not immune to the impact, even without the emotional or financial ties of ownership/livelihood. Two years after the footand-mouth disease outbreak in Japan in 2010, veterinarians, livestock technicians and even clerical workers interacting with the farmers suffered mental stress (33). To that end, current guidelines include the recommendation that "to mitigate the negative psychological effects of involvement in mass euthanasia activities, psychological counselors should be made available to both staff and the stakeholders" (34).
Finally, a less obvious impact on human welfare is the public health risk posed by carcass disposal (35). Of all carcass disposal methods open air burning and unlined burial of carcasses pose the highest risks of contaminating ground and surface water, soil, and air with pollutants and pathogens like E. coli and Salmonella (34,36). Though banned in many countries (36) the U. S. permits both methods for emergency disposal of carcasses (37). Composting is a frequently employed method of disposing of casualty animals on farm and it too poses similar risks if done at scale (37). Additional risks to public health are posed by vectors that feed on carcasses, such as birds, flies, and mosquitos as they can spread biological leachate components (38). Onfarm burial and composting, "in-house" in the case of poultry, were among measures employed to dispose of carcasses in the current pandemic. Concerns were raised for public health in areas where carcasses were disposed of using such methods not only because of the risk of pathogen spread but also because of odor and flies (39,40). Additionally, USDA-APHIS (34) acknowledge the potential for psychological harm caused by the "extremely unpleasant odors and sight of animal remains." Inhabitants of areas where carcasses were disposed of at scale may already be disadvantaged in terms of their health and welfare (41). The air around pig and poultry sites contains hydrogen sulfide and ammonia, particulate matter, and bacteria (42). Such pollutants act as eye and respiratory irritants (43). Unsurprisingly then, inhabitants are more likely to suffer more from asthma and other respiratory diseases (44). Exposure to these pollutants also contributes to mental stress (45) and elevated blood pressure (46). Hence, the threats to public health associated with carcass disposal may compound existing health challenges for people in the surrounding population and may even place them at higher risk of serious complications or death should they contract COVID-19 (40).
COVID-19 EFFECTS ON ANIMAL WELFARE
The biosecurity and pollution risks posed by mass carcass disposal outlined in the preceding section could also adversely affect the welfare of wild animals, fish, birds, and insects which are not discussed in the current paper. Here we focus on the effects that human clusters of COVID-19 at meat processing plants and the associated decisions to close them, had on animal welfare. Within the U. S., the closures began with a Foster Farms poultry processing plant at Farmerville, Louisiana on March 27th 2020 (19). Over the next 4 weeks, a cascade of closures across cattle, poultry, and pig sectors followed-some closures were only for a few days for deep cleaning, others were longer (47). The result was a loss in slaughter and processing capacity. By the 4th week in April, it was estimated that pig slaughter capacity in the U. S. was operating at only about 55% of normal (48), meaning that about 250,000 pigs a day were at slaughter weight, but had nowhere to go for slaughter. The impact was similar for other livestock industries reflected in the monthly data for all species (Figure 2).
By April 28th 2020, the U. S. President invoked the Defense Production Act of 1950, and issued an Executive Order mandating processing plants to reopen. Since then, plants reopened, but many with reduced capacity due to staff shortages. By May 19th, pig slaughter capacity was back to 79.3% of normal, but this still represented a shortfall of over 100,000 pigs per day. For poultry, increasing the number of processing plants operating with line speed waivers recaptured some of the reduced capacity. This allows the number of birds being stunned and killed to increase from 140 birds/min to 175 birds/min. This possibly increased the number of birds exposed to incomplete stunning which poses major concerns for animal welfare (50). With the slaughter end of the chain experiencing reduced capacity, there is an almost immediate impact on animal welfare on farm mostly arising from overcrowding. As detailed above, the poultry and pig industries in particular are intensive and integrated, with little or no flexibility within the production system. When pigs and chickens are unable to leave the farm for the usual slaughterhouse at the designated time, there is an immediate "bottleneck" in the system, because the "production" of new chicks and piglets continues unchecked. With longer gestations and slower growth rates, cattle production is under less immediate pressure. In some cases, there is extra slaughter capacity at other processing plants, but this may increase transportation time and distance, exposing animals and birds to increased transport stress (51).
Intensive pig and poultry production systems are characterized by maximal use of buildings, maximizing the number of chickens or pigs per square area, and the number of days the pens or buildings are in use per year. Each farm has a pre-determined flow with rigid set dates for the animals to enter and leave, based on expected growth rates. Broiler chickens arrive on farm as day-old chicks and are ready to leave at slaughter weight 6-7 weeks later. With a 3-week egg incubation period, the whole production cycle is 9-10 weeks. Pigs in the U. S. move through the farrowing house (3 weeks), the nursery (6-8 weeks) and the grow-finish barn (16-17 weeks) before slaughter. With a nearly 4-month gestation period, the pig production cycle is 41-44 weeks. Without the ability to move livestock off the farm, serious overcrowding occurs within days or a few weeks at most.
For broiler chickens, their phenomenal growth rate causes almost immediate problems in terms of lack of space. For example, if stocked at the maximal EU stocking density of 33 kg/m 2 under minimum welfare standards, this equates to about 13 birds/m 2 at 6 weeks of age (about 2.5 kg/bird). By week 7, there is 42 kg/m 2 and by week 8 there is 48 kg/m 2 . EU farms that meet certain extra requirements can stock up to 42 kg/m 2 (52) and meeting this target at 6 weeks of age equates to about 17 birds/m 2 . By week 7, there is 54 kg/m 2 and by week 8 there is 62 kg/m 2 . Hence, overcrowding from a legal definition occurs within 1-7 days. From a welfare perspective, high stocking densities can lead to decreased walking ability, poorer leg health, increased fearfulness, increased footpad and hock dermatitis and increased mortality (53). Overcrowding-induced increased heat production and associated reduced environmental qualities, such as poorer air and bedding quality exacerbates these welfare issues.
Pigs are selected for increased growth rates but the fact that the birth-to-slaughter time period is 24-28 weeks and is a multi-stage process, means the industry is slightly more flexible compared to broiler production. Modeling exercises determine the impacts that imposed movement restrictions may have with respect to an outbreak of a foreign animal disease (FAD), such as African swine fever (ASF). Increasingly, pig production is on multiple sites, with piglets moving off the breeding farm at weaning or after nursery phase. Modeling for FAD assumes no movement between units whereas the COVID-19 situation allowed it. Without movement between units, breeding-only units can reach critical overcrowding in 4-5 days. Nursery units take 24-52 days, grow-finish units take 78 days and farrow-tofinish units take 43 days (54, 55) to achieve crowding. Effects of crowding for pigs includes decreased general activity and comfort behaviors, increased aggression, skin lesions and tail injuries, increased foot and limb injuries, reduced growth and physiological function, and increased susceptibility to disease (56). The latter increases use of antimicrobials, which in turn increases the risk of antimicrobial resistance.
Clearly, fast growth rates are a major factor in overcrowding. In pigs, methods to decrease growth rates include removal of growth promoters, moving to lower energy diets, reducing feed availability and increasing building temperature to reduce appetite and hence, feed intake (57). Removing growth promotors is likely to improve pig welfare (58). However, anything that reduces feed intake may lead to animals experiencing hunger, a negative affective state (59) and reduced satiety may also lead to increased aggression as animals seek to gain access to a limited resource (60). Likewise, inducing heat stress has detrimental effects on pig welfare (61).
One way to slow or stop new animals and birds entering at the input end is to stop breeding the females. However, as the gestation length is nearly 16 weeks in pigs, it would take that long to feel the impact of this measure. Inducing abortions would have an immediate effect in terms of easing space in the farrowing house, which could be repurposed as nursery pig accommodation. This would relieve pressure up the chain, but only on a temporary basis. For poultry, the chain is much shorter, and a reduction in eggs entering the incubator, results in a reduction in bird numbers within 3 weeks. Alternatively, eggs can be removed from the incubator and euthanized, or chicks killed at hatching. The recommended methods for egg euthanasia are dependent on the stage of incubation. The American Veterinary Medical Association (AVMA) Depopulation Guidelines (62) recommend that eggs that are >80% incubated (day 16, chickens; day 22, turkeys, ducks) be treated as per newly hatched chicks, and subject to preferred methods that "include containerized gassing, cooling, freezing, and maceration." Eggs <80% incubated can be euthanized by freezing, cooling to <4 • C for 4 h or exposure to high CO 2 concentrations for at least 20 min. Implications for animal welfare of euthanizing eggs are unknown but there are considerable welfare, ethical, and societal concerns surrounding the killing of day old chicks (63,64). Maceration is often used for chicks up to 72 h old, and under EU regulations, maceration "should result in instantaneous maceration and death of the chicks and embryos (unhatched eggs). The apparatus should contain rapidly rotating, mechanically operating blades." There are a number of identified hazards that may prevent this from happening, such as slow equipment and overloading by handlers (65) and there is likely an increased risk of such hazards when both machines and workers experience higher than normal throughput. Maceration is banned in Switzerland, France, and Germany. Gassing also carries welfare concerns (66,67), especially with CO 2 , with one study concluding that "behavioral signs of distress were observed with all treatments, and occurred at concentrations lower than those causing insensibility" (67). There is some evidence that the U. S. broiler industry carried out egg and/or chick euthanasia, with marked reductions in eggs set and chicks placed, and a lower percentage of set eggs being placed (Figure 3).
The worst-case scenario is where the only resolution to the backlog of animals is to kill them on farm. Ideally, this would be by euthanasia, whereby animals have a "good death" without pain or distress. At the very least, emergency killings should observe the same level of animal welfare as during planned killings or standard slaughter. This means as little handling as possible and use of a killing method that either causes immediate death, or sedation followed by death, or death in already stunned/unconscious animals (69). However, this is difficult to achieve when killing animals at scale in an emergency. The most recent widespread need for mass depopulation of animals was in the control of ASF outbreaks and disturbing videos emerged of the burial and burning of live animals in Asia. Within the U. S., the AVMA released updated guidelines in 2019 (62), for use in conjunction with FAD PReP/NAHEMS Guidelines: Mass Depopulation & Euthanasia (34). The Guidelines detail appropriate methods by species, in terms of "Preferred, " "Permitted in Constrained Circumstances, " and "Not Recommended." For pigs, the "preferred" methods include gunshot, nonpenetrating captive bolt, penetrating captive bolt, electrocution, manual blunt force trauma, carbon dioxide (CO 2 ) and anesthetic overdose, though the applicability of each method is also dependent on size and age of the pig (62). Permitted in constrained circumstances are ventilation shutdown in combination with additional heat or CO 2 (abbreviated as "VSD Plus"), and dosing with sodium nitrite (62). However, there is little research on some of these methods. For example, sodium nitrite was previously only used in the control of feral pig populations (70) and never for mass depopulation of commercial pigs. Its efficacy is contingent upon pigs being able to ingest a toxic dose in a limited and acceptable, non-defined timeframe (62). As the COVID-19 crisis emerged, the U. S. National Pork Board issued an emergency request for proposals entitled "Animal well-being depopulation field trials" with a deadline of May 11th 2020 to identify projects and started by May 29th 2020. This highlights the paucity of information for pigs. The exact numbers of healthy pigs killed as a consequence of COVID-19 is not yet available, but officials in Iowa, the top pig-producing state in the U. S., estimate that 600,000 animals may need to be euthanized in the state alone (71).
For poultry, different methods are approved depending on whether the birds are indoors or outdoors and if they are floorreared or caged (62). For floor-reared birds, such as broilers or aviary-housed laying hens, "Preferred methods include water-based foam generators, water-based foam nozzles, wholehouse gassing, partial-house gassing, containerized gassing, cervical dislocation, mechanically assisted cervical dislocation, and captive bolt gun. Methods permitted in constrained circumstances include gunshot, VSD plus, controlled demolition, exsanguination, and decapitation" (62). For caged birds, "Preferred methods include whole-house gassing, partial-house gassing, and containerized gassing. Methods permitted in constrained circumstances include compressed air foam, cervical dislocation, mechanically assisted cervical dislocation, captive bolt gun, VSD plus, and decapitation" (62). Whole-house gassing using CO 2 emerged as the major method of choice, together with water-based foam methods. Importantly, The World Organization for Animal Health (OIE) does not condone water-based foam for euthanasia, even in situations of emergency disease control (72). Recently, the European Commission tasked the European Food Standards Agency to examine the scientific evidence surrounding mass euthanasia of farm animal species and identify hazards to animal welfare. The report concerning poultry identified 29 potential hazards, of which 26 were associated with the personnel carrying out the task (65). For both whole-house gassing and foam methods, insufficient time of exposure was a hazard. Timing of the accompanying VSD needs to be appropriate so that the chosen method is the cause of killing, rather than thermal stress caused by VSD itself. As with pigs, the exact number of poultry euthanized due to COVID-19 is currently unknown, but there are reports of the culling of up to 10 million chickens in the U. S. (73).
The potential negative impact of mass depopulation on the welfare of animals and birds is likely enormous. At its most extreme, distressing videos emerged of the need for additional captive bolt killing of pigs still alive after "2-3 h of 140 • F heat" following use of VSD Plus (74). Correspondingly, World Animal Protection called on the AVMA to remove this and water based foams from its guidelines of currently approved methods for the depopulation of animals as it causes prolonged heat stress and suffocation (75). In fact there are three major factors influencing animal welfare during the depopulation process (69): (i) handling prior to killing, (ii) the stun/kill quality, and (iii) confirmation of death prior to carcass disposal. Most methods of killing have limitations in one or more of these factors (62). For example, there may be a trade-off between possible distress during a longer time to induce unconsciousness and the benefits of reduced handling of individual animals associated with a particular method. The subjective feelings of the animals subjected to mass depopulation are likely to include, fear, pain, and distress potentially reflected in open-mouth breathing, ataxia, righting responses, escape attempts, and vocalizations (76) among other behavioral signs of suffering.
COVID-19 EFFECTS ON ENVIRONMENTAL WELFARE
Even under normal circumstances, carcass disposal methods pose a pollution risk (35). However, there are major environmental implications associated with disposing of carcasses at scale (38,77). Furthermore, as pig and poultry industries are often concentrated in specific geographical areas, killing thousands of animals and birds may create a new stream of waste in ecosystems already burdened by environmental pollution [e.g., (78)]. Generally, as carcasses degrade, bodily fluids, chemical and biological leachate components and hazardous gases [e.g., ammonia (NH 3 ), hydrogen sulfide (H 2 S), methane (CH 4 ), and other air pollutants] are released into the environment, including into the air, surface water, and groundwater. The extent to which there is a risk of this occurring obviously depends on the chosen method (38). However, some of the more risky methods of carcass disposal (38) were employed in the U. S. including unlined burial and composting (40,79). Both are prohibited in many countries including The European Union (E. U.) under the EU Animal By-Product Regulations 2014.
Composting is a carcass disposal method that promotes decomposition through placement of carcasses between layers (approximately two feet thick) of carbon rich organic materials. With the need for mass carcass disposal, massive quantities of materials like wood chips, corn stalks, sawdust, or straw were needed placing a drain on environmental resources. Under normal circumstances, composting has potential to contaminate the underlying soil and is associated with greenhouse gas (GHG) emissions (35). At scale, increases in ammonia-nitrogen appear to pose the most significant soil pollution hazard (80). Such risks are minimized by use of an impervious base layer, regular turning and covering the compost heaps (37) but this is difficult to achieve in an emergency. Some poultry producers composted chickens in the houses where they were killed by layering the carcasses with straw and "cooking" them under high heat for about a month in what is likely an energy intensive process. However, it can be difficult to successfully compost carcasses in non-purpose built or other "make-shift" type compost facilities resulting in increased GHG emissions (39). Furthermore, dead chicken compost is spread on fields similar to fertilizer and such land application poses "run-off " concerns as it is even higher in phosphorus than manure (81).
At the time of writing, there are no reports of mass depopulation in the E. U. but the need for carcass disposal at scale could change with continuing closures of meat processing plants. If required, it would likely have to be by incineration (either on or off-farm) and rendering both of which are less risky to the environment in terms of contamination (38). However, it is widely acknowledged that neither process could cope with carcass disposal at scale. Assuming limitations with capacity in the few remaining rendering plants operational in the E. U. (35) could be overcome, the process still has a high-energy demand and produces effluent with high biological and chemical oxygen demand. Net GHG emissions can be minimized if some of the by-products (e.g., tallow) are recovered for subsequent energy production. The process also means animals are not wasted completely as rendering claims to recycle meat, bone, and fat into ingredients for numerous products. Incineration of carcasses is also highly energy intensive, exacerbated by the relatively high water content of carcasses meaning that it generates considerable GHG emissions. Large-scale mobile waste incinerator units could be used to process massive volumes of animal carcasses in a biologically safe way. However, there are issues with the operation costs and turnaround time, and ash disposal may cause environmental challenges. There are more environmentally friendly methods of carcass disposal (38). However, processes such as alkaline hydrolysis, are currently too expensive for use in anything but highly specialized operations (82).
As mentioned earlier, killing of poultry in the current crisis often involved foam methods. Water-based compressed air foam (CAF) has its origins in firefighting; CAFs reduce the total water supply to extinguish a fire to as little as onethird compared with applying water alone. However, as a form of mass euthanasia they use copious amounts of water (37). They also contain chemical surfactants and preservatives and certain biological nutrients. Hence, in the case of protein-based foams, breakdown in the environment releases ammonia. Other reported environmental concerns include water pollution/deoxygenation and the accumulation of the associated compounds in plants and animals (83) although the extent to which these are potential problems associated with its use in mass depopulation of poultry is unknown.
In a somewhat related environmental problem, numerous countries dumped hundreds of thousands of liters of milk because of the fall in demand [e.g., (84)]. Milk dumping poses a serious risk to fish and aquatic life as it reduces oxygen levels if it gets into waterways due to its high biochemical oxygen demand (85). In the U. S., farmers were advised to hold milk in manure storage lagoons if high rainfall was expected as this causes even faster runoff. However, such manure storage lagoons are themselves prone to failure during particularly high rainfall events (86).
Some dairy cooperatives advised farmers to cull extra cows (87). Any form of involuntary culling of animals raises GHG emissions (88). Hence, emergency disposal of farm animals (and their products) represents a dramatic increase in the carbon footprint of food production systems. At its most basic, it also represents an enormous waste of the finite resources (land/feed, water, and fossil fuels) that went into producing those animals and birds in the first place.
WHAT CAN WE DO TO LESSEN THE IMPACT?
The post-World War II industrialization of agriculture was successful in its immediate goal of increasing the amount and affordability of food in developed countries. The costs associated with such a sustained push for more plentiful, cheaper food generally remained hidden when the system was functioning, supported by the general dissociation of food production from food consumption (89). Not surprisingly then, perturbations about our models of food production were mainly related to direct and immediate threats to human health caused by food safety emergencies such as "mad cow disease" or dioxin scares (90,91). In recent years, the number of publications relating to the additional threats of climate change, biodiversity loss, and antimicrobial resistance associated with food animal production increased (92)(93)(94). However, the COVID-19 pandemic revealed the harsh reality about the fragility and high "costs" associated with intensive and highly specialized food production systems like no other threat before (95). The unequivocal detrimental and interrelated implications of COVID-19, for humans, farm animals and the environment outlined in this paper, provides compelling evidence of complex interconnectivities that are captured in the One Welfare concept (12). Indeed, One Welfare reconnects food production with food consumption, the diametric ends of the production chain. Apprehending this connection is crucial if we are to undertake the radical overhaul required of the way in which we currently raise, kill, process, market and consume meat, and dairy products (96,97). With many environmental systems and processes being pushed beyond safe boundaries by food production the need for change is urgent (97). Indeed, there are threats that a new pandemic is imminent at the time of writing (98). Changes are required at all stages from production through processing and retail to consumption (99,100). In the ensuing sections, we initially suggest some of the immediate, more short-term solutions that could be implemented at each of these stages.
Production
The need for emergency killing of animals and birds at scale on farm as well as the strategies employed to reduce throughput (slowing growth rates, induced abortions etc.) pose major problems for One Welfare as outlined above. Therefore, in the face of more frequent threats similar to the current COVID-19 crisis, it is imperative that such strategies are avoided completely. Achieving this likely requires the transformative change of current animal production systems referred to above so there are not many immediate, short term solutions. Indeed the tentative suggestions below come at a cost to some aspect of One Welfare and should be limited to exceptional circumstances.
A relaxation of quality assurance/premium product standards, i.e., Global Animal Partnership 5-step Animal Welfare Standards (101), RSPCA Assured (102) If pigs are unable to leave the farm for regular slaughter due to processing plant closures, pressure on space within the system increases. Without relaxation of standards, farmers would have to euthanize animals or risk losing premium payments for failing to maintain scheme standards. Hence, temporary relaxation could not only reduce the number of animals depopulated, but also reduce stresses associated with impending financial distress for the farmer. Clearly such standards assure better quality of production methods with associated benefits to animal welfare and food safety so other aspects of One Welfare would suffer.
The U. S. National Pork Board suggested moving animals into temporary housing or outdoors (103) as a temporary solution to the problem of surplus animals. However, this was an unrealistic option for many producers, for obvious reasons such as lack of an additional, suitable spaces. This "solution" could also constitute an animal welfare risk due to potential exposure of animals to adverse weather, inappropriate climatic conditions (for weaned pigs for example) and difficulty supplying feed or water outdoors. Nevertheless, there is undoubtedly merit in documenting available/empty buildings, land, or other areas that might be suitable to accommodate surplus animals. Producer groups or large integrators could co-ordinate these databases at national or local level and across species. Such a solution would also be useful to help in moving animals to safer locations if there was threat of natural disasters such as flooding. However, it would not be useful in the face of an infectious threat to animal health where movement is prohibited (as in the case of ASF).
Processing
Ideally surplus/additional animals would be slaughtered in the usual way (69) but currently this is not possible given the reduction in processing plant capacity across all species (Figure 2), and in many countries worldwide (17). The June 17th estimate for the U. S. pig industry, was a backlog of 3.2 million pigs (104). As with the trend in farm numbers and sizes, there is a similar trend in processing plants, with fewer plants processing larger numbers of animals. In 1970, there were over 7,000 processing plants. In 2020, there are about 2,700, of which the U. S. federal government inspects 835 and which account for about 99% of total slaughter capacity. The range in capacity within these 835 plants is large. For cattle, the U. S. federal government inspects 670 plants but the 12 largest slaughter 52% of the total number. For pigs, the U. S. federal government inspects 619 plants and the 14 largest slaughter 59% of the total number. Hence, if the largest processing plants are closed, the smaller plants have insufficient spare capacity to make up the shortfall, and so until the point at which the processing plants are back online, short-term remedial action could include the following options. There are a myriad of reasons for the worldwide decline in the number of abattoirs, however, burgeoning food safety regulations represent a significant financial burden for these small businesses (105,106). Such rules are increasingly aligned with global standards and therefore developed for the intensive, large-scale food system, which makes them antagonistic to the practices of small-scale farmers, and local production systems (107). Efforts to address the decline in local abattoirs should include a broadening of the scope of risk analysis (108) to incorporate the benefits to One Welfare associated with local slaughter in small or mobile abattoirs (109,110).
In the immediate term, it is clear that we need to protect the welfare of humans working in the processing sector better. The meat processing industry is a difficult working environment and regardless of country, there appears to be an increasing reliance on migrant labor to fill positions in what is known as a high employee turnover industry. For example, countries in Western Europe have many migrant workers from Eastern Europe (111). The United States has many migrant workers from Latin America (112). Many plants do not have unionized workforces and many employ undocumented or sub-contracted workers on low wages, with the tacit acknowledgment that the power and major economic benefit lies with the employer. The combination of these social factors and physical factors within the workplace (proximity, ventilation, aerosolization) made processing plants ideal hotspots for clusters to emerge (113). The Centers for Disease Control and Prevention and the Occupational Safety and Health Administration issued joint guidance for processing plants in the U. S. after closing and cleansing (114). Some of these measures include temporary modification of the physical environment; especially increasing spacing between workers, but the longer-term solution requires redesign of processing plants (113). Other guidance focused on the workers, including guidelines to isolate from others during travel to and from work, and staying away from work and seeking medical attention when sick (114). This advice is well meaning, but the current reality is that the combination of low pay, lack of sick leave and medical insurance, crowded social housing and lack of public transport means that much of the advice cannot be followed. There will need to be a longer-term commitment from the processors themselves to invest in their workforce, and improve work conditions, pay, and access to healthcare. The German Agriculture Minister has been vocal in decrying that meat has become a cheap product which does not equate with sustainability, and will introduce legislation to force processing plants to hire employees directly, to end the sub-contract culture and improve worker pay and conditions (115). This will incur cost, and that cost should be met by the combined actors up the supply chain, including retailers and consumers.
Retail
Vertical integration and reliance on large, centralized meat processing plants means there are many opportunities for bottlenecks in the long chain between farm and retail when challenges arise. Distinct differences in the U. S. between supply chains for grocery stores and the food service industry exacerbates this and contributes to the inflexibility of the system. Aligned with a shift amongst certain consumers to the practice of "consumption for the greater good" demand increased for "local" produce or "slow food" in the last few decades (116,117). This is supplied either through farmers markets (118), or through Community Supported Agriculture. In the latter, families buy "shares" in a farm which supplies them mostly with fruit and vegetables, but also meat, eggs, and dairy, throughout the year (119). Uptake increased greatly during the current pandemic as did interest in these "direct-to-consumer" retail models with some having waiting lists in the hundreds (120). Closure of meat processing plants prompted some farmers to explore alternative methods of sales and distribution. This involved use of online platforms and direct marketing (121), together with farmers markets (122), where still open, and partnering with dine-in restaurants, moving to home delivery. However, such alternative methods are more accessible to those producers who are already part of shorter supply chains, such as those in niche markets or certification schemes such as organic and high welfare (123). Other advantages of this direct approach is economic gain for the farmer and affordability of high quality food for the consumer. For example, organic food in Brazil can be sold direct at farmers markets, without the sometimes 400 times mark-up seen in supermarkets (124).
Consumption
There were several immediate effects of COVID-19 on consumption patterns which if sustained could improve One Welfare. Working from home and the closure of schools and restaurants increased consumption of meals at home, shifting purchasing patterns from restaurants to supermarkets (125). While supermarket freezers were initially emptied of preprepared meals there was also increased purchasing of basic ingredients, highlighting an increase in in-home preparation of meals (126) which has potential benefits to human health (127). Sales also soared for meal kit companies, such as Blue Apron and HelloFresh, and also for plant-based meats such as Impossible Foods and Beyond Meat, which saw a 264% increase in sales over March-May 2020 (128). This increase in consumption of plant-based alternatives to meat is controversial. These popular brands are highly processed, and they may be of doubtful benefit to human health, often being served as a meat substitute in an otherwise unchanged "fast food" diet (129). They may have benefits for the environment in that "A Beyond Burger generates 90% less GHG emissions, requires 46% less energy, has >99% less impact on water scarcity and 93% less impact on land use than a ¼ pound of U. S. beef (130)." but these products do contain ingredients from monoculture agriculture and should still be sourced with ethical responsibility. Highly processed plant-based meat alternatives may have a role to reduce overall meat consumption-a 50% reduction of which would have an estimated 35% reduction in GHG gases, a 51% reduction in food's land use (131)-but a diet rich in unprocessed plantbased foods will be more beneficial to One Welfare. A shift away from Western-style, high meat-based diets to others such as the Mediterranean Dietary Pyramid (132), would impact human, animal and environmental welfare, increasing the sustainability of food production and consumption (133).
LONG TERM SYSTEM OVERHAUL
COVID-19 revealed that our current, large-scale, verticallyintegrated food systems lack resilience or the capacity to adapt over the short term in the face of disturbance. A proposed food system resilience action cycle (134), would see a system encountering a shock (such as COVID-19 pandemic), absorbing it, reacting to it, restoring output to pre-shock levels, but also learning and building robustness ready for the next disturbance, so that its effect is dampened. We identified some potential learning moments and suggested changes to different components of the food chain to protect One Welfare in the face of future pandemics such as COVID-19. However, the process of building such resilience into the food chain will likely protect One Welfare irrespective of whether the challenge is related to another pandemic or to the "the elephant in the room"-climate change. Climate change represents the biggest threat "with the most unknown consequences for agricultural sustainability" (135), with adverse weather events, drought, flood, and wildfire events becoming more frequent (136) and livestock and crop pests extending their geographical reach (137). Ensuring food system resilience in the face of grand challenges can only come from a global transformation of the current model given that much of the world's population is inadequately nourished and many environmental systems and processes are pushed beyond safe boundaries by food production (97). We are perhaps fortunate that the COVID-19 pandemic has elucidated what lies ahead and, if acted upon, will enable us to hit reset and change while we still can.
Globally, we need to move away from the concept that Western industrialized agriculture, and aquaculture, and especially its intensive livestock and fish production systems, are the panaceas that will end food insecurity, even with a growing population and the increasing demand for animal protein. For global animal agriculture, at any one time, there are about 25 billion poultry, 2.25 billion sheep and goats, 1.5 billion cattle and 1 billion pigs (138). Every year, we consume 50 billion chickens, 1.5 billion pigs, 1 billion sheep and goats and 300 million cattle and about 173 million tons of fish, with about 80 million tons farmed (139). These numbers are currently increasing year-on-year as the industrialized model of livestock and fish production spreads to developing countries, especially in Asia (140) with associated increases in antimicrobial use (141) and other costs to One Welfare. The damage associated with the overriding focus on production efficiency could be addressed by a more holistic interpretation of efficiency such as that offered by the One Welfare approach which safeguards animal, human, and environmental welfare.
The European Union Farm to Fork (F2F) Strategy (142) appears to have a One Welfare approach at its core with its aim to transform food production into a "fair, healthy and environmentally-friendly food system." F2F proposes changes to the whole supply chain, focusing on sustainability at all stages-shortening the chain and moving away from the "industry to fork" system (143), and adopting methods to reduce the environmental impact of production, manufacture, processing, retailing, packaging, and transportation, while preserving affordability, ensuring fair distribution of economic returns and safeguarding agri-food workers' safety and welfare. The strategy also states that animal welfare must be improved and that there must be less reliance on pesticides and antimicrobials, and biodiversity loss reduced and reversed. F2F acknowledges the interconnectedness of the planet and the global nature of trade, and hence that "change" needs a global approach. As the EU is the world's major exporter and importer of food it is wellpositioned to influence global transformative change by adapting trade policies aligned to the One Welfare approach.
Likewise, the United Nations Sustainable Development Goals (SDGs) will help guide transformation of our food systems (144). One Welfare is implicitly embraced in the 17 goals to "end hunger, achieve food security and improved nutrition and promote sustainable agriculture." For example sub-Goal 2.4 states that "By 2030, ensure sustainable food production systems and implement resilient agricultural practices that increase productivity and production, that help maintain ecosystems, that strengthen capacity for adaptation to climate change, extreme weather, drought, flooding, and other disasters and that progressively improve land and soil quality" (144). At first glance, animal welfare only applies to Goal 2 though even here it is not explicitly mentioned. However, a deeper examination of the SDG agenda revealed that out of 169 targets, 66 are relevant to animal welfare (145). More importantly, relationships between the SDGs and animal welfare were all positive, such that there was no situation where attainment of the SDG conflicted with improving or safeguarding animal welfare (145).
In spite of the tacit One Welfare approach in the F2F strategy and the SDGs, the lack of a specific focus on animal welfare is concerning. As animal welfare scientists, we are convinced of the importance of animal welfare in the development and delivery of solutions to global challenges while urging engagement as part of the interdisciplinary teams working on them (7,146). In fact, framing animal welfare as the primary driver within the One Welfare concept is likely well-founded for a number of reasons. Firstly, there is a strong relationship between caring for animals, for a species, and for an ecosystem and this relationship is key to encouraging humans to conserve resources and protect the environment [e.g., (147)]. Farm animal welfare also plays a major role in driving animal health, performance and food safety all of which are crucial to the sustainability of animal production systems (148)(149)(150). In fact, improvements to animal health leads to a similar reduction in the carbon footprint of livestock farming as breeding for higher productivity but without the associated costs to welfare (151). We urge the strong support of such "win-win" strategies as they address both environmental and ethical sustainability. We stress that the consequences of current and future strategies for animal welfare must be scrutinized and contrasted against their effectiveness in mitigating climate change to identify the most cost-effective measures for improving environmental sustainability of livestock production. Similarly, others conclude that the welfare of farmed and wild animals should be central to the development of sustainable agriculture (152). This is even though concerns have been voiced (and allayed) that increased agricultural efficiency will inevitably conflict with animal welfare (148).
Hence, intensification per se is not necessarily bad, but it is imperative to practice sustainable intensification (153). Indeed, notwithstanding the problems posed by the focus on production efficiency, there is a need to increase agricultural output globally to deliver sustainable food security. However, there must be simultaneous progress on inputs such as moderating demand for livestock products (100) and decreasing food wastage, estimated at between 11 and 60% depending on the commodity (154). There should be focus on increasing yield per unit of current cultivated land mass, rather than increasing quantity of cultivated land mass. It may be that yield increases cannot be achieved everywhere and that some land is appropriate for management systems that promote biodiversity whereas other land may not be, and that it is better to intensify and "sacrifice" some land to monoculture agriculture, leaving other land to maintain full biodiversity rather than impact the biodiversity of all land to some extent. Others would argue that such a "land sparing" approach assumes that the functionality of biodiversity in agroecosystems is negligible (155). They suggest that a "land sharing" approach acknowledges the crucial ecosystem services provided by wildlife friendly farming and agroecological intensification. Silvopastoral systems, pastures with shrubs and trees as well as herbage, are an example of a land sharing approach which can be more productive than pasture alone and which confers high levels of welfare to farmed and wild animals whilst at the same time improving human and environmental welfare (152). At the other end of the spectrum the "high tech" Kipster farm produces One Welfare friendly (carbon neutral) eggs in a system that employs "low-opportunity-cost feedstuffs" (156). Clearly, there is not a "one size fits all" solution (153,157). We must create context specific solutions, which are best developed by rigorous collaboration between disciplines (158), which consider individuals, communities, populations, and ecosystems (159) and which are supported by connected research, incentives, and political will (135).
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Domain: Business Agricultural And Food Sciences
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