Ali Nassiri Aghdam; Zeynab Mortazavifar
Abstract
To transform their innovative ideas to profitable businesses, entrepreneurs need to organize many different transactions. To perform theses transaction, they need to operate in the context of institutional environment. If institutional environment facilitates transactions and lowers their costs, it is ...
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To transform their innovative ideas to profitable businesses, entrepreneurs need to organize many different transactions. To perform theses transaction, they need to operate in the context of institutional environment. If institutional environment facilitates transactions and lowers their costs, it is said that there is a good business environment and we expect that the benefits of transactions outweigh their costs and in this environment, innovations relevant to transactions can be realized and vice versa. In this paper, following John R. Commons, one of the pioneers of original institutional economics, we argue that to lower transaction costs, institution must be able to resolves conflicts of interest. In other word, to design cost-economizing institutions, one needs to recognize conflicts of interest and find solutions in the way that they can be resolved. In this framework, we demonstrate that some of the World Bank’s Doing Business Indicators are designed to indicate the existence and efficiency of such institutions. If it seems acceptable, then improving business environment would be a continuous process of designing institutions that their main function is resolving conflicts of interest.
Hamid Padash; Bahman Khodapanah; Mahdi Ebrahimzadeh
Abstract
In the knowledge-based economy, the key of wealth creation is accumulation and application of knowledge in activities and the globalization process of economy. This research, on the basis of institytional economics literature v.s. neoclassical economics, aimes to examine the role of the institutional ...
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In the knowledge-based economy, the key of wealth creation is accumulation and application of knowledge in activities and the globalization process of economy. This research, on the basis of institytional economics literature v.s. neoclassical economics, aimes to examine the role of the institutional environment in realization and development of knowledge-based economy. We have examined the impact of institutional environment on the knowledge economy by using theoretical framework, empirical evidence and regression estimation. Based on theoretical literature, we have analysed institutional environment in three levels: political environment, legal environment and business environment. Then, regression results suggest that political and environment indicators have positive and significant effect on changes in Knowledge Economy Index (KEI), but the effect of business environment has not found to be significant. In general, the effect of overall institutional environment index on the KBI changes is confirmed.
