Journal of Economics, Management and Trade

Transaction Cost Economics in European Financial Markets: A PLS-SEM Analysis (2012–2023)

Hannes Laudenbach — 2025-09-28

Aims: This study examines the impact of financial market regulations, specifically MiFIR and MiFID II, on transaction costs and competitive positioning within European financial market infrastructures. The research evaluates the extent to which regulatory interventions influence market leadership, revenue structures, and cost efficiency in stock exchange organizations.

Study Design: The study employs an empirical approach based on Partial Least Squares Structural Equation Modeling (PLS-SEM) to analyze the relationships between infrastructure transactions, market economics, infrastructure operations, and transaction costs. Transaction costs are measured as the revenues of financial market infrastructure providers, reflecting the cost implications for market participants.

Place and Duration of Study: The study focuses on European financial market infrastructures over the period 2012–2023, covering both pre- and post-implementation phases of MiFID II.

Methodology: Secondary data were collected from audited annual financial reports, trading statistics, and regulatory disclosures. The dataset consists of 120 observations, transformed using natural logarithms (LN) to facilitate statistical modeling. A PLS-SEM was developed based on secondary data and regulatory sources. The PLS-SEM analysis was performed using 5,000 bootstrapped subsamples to assess model validity and path significance.

Results: The findings indicate that infrastructure operations have a strong positive effect on transaction costs (path coefficient: 0.870), whereas infrastructure transactions exert a weaker influence (path coefficient: 0.083). Market economics do not directly affect transaction costs (path coefficient: 0.027) but positively influence infrastructure operations (path coefficient: 0.311). The model exhibits strong explanatory power, with an R² of 0.909 for transaction costs and 0.682 for infrastructure operations. The analysis shows that operational cost structures are the primary driver of transaction costs in stock exchanges, while trading activity plays a more limited role. Broader market dynamics indirectly affect costs by shaping infrastructure demands. The model demonstrates high explanatory power.

Conclusion: This study provides empirical evidence on the regulatory impact on financial market infrastructures, highlighting the critical role of infrastructure operations in shaping transaction cost structures. The findings suggest that regulatory compliance, cost structures, and market dynamics collectively influence market leadership and competitive positioning. Future research could explore technological advances and cross-border market integration as potential factors influencing regulatory cost optimization and the efficiency of financial markets, thus contributing to the field of science.

Income Effects on the Challenges of Buying Organic Products: A Consumer Perspective

Chenna Upendra Madduri — 2025-10-07

This study investigates how household income influences the challenges consumers face when purchasing organic products in Chittoor district, Andhra Pradesh, India. Using a descriptive and analytical design, data were collected from 400 respondents across the revenue divisions of Chittoor, Palamaner, Kuppam, and Nagari through a structured questionnaire. The analysis employed descriptive statistics, one-way ANOVA, and chi-square tests to assess income-related differences in key barriers such as price, product availability, cultural beliefs, and promotional awareness. Results reveal that income is a significant determinant of purchasing challenges. Middle-income households (₹20,001–₹40,000) reported the highest difficulties, particularly regarding affordability and limited availability, while higher-income groups (above ₹50,000) experienced fewer obstacles. High cost (mean = 3.42) and lack of promotional information (mean = 3.35) emerged as the most pressing barriers. Cultural beliefs and peer influence also contributed to consumer hesitancy, especially among lower-income segments. The findings suggest the need for income-sensitive strategies such as targeted price incentives, community-based awareness programs, and improved distribution networks. Policymakers, marketers, and local producers can use these insights to enhance accessibility, affordability, and awareness of organic products, thereby fostering sustainable consumption in semi-urban and rural markets.

Non–Performing Assets: Status and Trends of the Select Public and Private Sector Banks in India

Achakala Sai Koteswara Rao — 2025-10-11

Non-Performing Assets (NPAs) continue to pose a significant threat to the financial stability and efficiency of the Indian banking sector, particularly among Public Sector Banks (PSBs). This study examines the trends and status of NPAs in six selected public and private sector banks viz., State Bank of India, Punjab National Bank, Bank of Baroda, HDFC Bank, ICICI Bank, and Axis Bank over the period 2014-15 to 2023-24. The statistical tools such as mean, standard deviation, coefficient of variation, and ANOVA applied and, the research analyzed Gross and Net NPA Ratios to evaluate asset quality differences between the two sectors. Results indicate that public sector banks consistently exhibit higher NPA levels due to weak credit appraisal systems, policy obligations, and regulatory lapses, whereas private banks demonstrate better performance through stronger risk management practices. Hypothesis testing confirms significant variation in NPA ratios among the select banks. The study further explores the root causes of NPAs, including willful defaults, industrial sickness, fraudulent practices, and coordination failures among lenders. The growing burden of NPAs hampers credit growth, raises interest rates, undermines public confidence, and weakens capital adequacy, ultimately slowing down the overall economy. This analysis offers valuable insights to aid policymakers, regulators, and banking institutions in devising targeted strategies for effective NPA management and sustainable financial development.

Is Learning-by-exporting and Self-selection Market Specific? Evidence from Zimbabwean Manufacturing Firms’

Albert Makochekanwa — 2025-10-14

The study examined the learning-by-exporting and self-selection hypotheses with the level of development of the export destination as one of the major variable. The specific questions to be answered by this research are: Is learning-by-exporting and self-selection hypotheses market specific? Specifically, and using World Bank enterprises survey of 2016, the study investigated the extent to which differences in sunk costs across export market destinations make it more difficult or easier to penetrate some markets than others. Post-entry, the study analyzed whether learning-by-exporting that result in knowledge and technology spillover is a function of the level of development of the destination trading market. To achieve the objective of the research, the study used ordinary least squares (OLS) and maximum likelihood Probit estimators, respectively, to test the hypotheses that learning-by-exporting and self-selection are market specific. Both ordinary least squares (OLS) and Probit estimations fail to provide evidence supporting the theoretical propositions that learning-by-exporting and self-selection hypotheses vary by the level of development of a given firm’s export market. In other words, the study’s findings show that for Zimbabwean manufacturing exporters, learning-by-exporting is not market specific. That is, there is no advantageous scope for learning in a developed export market when compared to developing country export markets. At the same time, the study’s empirical estimations found that self-selection proposition is also not market specific. This implies that, for Zimbabwean manufacturing firms, the obstacles (if any) of penetrating both developed and developing export markets are the same. Thus, there is need to improve the general microeconomic environment in which firms operate will be instrumental in reducing the sunk costs of foreign market entry.