Examining the Role of Government Intervention in Market Failure and Government Failure

Authors

  • Chih-Hsiung Chang University of I-Shou

DOI:

https://doi.org/10.33423/jabe.v24i5.5550

Keywords:

business, economics, government intervention, market failure, government failure, card debt crisis, information asymmetry, advice selection, moral hazard

Abstract

This study investigated the role of government intervention in market failure and government failure during the card debt crisis in Taiwan. To achieve this goal, data related to information asymmetry was collected and combined with adverse selection and moral hazard data to confirm if market failure existed. Based on the confirmation of market failure, the study examined if government interventions could improve the market failure or, conversely, lead to government failure. Through constructing the research model and testing the research hypotheses related to market failure and government failure, the results showed that government interventions were essential to solve the card debt crisis under information asymmetry or market failure. The conclusions also implied that policymakers needed to employ resilient responses to improve the crisis in time, but never fell into the controversies of liberalism or protectionism.

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Published

2022-11-10

How to Cite

Chang, C.-H. (2022). Examining the Role of Government Intervention in Market Failure and Government Failure. Journal of Applied Business and Economics, 24(5). https://doi.org/10.33423/jabe.v24i5.5550

Issue

Section

Articles