Production Technology Estimates and Balanced Growth

Capital‐labour substitution and total factor productivity (TFP) estimates are essential features of many economic models. Such models typically embody a balanced growth path. This often leads researchers to estimate models imposing stringent prior choices on technical change. We demonstrate that estimation of the substitution elasticity and TFP growth can be substantially biased if technical progress is thereby mis‐specified. We obtain analytical and simulation results in the context of a model consistent with balanced and near‐balanced growth (i.e. departures from balanced growth but broadly stable factor shares). Given this evidence, a constant elasticity of substitution production function system is then estimated for the US economy. Results show that the estimated substitution elasticity tends to be significantly lower using a factor‐augmenting specification (well below one). We are also able to reject conventional neutrality forms in favour of general factor augmentation with a non‐negligible capital‐augmenting component. Our work thus provides insights into production and supply‐side estimation in balanced‐growth frameworks.     

Remanufacturing for the Circular Economy: An Examination of Consumer Switching Behavior

For the circular economy to be tenable, consumers need to not only return products after use, but also purchase products that are remanufactured. However, research finds that consumers have a poor opinion of remanufactured products and are typically not prepared to adopt them. Thus, development of the circular economy is dependent upon deeper understanding of consumers’ attitudes and behaviors. Research typically considers either micro‐level or macro‐level factors when assessing consumer perceptions of remanufactured products. The current research incorporates macro‐level factors of price, government incentives and environmental benefits with the moderating influence of micro‐level consumer attitudes to examine consumers’ intention to switch from purchasing new products to remanufactured products. The findings suggest that a consumer's attitude toward remanufactured products is an important moderating factor predicting consumer switching behavior to remanufactured products. Copyright © 2016 John Wiley & Sons, Ltd and ERP Environment     

The cost-effectiveness of alectinib in anaplastic lymphoma kinase-positive (ALK+) advanced NSCLC previously treated with crizotinib

Introduction Anaplastic lymphoma kinase (ALK) targeting drugs provide an important option for advanced non-small cell lung cancer patients with this distinct tumor type; however, there is considerable uncertainty as to which drug provides the optimal value after crizotinib treatment. This study estimated the cost-utility of alectinib vs ceritinib from a US payer perspective.

Methods A cost-utility model was developed using partition survival methods and three health states: progression-free (PF), post-progression (PP), and death. Survival data were derived from the key clinical trials (alectinib: NP28761 &; NP28673, ceritinib: ASCEND I and II). Costs included drugs, adverse events, and supportive care. Utilities were based on trial data and the literature. One-way and probabilistic sensitivity analyses (PSA) were performed to assess parameter uncertainty.

Results Treatment with alectinib vs ceritinib resulted in increases of 2.55 months in the PF state, 0.44 quality adjusted life-years (QALYs), and $13,868, yielding a mean cost/QALY of $31,180. In the PSA, alectinib had a 96% probability of being cost-effective at a willingness-to-pay of $100,000/QALY. Drivers of model results were drug costs and utilities in the PF health state. The ICER ranged from $10,600–$65,000 per QALY in scenario analyses, including a sub-group analysis limited to patients with prior chemotherapy and crizotinib treatment.

Conclusions Treatment with alectinib in ALK?+?crizotinib-treated patients increased time progression-free and QALYs vs ceritinib. The marginal cost increase was driven by longer treatment durations with alectinib. This model demonstrates that alectinib may be considered a cost-effective treatment after progression on crizotinib.     

The Effect of Leasing versus Buying on Entry Deterrence

Models of entry deterrence typically require that incumbents possess a cost advantage as a prerequisite for deterring entry. Potential entrants possess a cost advantage over incumbents, however, if input costs fall over time. This paper models the behavior of an incumbent and a potential entrant when the input cost falls over time and the firms have the option of buying or leasing the input. The model shows that if the future cost savings from new technology exceed the marginal transaction costs of leasing the current equipment, then leasing increases the incumbent's ability to deter entry. Copyright © 2011 John Wiley & Sons, Ltd.     

Granting preferential market access in services sequentially versus jointly with goods

Despite the cost and resource‐effectiveness of joint trade negotiations and complementarities between goods and services‐trade flows, more than 12% of the 132 WTO‐notified services‐trade agreements (STAs) in force until August 2015 were entered into effect sequentially to goods‐trade accords. This stylised fact motivates our study of the determinants of joint versus sequential negotiation/accession of goods and services accords, a subject hitherto unexplored in the growing literature on the determinants of STA membership. Our results suggest larger marginal effects of fundamental economic, geographic, institutional, doing business and services regulatory factors on the propensity of joint negotiation/accession compared to STA formation alone. Moreover, cultural‐distance variables are only found to affect the likelihood of joint preferential liberalisation of goods and services trade, without influencing STA‐only membership.     

How Do Squatters Deal with the State? Legalization and Anomalous Institutionalization in Madrid

Radical and autonomous urban movements like the European squatters' movement tend to resist integration into the institutions of the state, although particular legal and political conditions in each country or city may significantly alter this tendency. In this article, I examine the controversial issue of ‘institutionalization’ among squatters, focusing on the few cases of legalized squats (social centres) in the city of Madrid. Negotiations with the state authorities and processes of legalization are the major forms of institutionalization involving squatters. However, an anomalous kind of institutionalization also emerges once squats, whether legalized or not, become consolidated and socially accepted. For squatting to have a successful impact, then, depends on both the type of autonomy achieved by squatters and the different outcomes of the processes of institutionalization. The case of Madrid provides empirical evidence that: (1) negotiations with state authorities were very frequent among squatters, but most were defensive; (2) the few cases of legalization were due to specific conditions such as the urban centrality of the squats, single‐issue identities, social network solidarity, favourable media coverage, formal organizations working as facilitators and the squatters' leadership of the process. Furthermore, legalized squats in Madrid preserved a high degree of autonomy, self‐management and ties to other radical social movements. In conclusion, both the legalized squats and the squatters' movement in Madrid as a whole, avoided ‘terminal institutionalization’ and, instead, gave shape to a ‘flexible’ one.     

Fighting Capital Flight in Africa: Evidence from Bundling and Unbundling Governance

This study investigates the effect of governance on capital flight by bundling and unbundling governance. The empirical evidence is based on 37 African countries for the period 1996–2010 and the Generalised Method of Moments. Governance is bundled by principal component analysis, namely: (i) political governance from political stability and ‘voice and accountability’; (ii) economic governance from government effectiveness and regulation quality and (iii) institutional governance from corruption-control and the rule of law. The following findings are established. (i) Political stability and ‘voice and accountability’ reduce capital flight while the collective effect of political governance is not significant. (ii) Economic governance increases capital flight whereas the individual effects of regulation quality and government effectiveness are not significant. (iii) Corruption-control and institutional governance negatively affect capital flight whereas the impact of the rule of law is not significant. (iv) Taken together, Corruption-control is the most effective governance weapon in the fight against capital flight. (v) Priority in the Washington Consensus is more effective at fighting capital flight compared to the Beijing Model. Policy implications are discussed.     

When idealists evade taxes: the influence of personal moral philosophy on attitudes to tax evasion – a Lebanese study

This paper explores attitudes regarding tax evasion and the relationship between personal moral philosophy and such attitudes in a weak tax environment. The results confirm the multidimensionality of tax evasion attitudes. Idealism was negatively related to self‐interest tax evasion attitudes while relativism was positively related to such attitudes. Idealism was also positively related to tax evasion attitudes stemming from concerns about the justice of the tax system. Idealists in a weak tax environment seemingly go through a cognitive reframing process where they recognize that the tax system is unfair, and accordingly tax evasion is a way to serve a different moral absolute, that is of equity, rather than another different moral absolute, which is fulfilling obligations to governments. The results are also explained in light of the suggested low moral intensity of tax evasion among respondents. Policy implications are presented.