AIDS is your business

If your company operates in a developing country, AIDS is your business. While Africa has received the most attention, AIDS is also spreading swiftly in other parts of the world. Russia and Ukraine had the fastest-growing epidemics last year, and many experts believe China and India will suffer the next tidal wave of infection. Why should executives be concerned about AIDS? Because it is destroying the twin rationales of globalization strategy-cheap labor and fast-growing markets--in countries where people are heavily affected by the epidemic. Fortunately, investments in programs that prevent infection and provide treatment for employees who have HIV/AIDS are profitable for many businesses--that is, they lead to savings that outweigh the programs' costs. Due to the long latency period between HIV infection and the onset of AIDS symptoms, a company is not likely to see any of the costs of HIV/AIDS until five to ten years after an employee is infected. But executives can calculate the present value of epidemic-related costs by using the discount rate to weigh each cost according to its expected timing. That allows companies to think about expenses on HIV/AIDS prevention and treatment programs as investments rather than merely as costs. The authors found that the annual cost of AIDS to six corporations in South Africa and Botswana ranged from 0.4% to 5.9% of the wage bill. All six companies would have earned positive returns on their investments if they had provided employees with free treatment for HIV/AIDS in the form of highly active antiretroviral therapy (HAART), according to the mathematical model the authors used. The annual reduction in the AIDS "tax" would have been as much as 40.4%. The authors' conclusion? Fighting AIDS not only helps those infected; it also makes good business sense.     

Update on HIV infection

In the third decade of the global epidemic, it is evident that human immunodeficiency virus (HIV) disease is quite different from the disease first recognized among a small number of homosexual men in 1981. The spread of HIV has been particularly alarming in developing countries, especially sub-Saharan Africa and Southeast Asia, and it continues to threaten other populations in Eastern Europe, Latin America and the Caribbean. HIV therapeutic advances have resulted in a marked decrease in acquired immunodeficiency syndrome (AIDS) incidence and death in the United States and Western Europe. With the introduction of "triple therapy," antiretroviral treatment has resulted in an extraordinary increase in the quality of life and life expectancy among HIV-infected persons. However, the rate of decline in AIDS incidence and deaths from the latter part of 1998 through 2000 has slowed for a number of reasons. Even with the stabilization of HIV in Western countries, it remains as important as ever to follow sound insurance principles to address HIV risk. The clinical success stories have yet to be translated into the insurance realm. A very strict analysis of the medical literature will be needed.     

AIDS and African Development

Because AIDS affects primarily the most productive age groupand is fatal and widespread, it will have a larger impact onAfrican development than other more common diseases. Infectionrates are higher in urban than in rural areas, and studies suggestthat they are highest among urban high-income, skilled men andtheir partners. Macroeconomic models show that the greater theinfection rate among educated workers and the greater the propensityto finance medical care out of savings, the more detrimentalis the impact of AIDS on the growth of per capita income. Regardlessof the macroeconomic effect, most households and businessesdirectly affected by AIDS will be economically worse off, atleast in the short run. It is not clear, however, what effectAIDS will have on poverty in Sub-Saharan Africa or on incomeinequality. Governments need to assess the potential economicimpact of AIDS, implement cost-effective programs to mitigatethe impact, and target prevention programs to the economic sectorsmost sensitive to HIV infection.      

Impact of AIDS/HIV on medical directors

The decade of AIDS/HIV has changed the way insurance medicine is practiced by medical directors. One director details some of these changes.     

The Long-Run Economic Costs of AIDS: A Model with an Application to South Africa

Primarily a disease of young adults, AIDS imposes economic coststhat could be devastatingly high in the long run by underminingthe transmission of human capital—the main driver of long-runeconomic growth—across generations. AIDS makes it harderfor victims’ children to obtain an education and deprivesthem of the love, nurturing, and life skills that parents provide.These children will in turn find it difficult to educate theirchildren, and so on. An overlapping generations model is usedto show that an otherwise growing economy could decline to alow-level subsistence equilibrium if hit with an AIDS-type increasein premature adult mortality. Calibrating the model for SouthAfrica, where the HIV prevalence rate is over 20 percent, simulationsreveal that the economy could shrink to half its current sizein about four generations in the absence of intervention. Programsto combat the disease and to support needy families could avertsuch a collapse, but they imply a fiscal burden of about 4 percentof GDP.     

A case of AIDS

"A case of AIDS" by Richard S. Tedlow and Michele S. Marram explores the issues involved in managing an HIV-infected employee over time. When an opening on his team occurs, should Greg hire Joe despite his HIV infection? How should Greg handle the issue of confidentiality? And when Joe asks for a promotion, how should Greg manage the issue of Joe's long-term career? Three experts discuss each stage of the case as it unfolds.     

Nothing prepared me to manage AIDS

Articles and seminars about AIDS in the workplace are not adequate preparation for the genuine problems faced by actual managers in real organizations. There are no easy, win-win solutions to the impossible dilemmas AIDS presents, only various forms of damage control and, at best, more or less humane compromises. Gary Banas knows. Over a period of four years, two of his direct reports developed AIDS, and he watched them suffer through debility, slowly deteriorating performance, and eventual death. He also watched the gradual decline of their subordinates' productivity and morale. He found that, to different degrees, both men refused to acknowledge their illness and their decreasing organizational effectiveness. One of them resisted the author's efforts to give him an easier job at no loss in salary. Both insisted on confidentiality long after the rumor mill had identified their problem. In the course of these two consecutive ordeals, Banas discovered that AIDS patients fall into no single, neat category. AIDS is not an issue but a disease, and the people who get it are human beings first and victims second. He also learned that AIDS affects everyone around the sick individual and that almost every choice a manager makes will injure someone. Finally, he came to understand that while managers have an unequivocal obligation to treat AIDS-afflicted employees with compassion and respect, they have an equally unequivocal obligation to keep their organizations functioning. "Don't let anyone kid you," Banas warns. "When you confront AIDS in the workplace, you will face untenable choices that seem to pit your obligation to humanity against your obligation to your organization.(ABSTRACT TRUNCATED AT 250 WORDS)     

Securities Laws, Disclosure, and National Capital Markets in the Age of Financial Globalization

As barriers to international investment fall and technology improves, the cost advantages for a firm's securities to trade publicly in the country in which that firm is located and for that country to have a market for publicly traded securities distinct from the capital markets of other countries will progressively disappear. Securities laws remain an important determinant of whether and where securities are issued, how they are valued, who owns them, and where they trade. I show that there is a demand from entrepreneurs for mechanisms that allow them to commit to credible disclosure because disclosure helps reduce agency costs. Under some circumstances, mandatory disclosure through securities laws can help satisfy that demand, but only provided investors or the state can act on the information disclosed and the laws cannot be weakened ex post too much through lobbying by corporate insiders. With financial globalization, national disclosure laws can have wide-ranging effects on a country's welfare, on firms and on investor portfolios, including the extent to which share holdings reveal a home bias. In equilibrium, if firms can choose the securities laws they are subject to when they go public, some firms will choose stronger securities laws than those of the country in which they are located and some firms will do the opposite.     

Governance and bank valuation

This paper assesses the impact of the ownership structure of banks and shareholder protection laws on bank valuations while controlling for differences in bank regulations. Except in a few countries with very strong shareholder protection laws, banks are not widely held. Rather, families or the State control banks. Furthermore, (i) larger cash-flow rights by the controlling owner boost valuations, (ii) stronger shareholder protection laws increase valuations, and (iii) greater cash-flow rights mitigate the adverse effects of weak shareholder protection laws on valuations. These results suggest that ownership structure is an important mechanism for governing banks.     

Transparency of medicines data and safety issues–a European/US study of doctors’ opinions: what does the evidence show?

Over the past 10 years, European pharmaceutical regulators (especially the European Medicines Agency [EMA]) have enacted a wave of transparency policies. Since 2010, the overwhelming majority have focused on releasing more scientific medicines information online and providing open access to regulatory data. Amongst other benefits, EMA expects its policies to build public trust and provide outsiders with a better understanding of regulatory decision-making. Yet, few studies have empirically examined the EMA’s transparency policies, especially on the end users of ‘transparent’ information (e.g. medical doctors or patients). This paper presents standout findings from a November 2014 survey conducted in Spain, Germany, France and the United Kingdom with a sample of 1005 general practitioners and medical specialists treating either multiple sclerosis, rheumatoid arthritis, osteoporosis, idiopathic pulmonary fibrosis or HIV/AIDS. The study found that 76% of respondents think it is a bad idea to release information into the public domain before possible safety issues have been investigated by the regulators and (relevant) pharmaceutical company. The results also suggested that medical doctors in Europe have a poor understanding of pharmaceutical regulatory activities. In particular, the majority were largely unaware of the current activities of the EMA, did not have good knowledge of how the regulators assess the safety of medicines (e.g. only 17% said they had good knowledge of how EMA assess the safety of medicines) and were unfamiliar with regulatory documents frequently used by regulators and industry to discuss the safety of medicines (e.g. in approving a medicine).     

Shareholder litigation rights and capital structure decisions

We exploit the staggered adoption of the universal demand (UD) laws across U.S. states, which impedes shareholder rights to initiate derivative lawsuits, as a quasi-natural experiment to examine the relation between shareholder litigation rights and firm capital structures. We find that weaker shareholder litigation rights due to the UD laws adoption lead to higher financial leverage, which enhances firm value. Furthermore, the positive relation between the UD laws adoption and financial leverage is more pronounced for firms exposed to higher shareholder litigation risk ex ante or financially constrained firms. Our evidence is consistent with lower shareholder litigation threats motivating firms to increase financial leverage.     

Do Hostile Takeovers Stifle Innovation? Evidence from Antitakeover Legislation and Corporate Patenting

I examine how strong corporate governance proxied by the threat of hostile takeovers affects innovation and firm value. I find a significant decline in the number of patents and citations per patent for firms incorporated in states that pass antitakeover laws relative to firms incorporated in states that do not. Most of the impact of antitakeover laws on innovation occurs 2 or more years after they are passed, indicating a causal effect. The negative effect of antitakeover laws is mitigated by the presence of alternative governance mechanisms such as large shareholders, pension fund ownership, leverage, and product market competition.     

Modeling the macroeconomic effects of AIDS, with an application to Tanzania.

The 1956 Solow growth model is expanded to study the effects of the AIDS epidemic on the growth path of the economy and per capita GDP (gross domestic product). AIDS and no-AIDS scenarios are compared analytically and via simulations based upon Tanzanian demographic and macroeconomic data. The 1st section discusses various channels through which AIDS might affect the macroeconomy and describes its expected demographic impact in Tanzania. The model incorporating these key channels is then developed in the 2nd section. It is employed specifically to discuss the likely effect on the ratio of capital to labor and on output per capita as the economy moves from a no-AIDS situation toward a new steady state in which AIDS is assumed to be endemic. A simple simulation model in the 3rd section forecasts the time paths of macro aggregates in Tanzania as the prevalence of AIDS increases. These time paths are then compared with simulated results for a no-AIDS situation to determine the severity of the impact of the disease on the growth path of the Tanzanian economy, Bulatao's 1990 demographic scenarios are input in the simulated version of the model. The 4th section concludes by considering the policy implications of the analysis. The analysis indicates that without decisive policy action AIDS may reduce the GDP of Tanzania in the year 2010 by 15-25% over what it would be if AIDS did not exist. Per capita income levels are expected to fall by 0-10% by the year 2010.     

论中国金融全球化区域化进程中金融监管法律的协调

中国金融业的全球化与区域化进程对中国的金融监管提出了新挑战,作为金融监管的制度基础,金融监管法律制度同样面临如何适应中国金融业全球化与区域化的问题。本文认为全球化区域化进程中中国金融监管法律的制度建设,应以法律协调的方式进行。本文从分析中国金融全球化区域的特征入手,明确了全球化区域化对中国金融监管法律协调的需求,然后在具体分析国际社会金融监管法律协调实践的基础上,提出中国金融全球化区域化进程中金融监管法律协调的目标、原则及其协调方式的选择建议。     

Further results on the macroeconomic effects of AIDS: the dualistic, labor-surplus economy.

Analyses by Cuddington in 1993 and forthcoming work from Cuddington and Hancock model the macroeconomic effects of the AIDS epidemic using a modified Solow growth model. This single-sector framework rests upon the assumption that labor and capital are always efficiently allocated throughout the economy with neither market failures nor policy-induced distortions resulting in resource misallocation. Economies in low-income developing countries in sub-Saharan Africa, however, are not operating at capacity. Impact models based upon the potential growth path of economies will therefore significantly overstate the effect of an AIDS epidemic. The author thus incorporates the presence of underemployment and dual labor markets to redress the limitations of these earlier impact models. The dual-economy simulations of the economic impact of AIDS using Tanzanian data suggest that the macroeconomic consequences of the epidemic are of the same order of magnitude as those obtained using a single-sector, full-employment model: gross domestic product (GDP) is 15-25% smaller by 2010 than it would have been without AIDS, and per capita GDP is 0-10% smaller. Output lost from AIDS in the dual-economy framework is approximately the same as the output gain achievable through policies designed to increase labor market flexibility. Findings suggest that serious economic reform in economies fraught with AIDS may lessen the negative economic effects of the epidemic.     

Whistleblower laws and corporate fraud: Evidence from the United States

We use data from the United States to assess whether whistleblower laws that protect private employees from retaliation have an impact on corporate fraud. Currently, eighteen states have whistleblower laws that offer such protection. Our analysis indicates that, in these states, a higher awareness of whistleblower laws is associated with a lower state-level conviction rate for corporate fraud. This finding is consistent with the hypothesis that whistleblower laws that cover private employees have a deterrent effect on corporate fraud, and that awareness of the provisions of whistleblower laws plays a key role in determining their effectiveness as a policy tool.     

房地产投资信托制度(REITs)风险之法律规制与运营控制

房地产投资信托制度(REITs)中的风险问题,是任何一个研究REITs的理论界或实务界人士都必须回答的问题。在规制REITs风险的方法中,主要分为两种:最直接的处理风险问题的方法是由美国《投资公司法案》控制债务杠杆;而其它法规对REITs风险的规制,则是较为间接的控制风险的方法。伞型合伙(UPREITs)结构的风险,美国财政部和国家税务局IRS的相关法规可对此进行规制。下属合伙(DOWNREITs)结构的风险则可以采用三种运营方式予以控制。     

The Impact of Changes in Job Security Regulations in India and Zimbabwe

Employment laws in India and Zimbabwe require employers to obtainpermission from the government to retrench or lay off workers.The effect of these laws on the demand for employees in 64 manufacturingindustries is examined using time series data. Little evidenceis found indicating slower adjustments in employment levelsand hence retardation in any structural adjustment followingthe new laws. However, in both countries a substantial declinein the demand for employees (other things equal) followed thenew legislation. In Zimbabwe it is difficult to be precise abouta causal connection between the drop in the demand for labor(allowing for concurrent increased wages) and the new legislationbecause enactment occurred simultaneously with Independence;however, the current economic climate induced high levels ofinvestment in capital but not investments in long-term commitmentsto employees. But in India further evidence supports a causalconnection: larger establishments covered by the job securityregulations tended to experience a decline in the demand forlabor while smaller, uncovered enterprises in the same industriesdid not; moreover the decline in demand for employees acrossindustries in India was larger where the private sector predominates,where larger establishments covered by the new laws are important,and where a smaller proportion of employees are union members.Thus in both countries the policy implemented to protect jobsmay have resulted in far fewer jobs.     

Medicines transparency at the European Medicines Agency (EMA) in the new information age: the perspectives of patients

The concept of transparency has gained widespread appeal in the European pharmaceutical domain, not least at the European Medicines Agency (EMA). Agency policies have two main objectives: (1) to enable the reuse of data (e.g. clinical study reports) and (2) to empower patients to directly and indirectly make more informed decisions on medicines. Past research has almost exclusively focused on the perspectives of external researchers intending to reanalyse data made publically available. Few studies, however, have explored what can be learnt from the perspectives of other actors (e.g. health care professionals, patients, the regulators themselves, industry and others). This empirical study explores the EMA’s transparency policies from the perspectives of patients. After presenting the results of a survey (N = 1010) with a sample of individuals diagnosed with five specific medical conditions (HIV/AIDS, multiple sclerosis, rheumatoid arthritis, osteoporosis and idiopathic pulmonary fibrosis) from four EU countries (Germany, Spain, France and the UK), the authors argue that EMA’s transparency policies do not adequately address the real-world complexities of communicating with patients. In turn, the paper concludes that the perspective of patients provides an essential contribution to understanding the full net effects (positive, negative and/or limited) of EMA’s transparency policies.     

Managerial discretion and efficiency of internal capital markets

I use the staggered adoption of state-level antitakeover laws to provide causal evidence that managerial agency problems reduce the allocative efficiency of conglomerate firms. I find that increases in control slack following the passage of antitakeover laws reduces q-sensitivity of investment by 64%. The adverse impact of the laws appears mostly at conglomerate firms that benefited from disciplinary takeover threats prior to the passage of the laws, lacked alternative sources of pressure on management, or had the structural makings to fuel wasteful influence activities and power struggles among managers. These findings suggest that takeover threats impact the efficiency of resource allocation.