Trade and the environment: from a ‘Southern’ perspective

The relationship between free trade and the environment is one of the main issues of contention between environmental and ecological economics. Environmental economics assumes a positive relationship between free trade, economic growth and environmental policies. Environmental externalities may cause important damage. However, trade is not to be blamed for this. Instead, the fault lies with policy inadequacies at the national level. On the other hand, some ecological economists criticise the assumptions of environmental economics, especially the immobility of production factors and the positive correlation between income and environmental quality. They plead for measures to prevent deterioration of ‘Northern’ environmental standards in a ‘race to the bottom’ due to ‘ecological dumping” from the South. In this paper, we argue that neither environmental economics nor ‘Northern’ ecological economics take into account the structural conditions determining the international trade system. Based on some new empirical evidence on material flows, we stress the notion of environmental cost-shifting. If physical and political ecology perspectives are adopted, a ‘Southern’ approach to the trade-and-environment issue may arise.     

Are valuation effects desirable from a global perspective?

Recent studies have emphasized the role of valuation effects due to exchange rate movements in easing the process of adjustment of the external balance of a country. This paper asks to what extent valuation effects are desirable from a global perspective as a mean to achieve an efficient allocation of resources. In a frictionless world, it is desirable to have large movements in prices and exchange rates. But once a small degree of price rigidity is introduced not only should prices be stabilized but also the response of the exchange rate should be muted. There is a minor role for valuation effects that depends both on the size and composition of assets and liabilities.     

Analysis of product efficiency in the Korean automobile market from a consumer’s perspective

In this study we develop and describe a conceptual and methodological framework to measure technical and allocative efficiency at the product level considering consumer choice, which encompasses overall efficiency. Empirically, we combined data envelopment analysis and a discrete choice model in order to measure efficiency levels. The suggested framework is applied to the Korean automobile market. The relationship between the level of efficiency and market performance is discussed in terms of market share.     

Monopoly power and the firm’s valuation: a dynamic analysis of short versus long-term policies

Summary. Recent anti-trust cases exacerbated the concerns of investors regarding the effects of a firms monopoly power on its production choice, shareholder value, and the overall economy. We address this issue within a dynamic equilibrium model featuring a large monopolistic firm whose actions not only affect the price of its output, but also effectively influence the valuation of its stock. The latter renders time-inconsistency to the firms dynamic production choice. When the firm is required to pre-commit to its strategy, the ensuing equilibrium is largely in line with the predictions of the textbook monopoly model. When the firm behaves in a time-consistent manner, however, the predictions are strikingly at odds. The trade-off between current profits and the valuation of future profits induces the firm to increase production beyond the competitive benchmark and cut prices. This policy may result in destroying shareholder value, and does indeed fully wipe out the firms profit in the limit of the decision-making interval shrinking to zero, in line with the Coase conjecture.Received: 23 December 2003, Revised: 1 March 2004, JEL Classification Numbers: D42, D51, D92, E20, G12.Correspondence to: Anna PavlovaWe thank Steve Spear and the anonymous referees for helpful suggestions. We are also grateful to Franklin Allen, Dave Cass, Peter DeMarzo, Bernard Dumas, Ron Giammarino, Rich Kihlstrom, Leonid Kogan, Branko Urosevic, Dimitri Vayanos, seminar participants at Boston University, University of Colorado at Boulder, Columbia University, MIT, University of Pennsylvania, Princeton University, American Finance Association Meetings, and European Finance Association Meetings for valuable comments. All errors are solely our responsibility.     

Urbanization and urban-rural inequality in china: a new perspective from the government��s development strategy

This paper offers a novel explanation for the lower urbanization rate and great urban-rural inequality in China. Our study reveals that, heavy-industry-oriented development strategy will result in lower urbanization rate and higher urban-rural inequality. The greater the degree of heavy-industry-oriented development strategy is, the lower the urbanization rate is, and the higher the urban-rural inequality is. From a dynamic perspective, heavy-industry-oriented development strategy reduces the capital accumulation rate, which results in a slower progress of urbanization and a highly persistent urban-rural inequality. The higher the degree of heavy-industry-oriented development strategy, the slower the progress of urbanization, and the longer the urban-rural inequality will last. This mechanism can potentially explain the lower urbanization rate and higher urban-rural inequality in China under a unified framework.     

Cost and outcomes associated with rivaroxaban vs enoxaparin for the prevention of postsurgical venous thromboembolism from a US payer’s perspective

Abstract

Objective:

The objective of this analysis was the evaluation of the outcomes and costs associated with rivaroxaban and enoxaparin for the prevention of postsurgical venous thromboembolism (VTE) in patients undergoing total hip replacement (THR) and total knee replacement (TKR) from the US payer perspective.

Methods:

VTE event rates have been reported in three Phase III clinical trials that compared rivaroxaban and enoxaparin for VTE prevention after orthopedic surgery during the prophylaxis (≤35 days for THR patients and 10–14 days for TKR patients) and post-prophylaxis periods (≤90 days following surgery). These data were used in this decision-analytic model to estimate and compare health outcomes and costs associated with rivaroxaban and enoxaparin. The base-case analysis considered the number and costs of symptomatic VTE events during the prophylaxis period only. A 90-day horizon was considered in the sensitivity analysis.

Results:

Following THR, when extended durations of prophylaxis (35 days) were compared, rivaroxaban was associated with lower costs than enoxaparin, with total saving costs of $695/patient. When an extended duration of rivaroxaban prophylaxis (35 days) was compared with a short duration (10–14 days) of enoxaparin prophylaxis, rivaroxaban was estimated to prevent 9.9 additional symptomatic VTE events per 1000 patients, while saving $244/patient (rate/1000 patients). In the TKR population, short duration of rivaroxaban prophylaxis was estimated to prevent 13.1 additional symptomatic VTE events per 1000 patients. It was also less costly than short duration enoxaparin prophylaxis, with a saving of $411/patient (rate/1000 patients).

Limitations:

Only statistically significant differences were captured in the base-case economic analysis, and, therefore, differences in pulmonary embolism (PE) and bleeding events were not captured.

Conclusions:

In this model, rivaroxaban reduced total treatment payer costs vs enoxaparin for the prevention of VTE in THR or TKR patients.     

Political connection,corporate philanthropy and efficiency: Evidence from China’s anti-corruption campaign

We find that the 2013 Chinese anti-corruption campaign remarkably reduced charitable donations from listed companies with strong political connections, and lessened government subsidies to these companies, implying a reciprocal relationship between companies and the government prior to the campaign. The campaign also improved the productivity of companies with strong connections. The results are consistent with a model in which favor exchanges between firms and the government divert resources away from production in a corrupt environment. These findings highlight a self-serving, and sometimes corrupt, motive of corporate donation, and imply that the campaign is effective in curbing corrupt collusion between companies and government officials. Moreover, they give empirical support to the negative efficiency implications of corruption.     

Cuba’s reform and economic growth: a comparative perspective with Vietnam

Cuban reform process lags behind the GDP growth reached by the Vietnamese. When comparing the evolution of the different sectors and demand components of GDP, Vietnam has had higher growth rates in all cases, highlighting exports first and investment second. Once the Balance of Payments Constrained Growth model has been estimated, the significant effect of the foreign exchange constraints on growth for both countries is confirmed. However, the Vietnam growth can be explained not only by its export success. International openness, which included the end of the US embargo, and institutional factors also explains the differential of results.     

Does a firm’s supplier concentration affect its cash holding?

High supplier concentration (SC) of a firm can weaken the firm’s bargaining power, which reduces its profitability and internal funds. Also, high SC likely increases the firm’s exposure to supply shocks, which results in high costs of external financing. Consequently, high-SC firms will incline to hold more cash due to the precautionary concern. However, there is little research into the effect of SC on cash holdings. This paper investigates how SC affects cash holdings with Chinese firms over 2009–2016. We find that a firm’s cash holding increases with its SC. Further investigations show that this positive relation stems from the unfavorable impact of SC on trade credit and equity financing. Our results are robust to different tests including the instrumental variable approach and the propensity score matching. Our findings are new to the literature and help to explain the cash holding puzzle. Our study also indicates that choosing supplier concentration adequately is important in maintaining a firm’s financial health.     

Household’s optimal mortgage and unsecured loan default decision

How do households make optimal borrowing and default decisions when they have the option to borrow in multiple ways? In this paper, I analyze households’ optimal mortgage and unsecured loan borrowing and default decisions in the context of the recent recession. I model households as able to default on mortgage debt to walk away from capital losses, at the price of foreclosure. However, a household can also default on unsecured debt to maintain its home, in exchange for a longer exclusion from credit markets following default. Depending on the costs of each alternative, financially constrained households exhibit heterogeneity in optimal default decisions.Next, I analyze how mortgage loan modification policies, after a sudden drop in house prices, affect household choices in the mortgage and unsecured loan markets. The quantitative exercise shows that the government-driven mortgage modification program, initiated in 2009, reduces the mortgage default rate by 0.27% points. However, this increases the unsecured loan charge-off rate by 0.66% points.     

Poland’s Poverty from the US Perspective

The major objective of this study is to provide a tangible metric that can be used to assess the state of Polish poverty. To do so, we compare certain characteristics of poverty in Poland and United States, with a focus on different societal groups affected by poverty in each country. Based on official, mostly income-based statistics measuring poverty in the United States and Poland, we find that a higher percentage of the overall population in the United States is poor than in Poland and, relative to median country-specific incomes, that poverty is deeper. Examining selected societal groups that typically experience a high incidence of poverty, we find more American children, elderly, and disabled are poor than in Poland. In conclusion, the breadth of poverty is wider in the United States than in Poland and, perhaps more importantly, poverty in America may also, in some important ways, be more intractable.     

Changes in cyclical patterns of the USA labor market: from the perspective of nonlinear Okun’s law

The validity of Okun’s law has been debated because of the increase in cyclicality in aggregate hours after 1985. To investigate this, I measure Okun’s coefficients in three phases of the business cycle – recession, early, and late expansions. I found that an increased coefficient for aggregate hours is due to the increased responsiveness of the employment rate during late expansions and to the increased responsiveness of hours per employee during early expansions. These findings question the flexible labor market hypothesis focusing on firms’ firing behaviors during recessions. Rather, working hours’ flexibility represents a more prominent feature of the post-1985 USA labor market.     

Cost-effectiveness of insulin detemir versus insulin glargine for Thai type 2 diabetes from a payer’s perspective

Aims: An economic evidence is a vital tool that can inform the decision to use costly insulin analogs. This study aimed to evaluate long-term cost-effectiveness of insulin detemir (IDet) compared with insulin glargine (IGlar) in type 2 diabetes (T2DM) from the Thai payer’s perspective.

Methods: Long-term costs and outcomes were projected using a validated IMS CORE Diabetes Model, version 8.5. Cohort characteristics, baseline risk factors, and costs of diabetes complications were derived from Thai data sources. Relative risk was derived from a systematic review and meta-analysis study. Costs and outcomes were discounted at 3% per annum. Incremental cost-effectiveness ratio (ICER) was presented in 2015?US Dollars (USD). A series of one-way and probabilistic sensitivity analyses were performed.

Results: IDet yielded slightly greater quality-adjusted life years (QALYs) (8.921 vs 8.908), but incurred higher costs than IGlar (90,417.63 USD vs 66,674.03 USD), resulting in an ICER of ～1.7 million USD per QALY. The findings were very sensitive to the cost of IDet. With a 34% reduction in the IDet cost, treatment with IDet would become cost-effective according to the Thai threshold of 4,434.59 USD per QALY.

Conclusions: Treatment with IDet in patients with T2DM who had uncontrolled blood glucose with oral anti-diabetic agents was not a cost-effective strategy compared with IGlar treatment in the Thai context. These findings could be generalized to other countries with a similar socioeconomics level and healthcare systems.     

Italy’s decline and the balance-of-payments constraint: a multicountry analysis

According to the literature, the decline experienced by the Italian economy in the last two decades depends on a slowdown of its labour productivity, starting in the 1990s. The supply-side explanations of this slowdown are inconsistent with the major stylised facts. In this paper, we verify whether a better explanation is provided by the effect of a negative demand shock, through Italy’s external constraints, in the framework of Kaldor-Dixon-Thirlwall’s cumulative growth model. To this end, we use a multi-country generalisation of Thirlwall’s balance-of-payments-constrained growth model, which allows us to investigate the contribution of Italy’s main trade partners to Italy’s long-run growth from 1970 to 2010. The trade partners are disaggregated into seven groups: Eurozone core, Eurozone periphery, United States, other European countries, OPEC countries, BRIC, and the rest of the world. The results show that Italy’s long-run growth has been consistent with the Bop-constraint, that its decline can be explained by a progressive tightening of this constraint, that the sudden slowdown of labour productivity in the 1990s corresponds to a major shock on Italy’s external constraint, and that the major contributions to this shock came, through different channels of transmission, from the core Eurozone countries and from OPEC countries.     

Commercial loan borrower’s optimal borrowing and prepayment decisions under uncertainty

We model a firm which faces continuing stochastic money needs and fluctuating interest rates. The borrower minimizes the expected present value of the sum of interest payments and prepayment penalty costs subject to a liquidity constraint. Since contingent opportunities are absent from the model, we find (i) the firm should not inventory cash, (ii) the firm should prepay the maximum amount possible if it prepays at all.     

Innovation and skills from a sectoral perspective: a linked employer–employee analysis

Science and engineering skills as well as management and leadership skills are often referred to as sources of innovative activities within companies. Broken down into sectoral innovation patterns, this article examines the role of formal education, actual occupation and work experience in the innovation performance in manufacturing firms within a probit model. It uses unique micro data for Germany (LIAB) that contain information about corporate innovation activities and the qualification of employees in terms of formal education, actual professional status and work experience. We find clear differences in the human capital endowment between sectors according to the Pavitt classification. Sectors with a high share of highly skilled employees engage in above average product innovation (specialised suppliers and science-based industries). However, according to our estimation results, across as well as within these sectors a large share of highly skilled employees does not substantially increase the probability of a firm being innovative.     

America’s neglected debt to the Dutch,an institutional perspective

America’s early constitutional development owes a good deal to the experience and policies of the Dutch republic. Many of the parallels are direct: In the late 16th century, the Dutch fought a successful war to secede from a major empire. They wrote a declaration of independence and adopted a federal model of Republican governance almost exactly two hundred years before the Americans. Somewhat later, the Dutch republic and its political institutions subsequently inspired and protected enlightenment scholars. Its leading political family and army played a crucial role in curtailing English absolutism in England and in England’s American colonies, and its federal template provided a model for early American institutions.

Measuring universities’ R&D performance in China’s provinces: a multistage efficiency and effectiveness perspective

ABSTRACT

Evaluating universities’ R&D performance can serve as a tool for policymakers, enabling them to identify the best R&D practitioners for benchmarking and develop strategies for enhancing performance by highlighting areas of weakness. This study divides universities’ R&D performance into two dimensions: efficiency and effectiveness. We employ a network data envelopment analysis approach to measure universities’ R&D efficiency, and separately use a multi-index comprehensive evaluation method to assess their R&D effectiveness from a multistage perspective. We calculate the comprehensive R&D performance of universities in 30 provinces in China from 2004 to 2014. An analysis of temporal variation reveals that universities’ R&D performance in some provinces improved rapidly, increasing gaps in performance as a whole. The spatial pattern for the 30 provinces shows that universities in provinces with medium or strong R&D performance are mainly in coastal provinces and central areas in China. Finally, universities’ R&D activities are considered ‘efficient and effective’ only in a small number of provinces, while in most provinces, these activities can generally be considered ‘less efficient and effective.’ Hence, universities in provinces with different R&D performance modes should implement targeted improvement strategies according to their characteristics.