The stained China miracle: Corruption,regulation, and firm performance

Regional corruptness in China has a positive effect on the profitability of private firms, but not that of state-owned firms. A natural experiment of exogenous trade policy change suggests that corruption may help private firms circumvent government regulation.     

The impact of privatization on firm performance in a transition economy

The Vietnamese privatization programme, launched in 1992, differs from the usual Western privatization programmes in terms of the residual percentage of shares owned by the state and the portion of shares owned by insiders. This begs the question whether these differences influence the effects of the programme on firm performance. This study measures the impact of privatization on firm performance in Vietnam by comparing the pre‐ and post‐privatization financial and operating performance of 121 former state‐owned enterprises (SOEs). We find significant increases in profitability, sales revenues, efficiency and employee income. Results of applying the ‘difference‐in‐difference’ (DID) method, wherein a control group of firms is used to pick up the influence of other determinants of firm performance, suggest that the performance improvements may indeed be associated with equitization. Regression analyses reveal that firm size, residual state ownership, corporate governance and stock market listing are key determinants of performance improvements.     

The impact of bank competition and concentration on industrial growth

This paper studies whether bank competition affects growth of non-banking industries. We find that non-cooperative bank competition and stability promote industrial growth robustly. Bank concentration may also affect growth positively; the latter effect increases for higher levels of competition.     

The impact of dual network structure on firm performance: the moderating effect of innovation strategy

ABSTRACT

Firm innovation is embedded in a collaboration network among researchers and a knowledge network composed of knowledge elements; the two networks are decoupled. Guided by social network theory, this study puts forward the definition and the classification of firm dual network structure, probes into the influence of dual network structure on firm performance, and explores the alignment between innovation strategy and firm dual network structure. We conduct an empirical study of 183 listed companies in China from 2004 to 2018. It is found that the four types of dual network structure all have positive impacts on firm performance, and the impact of a collaboration network is slightly higher than that of a knowledge network. Besides, innovation strategy plays a positive moderating role in the relationship between dual network structure and firm performance. Our findings provide new ideas for firms to identify and optimise knowledge and collaboration network structures and match them with innovation strategy to improve performance.     

Structure and performance of the service sector in transition economies1

This paper examines the performance of the service sector in the Eastern European transition economies during the 1997–2004 period. The performance of the service sector as a whole and of its sub‐sectors is very heterogeneous within the region. Service sub‐sectors that are information and communications technology producers or users and those using skilled labour more intensively exhibit the highest labour productivity growth. Our estimates show a positive and significant effect of liberalization on service labour productivity growth that is stronger for sub‐sectors that are more distant from the technological frontier. Service liberalization is also shown to have a positive effect on labour productivity levels and growth of downstream manufacturing industries.     

The impact of third-country effects and economic integration on China's outward FDI

The study employs a spatial econometric model to explore the impact of third-country effects and economic integration on China's outward FDI (OFDI). The results show that the pattern of China's OFDI tends toward a complex FDI without third-country effects. The degree of economic integration and host country's political risk both have a negative influence on China's OFDI. Furthermore, greater cultural proximity between China and the host country, as well as greater per capita income (market size), both have significant benefits to China's OFDI. The host country's market opportunity has a significant negative effect on China's OFDI.     

The impact of product market regulation on productivity through firm churning: Evidence from European countries

Productivity performance in European countries has been a policy concern for several decades. This paper shows that productivity can be enhanced by product market policies which, by increasing competition and efficiency, facilitate higher rates of firms’ entry and exit (i.e. firm churning). Drawing on annual country-sector data for the period 2000–2014 across the EU countries, we find that: (i) competition-enhancing regulation is associated with a higher rate of firm churning; (ii) firm churning, in turn, appears to be positively related to higher total factor productivity at the sector level by facilitating the entry of new competitive firms and the exit of less productive ones. Overall, we conclude that stringent product market regulation can be indirectly associated, via its impact on business dynamism, with the somewhat weak productivity performance in a number of EU countries. Thus, our results point towards substantial productivity gains that could follow from the introduction of further competition-enhancing measures in product markets.     

Foreign direct investment under a weak rule of law

We have developed a self‐enforcing contract model to show that better economic fundamentals can help an area or a region under a weak rule of law – but with order – to attract foreign direct investments (FDIs), whereas lowering taxes does not necessarily help. Using a cross‐region Chinese dataset, we find evidence consistent with our theoretical analysis. Regional variations in tax rates and the perceived quality of formal contracting institutions are not correlated with regional FDI inflows, but leadership characteristics are. Most conventional economic factors have the predicted effects on FDIs. The finding that FDI is lower in locations where domestic private firms have better access to finance and where the air quality is poor is also new to the literature.     

Incentives and the Sorting of Altruistic Agents into Street‐Level Bureaucracies*

Many street‐level bureaucrats have the dual task of helping some clients, while sanctioning others. We develop a model of a street‐level bureaucracy, and we study the implications of its personnel policy on the self‐selection and allocation decisions of agents who differ in altruism towards clients. When bureaucrats are paid flat wages, they do not sanction, and the most altruistic types sort into bureaucracy. Pay‐for‐performance induces some bureaucrats to sanction, but it necessitates an increase in compensation, which can result in sorting from the top and bottom of the altruism distribution. We also explain why street‐level bureaucrats often experience an overload of clients.     

The trade-off between innovation and defense industrial policy: A simulation model analysis of the Norwegian defense industry

The paper investigates the trade-off between innovation and defense industrial policy. It presents an agent-based simulation model calibrated for the Norwegian defense industry that compares different policy scenarios and examines the effects of a pending EU market liberalization process. The paper points to two main results. (1) It finds that a pure scenario where national authorities focus on, and provide support exclusively for, either a) international competitiveness or b) national defense and security objectives, is more Pareto efficient than a corresponding mixed strategy where policy makers simultaneously pursue both international competitiveness and defense and security objectives. (2) Under the conditions of the new EU liberalization regime, it finds that a stronger and more visible trade-off will emerge between international competitiveness and national defense and security objectives. Policy makers will have to choose which to prioritize, and set a clear agenda focusing on one of the two objectives.     

The effect of pharmacogenetic profiling with a clinical decision support tool on healthcare resource utilization and estimated costs in the elderly exposed to polypharmacy

Objective:

To compare healthcare resource utilization (HRU) and clinical decision-making for elderly patients based on cytochrome P450 (CYP) pharmacogenetic testing and the use of a comprehensive medication management clinical decision support tool (CDST), to a cohort of similar non-tested patients.

Methods:

An observational study compared a prospective cohort of patients ≥65 years subjected to pharmacogenetic testing to a propensity score (PS) matched historical cohort of untested patients in a claims database. Patients had a prescribed medication or dose change of at least one of 61 oral drugs or combinations of ≥3 drugs at enrollment. Four-month HRU outcomes examined included hospitalizations, emergency department (ED) and outpatient visits and provider acceptance of test recommendations. Costs were estimated using national data sources.

Results:

There were 205 tested patients PS matched to 820 untested patients. Hospitalization rate was 9.8% in the tested group vs 16.1% in the untested group (RR?=?0.61, 95% CI?=?0.39–0.95, p?=?0.027), ED visit rate was 4.4% in the tested group vs 15.4% in the untested group (RR?=?0.29, 95% CI?=?0.15–0.55, p?=?0.0002) and outpatient visit rate was 71.7% in the tested group vs 36.5% in the untested group (RR?=?1.97, 95% CI?=?1.74–2.23, p?<?0.0001). The rate of overall HRU was 72.2% in the tested group vs 49.0% in the untested group (RR?=?1.47, 95% CI?=?1.32–1.64, p?<?0.0001). Potential cost savings were estimated at $218 (mean) in the tested group. The provider majority (95%) considered the test helpful and 46% followed CDST provided recommendations.

Conclusion:

Patients CYP DNA tested and treated according to the personalized prescribing system had a significant decrease in hospitalizations and emergency department visits, resulting in potential cost savings. Providers had a high satisfaction rate with the clinical utility of the system and followed recommendations when appropriate.