Explaining the Persistence of Profits: A Time-Varying Approach

The present paper analyzes the determinants of profit persistence using a newly developed methodology that allows the persistence parameter to vary with time. It therefore addresses a significant limitation of previous persistence models, which have assumed unrealistically that persistence is fixed over relatively long periods of 20 years and upwards. The concentration of the industry is found to have a significant positive impact on profit persistence. However, at firm level, market share and risk have a surprisingly negative impact     

Human capital,age structure and growth fluctuations

This article assesses the empirical relationship between per capita income growth fluctuations and the age-structured human capital variations across four groups of geographically clustered developed and developing countries from spatial perspective. We estimate a spatial Vector Autoregressive (VAR) model of income dynamics where the distance between countries is defined on relational space based on their similarity in appropriation tendency of human capital in the production processes. These distances are computed using a newly developed human capital data set which fully characterizes the demographic structure of human capital, and thus underlines the joint relevance of demography and human capital in economic growth. Spatial effects on growth interdependence and complementarity are then explored with respect to the proposed distance metrics. Our results imply that significant cross-country growth interdependence based on human capital distances exists among defined country groups suggesting the need for a cooperative policy programme among them. We also find that the relationship between economic growth and human capital is highly nonlinear as a function of the proposed human capital distance.     

Financial consequences of a payment-by-results scheme in Catalonia: gefitinib in advanced EGFR-mutation positive non-small-cell lung cancer

Background: In 2011 the first payment-by-results (PbR) scheme in Catalonia was signed between the Catalan Institute of Oncology (ICO), the Catalan Health Service, and AstraZeneca (AZ) for the introduction of gefitinib in the treatment of advanced EGFR-mutation positive non-small-cell lung cancer. The PbR scheme includes two evaluation points: at week 8, responses, stabilization and progression were evaluated, and at week 16 stabilization was confirmed. AZ was to reimburse the total treatment cost of patients that failed treatment, defined as progression at weeks 8 or 16.

Objective: To estimate the financial consequences of this PbR reimbursement model and determine the perception of the stakeholders involved in the agreement.

Methods: Differential drug costs between two scenarios, with and without the PbR, were calculated. A qualitative investigation of the organizational elements was performed by interviewing the parties involved in the agreement.

Results: Forty-one patients were included from June 2011 to October 2013 and assessed at two evaluation points. Clinical results were comparable to those observed in the pivotal studies of gefitinib. The difference in the cost of gefitinib using the PbR compared to the traditional purchasing scenario was 6.17% less at 8 weeks, 11.18% at 16 weeks and 4.15% less for the overall treatment. The PbR resulted in total savings of around €36,000 (€880 per patient). From an operational and organizational perspective, the availability of adequate data systems to measure outcomes and monitor accountability and the involvement of healthcare professionals were acknowledged as crucial.

Conclusions: Tangible and intangible benefits were identified with respect to the interests of the parties involved. This has led to the incorporation of innovation for patients under acceptable conditions.     

China's Belt and Road Initiative: Can Europe Expect Trade Gains?

The Belt and Road Initiative (BRI) aims to improve cross‐border infrastructure to reduce transportation costs across a massive geographical area between China and Europe. We estimate how much trade might be created among Belt and Road (B&R) countries as a consequence of the reduction in transportation costs (both railway and maritime) and find that European Union countries, especially landlocked countries, will benefit considerably. This is also true for Eastern Europe and Central Asia and, to a lesser extent, South‐East Asia. In contrast, if China were to seek to establish a free trade area within the B&R region, EU member states would benefit less, while Asia would benefit more. Xi Jinping's current vision for the B&R, centered on improving transport infrastructure, is advantageous for Europe as far as trade creation is concerned.     

The effects of wind generation capacity on electricity prices and generation costs: a Monte Carlo analysis

We use Monte Carlo analysis to examine the potential of increased renewable generation to provide a hedge against variability in energy prices and costs. Fuel costs, electricity demand and wind generation are allowed to vary and a unit commitment and economic dispatch algorithm is employed to produce cost-minimizing generation schedules under different levels of installed wind capacity. Increased wind capacity reduces the mean and the variance of production costs but only the variance of electricity prices. Wind generators see their market revenues increase while consumer payments and fossil generator profits do not considerably vary as wind capacity increases. Risk aversion is captured by considering the conditional value-at-risk for both consumers and producers. The optimal level of wind generation increases as risk aversion increases due to the potential of wind to act as a hedge against very high electricity prices in high fuel price scenarios.     

INDIVIDUAL DETERMINANTS OF SELF‐EMPLOYMENT ENTRY: WHAT DO WE REALLY KNOW?

The analysis of the decision to enter into self‐employment is a hot topic in the economic literature. Among the elements that most directly influence this decision, individual factors are central. This study produces a comprehensive survey of the impact of these factors, covering both the theoretical arguments and the main conclusions emerging from the empirical studies. We analyze 12 critical determinant factors of the entry into self‐employment grouped into seven categories: (1) basic individual characteristics (gender, age, marital status, and children); (2) family background (parents and spouse); (3) personality characteristics; (4) human capital (education and experience); (5) health condition; (6) nationality and ethnicity; and (7) access to financial resources. While for some of the factors solid conclusions can be found, for others additional research is still needed in order to shed further light on their influence.     

Gender differences in occupational mobility – evidence from Portugal

In this paper we evaluate if gender influences the pattern of upward and downward occupational mobility. With data for Portugal in the period 1998–2009, we find that women have a lower probability of upward mobility and a higher probability of downward mobility. The results also reveal the importance of some other determinant factors, especially education and initial occupation. Additionally, considering an analysis in which we group occupations into four ranked categories (low, medium-low, medium-high, and high level occupations), we confirm that the determinants of occupational mobility depend on the ranking of the initial occupation. This analysis allows us to conclude that the unfavorable pattern of occupational mobility in the case of women is due, essentially, to the disadvantage they have at the bottom of the distribution. On the contrary, in the top occupations, the results suggest the existence of equality between genders.     

Micro-behaviors and structural properties of knowledge networks: toward a ‘one size fits one’ cluster policy

The economic returns of cluster policies have been recently called into question. Based on a “one size fits all” approach consisting in boosting R&D collaborations and reinforcing network density, cluster policies are suspected to have failed in reaching their objectives. The paper proposes to go back to the micro foundations of clusters in order to disentangle the links between the long run performance of clusters and their structural properties. We use a simple agent-based model to shed light on how individual motives to build knowledge relationships can give rise to emerging structures with different properties, which imply different innovation and renewal capacities. The simulation results are discussed in a micro-macro perspective, and motivate suggestions to reorient cluster policy guidelines towards more targeted public-funded incentives for R&D collaboration.     

On Export Composition and Growth

The hypothesis that exports in technology-intensive industries have a higher potential for positive externalities coupled with higher productivity levels (due to higher rates of capitalization) is tested using a comprehensive and detailed data set, covering 45 industrialized and developing countries and including exports of 33 industries over the time period 1981–1997. The estimation results, using a random effects model and employing an instrumental variables estimator, support the hypothesis of qualitative differences between high- and low-tech exports with respect to output growth. The superior performance of high-tech exports stems from their positive productivity differential to the domestic sector, while the externality effect is not significant at any meaningful level of significance. The positive productivity differential is only significant for the subsample of developing countries. No significant effects were found to be present in the subsample of OECD member countries. JEL no. O41, O50, C23, F14