Is inflation targeting or the fixed exchange rate more effective for attracting FDI into developing countries?

This article investigates which monetary policy regime – inflation targeting or the fixed exchange rate – is more effective for attracting FDI inflows into developing countries. Using propensity score matching and the difference-in-differences estimator, we find no evidence that adopting an inflation targeting regime would be more effective than adopting a fixed exchange rate, and vice versa, in encouraging FDI inflows.     

Cost-effectiveness of sacubitril/valsartan versus enalapril in patients with heart failure and reduced ejection fraction

Background: Sacubitril/valsartan reduces cardiovascular death and hospitalizations for heart failure (HF). However, decision-makers need to determine whether its benefits are worth the additional costs, given the low-cost generic status of traditional standard of care.

Aims: To evaluate the cost-effectiveness of sacubitril/valsartan compared to enalapril in patients with HF and reduced ejection fraction, from the Singapore healthcare payer perspective.

Methods: A Markov model was developed to project clinical and economic outcomes of sacubitril/valsartan vs enalapril for 66-year-old patients with HF over 10 years. Key health states included New York Heart Association classes I–IV and deaths; patients in each state incurred a monthly risk of hospitalization for HF and cardiovascular death. Sacubitril/valsartan benefits were modeled by applying the hazard ratios (HRs) in PARADIGM-HF trial to baseline probabilities. Primary model outcomes were total and incremental costs and quality-adjusted life years (QALYs) and the incremental cost-effectiveness ratio (ICER) for sacubitril/valsartan relative to enalapril

Results: Compared to enalapril, sacubitril/valsartan was associated with an ICER of SGD 74,592 (USD 55,198) per QALY gained. A major driver of cost-effectiveness was the cardiovascular mortality benefit of sacubitril/valsartan. The uncertainty of this treatment benefit in the Asian sub-group was tested in sensitivity analyses using a HR of 1 as an upper limit, where the ICERs ranged from SGD 41,019 (USD 30,354) to SGD 1,447,103 (USD 1,070,856) per QALY gained. Probabilistic sensitivity analyses showed the probability of sacubitril/valsartan being cost-effective was below 1%, 12%, and 71% at SGD 20,000, SGD 50,000, and SGD 100,000 per QALY gained, respectively.

Conclusions: At the current daily price sacubitril/valsartan may not represent good value for limited healthcare dollars compared to enalapril in reducing cardiovascular morbidity and mortality in HF in the Singapore healthcare setting. This study highlights the cost-benefit trade-off that healthcare professionals and patients face when considering therapy.     

Education and income attraction: an online dating field experiment

Prior studies have found a robust correlation in the education of dating and married couples. However, there is little evidence to suggest that such correlations are causal, that is, for the sake of relationship public goods such as the pleasures of the enlightened conversations that only a common high level of education might support. Being empirical studies, they cannot rule out couples matching on other characteristics like income, height or health, which are correlated with education, from driving results. We contribute to this literature by randomly assigning high and low education and income levels to 388 artificial male and female profiles on a large online dating website in China. We then counted thousands of ‘visits’ – clicks on abbreviated profiles, which included education and income information, from search engine results. We found that men’s visits to female profiles were unaffected by the profile’s assigned education level, while women’s visits to male profiles increase with the profile’s education. However, that increase was not increasing on the women’s own level of education, though their visits to the higher income male profiles was increasing on their own education. Our findings suggest that the relationship public goods that stem from a common level of high education are not at the forefront of either men’s or women’s minds before their first dates, when one might expect such goods to play a critical role in the decision to develop the relationship further.     

Options in technology investment games: The real world TFT-LCD industry case

The Thin Film Transistor-Liquid Crystal Display (TFT-LCD) industry has demonstrated that the investment of huge amounts of capital in new plants is a key factor for success. Decisions about investing in the latest generation of plant involve billions of dollars and a great deal of uncertainty. Moreover, the industry shows distinct oligopolistic characteristics, so the first mover's reactions must be considered when making capital decisions in such competitive environments. The traditional net present value (NPV) rule is a ‘now-or-never’ concept that fails to capture the need for managerial flexibility, which is especially important when investments are irreversible and involve a great deal of uncertainty. In this paper, we use a combination of real options and game theory to analyze the investment strategies of a case company in the TFT-LCD industry. The results show that real options reveal the value of flexibility, which NPV fails to consider. In addition, we apply game theory analysis to different investment strategies to demonstrate the decision-making processes used by competing companies.     

Modelling the linkages between US and Latin American stock markets

This paper examines the linkages between US and Latin American stock markets during the 1995–2002 period using recently developed cointegration techniques that allow for structural shifts in the long-run relationship. Results suggest that when conventional cointegration tests are applied, a long-run relationship is found only in the cases of Brazil and Mexico for the Dow Jones (DJ) index, and in the case of Brazil for the Standard and Poor's 500 (SP500) index. In contrast, if the possibility of structural breaks is introduced, strong evidence is found in favour of such a relationship between the Argentine, Chilean and Venezuelan indices and the DJ index after the 1998 financial turmoil, and between the Brazilian and Mexican indices and the DJ index before such turbulence, while some marginal cointegration is detected between the Mexican and DJ indices from February 1998. Additionally, evidence is found of a cointegrating relationship between the Argentine, Chilean and Mexican indices and the SP500 index from August 1998, April 1999 and October 1999, respectively, and between the Brazilian and the SP500 indices before November 1997, as well as some marginal cointegration between the Mexican and SP500 indices before October 1999. The results suggest that the gains from international diversification for investors with long holding periods is limited.     

Professors and hamburgers: an international comparison of real academic salaries

In recent years, academic staff unions and associations have argued for higher salaries for academics on the grounds that existing salaries have not kept pace with inflation, are well below commercial salaries and, most glaringly, are much lower than the salaries of their overseas counterparts. However, most international comparisons are made based on exchange rate conversions, which is inappropriate since purchasing power differentials are only reflected in exchange rates in the long term. Furthermore, the volatility of exchange rates make such conversions highly inaccurate. A comparison is provided of real academic salaries by converting the nominal salaries in each country to their purchasing power equivalents, using the Big Mac Index. Our results show that real academic salaries are highest in Hong Kong and Singapore, relative to the developed countries, while Hong Kong tax and social security deductions are lowest. Furthermore, real salary levels, combined with intrinsic considerations such as the quality-of-life, indicate that Canada and New Zealand are unattractive places for visiting/migrating academics, while Australia and the USA are relatively attractive. It is suggested that these findings could be of use to policy-makers and academic unions in salary negotiations, as well as academics making relocation decisions.     

Dynamic Hedging Effectiveness in South Korean Index Futures and the Impact of the Asian Financial Crisis

This paper focuses on the impact of the 1997 Asian financial market crisis upon hedging effectiveness within the KOSPI 200 stock index and index futures markets. The paper utilizes the inter-temporal relationship between the two markets to examine the characteristics of several minimum variance hedge ratios. It also examines the performances of alternative hedging strategies for dynamic portfolio management in the presence of cointegrated time-varying risks. The results show a decline in the persistence of conditional volatility within market prices after the crisis. This decline leads to the relative performance of utilizing constant hedge ratios to increase, though not significantly so to guarantee a superior performance over more sophisticated time-varying hedge ratio strategies.     

Dominant stakeholders,activity and accountability discharge in the CSO sector

Civil society organisations (CSOs) comprise a diverse range of associations, including non‐governmental organisations (NGOs), community groups, political parties and social networks. Nevertheless, despite heterogeneity, regulators, funders and donors often treat CSOs as homogeneous when demanding accountability. This paper highlights differences in to whom CSOs across different categories (or types) perceive themselves to be accountable, what for and the different practices they undertake to discharge accountability. It calls for stakeholders to acknowledge diversity in accountability across different CSO types. This survey‐based research finds CSOs weight upwards and downwards stakeholders equally, and undertake voluminous reporting. They would benefit from negotiating multiple‐use mechanisms, especially with dominant stakeholders. In combining stakeholder and accountability theory, the research highlights specific CSO types needing further study.     

The influence of organizational context on the managerial turnover–performance relationship

This study performs a comprehensive examination of organizational context in the relationship between managerial turnover and organizational performance. Using theoretical frameworks of human and social capital, we focus on the moderating roles of entity size, employment system, industry brand, and location. To test our hypotheses, we worked with the company records of a multinational fashion retail group with more than 4,000 stores grouped into eight different brands and 100,000 employees in more than 31 countries. To estimate the causal contextual effects of the relationship between voluntary managerial turnover and organizational performance, we designed a quasi-experiment using propensity score matching analysis. Our results show that the dysfunctional side of managerial turnover is significant for stores that are large, for stores managed under a primary employment system, for brands operating with higher levels of service orientation, and for countries with more restrictive employment protection legislation. We discuss the implications of these findings for practice and for future research.     

The Wealth Effects of REIT Property Acquisitions and Dispositions: the Creditors’ Perspective

The Journal of Real Estate Finance and Economics - Prior studies of REIT property transaction activity focus on shareholder wealth effects. This study examines the effects of property acquisitions,...