Cherries for sale: The incidence and timing of cross-border M&A

This paper develops a model of cross-border M&A activity that features firm-level productivity shocks and endogenous export activity. We show that foreign firms will be relatively more attracted to targets in the domestic country that had high productivity levels that induced them to invest in large export networks several years prior to acquisition, but subsequently experienced a negative productivity shock (i.e., cherries for sale). From the theory we derive a dynamic panel binary choice empirical model to predict cross-border M&A activity, and find strong evidence for our hypotheses connecting the evolution of firm-level productivity to the ultimate targets of cross-border acquisitions using French firm-level data.     

Developing a preference-based utility scoring algorithm for the Psoriasis Area Severity Index (PASI)

Abstract

Introduction: It is challenging to identify health state utilities associated with psoriasis because generic preference-based measures may not capture the impact of dermatological symptoms. The Psoriasis Area Severity Index (PASI) is one of the most commonly used psoriasis rating scales in clinical trials. The purpose of this study was to develop a utility scoring algorithm for the PASI.

Methods: Forty health states were developed based on PASI scores of 40 clinical trial patients. Health states were valued in time trade-off interviews with UK general population participants. Regression models were conducted to crosswalk from PASI scores to utilities (e.g. OLS linear, random effects, mean, robust, spline, quadratic).

Results: A total of 245 participants completed utility interviews (51.4% female; mean age?=?45.3?years). Models predicting utility based on the four PASI location scores (head, upper limbs, trunk, lower limbs) had better fit/accuracy (e.g. R², mean absolute error [MAE]) than models using the PASI total score. Head/upper limb scores were more strongly associated with utility than trunk/lower limb. The recommended model is the OLS linear model based on the four PASI location scores (R²?=?0.13; MAE?=?0.03). An alternative is recommended for situations when it is necessary to estimate utility based on the PASI total score.

Conclusions: The derived scoring algorithm may be used to estimate utilities based on PASI scores of any treatment group with psoriasis. Because the PASI is commonly used in psoriasis clinical trials, this scoring algorithm greatly expands options for quantifying treatment outcomes in cost-effectiveness analyses of psoriasis therapies. Results indicate that psoriasis of the head/upper limbs could be more important than trunk/lower limbs, suggesting reconsideration of the standard PASI scoring approach.     

A new approach to measure tactical voting: evidence from the British elections

Although tactical voting attracts a great deal of attention, it is very hard to measure as it requires knowledge of both individuals’ voting choices as well as their unobserved preferences. In this article, we present a simple empirical strategy to nonparametrically identify tactical voting patterns directly from balloting results. This approach allows us to study the magnitude and direction of strategic voting as well as to verify which information voters and parties take into account to determine marginal constituencies. We show that tactical voting played a significant role in the 2010 election, mainly for Liberal–Democratic voters supporting Labour. Moreover, our results suggest that voters seem to form their expectations based on a national swing in vote shares rather than newspaper guides published in the main media outlets or previous election outcomes. We also present some evidence that suggests that campaign spending is not driving tactical voting.     

Consumption versus Demand‐Recovery after BSE?: A Fuller Analysis

Consumption versus Demand ‐ Recovery after BSE?:A Fuller Analysis Counterpoint–Hubbard – By 1999 consumption of beef in the UK had recovered to its pre‐BSE level of 1995, but what about demand? Simple market analysis demonstrates that given an initial negative shift in the demand schedule, there are five possible combinations of subsequent shifts in demand and supply that result in consumption returning to its original level. Thompson and Tallard (EuroChoices, Spring 2003) contend that demand did not recover until 2001, which implies a positive shift in supply, i.e. more beef supplied at any given price. A more likely outcome, however, is a negative supply shift, because of additional BSE‐related costs and the removal of beef from the food chain. This requires demand to have more than recovered by 1999. Thus any investigation of the impact of BSE on the beef market needs to consider supply as well as demand changes. Reply–Thompson Consumption data alone are an inappropriate benchmark to evaluate shifts in demand caused by BSE. Our estimates of the demand shift account for changes in the determining economic factors, namely meat prices and income; but consumer demand does not depend directly on beef supply. Full market analysis, however, could add useful insight if based on similar evaluations of shifts in supply, trade and stocks. La demande s'est elle rétablie au même niveau que la consommation après I'ESB ? Un complément ?analyse. Counterpoint–Hubbard En 1999, la consommation de viande bovine au Royaume‐Uni a retrouvé son niveau de 1995, avant ?EapidÉmie ?ESB. Mais qu'en est‐il de la demande ? La théorie élémentaire des marchés montre qu'à partir ?une chute initiale donnée, le retour au niveau de consommation originel peut résulter de cinq combinaisons de déplacements dans les courbes ?offre et de demande. Thompson et Tallard (Eurochoices, printemps 2003) soutiennent que la demande n'est pas revenue à son niveau original avant 2001, ce qui suppose un déplacement vers le haut de la courbe ?offre, c'est‐à‐dire, une augmentation de ?offre de bceuf pour un prix donné quelconque. Un glissement vers le bas de la courbe ?offre est cependant bien plus vraisemblable, du fait des coûts supplementaires liés aux mesures sanitaires et à?interruption de la présence du b?uf dans les filières alimentaires. Cela implique que la demande en 1999 aurait plus que compensé la chute antérieure. Ainsi, toute analyse de ?impact de ?ESB sur le marché du b?uf doit envisager la possibilityé de changements aussi bien dans ?offre que dans la demande. Réponse de Thompson A elles seules, les données concernant la consommation sont bien insuffisantes pour évaluer les changements dans les courbes de demande apportés par ?ESB. Notre estimation du glissement de la demande résulte de ia considération des facteurs qui la commandent, à savoir le prix et les revenus, sans que la demande dépende directement de ?offre. Cependant, une analyse complète du marché pourrait en effet Jeter une certaine lumière sur la question, à condition ?être basée sur des évaluations cohérentes des glissements dans ?offre, le commerce extérieur et les stocks. Verbrauch versus Nachfrage –Erholung nach dem BSE‐Skandal? Eine ausführlichere Analyse Counterpoint–Hubbard Bis zum Jahr 1999 hatte sich der Verbrauch von Rindfleisch in Großbritannien wieder auf den Stand vor dem BSE‐Skandal aus dem Jahr 1995 eingestellt, was aber war mit der Nachfrage geschehen? Eine einfache Marktanalyse zeigt, dass bei einer anfanglichen negativen Verschiebung der Nachfrage fünf Kombinationen nachfolgender Verschiebungen möglich sind, die dazu führen, dass der Verbrauch wieder seinen ursprünglichen Stand erreicht. Thompson und Tallard (EuroChoices, Frühjahr 2003) behaupten, dass sich die Nachfrage erst im Jahr 2001 erholt habe, was eine positive Verschiebung des Angebots impliziert, d.h. ein höheres Rindfleischangebot zu jedem beliebigen Preis. Ein wahrscheinlicheres Ergebnis wäre jedoch eine negative Angebotsverschiebung aufgrund von zusätzlichen mit BSE verbundenen Kosten und ein Herausfallen von Rindfleisch aus der Nahrungskette. Dies bedeutet, dass sich die Nachfrage bis zum Jahr 1999 mehr als erholt haben muss. Daher ist es erforderlich, dass jede Untersuchung der Auswirkung von BSE auf den Rindfleischmarkt sowohl Angebots‐ als auch Nachfrageanderungen berücksichtigt. Antwort–Thompson Verbrauchsdaten allein reichen nicht aus, um durch BSE verursachte Nachfrageverschiebungen zu evaluieren. Unsere Schätzungen zur Nachfrageverschiebung erklären die Änderungen in den ökonomischen Bestimmungsgründen, Fleischpreise und Einkommen; dieVerbrauchernachfrage hängt allerdings nicht direkt vom Rindfleischangebot ab. Eine ausführliche Marktanalyse könnte jedoch zusätzliche nützliche Erkenntnisse erbringen, wenn sie auf ähnlichen Bewertungen von Verschiebungen des Angebots, des Handels und der Lagerbestände beruht.     

Trade in the Triad: how easy is the access to large markets?

Abstract. In this paper, we measure market access between the United States, the EU, and Japan (the Triad), using the effect of national borders on trade patterns. We investigate overall and industry‐level trends of bilateral trade openness and provide explanations for those using proxies for bilateral observed protection (tariffs and NTBs), home bias of consumers, product differentiation, and levels of FDI. The explanations related to actual protection, home bias and substitutability of goods put together explain a large part of the border effect between blocs of the Triad, although they do not explain the whole of the border effect puzzle. JEL classification: F12, F15     

Impacts of Immigration on an Ageing Welfare State: An Applied General Equilibrium Model for France

Immigration is often seen as an instrument of adaptation for ageing countries. In this paper, we evaluate, using a dynamic general equilibrium model, the contribution of migration policy in reducing the tax burden associated with the ageing population in France. Four alternative scenarios, compared with a baseline scenario based on official projections, are simulated with the aim of quantifying the effects of immigration on French social protection finances. We show that the age and, to a lesser extent, the skill structure of immigrants are the key features that mainly determine the effects on social protection finances. Overall, these effects are all the more positive in the short to medium term if the migration policy is selective (in favour of more skilled workers). In the long term, the beneficial effects of a selective policy may disappear. But whatever the degree of selectivity of the migration policy, the financial gains from higher consequent migration flows are relatively moderate compared with the demographic changes implied by ageing.     

Wealth Breeds Decline: Reversals of Leadership and Consumption Habits

In a two-region model, we formalize Kindlebergers idea that wealth breeds first more wealth, and then decline: when one region leads, its inhabitants develop consumption habits incompatible with the necessary investment in knowledge to remain the leader. This gives the other region a window of opportunity to gain economic primacy. The theory suggests that differences across regions that have similar characteristics may persist even if physical capital flows from rich to poor regions. We study patterns of overtaking, alternating primacy, irreversible decline, and monotonic convergence, according to the initial dispersion of knowledge and the strength of consumption habits. Even though exogenous factors may matter on some occasions, we show that they are not necessary to reverse economic leadership.