Economic evaluation of healthcare technology improving the quality of social life: the case of assistive technology for the disabled and elderly

Public investments in healthcare technology for the disabled and elderly to improve the quality of social life have been vigorous, but the economic evaluation of the assistive technology is still lacking. Under this circumstance, the purpose of this study is to analyse the socio-economic value of developing assistive technologies with the potential to improve the quality of social life, especially for disabled and elderly individuals. Based on a survey of 400 respondents, the spike model, a special form of the contingent valuation method (CVM) is applied to assess the value of assistive technologies. In Korea, a household’s willingness-to-pay (WTP) for the development of assistive technologies is US$4.26 per year, on average, in the form of a government-levied tax; although many people express zero WTP for the development of these technologies, people with higher household savings, higher levels of education and higher levels of charity donations have a higher WTP for the development of assistive technology. We conclude that although assistive technologies have considerable economic value many people express zero WTP for the development of these technologies. Therefore, political and social educational efforts are necessary to reach social consensus on the government investment in such technologies.     

ILLIQUIDITY COMPONENT OF CREDIT RISK – THE 2015 LAWRENCE R. KLEIN LECTURE

We provide a theoretical decomposition of bank credit risk into insolvency risk and illiquidity risk, defining illiquidity risk to be the counterfactual probability of failure due to a run when the bank would have survived in the absence of a run. We show that illiquidity risk is (i) decreasing in the “liquidity ratio”—the ratio of realizable cash on the balance sheet to short‐term liabilities; (ii) decreasing in the excess return of debt; and (iii) increasing in the solvency uncertainty—a measure of the variance of the asset portfolio.     

Asymmetry and nonstationarity for a seasonal time series model

Tests for symmetry and seasonal unit roots are developed for an extended model of Hylleberg et al. (1990. Seasonal integration and cointegration. Journal Econometrics 44, 215–238.) which can represent both partial seasonal unit roots and threshold effects. Methods based on ordinary least squares (OLS) estimation and instrumental variable (IV) estimation are proposed and compared. For adjusting mean functions, ordinary mean adjustment and recursive mean adjustment are both considered. Several tests are constructed from various combination of estimation schemes and mean adjustment schemes. Among the tests, the tests based on IV-estimation are recommended because they have very simple limiting null distributions and have finite sample power properties comparable to those based on the OLSE. The recommended tests are applied to a US unemployment rate data set and find evidences for both nonstationarities associated with zero frequency and threshold effects.     

Technology Foresight Activities in Korea and in Countries Closing the Technology Gap

This article discusses technology foresight in selected countries which were politically dependent (colonial) before World War II and considered as “under-developed” in the post-war period. Most of them show considerable economic dynamism in the 1990s, which is not always based on their own scientific and technological capability. For this group of countries, national exercises in technology foresight are likely to be an important tool in planning the strategic direction for science and technology development in order to catch up economically as well as socially. In Korea, which has recently become an OECD member, comparative advantage based on factors such as low wages and protected industries are no longer effective as the economy is now wide open to the world. Foresight is being used to look at comparative advantages based on Korea’s own knowledge-creating activities. In southeast Asian countries, foresight is still in an infant stage, but most of these have medium-term planning cycles and have undertaken longer-term vision studies. In South Africa, a national foresight project is running, as is an adapting foresight process to make the large national research organization fit. In Latin America, an agenda has been set up which indicates the desire of several countries to engage in foresight activities using different approaches.     

Some Bad News Is Good News for Foreign Investors: The Case of Intellectual Property Rights Infringement in China

Despite China's attractiveness to foreign investors, intellectual property rights (IPR) protection in China has not caught up with international standards. This research aims to quantify the relationships between IPR violations, government effectiveness, and foreign direct investment (FDI) inflows in the context of China. Our econometric modeling and estimation based on provincial level data over 2002‐2012 show that in an early development stage of law and regulatory enforcement, the bad news of a rising number of IPR dispute cases signals the good news of an improvement in law and regulatory enforcement, which encourages IPR owners to raise legal cases. By contrast, in the later development stage, when law and regulatory enforcement has become much more effective, the bad news of a rising number of IPR disputes manifests itself as very bad news. Furthermore, this study confirms that FDI inflows enhance IPR protection through improving government effectiveness, and government effectiveness is one of the key factors promoting FDIs. © 2016 Wiley Periodicals, Inc.     

Market Segmentation Effects in Corporate Credit Rating Changes: The Case of Emerging Markets

We examine stock market reactions to corporate credit rating changes in 26 emerging market countries included in the Morgan Stanley Capital International (MSCI) Emerging Market Index. We hypothesize and test the notion that emerging market firms in the American Depository Receipts (ADRs) markets are more likely to purchase ratings from the Big Two (Moody’s and S&P), and that they react more strongly to the announcements of corporate rating changes by Moody’s or S&P than to those of raters in local markets. We compare the effect of credit rating changes of the Big Two in two emerging stock markets: local markets (local currencies) and ADR markets (U.S. dollars). We find significant price reactions in the ADR markets, and insignificant reactions in local markets, and conclude that there is capital market segmentation in ADR markets for credit rating changes of emerging market firms. We find evidence that investors react more strongly in the ADR markets than local markets because they require higher costs of capital for firms cross-listed both in the ADR markets and local markets due to greater expected bankruptcy costs and foreign exchange risks of those firms. We also report that stock markets react significantly, not only to rating downgrades, but also to upgrades in the ADR markets.

MVNO services: Policy implications for promoting MVNO diffusion

This study seeks to validate a comprehensive model of consumer acceptance in the context of MVNOs. While the MVNO business model has gained much popularity over the past few years, it shows a sign of drastic decrease. This study uses the unified theory of acceptance and the use of technology (UTAUT) model with constructs from the innovation diffusion theory (IDT) such as compatibility, relative advantage and social influence. Structural equation modeling is used to construct a predictive model of attitudes toward the MVNO services. While the model confirms the classical role of technology adoption factors (i.e., perceived usefulness and ease of use are key antecedents to consumers’ intention), the results also show that users’ intention and usage are influenced by IDT factors. The model brings together extant research on MVNO and provides an important cluster of antecedents to eventual technology acceptance via constructs of behavioral intention to use and to the actual MVNO usage. Policy implications of MVNO are discussed in terms of consumer adoption and market diffusion.     

The Benefits of Diverse Preferences in Library Consortia

We study the case in which a library consortium increases the aggregate payoff of the member libraries. We find that libraries with similar preferences are likely to lose from building a consortium and that those with diverse preferences are likely to gain by doing so. Combining libraries with diverse preferences implies that their valuation for different publishers' journals is more symmetric, which intensifies competition among publishers for scarce combined budgets. A tension between short term and long term considerations might generate a ‘library consortium trap.’ Our insight can be applied to other buyer groups as long as competition is generated by buyers' budget constraints.     

Measuring the Connectedness of the Global Economy

We develop a technique to exploit forecast error variance decompositions to evaluate the macroeconomic connectedness embedded in any multi-country macroeconomic model with an approximate vector autoregressive (VAR) representation. We apply our technique to a large global VAR model covering 25 countries and derive vivid representations of macroeconomic connectedness. We find that the US exerts a dominant influence in the global economy and that Brazil, China, and the Eurozone are also globally significant. Recursive analysis over the period of the global financial crisis shows that shocks to global equity markets are transmitted rapidly and forcefully to real trade flows and real GDP.