Where Do Breakthroughs Come From? Characteristics of High‐Potential Inventions

Breakthrough technological inventions create the foundation for many innovative opportunities. Through novel scientific fundamentals and unique combinations of knowledge, they form a new basis for technology development and innovation, shifting their industry's mindset about what is feasible and valuable. Prior research has, to date, characteristically taken an organizational‐level perspective on technology breakthroughs, seeking to explain the occurrence of breakthroughs as a function of firm‐level characteristics and processes. This tells us less, however, about the underlying knowledge structures of the technologies themselves. This research is based on the assumption that an examination of the knowledge foundations of high‐potential inventions can enrich our understanding about the underlying features of innovations that transform industries and advance societies. In this manner, we can clarify how certain technologies are advanced and extended, providing the basis for future discoveries. Our analysis focuses on high‐potential patents: those having the highest number of forward citations in a given class. We conduct this analysis on a sample of 298 breakthrough patents and two comparison nonbreakthrough groups in drug and semiconductor classes. Our results show that breakthrough technologies, compared with nonbreakthroughs, are more likely to build on: (1) the past technological developments of others, by backward citing and embodying knowledge from prior discoveries (earlier patents), but not one's own previous developments; (2) the latest technologies, by backward citing recent patents; (3) geographic proximity, evidenced by the fact that the focal patents backward cite patents from one's own country; and (4) greater technological breadth, evidenced by the fact that knowledge captured in the patents encompasses a larger number of technical fields. Based on these results, we frame the occurrence of breakthroughs as involving a process where these significant developments happen early in the progress of a technology, but after some relevant knowledge has accumulated. This reinforces the concept that a learning effect needs to occur before breakthroughs can happen. In addition, our findings suggest that the knowledge underlying breakthroughs is likely to come from other organizations or individuals, rather than the developing entity. They also incorporate broader insights from technological diversity but do not exhibit geographic diversity. Instead, they are associated with geographic proximity, which may better enable knowledge sharing and integration given the reliance on other entities and diverse knowledge.     

Can Micro Health Insurance Reduce Poverty? Evidence From Bangladesh

This article examines the impact of micro health insurance on poverty reduction in rural areas of Bangladesh. The research is based on household‐level primary data collected from the operating areas of the Grameen Bank during 2006. A number of outcome measures are considered; these include household income, stability of household income via food sufficiency and ownership of nonland assets, and the probability of being above or below the poverty line. The results show that micro health insurance has a positive association with all of these indicators, and this is statistically significant and quantitatively important for food sufficiency.     

DOES EDUCATION REDUCE INCOME INEQUALITY? A META‐REGRESSION ANALYSIS

This paper reexamines the effects of education on inequality through a comprehensive meta‐regression analysis of the extant empirical literature. We find that education affects the two tails of the distribution of income: Education reduces the income share of top earners and increases the share of the bottom earners. Education has been particularly effective in reducing inequality in Africa. Some of the results suggest that secondary schooling appears to have a stronger effect than primary schooling, though this finding is not always robust. The heterogeneity in reported estimates can be largely explained by differences in the specification of the econometric model and measure of inequality and education.     

Social trust and international trade: the interplay between social trust and formal finance

Social trust can facilitate access to alternative sources of finance to firms when formal finance is scarce or entails large transaction costs, especially in economies with less developed financial systems. Since exporting firms are relatively more dependent on external finance, we find that high levels of social trust in an economy with a relatively less developed financial sector have positive effects on exports. We combine the World Values Survey that provides information on social values and the UN Comtrade data for the period 1995–2007. Our analysis is carried out at the level of bilateral trade in 2-digit and 3-digit digit industry classifications that not only allows controlling for industry-level heterogeneities but also mitigates concerns of potential reverse causality.     

Financial Development, Economic Growth and Adaptive Efficiency： A Comparison between China and Pakistan

The strong economic growth in China is difficult to reconcile with its inefficient financial system. The puzzle of China＇s financial development and growth can be explained through a dynamic criterion of adaptive efficiency, rather than through allocative efficiency. Using the framework of an autoregressive distributed lag model, the present paper tests the hypothesis that the GDP growth rate is dependent on financial development along with other variables in China and Pakistan. The hypothesis cannot be rejected in both cases. However, the results show that economic growth has a negative relationship with credit to the private sector in China. We conclude that financial development is a source of China＇s high growth rate and that the banking system is still under an evolutionary process, involving the pursuit of social objectives instead of the sole objective of profit maximization. Our results provide some implications for other developing countries like Pakistan.     

Technical substitution of production factors through shadow pricing of factors

In underdeveloped countries, the market prices of factors do not reflect their economic opportunity cost, because of various market imperfections, state regulations, and population growth. Therefore, it is necessary that shadow prices of factors, instead of market prices of factors, should be used in the evaluation and selection of projects. Three alternative approaches to derive shadow prices have been outlined along with their shortcomings.     

Setting the course for quality assurance in higher education

While the application of quality management and total quality management in higher education (HE) are discussed in literature, quality assurance (QA) of academic programs—the main services offered by higher education institutes (HEIs)—is yet to be fully understood. Scepticism prevails on how the principles of QA—having origin in manufacturing sector—can be applied in HE. The main question addressed in this article is ‘how the academic processes can be designed for QA?’ This paper suggests the use of systems approach for a number of reasons: first systems approach brings wide range of stakeholders into organisational consciousness. Second, it allows deployment of QA strategically through the development of a mission for the HEI. Third, it allows alignment and realignment of academic processes with the mission of the HEI. Finally, it allows systematic management of QA implementation with an essential focus on continual improvement. The mentioned elements are embodied in a framework consisting of a list of diagnostic questions to guide the integration of QA into academic processes. The framework should help HEIs integrate QA into academic programs with continual improvement as an essential ingredient.