Stochastic Regional Convergence in China: The Role of Regional Clusters in a Nonlinear Perspective (1952–2007)

This paper investigates the notion of stochastic convergence behaviour across the Chinese provinces. Unlike previous works, the present paper takes into account the economic geography by examining the regional clusters and the significant transformation of the Chinese economy through the introduction of structural breaks and nonlinearities in the model. Results indicate that the regional clusters are relevant to the convergence behaviour across China, when both the administrative division and the regional clusters are considered. However, the number of provinces that are converging is higher in the latter case. When nonlinearities were considered across the regional clusters, we found that 18 provinces have already converged with their cluster, 3 provinces are catching up and 10 regions show divergence. These findings are useful for the design and development of national and regional economic policies in the Chinese economy.     

As You Sow So Shall You Reap: From Capabilities to Opportunities

Long-run growth is about the structural transformation (diversification and upgrading) of the economy, itself a function of the accumulation of capabilities that allows a country to produce new and more unique products. In this paper, we develop an “Index of Opportunities” for 96 non-high-income countries. This Index summarises countries' capabilities to undergo structural transformation, as captured by their export baskets. It has four dimensions—sophistication, diversification, “standardness” and possibilities for exporting new products with revealed comparative advantage. We find that China, India, Poland, Thailand, Mexico and Brazil rank high in the index. This means that these countries have accumulated significant capabilities (as reflected in their export baskets) and hence are well positioned for further economic transformation. At the other extreme, Guinea, Malawi, Benin, Mauritania and Haiti score very poorly. While both groups of countries need to focus policy on the development of capabilities that facilitate structural transformation, the nature and degree of policy support required are very different.     

Corruption Distance and Foreign Direct Investment

We study the effects of “corruption distance,” defined as the difference in corruption levels between country pairs on bilateral foreign direct investment (FDI). Using a “gravity” model and the Heckman (1979) two-stage framework on a data set of forty-five countries from 1997 to 2007, we find that corruption distance adversely influences both the likelihood of FDI and the volume of FDI. A novel finding in this study is that we identify the asymmetric effect of corruption distance and find that the positive corruption distance, defined as the corruption distance from a high corruption source to a low corruption host country, is the prominent one that affects the behavior of bilateral FDI.     

RAM: A Range Adjusted Measure of Inefficiency for Use with Additive Models,and Relations to Other Models and Measures in DEA

Generalized Efficiency Measures (GEMS) for use in DEA are developed and analyzed in a context of differing models where they might be employed. The additive model of DEA is accorded a central role and developed in association with a new measure of efficiency referred to as RAM (Range Adjusted Measure). The need for separately treating input oriented and output oriented approaches to efficient measurement is eliminated because additive models effect their evaluations by maximizing distance from the efficient frontier (in ₁, or weighted ₁, measure) and thereby simultaneously maximize outputs and minimize inputs. Contacts with other models and approaches are maintained with theorems and accompanying proofs to ensure the validity of the thus identified relations. New criteria are supplied, both managerial and mathematical, for evaluating proposed measures. The concept of approximating models is used to further extend these possibilities. The focus of the paper is on the physical aspects of performance involved in technical and mix inefficiencies. However, an Appendix shows how overall, allocative and technical inefficiencies may be incorporated in additive models.     

Borders Redrawn: Measuring the Statistical Creation of International Trade

In this note, we quantify how much of the increase in the volume of international trade that took place since 1945 is attributed to the reclassification of within‐country trade to international trade owing to changes in national boundaries. We do so by imposing the territorial delimitations corresponding to 1946 to the current trade flow data, thus quantifying the volume of international trade that would not have been labelled international given national boundaries right after the end of World War II. Our results show that the effect of ‘boundary redrawing’ corresponds roughly to 1 per cent of the total volume of international trade. If colonial trade had been statistically considered to be within‐country (within‐empire) trade instead of international trade, the independence of colonies would have raised this effect to approximately 3 per cent of total trade.     

Is the Export-led Growth Hypothesis Enough to Account for China＇s Growth？

One of the missing pieces preventing us from understanding recent Chinese economic development is the role played by openness and capital accumulation in this process. The question is whether the sharp economic＇ growth that the Chinese economy has experienced is another case of export-led growth due to the open-door policy or whether, on the contrary, this growth has been caused by high domestic savings and investment rates （and the consequent capital accumulation）. To answer this question, we employed an empirical framework of the cointegrated vector autoregressive model. The empirical results show that both investment （in physieal capital and R＆D） and exports, as well as the exchange rate policy, are relevant factors in explaining China＇s long-run economic growth over the past 4 decades.     

Are estimates of labour demand functions mere statistical artefacts?

This paper considers the estimation of putative neoclassical aggregate labour demand functions using constant price value data. Regression results normally find that employment is negatively related to the real wage and that the constant‐output elasticity of employment with respect to the real wage is about ?0.3. This is taken as evidence that unemployment is the result of the real wage being too high, ceteris paribus. This paper shows that these estimates are purely the result of an underlying identity and cannot be interpreted as implying any causal relationship and, as such, they have no policy implications.     

Cost-effectiveness analysis of implementing an antimicrobial stewardship program in critical care units

Aims: To evaluate the cost-effectiveness of antimicrobial stewardship (AS) program implementation focused on critical care units based on assumptions for the Spanish setting.

Materials and methods: A decision model comparing costs and outcomes of sepsis, community-acquired pneumonia, and nosocomial infections (including catheter-related bacteremia, urinary tract infection, and ventilator-associated pneumonia) in critical care units with or without an AS was designed. Model variables and costs, along with their distributions, were obtained from the literature. The study was performed from the Spanish National Health System (NHS) perspective, including only direct costs. The Incremental Cost-Effectiveness Ratio (ICER) was analysed regarding the ability of the program to reduce multi-drug resistant bacteria. Uncertainty in ICERs was evaluated with probabilistic sensitivity analyses.

Results: In the short-term, implementing an AS reduces the consumption of antimicrobials with a net benefit of €71,738. In the long-term, the maintenance of the program involves an additional cost to the system of €107,569. Cost per avoided resistance was €7,342, and cost-per-life-years gained (LYG) was €9,788. Results from the probabilistic sensitivity analysis showed that there was a more than 90% likelihood that an AS would be cost-effective at a level of €8,000 per LYG.

Limitations: Wide variability of economic results obtained from the implementation of this type of AS program and short information on their impact on patient evolution and any resistance avoided.

Conclusions: Implementing an AS focusing on critical care patients is a long-term cost-effective tool. Implementation costs are amortized by reducing antimicrobial consumption to prevent infection by multidrug-resistant pathogens.