The evolution of a local R&D strategy: the experience of a service in the UK National Health Service (NHS)

Increasing concern about the state of health‐related research in the UK in the 80s and early 90s, led to an influential parliamentary review. The consequence of this was to strengthen health research through a programme that was fully integrated into the management structure of the NHS. No country had ever attempted such an ambitious approach ( Black, 1997 ). In 1994 a far‐reaching review, recommended further, revolutionary changes to the management of R&D in the UK National Health Service ( Culyer, 1994 ). Many of these were implemented in 1997 with the result that every UK health service at regional and local level has developed an infrastructure, and management arrangements for R&D activity. In most local areas, hospitals with significant involvement in R&D have been eligible to bid to the UK Department of Health for NHS R&D Support funds. In Nottingham, three Hospital Trusts and a community based service made bids to the Department of Health and received grants to support R&D. This paper focuses on one of the hospital Trusts ‐ the mental health service in Nottingham. Our experience will be of particular interest as the first bid that the mental health service made was spectacularly unsuccessful. The organisation was forced to consider dis‐investment in its existing research infrastructure and a potential negative impact on the provision of patient care. This led to a wide‐ranging consultation and evaluation of research and research‐related activity. A range of approaches and tools were deployed to develop the strategy and to ensure its successful implementation and evolution. The strategy reflected a balanced approach, taking into account historical and organisational research strengths, while recognising the need to build capacity and capability, enhance foresight capability and strengthen the knowledge base. The ability to contribute to, and influence policy and practice has been a key driver of the strategy. The result was a successful bid and the evolution of an R&D strategy that has been flexible in its response to policy changes, changing local circumstances and wider socio‐economic trends and technical innovations. Furthermore, R&D performance, measured through outputs, impacts and income, has continually improved and increased.     

Non‐linear Predictability of UK Stock Market Returns*

Linear predictability of stock market returns has been widely reported. However, recently developed theoretical research has suggested that due to the interaction of noise and arbitrage traders, stock returns are inherently non‐linear, whereby market dynamics differ between small and large returns. This paper examines whether an exponential smooth transition threshold model, which is capable of capturing this non‐linear behaviour, can provide a better characterization of UK stock market returns than either a linear model or an alternate non‐linear model. The results of both in‐sample and out‐of‐sample specification tests support the exponential smooth transition threshold model and hence the belief that investor behaviour does differ between large and small returns.     

WHAT WILL HAPPEN TO THE EURO?

The Stability Pact ‐ intended to make EMU governments run prudent budgets ‐ is losing its credibility. This article asks the question: what will happen if national debts start to rise again and some governments then have difficulty borrowing? It suggests that there will be calls for bailout, that the EU's political structures will not cope well with the resulting arguments over which countries will pay, and that the eventual and painful result will be a return to the principle that currencies and political areas coincide.     

Equity Volatility and Corporate Bond Yields

This paper explores the effect of equity volatility on corporate bond yields. Panel data for the late 1990s show that idiosyncratic firm‐level volatility can explain as much cross‐sectional variation in yields as can credit ratings. This finding, together with the upward trend in idiosyncratic equity volatility documented by Campbell, Lettau, Malkiel, and Xu (2001), helps to explain recent increases in corporate bond yields.     

Buildings for the Japanese information economy : Neighbourhood and resort offices

A new physical infrastructure to support activities based on communications and the transmission of information is being developed. Part of this infrastructure includes the construction of ‘intelligent’ buildings which are seen to play as important a role in improving efficiency of office workers as automation has played on the shopfloor of manufacturing industry. The location of these buildings is important. This article focuses on two types of experimental office development—neighbourhood offices and resort offices.     

A note on incentive incompatibility under franchising

This note provides a formal demonstration of the incentive incompatibility problem that exists in franchisor — franchisee relationships. It is shown that incentive incompatibility exists with respect to both price and quality. Several contractual mechanisms designed to mitigate the incompatibility problem are examined.     

Open-bank assistance transactions and prompt corrective action

Open-bank assistance (OBA), provided to troubled banking institutions by the FDIC to prevent their failure, has been criticized extensively on grounds that closed-bank transactions, especially early closed bank transactions, are less expensive to the FDIC. This article analyzes a case in which OBA makes public policy sense, under conditions in which uncertainty is introduced into the valuation of a bank's nonperforming assets. Under such uncertainty, the FDIC may play a role by providing to the acquiror of the troubled institution essentially costless (to the FDIC) standby insurance on the ultimate workout values of the nonperforming assets. If properly structured, such an OBA transaction would meet critics' objections by minimizing FDIC cost and creating incentives for the early recapilization of troubled banks.