Empirics of health-aid,education and infant mortality: a semiparametric study

The present article uses semiparametric regression to capture the impact of foreign-aid given for health purposes on the Infant Mortality Rate (IMR) of poor developing countries, after controlling for other covariates. We also investigate whether education (general awareness) helps lower IMR directly or helps improve effectiveness of health-aid in reducing IMR. In addition, the study investigates whether various disaggregated components of health-aid (for example, aid that goes for infectious disease control or nutrition) help lower IMR. We find that although adult education (awareness) always lowers IMR, the overall effect of health-aid remains insignificant. Our conclusion is robust to various disaggregated components of health-aid as well. We also check if health-aid has improved prenatal care for expecting mothers but our conclusion regarding the overall ineffectiveness of aid remains unchanged. Interestingly, we find that total health-aid as well as nutrition aid may lower IMR only after education exceeds a threshold level – a new angle that has not been explicitly explored before. We also find interesting role of education in making the aid more effective for prenatal care. Our semiparametric nonlinear estimation strategy helps us unravel certain interesting thresholds and facts which cannot be captured in a linear parametric estimation framework.     

AN INVESTIGATION INTO THE CAUSALITY AMONG FIRMS' DIVIDEND,INVESTMENT, AND FINANCING DECISIONS

In this paper we posit that information asymmetries and the resultant signaling implications make a firm's investment decision dependent on its dividend and financing decisions. By applying the vector autoregressive modeling technique to 100 firms randomly selected from ten four-digit SIC industries, we find evidence of interdependencies among the three decisions. The success of the model in predicting each of the three decision variables also suggests that these decisions should be analyzed in a simultaneous equation framework.     

Strategic information revelation when experts compete to influence

We consider a persuasion game between a decision‐maker and a set of experts. Each expert is identified by two parameters: (i) “quality” or his likelihood of observing the state (i.e., learning what the best decision is) and (ii) “agenda” or the preferred decision that is independent of the state. An informed expert may feign ignorance but cannot misreport. We offer a general characterization of the equilibrium. From the decision‐maker's standpoint, (a) higher quality is not necessarily better, (b) extreme agendas are always preferred, and (c) the optimal panel may involve experts with identical (rather than conflicting) agendas.     

Intellectual Property Rights and the Quality of Transferred Technology in Developing Countries

This paper addresses the effects of a stronger patent system in developing countries on the quality of transferred technology and welfare. We show that a stronger patent system can reduce the quality of licensed technology. The presence of technology licensing may encourage the developing country to adopt a stronger patent system compared with the situation where licensing is not an option.     

Hidden Costs of Offshore Outsourcing: an Analysis of Offshoring Decisions

Offshore outsourcing has grown as a form of industrial organisation to increase profitability of firms. However, offshoring may be less lucrative than envisaged, due to the presence of hidden costs. We study the strategic interaction amongst onshore Cournot firms in the decision to offshore when they receive signals about offshore hidden costs. The analysis helps suggest policy implications for countries which are potential offshoring locations. We find the precision of signals and the range of possible hidden costs to be crucial in determining offshoring destinations. Updating of information about hidden costs leads to different equilibria including herding in offshoring.