Is off-farm income reforming the farm? Evidence from Mexico

Does access to off-farm income complement or compete with agricultural production? This article explores the effect of off-farm income on agricultural production activities, using data from the 2003 Mexico National Rural Household Survey. We first discuss the theoretical conditions under which access to off-farm income may influence production in an agricultural household model. Instrumental-variable (IV) estimation methods are then used to test whether agricultural production activities, technologies, and input use differ between households with and without access to off-farm income. We find that off-farm income has a negative effect on agricultural output and the use of family labor on the farm, but a positive impact on the demand for purchased inputs. There is also a slight efficiency gain in households with access to off-farm income. Findings offer insights into how household production evolves as rural households increasingly engage in off-farm income activities.     

Digitalisierung im Gesundheitswesen — zwischen Datenschutz und moderner Medizinversorgung

The digital transformation of the healthcare branch is important and unstoppable. The enormous possibility of digitalisation to redesign and enhance processes has been shown in other branches. Digital technologies offer the similarly large potential to improve the quality and efficiency of healthcare services. However, in terms of digitalisation, the German health system lags behind other European countries. But given a lack of available evidence, the effects of the digitalisation of the healthcare system cannot be reliably evaluated. Digital access to patient data necessitates constructive error cultures in organisations in order to limit defensive medicine. And digital access to health information necessitates individual competence in searching and using this information for participatory decision-making. As with all technological progress, information security is very important in order to gain citizens’ confidence in a digital healthcare system. Thus, it is necessary to simultaneously pursue both enhanced privacy standards and state-of-the-art medical technology.     

Capital budgeting, information timing, and the value of abandonment options

This paper investigates how an abandonment option influences the optimal timing of information in a sequential adverse selection capital budgeting model. While the divisional manager has imperfect private pre-contract information, headquarters can time whether the manager obtains perfect project information before (timely information) or after (delayed information) the contract is signed. In the absence of the abandonment option, headquarters favors timely (delayed) information if the investment costs are high (low). The presence of the abandonment option favors delayed information because under the timely information regime the value of the abandonment option is zero, whereas under the delayed information regime the value of the option is positive.     

Implications of the US Tax Reform for Transatlantic FDI

On 22 December 2017 President Trump signed the Tax Cuts and Jobs Act. This corporate tax reform can be considered the most significant amendment of the US corporate tax code since 1986. Besides the reduction of the corporate income tax rate from 35% to 21%, the Tax Cuts and Jobs Act entails features like a switch from worldwide income taxation to territorial taxation, as well as immediate deductions for certain assets. This leads to a substantial improvement for the US in global tax competition. In this paper, we analyse the effects of the US tax reform on FDI flows between Europe and the US. We find that European high-tax countries in particular will suffer from a net outflow of FDI.