the control of technology alliances an empirical analysis of the biotechnology industry we examine the determinants of control rights in biotechnology alliances through three case studies and a quantitative analysis aghion and tirole 1994 argue that control rights will be assigned so as to maximize the value of the final output as long as the r d firm has sufficient financial resources consistent with this framework the allocation of control rights to the r d firm increases with the firm s financial resources the empirical evidence regarding the relationship between control rights and the stage of the project at the time the alliance is signed is more ambiguous

what drives health care expenditure baumol s model of unbalanced growth revisited the share of health care expenditure in gdp rises rapidly in virtually all oecd countries causing increasing concern among politicians and the general public yet economists have to date failed to reach an agreement on what the main determinants of this development are this paper revisits baumol s baumol w j 1967 macroeconomics of unbalanced growth the anatomy of urban crisis american economic review 57 3 415 426 model of unbalanced growth showing that the latter offers a ready explanation for the observed inexorable rise in health care expenditure the main implication of baumol s model in this context is that health care expenditure is driven by wage increases in excess of productivity growth this hypothesis is tested empirically using data from a panel of 19 oecd countries our tests yield robust evidence in favor of baumol s theory

the structure of licensing contracts industrial organization theory has explored several issues related to licensing but empirical analyses are extremely rare we amass a new and detailed dataset on licensing contracts and use it to present some simple facts concerning licensing behavior our analysis reveals robust cross industries differences in several contractual features such as exclusivity cross licensing ex ante versus ex post technology transfers and licensing to related versus unrelated parties we offer an interpretation of these facts based on cross industry variation in the strength of intellectual property rights

modelling the dynamics of a public health care system evidence from time series data the english national health service nhs was established in 1948 and has therefore yielded some long time series data on health system performance waiting time for inpatient care have been a persistent policy concern since the creation of the nhs after developing a simple theoretical framework of the dynamic interaction between key indicators of health system performance we investigate empirically the relationship between hospital activity waiting time and population characteristics using aggregate time series data for the nhs over the period 1952 to 2003 structural vector autoregression s var suggests that in the long run higher activity is associated with lower waiting times elasticity 0 9 an increase in the elderly population is associated with higher waiting time elasticity 1 3 in the short run higher lagged waiting time leads to higher activity elasticity 0 12 we also find that shocks in waiting times are countered by higher activity so the effect is only temporary

do per capita health care expenditures converge among oecd countries evidence from unit root tests with level and trend shifts this study examines the stochastic conditional convergence of per capita health care expenditures pchce among 19 oecd countries over the period 1972 2008 specifically newly developed lm and rals lm unit root tests with allowance for two endogenously determined structural breaks are employed the results indicate support for pchce convergence among most oecd countries the results are stronger in more general tests that control for two breaks and nonnormal errors panel unit root tests provide additional support for the stochastic convergence of pchce

on the term structure of the foreign exchange rates and market efficiency abstract the efficiency hypothesis of the foreign exchange market is examined by considering the term structure of foreign exchange rates jointly with that of interest rates in the context of interest rate parity principle the canadian u s data are found to be consistent with the hypothesis of the market efficiency and a constant exchange risk premium

can baumol s model of unbalanced growth contribute to explaining the secular rise in health care expenditure an alternative test in a recent paper i argued that baumol s model of unbalanced growth offers a ready explanation for the observed secular rise in health care expenditure hce in rich countries baumol s model implies that hce is driven by wage increases in excess of productivity growth i tested this hypothesis empirically using data from a panel of 19 organization for economic cooperation and development oecd countries and found robust evidence in favour of baumol s theory an alternative way to test baumol s theory is to check whether its implication that variations in the relative price of medical care contribute significantly to explaining variations in health expenditure in the same direction has an empirical grounding earlier studies although mostly not in an explicit attempt to test baumol s theory have occasionally rejected this hypothesis despite poor data quality of the available medical price indices i perform the alternative test using data for nine oecd countries my findings suggest that the relat

health care expenditures and gdp panel data unit root test results abstract this short paper presents unit root test results for time series on per capita national health care expenditures and gross domestic product in the oecd unlike the country by country test used by hansen p king a 1996 the determinants of health care expenditure a cointegration approach j health econ 15 127 137 the test we employ exploits the panel nature of the oecd data using this approach we are able to reject the null hypothesis that these series contain unit roots no single test is likely to be definitive in this rapidly evolving area of econometric research however our results help to mitigate concern that panel data analyses of national health care expenditures are misspecified

analysing inflation by the fractionally integrated arfima garch model this paper considers the application of long memory processes to describing inflation for ten countries we implement a new procedure to obtain approximate maximum likelihood estimates of an arfima garch process which is fractionally integrated i d with a superimposed stationary arma component in its conditional mean additionally this long memory process is allowed to have garch type conditional heteroscedasticity on analysing monthly post world war ii cpi inflation for ten different countries we find strong evidence of long memory with mean reverting behaviour for all countries except japan which appears stationary for three high inflation economies there is evidence that the mean and volatility of inflation interact in a way that is consistent with the friedman hypothesis

the determinants of canadian provincial health expenditures evidence from a dynamic panel this article seeks to reveal the magnitude of the income elasticity of health expenditure and the impact of non income determinants of health expenditure across canada for this purpose panel data on gross domestic product the relative price of health care the share of publicly funded health expenditure the share of senior population and the life expectancy at birth have been used to investigate the determinants of canadian provincial health expenditures over a 28 year period dynamic models of health expenditure are analysed via generalized instrumental variables giv and generalized method of moments gmm results indicate that the long run income elasticity of health expenditure is substantially lower than one thus health care is far from being a luxury in canada

patent protection in the shadow of infringement simulation estimations of patent value empirical estimates of the private value of patent protection are derived for four technology areas computers textiles combustion engines and pharmaceuticals using new patent data for west germany 1953 1988 patentees must pay renewal fees to keep their patents in force as well as legal expenses in order to enforce them a dynamic stochastic discrete choice model of optimal renewal decisions is developed incorporating both learning and depreciation as well as the potential need to prosecute infringement the evolution of the distribution of returns over the life of a group of patents is calculated for each technology using a minimum distance simulation estimator results indicate that the aggregate value of protection generated per year is on the order of 10 of related r d expenditure

unit root and cointegration tests timeseries versus panel estimates for international health expenditure models classical regression estimates of the determinants of the oecd health expenditures are useful for policy formulation and evaluation however if the underlying timeseries data are not collectively stationary in levels the estimated parameters are faulty and can misguide health policy until very recently the crucial stationarity tests were ignored in a large number of studies on international comparisons stationarity adf phillips perron ips heterogeneous panel and cointegration engle granger bivariate johansen s multivariate tests are conducted here using 1960 1997 health expenditures data 1998 cd rom of 19 oecd countries it is found that extending the time series data length affects the order of integration and number of cointegrating vectors however it is arguable whether the order of integration decreases or increases as more observations are added for testing the failure of the johansen and engle granger cointegration tests for most of the oecd countries cautions policy makers against

agricultural biotechnology s complementary intellectual assets we formulate and test a hypothesis for the dramatic restructur ing that the plant breeding and seed industry has recently undergone the reorganization can be explained in part by the desire to exploit comple mentarities between intellectual assets needed to create genetically mod ified organisms this hypothesis is tested using data on agricultural biotechnology patents notices for field tests of genetically modified organisms and firm characteristics the presence of complementarities is identified with a positive covariance in the unexplained variation of asset holdings results indicate that coordination of complementary assets has increased under the consolidation of the industry ne of the central problems in the economics of inno vation concerns how industries change as they absorb fundamental research breakthroughs rarely has change been more pronounced than in agriculture following the introduction of recombinant dna technology and affiliated techniques of genetic engineering by offering breeders the ability to alter plant traits by directly manipulating se quences of genetic code tools of agricultural biotechnology change the possibilities for crop improvement profoundly the new techniques enhance the speed and precision of agricultural research and development r d while ex panding the space of potential new products seed firms now offer farmers crop varieties embodying new ap proaches for controlling pests managing physical stresses on plants increasing crop yields and growing differenti ated quality enhanced crops concurrent with these technical changes in the r d process the agricultural inputs industry has over the past two decades witnessed a comprehensive restructuring sev eral large chemical firms including monsanto dow and dupont moved aggressively into plant biotechnology mak ing huge investments in the life sciences as newly minted agronomic systems companies these firms acquired all of the large national seed firms in north america including pioneer dekalb asgrow garst and others meanwhile the research intensive agricultural biotechnology sector from its appearance in the 1980s as a large set of small startup firms had by the end of the 1990s already reached a second stage with most of the startups either folded or acquired by the new agronomic systems giants the industry s consoli dation was surprising not only for its rapid pace and com prehensive scope but also for the extremely high valuations at which some firms were acquired in 1997 for example monsanto acquired holdens foundation seeds of wil liamsburg iowa together with two marketing subsidiaries for 1 02 billion 25 times the annual sales of the mature privately held firm whose revenues derived entirely from the breeding and distribution of corn seed the emergent industry structure with a relatively small number of tightly woven alliances each organized around a major life sciences firm each vertically integrated from basic r d through to marketing stands in contrast to the more diffuse structure of twenty years ago this structure is likewise noteworthy when one considers trends in other research intensive fields the pharmaceutical biotechnology industry for example maintains a large number of free standing firms specializing in r d and earning revenues through various licensing agreements majewski 1998 hall and ziedonis 2001 observe that the u s semiconduc

characteristics of patent litigation a window on competition we examine the patenting behavior of firms in an industry characterized by rapid technological change and cumulative innovation recent survey evidence suggests that semiconductor firms do not rely heavily on patents to appropriate returns to r d yet the propensity of semiconductor firms to patent has risen dramatically since the mid 1980s we explore this apparent paradox by conducting interviews with industry representatives and analyzing the patenting behavior of 95 u s semiconductor firms during 1979 1995 the results suggest that the 1980s strengthening of u s patent rights spawned patent portfolio races among capital intensive firms but it also facilitated entry by specialized design firms copyright 2001 by the rand corporation

licensing in the theory of innovation this article analyzes licensing in a noncooperative r d game we ask two questions what are the incentives for licensing a production technology and what is the impact of licensing on the pattern of innovation and the consequent evolution of industry costs and market structure the gainsfrom trading information through licensing contracts are achieved through the replacement of inefficient production techniques the ex post incentive and the elimination of inefficient research expenditures the ex ante incentive in a duopoly the availability of licensing encourages research when the firms initial production technologies are close in costs and discourages research when initial costs are asymmetric

the dynamics of the transfer and renewal of patents this article explores new data on the transfer and renewal of u s patents and interprets this new evidence using a model of patent transfers and renewal we find that the proportion of transferred patents is large and differs across technology fields and especially type of patentees we also find that the probability of a patent being traded depends on a number of factors the age of the patent the number of citations received by a given age the patent generality and whether the patent has been previously traded or not these findings are consistent with the predictions of a model of patent transfers and renewals

exchange rate market efficiency and new information abstract this paper uses a multi currency approach to analyze the relationship between forward exchange rates future spot rates and new information the empirical results tend to support the hypothesis that the exchange rate can be expressed as a function of factors known in advance and news

spot and forward rates in the canadian treasury bill market abstract the efficiency of the canadian treasury bill market is examined with data on spot and forward rates of return over the period from 7 62 to 3 79 the bill market has been efficient in the sense that it correctly uses the information contained in past spot rates in assessing the expected future spot rate and in determining the forward rate moreover the forward rate is found to contain some information about future spot rates above and beyond that in past spot rates

is health care really a luxury much of the work which has led to a widely held view that the income elasticity of health care spending exceeds one has been based on international cross section data or on pooled cross sections and time series in this paper we re examine this view in the context of long run equilibrium relationships between non stationary time series possibly including autonomous trends our results cast doubt upon the usefulness of pooling and upon the notion of an elasticity above one

the term structure of the forward premium abstract most studies of the efficiency of the foreign exchange market focus on a single maturity usually a one month forward exchange rate however one observes that forward contracts of many maturities are simultaneously traded in the foreign exchange market the hypothesis that the foreign exchange market uses all available information has implications for the joint behavior of forward exchange rates of various maturities this paper proposes an equilibrium theory of the term structure of the forward premium the model is tested using data on the german and canadian exchange rates the results indicate that the data are consistent with the theory for germany and inconsistent with the theory for canada

is health care a luxury the debate revisited with new evidence from emerging economies abstractthis paper studies the long run relationship between health care expenditure and income using a panel data set of emerging economies over the period 1995 2012 the results show that expenditure on health care and income are non stationary and cointegrated after controlling for cross sectional dependence and unobserved heterogeneity among different countries we find that the income elasticity of health care is less than 1 indicating that health care is a necessity and not a luxury government expenditure and out of pocket expenditure turn out to be important determinants of health care expenditure among non monetary factors results show that old age dependency and female education seem to have significant bearings on health care expenditures policy recommendations suggest that government should increase spending on health care in emerging economies since higher incomes may not automatically translate into higher health care spending by the people of these countries

on the international stability of health care expenditure functions are government and private functions similar this paper studies the stability of health care expenditure functions in a sample of oecd countries we adopt the cointegration approach and the results show that there is a long term relationship between total health care expenditure hce and gross domestic product gdp however the existence of cointegration is only shown when we admit the presence of some changes in the elasticities of the model our results also provide evidence against the existence of a unique relationship between health and gdp for the sample thus we can conclude that the differences in health systems may cause differences in the aggregate functions additionally we examine aggregate health functions for government ghce and private expenditures phce again finding evidence of different patterns of behaviour finally we open a discussion on the character of health as a necessary or luxury good in this context we find differences between the government and the private function in order to illustrate these findings we propose a theoretical model as an example of the influence of political decisions on income elasticity

the sale of ideas strategic disclosure property rights and contracting ideas are difficult to sell when buyers cannot assess an idea s value before it is revealed and sellers cannot protect a revealed idea these problems exist in a variety of intellectual property sales ranging from pure ideas to poorly protected inventions and reflect the nonverifiability of key elements of an intellectual property sale an expropriable partial disclosure can be used as a signal allowing the seller to obtain payment based on the value of the remaining undisclosed know how we examine contracting after the disclosure and find that seller wealth is pivotal in supporting a partial disclosure equilibrium and in determining the payoff size

a penny for your quotes patent citations and the value of innovations the use ofpatents in economic research has been seriously hindered by the fact that patents vary enormously in their importance or value and hence simple patent counts cannot be informative about innovative output the purpose of this article is to put forward patent counts weighted by citations as indicators of the value of innovations thereby overcoming the limitations of simple counts the empirical analysis of a particular innovation computed tomography scanners indeed shows a close association between citation based patent indices and independent measures of the social value of innovations in that field moreover the weighting scheme appears to be nonlinear increasing in the number of citations implying that the informational content of citations rises at the margin as in previous studies simple patent counts are found to be highly correlated with contemporaneous rd however here the association is within afield over time rather than cross sectional

how to license intangible property we examine the optimal licensing strategy of a research lab selling to firms who are product market competitors we consider an independent lab as well as a research joint venture we show that 1 demands are interdependent and hence the standard price mechanism is not the profit maximizing licensing strategy 2 the seller s incentives to develop the innovation may be excessive 3 the seller s incentives to disseminate the innovation typically are too low 4 larger ventures are less likely to develop the innovation and more likely to restrict its dissemination in those cases where development occurs and 5 a downstream firm that is not a member of the research venture is worse off as a result of the innovation

novelty and disclosure in patent law the stringency of the novelty requirement in patent law affects the pace of innovation because it affects the amount of technical information that is disclosed among firms it also affects ex ante profitability of research we compare weak and strong novelty requirements from the standpoint of social efficiency we ask how our answer depends on the rule that determines which firm gets a patent when two firms have patents pending on the same technology the possible rules are first to invent which applies in the u s and first to file which applies everywhere else

the determinants and effects of health expenditure in developed countries previous studies of international differences in health spending have been restricted to the use of relatively small samples of cross sectional data our objective here is to re examine the results of previous work using a sample of 560 pooled time series and cross section observations results confirm the importance of gdp as a determinant of health spending with an estimated income elasticity at or around unity but also suggest that oecd countries should not be regarded as a single homogeneous group the importance of some non income variables is also confirmed although the direct effect of these factors appears to be small

cointegration and dynamic time series models abstract this paper provides a survey of some of the recent developments in the field of econometric modelling with cointegrated time series in particular we describe the testing and estimation procedures which have become increasingly popular in the recent applied literature in addition to the two stage procedure proposed by engle and granger we consider extensions to the modelling of dynamic models with cointegrated variables such as the estimation of models with multiple cointegration vectors simultaneous systems models with seasonally integrated and cointegrated variables furthermore we illustrate the practical application of the techniques describes in the paper by means of a tutorial data set

corporate social responsibility and corporate performance evidence from a panel of us listed companies we investigate whether inclusion and permanence in the domini social index dsi affects corporate performance on a sample of around 1000 firms in a 13 year interval by controlling for size industry business cycle and time invariant firm idiosyncratic characteristics our results find partial support to the hypothesis that corporate social responsibility is a move from the shareholders wealth to a multi stakeholders welfare target on the one side permanence into the domini index di is shown to increase reduce significantly total sales per employee returns on equity but not when large and r d investing firms are excluded from the sample on the other side lower returns on equity for domini firms seem nonetheless to be accompanied by relatively lower conditional volatility and lower reaction to extreme shocks with respect to the control sample an explanation for these findings suggested by the inspection of domini criteria is that social responsibility implies on the one side decisions leadi

licensing to enhance demand for new technologies this article presents a model in which licensing competitors expands demand for a new proprietary product and therefore may be a profit maximizing strategy for the licensor even when licensing increases industry cost in the model buyers care about price and quality sellers can contract on price but not on quality and a single supplier has monopoly power licensing induces quality competition and allows the supplying firms to make a quality commitment that would not be credible for a single firm as a result licensing increases industry demand and may generate an increase in industry revenue sufficient to offset any increase in industry cost some of the characteristics of the model are informed by observations in the semiconductor industry

health care is an individual necessity and a national luxury applying multilevel decision models to the analysis of health care expenditures health care is neither a necessity or a luxury it is both since the income elasticity varies with the level of analysis with insurance individual income elasticities are typically near zero while national health expenditure elasticities are commonly greater than 1 0 the debate over whether health care is or is not a luxury good arises primarily from the failure to specify levels of analysis clearly so as to distinguish variation within groups from variation between groups apparently contradictory empirical results are shown to be consistent with a simple nested multilevel model of health care spending