FDI, Foreign Affiliate Operations, and the Transfer Process: Macroeconomic Adjustment to FDI Inflows in the Case of Costa Rica

The theoretical and empirical literature on the macroeconomic effects of capital inflows posits that a net inflow of foreign capital leads to an equilibrium real exchange rate (RER) appreciation through an expansion in aggregate demand. But this literature fails to distinguish between the different types of flows, or their specific mechanisms of influence. This paper analyses the adjustment process to FDI inflows in the case of Costa Rica, and focuses on whether, to what extent and through what mechanisms such adjustment requires a RER appreciation. It argues that a study of the process of macroeconomic adjustment to a net inflow of FDI -the transfer process- should not be detached from an investigation into the trade and financial practices of the foreign-owned firms towards which FDI flows. A two-sector model is developed to capture the basic interactions between foreign investment, domestic investment and the RER. It shows that the sectoral allocation of FDI, the response of domestic investment to exogenous changes in the foreign capital stock, the input composition of foreign capital, and the financial practices of foreign investors, are crucial determinants of the long-run equilibrium RER. The paper also includes two empirical parts. The first one provides an overview of the general trends of aggregate FDI inflows into Costa Rica between 1970-99, and analyses some data on the trade and financial patterns of foreign affiliates operating in the country. The second undertakes an econometric examination of the impact of FDI on output, investment, exports, imports and the RER, using cointegration techniques. The study is based on annual data for the period 1970-99. It is found that FDI exerts a strong negative impact on the equilibrium RER.

The growth companies puzzle: can growth opportunities measures predict firm growth?

While numerous empirical studies include proxies for growth opportunities in their analyses, there is limited evidence as to the validity of the various growth proxies used. Based on a sample of 1942 firm-years for listed UK companies over the 1990-2004 period, we assess the performance of eight growth opportunities measures. Our results show that while all the growth measures show some ability to predict growth in company sales, total assets, or equity, there are substantial differences between the various models. In particular, Tobin's Q performs poorly while dividend-based measures generally perform best. However, none of the measures has any success in predicting earnings per share growth, even when controlling for mean reversion and other time-series patterns in earnings. We term this the 'growth companies puzzle'. Growth companies do grow, but they do not grow in the key dimension (earnings) theory predicts. Whether the failure of 'growth companies' to deliver superior earnings growth is attributable to increased competition, poor investments, or behavioural biases, it is still a puzzle why growth companies on average fail to deliver superior earnings growth

Single-inhaler fluticasone furoate/umeclidinium/vilanterol versus fluticasone furoate/vilanterol plus umeclidinium using two inhalers for chronic obstructive pulmonary disease: A randomized non-inferiority study

Background: Single-inhaler fluticasone furoate/umeclidinium/vilanterol (FF/UMEC/VI) 100/62.5/25 μg has been shown to improve lung function and health status, and reduce exacerbations, versus budesonide/formoterol in patients with chronic obstructive pulmonary disease (COPD). We evaluated the non-inferiority of single-inhaler FF/UMEC/VI versus FF/VI + UMEC using two inhalers. Methods: Eligible patients with COPD (aged ≥40 years; ≥1 moderate/severe exacerbation in the 12 months before screening) were randomized (1:1; stratified by the number of long-acting bronchodilators [0, 1 or 2] per day during run-in) to receive 24-week FF/UMEC/VI 100/62.5/25 μg and placebo or FF/VI 100/25 μg + UMEC 62.5 μg; all treatments/placebo were delivered using the ELLIPTA inhaler once-daily in the morning. Primary endpoint: change from baseline in trough forced expiratory volume in 1 s (FEV1) at Week 24. The non-inferiority margin for the lower 95% confidence limit was set at − 50 mL. Results: A total of 1055 patients (844 [80%] of whom were enrolled on combination maintenance therapy) were randomized to receive FF/UMEC/VI (n = 527) or FF/VI + UMEC (n = 528). Mean change from baseline in trough FEV1 at Week 24 was 113 mL (95% CI 91, 135) for FF/UMEC/VI and 95 mL (95% CI 72, 117) for FF/VI + UMEC; the between-treatment difference of 18 mL (95% CI -13, 50) confirmed FF/UMEC/VI’s was considered non-inferior to FF/ VI + UMEC. At Week 24, the proportion of responders based on St George’s Respiratory Questionnaire Total score was 50% (FF/UMEC/VI) and 51% (FF/VI + UMEC); the proportion of responders based on the Transitional Dyspnea Index focal score was similar (56% both groups). A similar proportion of patients experienced a moderate/severe exacerbation in the FF/UMEC/VI (24%) and FF/VI + UMEC (27%) groups; the hazard ratio for time to first moderate/ severe exacerbation with FF/UMEC/VI versus FF/VI + UMEC was 0.87 (95% CI 0.68, 1.12). The incidence of adverse events was comparable in both groups (48%); the incidence of serious adverse events was 10% (FF/UMEC/VI) and 11% (FF/VI + UMEC). Conclusions: Single-inhaler triple therapy (FF/UMEC/VI) is non-inferior to two inhalers (FF/VI + UMEC) on trough FEV1 change from baseline at 24 weeks. Results were similar on all other measures of efficacy, health-related quality of life, and safety. Trial registration: GSK study CTT200812; ClinicalTrials.gov NCT02729051 (submitted 31 March 2016)

Testing for inconsistencies in the estimation of UK capital structure determinants

This article analyses the determinants of the capital structure of 1054 UK companies from 1991 to 1997, and the extent to which the influence of these determinants are affected by time-invariant firm-specific heterogeneity. Comparing the results of pooled OLS and fixed effects panel estimation, significant differences in the results are found. While the OLS results are generally consistent with prior literature, the results of our fixed effects panel estimation contradict many of the traditional theories of the determinants of corporate financial structure. This suggests that results of traditional studies may be biased owing to a failure to control for firm-specific, time-invariant heterogeneity. The results of the fixed effects panel estimation find larger companies to have higher levels of both long-term and short-term debt than do smaller firms, profitability to be negatively correlated with the level of gearing, although profitable firms tend to have more short-term bank borrowing than less profitable firms, and tangibility to positively influence the level of short-term bank borrowing, as well as all long-term debt elements. However, the level of growth opportunities appears to have little influence on the level of gearing, other than short-term bank borrowing, where a significant negative relationship is observed

The role of the discount rate in tendering highway concessions under the LPVR approach.

Flexible-term highway concessions are becoming quite popular around the world as a means of mitigating the traffic risk ultimately allocated to the concessionaire. The most sophisticated mechanism within flexible-term concession approaches is the least present value of the revenues (LPVR). This mechanism consists of awarding the concession to the bidder who offers the least present value of the revenues discounted at a discount rate fixed by the government in the contract. Consequently, the concession will come to an end when the present value of the revenues initially requested has been eventually reached. The aim of this paper is to evaluate the effect that the discount rate established by the government in the bidding terms has on the traffic-risk profile ultimately allocated to the concessionaire. To analyze this effect, a mathematical model is developed in order to obtain the results. I found that the lower the discount rate the larger will be the traffic risk allocated to the concessionaire. Moreover, I found that, if a maximum term is established in the contract, the lower the discount rate, the less skewed towards the downside will be the traffic-risk profile allocated to the concessionair

Noise-induced volatility of collective dynamics

"Noise-induced volatility" refers to a phenomenon of increased level of fluctuations in the collective dynamics of bistable units in the presence of a rapidly varying external signal, and intermediate noise levels. The archetypical signature of this phenomenon is that --beyond the increase in the level of fluctuations-- the response of the system becomes uncorrelated with the external driving force, making it different from stochastic resonance. Numerical simulations and an analytical theory of a stochastic dynamical version of the Ising model on regular and random networks demonstrate the ubiquity and robustness of this phenomenon, which is argued to be a possible cause of excess volatility in financial markets, of enhanced effective temperatures in a variety of out-of-equilibrium systems and of strong selective responses of immune systems of complex biological organisms. Extensive numerical simulations are compared with a mean-field theory for different network topologies

Comparison of stroke volume measurement between non-invasive bioreactance and esophageal Doppler in patients undergoing major abdominal-pelvic surgery

PURPOSE: Bioreactance is a non-invasive technology for measuring stroke volume (SV) in the operating room and critical care setting. We evaluated how the NICOM® bioreactance device performed against the CardioQ® esophageal Doppler monitor in patients undergoing major abdominal–pelvic surgery, focusing on the effect of different hemodynamic interventions. METHODS: SVNICOM and SVODM were simultaneously measured intraoperatively, including before and after interventions including fluid challenge, vasopressor boluses, peritoneal gas insufflation/removal, and Trendelenburg/reverse Trendelenburg patient positioning. RESULTS: A total of 768 values were collected from 21 patients. Pre- and post-intervention measures were recorded on 155 occasions. Bland–Altman analysis revealed a bias of 8.6 ml and poor precision with wide limits of agreement (54 and −37 ml) and a percentage error of 50.6%. No improvement in precision was detected after taking into account repeated measurements for each patient (bias: 8 ml; limits of agreement: 74 and −59 ml). Concordance between changes in SVNICOM and SVODM before and after interventions was also poor: 78.7% (all measures), 82.4% (after vasopressor administration), and 74.3% (after fluid challenge). Using Doppler SV as the reference technique, the area under the receiver operating characteristic curve assessing the ability of the NICOM device to predict fluid responsiveness was 0.81 (0.7–0.9). CONCLUSIONS: In patients undergoing major abdomino-pelvic surgery, SV values obtained by NICOM showed neither clinically or statistically acceptable agreement with those obtained by esophageal Doppler. Although, in the setting of this study, bioreactance technology cannot reliably replace esophageal Doppler monitoring, its accuracy for predicting fluid responsiveness was higher, up to approximately 80%

Improving response rates using a monetary incentive for patient completion of questionnaires: an observational study

Background: Poor response rates to postal questionnaires can introduce bias and reduce the statistical power of a study. To improve response rates in our trial in primary care we tested the effect of introducing an unconditional direct payment of 5 pound for the completion of postal questionnaires. Methods: We recruited patients in general practice with knee problems from sites across the United Kingdom. An evidence-based strategy was used to follow-up patients at twelve months with postal questionnaires. This included an unconditional direct payment of 5 pound to patients for the completion and return of questionnaires. The first 105 patients did not receive the 5 pound incentive, but the subsequent 442 patients did. We used logistic regression to analyse the effect of introducing a monetary incentive to increase the response to postal questionnaires. Results: The response rate following reminders for the historical controls was 78.1% ( 82 of 105) compared with 88.0% ( 389 of 442) for those patients who received the 5 pound payment (diff = 9.9%, 95% CI 2.3% to 19.1%). Direct payments significantly increased the odds of response ( adjusted odds ratio = 2.2, 95% CI 1.2 to 4.0, P = 0.009) with only 12 of 442 patients declining the payment. The incentive did not save costs to the trial - the extra cost per additional respondent was almost 50 pound. Conclusion: The direct payment of 5 pound significantly increased the completion of postal questionnaires at negligible increase in cost for an adequately powered study

Levosimendan for the prevention of acute organ dysfunction in sepsis

BACKGROUND Levosimendan is a calcium-sensitizing drug with inotropic and other properties that may improve outcomes in patients with sepsis. METHODS We conducted a double-blind, randomized clinical trial to investigate whether levosimendan reduces the severity of organ dysfunction in adults with sepsis. Patients were randomly assigned to receive a blinded infusion of levosimendan (at a dose of 0.05 to 0.2 μg per kilogram of body weight per minute) for 24 hours or placebo in addition to standard care. The primary outcome was the mean daily Sequential Organ Failure Assessment (SOFA) score in the intensive care unit up to day 28 (scores for each of five systems range from 0 to 4, with higher scores indicating more severe dysfunction; maximum score, 20). Secondary outcomes included 28-day mortality, time to weaning from mechanical ventilation, and adverse events. RESULTS The trial recruited 516 patients; 259 were assigned to receive levosimendan and 257 to receive placebo. There was no significant difference in the mean (±SD) SOFA score between the levosimendan group and the placebo group (6.68±3.96 vs. 6.06±3.89; mean difference, 0.61; 95% confidence interval [CI], −0.07 to 1.29; P=0.053). Mortality at 28 days was 34.5% in the levosimendan group and 30.9% in the placebo group (absolute difference, 3.6 percentage points; 95% CI, −4.5 to 11.7; P=0.43). Among patients requiring ventilation at baseline, those in the levosimendan group were less likely than those in the placebo group to be successfully weaned from mechanical ventilation over the period of 28 days (hazard ratio, 0.77; 95% CI, 0.60 to 0.97; P=0.03). More patients in the levosimendan group than in the placebo group had supraventricular tachyarrhythmia (3.1% vs. 0.4%; absolute difference, 2.7 percentage points; 95% CI, 0.1 to 5.3; P=0.04). CONCLUSIONS The addition of levosimendan to standard treatment in adults with sepsis was not associated with less severe organ dysfunction or lower mortality. Levosimendan was associated with a lower likelihood of successful weaning from mechanical ventilation and a higher risk of supraventricular tachyarrhythmia. (Funded by the NIHR Efficacy and Mechanism Evaluation Programme and others; LeoPARDS Current Controlled Trials number, ISRCTN12776039.

Bench-to-bedside review : targeting antioxidants to mitochondria in sepsis

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