The Competitiveness of the European ICT Industry

This paper investigates the international competitiveness of the European ICT sector. We use Labour productivity, R&D expenses and trade performance as proxies of competitiveness. The empirical analysis of 39 countries between 1999 and 2004 confirms our main hypothesis that the EU is performing better in the ICT services industry relative to manufacturing. In general, the average EU production efficiency is larger in the services sector, than in manufacturing. The study has important policy implications. Appropriate policies should be implemented – especially in the ICT manufacturing sector – for making EU more competitive in “non- price factors”, such as policies that facilitate the transformation of R&D expenses into product innovation. There are clearly areas for improvement in the way R&D is carried out in the ICT sector within the EU, with respect to both the allocation of R&D investment and the process of producing results from R&D

The impact of ICT diffusion on sovereign cost of debt

We examine the effect of a country’s level of information and communication technologies (ICT) diffusion on its credit rating and cost of debt. ICT diffusion is approximated using the Networked Readiness Index, which is designed to capture a country’s capacity and preparedness to participate in the digital economy. We adopt a modified random effects approach which allows us to distinguish between short and long run effects on a dataset of 65 countries for a time span of ten years. We show that ICT have a significant impact on a country’s credit rating and cost of debt which is robust to the presence of other variables proposed in the literature. The effect is stronger for non-OECD countries, indicating a pathway for developing countries to improve their access to debt markets. Our conclusions are robust to the advent of the recent financial crisis

Continuous-time VIX dynamics: on the role of stochastic volatility of volatility

This paper examines the ability of several different continuous-time one- and two-factor jump-diffusion models to capture the dynamics of the VIX volatility index for the period between 1990 and 2010. For the one-factor models we study affine and non-affine specifications, possibly augmented with jumps. Jumps in one-factor models occur frequently, but add surprisingly little to the ability of the models to explain the dynamic of the VIX. We present a stochastic volatility of volatility model that can explain all the time-series characteristics of the VIX studied in this paper. Extensions demonstrate that sudden jumps in the VIX are more likely during tranquil periods and the days when jumps occur coincide with major political or economic events. Using several statistical and operational metrics we find that non-affine one-factor models outperform their affine counterparts and modeling the log of the index is superior to modeling the VIX level directly

Sovereign debt markets in light of the shadow economy

We investigate the controversial role of the informal sector in the economy of 64 countries between 2003 and 2007 by focusing for the first time on the impact it has on sovereign debt markets. In addition to a standard ordered probit regression, we employ two nonparametric neural network modeling techniques in order to capture possible complex interactions between our variables. Results confirm our main hypothesis that the informal sector has significant adverse effects on credit ratings and lending costs. MLP neural networks offer the best fit to the data, followed by the RBF neural networks and probit regression, respectively. The results do not change with respect to the stage of economic development of a country and contradict views about the possibility of significant economic benefits arising from the informal sector. Our study has important implications, especially in the context of the ongoing sovereign debt crisis, since it suggests that a reduction in the informal sector of financially challenged countries is likely to help in relaxing credit risk concerns and cutting down lending costs. Finally, a decision tree analysis is used to exploit the inherent discreteness in the data and derive intuitive rules with respect to the level of the informal sector

Survivorship and Clinical Outcome of the Minimally Invasive Uniglide Medial Fixed Bearing, All-polyethylene Tibia, Unicompartmental Knee Arthroplasty at a Mean Follow-up of 7.3 Years

Background: Medial UKA performed in England and Wales represents 7 to 11% of all knee arthroplasty procedures, and is most commonly performed using mobile-bearing designs. Fixed bearing eliminates the risk of bearing dislocation, however some studies have shown higher revision rates for all-polyethylene tibial components compared to those that utilize metal-backed implants. The aim of the study is to analyse survivorship and maximum 8-year clinical outcome of medial fixed bearing, Uniglide unicompartmental knee arthroplasty performed using an all-polyethylene tibial component with a minimal invasive approach. Methods: Between 2002 and 2009, 270 medial fixed UKAs were performed in our unit. Patients were reviewed pre-operatively, 5 and 8 years post-operatively. Clinical and radiographic reviews were carried out. Patients’ outcome scores (Oxford, WOMAC and American Knee Score) were documented in our database and analysed. Results: Survival and clinical outcome data of 236 knees with a mean 7.3 years follow-up are reported. Every patient with less than 4.93 years follow-up underwent a revision. The patients’ average age at the time of surgery was 69.5 years. The American Knee Society Pain and Function scores, the Oxford Knee Score and the WOMAC score all improved significantly. The 5 years survival rate was 94.1% with implant revision surgery as an end point. The estimated 10 years survival rate is 91.3%. 14 patients were revised before the 5 year follow-up. Conclusion: Fixed bearing Uniglide UKA with an all-polyethylene tibial component is a valuable tool in the management of a medial compartment osteoarthritis, affording good short term survivorship

Oxford Phase 3 unicompartmental knee arthroplasty: medium-term results of a minimally invasive surgical procedure

PURPOSE: In the last decade, a major increase in the use of and interest in unicompartmental knee arthroplasty (UKA) has developed. The Oxford Phase 3 UKA is implanted with a minimally invasive technique using newly developed instruments. The objective of this prospective study was to evaluate the outcome of UKA in patients with medial osteoarthritis of the knee in a high-volume unit. METHODS: Two-hundred and forty-four UKAs were performed with a minimally invasive approach. The median age was 72 (43-91) years. The median follow-up was 4.2 years (range 1-10.4 years). Fourteen patients died, and nine were considered to be lost to follow-up, but all had a well-functioning prosthesis in situ until their last follow-up. Pain, function and health-related quality of life were evaluated pre- and postoperatively using patient- and assessor-based outcome scores, as well as radiographic evidence. RESULTS: The mean Knee Society knee and function scores, WOMAC-scores, Oxford-score and VAS pain and satisfaction all improved. Nine knees required revision. Eleven patients required an additional arthroscopic procedure due to persisting pain secondary to intra-articular pathology, and four patients required manipulation under anaesthesia because of limited range of motion. The 7-year cumulative survival rate of the arthroplasty was 94.4%. A low incidence (21%) of a radiolucent line beneath the tibial component was observed at 5 years of follow-up. CONCLUSION: This study showed a high survival rate of the Oxford Phase 3 UKA. Patient satisfaction and functional performance were also very high. Major complication rate was low; in addition, the incidence of radiolucency under the tibial component, when compared to present literature, was low. When strict indication criteria are followed, excellent, durable, and in our opinion reliable, results can be expected for this procedur

Interest Rate Volatility and Risk Management: Evidence from CBOE Treasury Options

This paper investigates US Treasury market volatility and develops new ways of dealing with the underlying interest rate volatility risk. We adopt an innovative approach which is based on a class of model-free interest rate volatility (VXI) indices we derive from options traded on the CBOE. The empirical analysis indicates substantial interest rate volatility risk for medium-term instruments which declines to the levels of the equity market only as the tenor increases to 30 years. We show that this risk appears to be priced in the market and has a significant time-varying relationship with equity volatility risk. US Treasury market volatility is appealing from an investment diversification perspective since the VXI indices are negatively correlated with the levels of interest rates and of equity market implied volatility indices, respectively. Although VXI indices are affected by macroeconomic and monetary news, they are only partially spanned by information contained in the yield curve. Motivated by our results on the magnitude and the nature of interest rate volatility risk and by the phenomenal recent growth of the equity volatility derivative market, we propose the use of our VXI indices as benchmarks for monitoring, securitizing, managing and trading interest rate volatility risk. As a first step in this direction, we describe a framework of one-factor equilibrium models for pricing VXI futures and options on the basis of empirically favored mean-reverting jump-diffusions