Firms' investment under financial constraints: a Euro area investigation

In this paper we describe a model of optimal investment of various types of financially constrained firms. We show that the resulting relationship between internal funds and investment is non-monotonic. In particular, the magnitude of the cash flow sensitivity of the investment is lower for firms with credit rationing compared to firms that are able to obtained short-term external financing. The inverse relationship is driven by the leverage multiplier effect. A positive cash flow shock increases the short-term borrowing capacity of the firm, which in turn has a positive effect on investment and firm's growth. Moreover, the leverage multiplier effect is the highest for firms relying on short-term credits and it is lower for firms that are able to obtain long-term financing. Analysing a large euro area data set we find strong empirical support for our theoretical predictions. The results also help to explain some contrasting findings in the financial constraints literature

Estimating travel reduction associated with the use of telemedicine by patients and healthcare professionals: proposal for quantitative synthesis in a systematic review

<p>Abstract</p> <p>Background</p> <p>A major benefit offered by telemedicine is the avoidance of travel, by patients, their carers and health care professionals. Unfortunately, there is very little published information about the extent of avoided travel. We propose to undertake a systematic review of literature which reports credible data on the reductions in travel associated with the use of telemedicine.</p> <p>Method</p> <p>The conventional approach to quantitative synthesis of the results from multiple studies is to conduct a meta analysis. However, too much heterogeneity exists between available studies to allow a meaningful meta analysis of the avoided travel when telemedicine is used across all possible settings. We propose instead to consider all credible evidence on avoided travel through telemedicine by fitting a linear model which takes into account the relevant factors in the circumstances of the studies performed. We propose the use of stepwise multiple regression to identify which factors are significant.</p> <p>Discussion</p> <p>Our proposed approach is illustrated by the example of teledermatology. In a preliminary review of the literature we found 20 studies in which the percentage of avoided travel through telemedicine could be inferred (a total of 5199 patients). The mean percentage avoided travel reported in the 12 store-and-forward studies was 43%. In the 7 real-time studies and in a single study with a hybrid technique, 70% of the patients avoided travel. A simplified model based on the modality of telemedicine employed (i.e. real-time or store and forward) explained 29% of the variance. The use of store and forward teledermatology alone was associated with 43% of avoided travel. The increase in the proportion of patients who avoided travel (25%) when real-time telemedicine was employed was significant (<it>P </it>= 0.014). Service planners can use this information to weigh up the costs and benefits of the two approaches.</p