The new economy: Essays in network economics and two-sided markets

Following the Introduction, which surveys existing literature on the technology advances and regulation in telecommunications and on two-sided markets, we address specific issues on the industries of the New Economy, featured by the existence of network effects. We seek to explore how each one of these industries work, identify potential market failures and find new solutions at the economic regulation level promoting social welfare. In Chapter 1 we analyze a regulatory issue on access prices and investments in the telecommunications market. The existing literature on access prices and investment has pointed out that networks underinvest under a regime of mandatory access provision with a fixed access price per end-user. We propose a new access pricing rule, the indexation approach, i.e., the access price, per end-user, that network i pays to network j is function of the investment levels set by both networks. We show that the indexation can enhance economic efficiency beyond what is achieved with a fixed access price. In particular, access price indexation can simultaneously induce lower retail prices and higher investment and social welfare as compared to a fixed access pricing or a regulatory holidays regime. Furthermore, we provide sufficient conditions under which the indexation can implement the socially optimal investment or the Ramsey solution, which would be impossible to obtain under fixed access pricing. Our results contradict the notion that investment efficiency must be sacrificed for gains in pricing efficiency. In Chapter 2 we investigate the effect of regulations that limit advertising airtime on advertising quality and on social welfare. We show, first, that advertising time regulation may reduce the average quality of advertising broadcast on TV networks. Second, an advertising cap may reduce media platforms and firms' profits, while the net effect on viewers (subscribers) welfare is ambiguous because the ad quality reduction resulting from a regulatory cap o¤sets the subscribers direct gain from watching fewer ads. We find that if subscribers are sufficiently sensitive to ad quality, i.e., the ad quality reduction outweighs the direct effect of the cap, a cap may reduce social welfare. The welfare results suggest that a regulatory authority that is trying to increase welfare via regulation of the volume of advertising on TV might necessitate to also regulate advertising quality or, if regulating quality proves impractical, take the effect of advertising quality into consideration. 3 In Chapter 3 we investigate the rules that govern Electronic Payment Networks (EPNs). In EPNs the No-Surcharge Rule (NSR) requires that merchants charge at most the same amount for a payment card transaction as for cash. In this chapter, we analyze a three- party model (consumers, merchants, and a proprietary EPN) with endogenous transaction volumes and heterogenous merchants' transactional benefits of accepting cards to assess the welfare impacts of the NSR. We show that, if merchants are local monopolists and the network externalities from merchants to cardholders are sufficiently strong, with the exception of the EPN, all agents will be worse o¤ with the NSR, and therefore the NSR is socially undesirable. The positive role of the NSR in terms of improvement of retail price efficiency for cardholders is also highlighted.

Context costs and comparative advantages in the telecommunications sector in Portugal and China

This Work Project aims to discuss the Context Costs and Comparative Advantages of the Telecommunications sector both in Portugal and China. The work was built mostly on primary research by interviews with relevant people (business persons, University Professors and Agencies directors), and by economic data publicly available. A list of context costs and comparative advantages was drawn for each country and possible resolutions suggestions were made in the end. The context costs depend heavily on the economic situation of the countries and it should be taken into account when assessing the degree of magnitude of each cost of context. The competitive advantages of each country were drawn in comparison with one another. Some key results stand out: firstly, Portugal’s costs of context depend mainly on governmental decisions, uncertainties and instability and China’s cost of context depend primarily on cultural norms, mainly the Guanxi; second, the telecommunications sector shares most of its context costs and advantages with other sectors; third, China as an economic power could use the telecommunications sector as a way to further develop and boost its economy.

Reframing reverse logistics, reducing costs

A Work Project, presented as part of the requirements for the Award of a Masters Degree in Management from the NOVA – School of Business and Economics

Health expenditures in the OECD: A political economy analysis using structural breaks

A Masters Thesis, presented as part of the requirements for the award of a Research Masters Degree in Economics from NOVA – School of Business and Economics

Money for nothing?: The net costs of medical training

A Masters Thesis, presented as part of the requirements for the award of a Research Masters Degree in Economics from NOVA – School of Business and Economics

How to improve supply chain performance of a specialized retailer: Managing landed costs of Zippy’s global supply chain

A Work Project, presented as part of the requirements for the Award of a Masters Degree in Management from the NOVA – School of Business and Economics

The financial system in Mozambique: Opportunities, barriers and market potential

This research is empirical and exploratory intending to analyse the attractiveness of banking in Mozambique, considering its positive outlook. To identify the opportunities and barriers, the methods adopted were elite interviews with banking executives, complemented by secondary data. The opportunities for new entrants seem to include bankarization and the emergence of micro and smallmedium enterprises; other avenues seem to include investment banking, support of mega-projects (e.g. energy, infrastructures) through syndicates and cooperation with multilaterals, and the participation in developing capital markets. Conversely, the main barriers include shortage of talent, inadequate infrastructures, poverty, unsophisticated entrepreneurial culture (e.g. informal economy, inadequate financial reporting), burdensome bureaucracy (e.g. visas), foreign exchange regulation, as well as low liquidity and high funding costs for banks. The key conclusions suggest a window of opportunity for niche markets, and new products and services in retail and investment banking.

Effects of quantitative easing on the USA economy: A test for policy effectiveness

The catastrophic disruption in the USA financial system in the wake of the financial crisis prompted the Federal Reserve to launch a Quantitative Easing (QE) programme in late 2008. In line with Pesaran and Smith (2014), I use a policy effectiveness test to assess whether this massive asset purchase programme was effective in stimulating the economic activity in the USA. Specifically, I employ an Autoregressive Distributed Lag Model (ARDL), in order to obtain a counterfactual for the USA real GDP growth rate. Using data from 1983Q1 to 2009Q4, the results show that the beneficial effects of QE appear to be weak and rather short-lived. The null hypothesis of policy ineffectiveness is not rejected, which suggests that QE did not have a meaningful impact on output growth.

Competition policy costs to firms

The existence of competition policy forces companies to adjust their behaviour. This is also costly. Using a database from a company on contracts, I will try to estimate if a specific competition policy disposition, supply contracts cannot be longer than 60 months, has costs for the coffee suppliers operating in the Portuguese “on-trade” coffee market. The estimation method used in this paper will be OLS. The results suggest that limiting the duration of exclusivity contracts to 60 months can be harmful to the coffee suppliers and it can even seriously affect the market functioning. Key

Reallocation of resources between the tradable and non-tradable sector in Portugal: Assessing the degree of structural transformation in the Portuguese economy

Portugal implemented a large number of structural reforms in the recent years, which are expected to enhance the allocation of resources in the economy, namely from the non-tradable to tradable sector. We argue that the methodology to identify the tradable sector used by some international institutions is outdated and may hamper an accurate assessment of the progress achieved so far. Based on an enhanced methodology to identify the tradable sector, we are able to provide a more accurate, clearer picture of the recent structural developments of the Portuguese economy.

Healthcare- Associated infections: An analysis of costs in a Portuguese Hospital

Hospital-acquired infections (HAIs) delay healing, prolong Hospital stay, and increase both Hospital costs and risk of death. This study aims to estimate the extra length of stay and mortality rate attributable to each of the following HAIs: wound infection (WI); bloodstream infection (BSI); urinary infections (UI); and Hospital-acquired pneumonia (HAP). The study population consisted of patients discharged in CHLC in 2014. Data was collected to identify demographic information, surgical operations, development of HAIs and its outputs. The study used regressions and a matched strategy to compare cases (infected) and controls (uninfected). The matching criteria were: age, sex, week and type of admission, number of admissions, major diagnostic category and type of discharge. When compared to matched controls, cases with HAI had a higher mortality rate and greater length of stay. WI related to hip or knee surgery, increased mortality rate by 27.27% and the length of stay by 74.97 days. WI due to colorectal surgery caused an extra mortality rate of 10.69% and an excess length of stay of 20.23 days. BSI increased Hospital stay by 28.80 days and mortality rate by 32.27%. UI caused an average additional length of stay of 19.66 days and risk of death of 12.85%. HAP resulted in an extra Hospital stay of 25.06 days and mortality rate of 24.71%. This study confirms the results of the previous literature that patients experiencing HAIs incur in an excess of mortality rates and Hospital stay, and, overall, it presents worse results comparing with other countries.

Custos indirectos associados à obesidade em Portugal

RESUMO - A obesidade constitui um importante problema de saúde pública com consequências económicas de grande dimensão. Os obesos têm um risco acrescido de contrair doenças e de sofrer morte prematura devido a problemas como a diabetes, hipertensão arterial, AVC, insuficiência cardíaca e algumas neoplasias malignas. O presente estudo tem como objectivo estimar o custo económico indirecto (valor da produção perdida) associado à obesidade em Portugal no ano de 2002. O estudo adopta uma abordagem tipo custos da doença baseada na prevalência. Os dados são retirados do Inquérito Nacional de Saúde e estatísticas de rotina publicadas pelo INE e por outros organismos oficiais. Consideram-se como obesas pessoas com índice de massa corporal (IMC) ≥ 30 kg/m2 e estabelecem-se como limites etários para participação em actividades económicas produtivas as idades compreendidas entre os 15 e os 64 anos. A estratégia de imputação de custos ao factor de risco obesidade caracteriza- se por estimar, para a população portuguesa, as proporções de doença e morte prematura atribuíveis à obesidade e em multiplicar as estimativas populacionais encontradas pelo valor da produtividade económica potencial das pessoas afectadas. O custo indirecto total da obesidade em Portugal no ano de 2002 foi estimado em 199,8 milhões de euros. A mortalidade contribuiu com 58,4% deste valor (117 milhões de euros) e a morbilidade com 41,6% (83 milhões de euros). Os custos da morbilidade advêm de mais de 1,6 milhões de dias de incapacidade anuais, principalmente por faltas ao trabalho associadas a doenças do sistema circulatório e diabetes tipo II. Os custos da mortalidade são o resultado de 18 733 potenciais anos de vida activa perdidos, numa razão de 3 mortes masculinas por cada morte feminina. Os resultados indicam que a obesidade acarreta consideráveis perdas económicas para o país. Comparando os resultados com um estudo complementar que calculou os custos directos (em cuidados de saúde) da obesidade, verifica-se que a componente indirecta representa 40,2% do total dos custos da obesidade. A implementação de estratégias que prevenissem ou reduzissem a incidência e prevalência de obesidade em Portugal poderia gerar ganhos de produtividade elevados. Para conhecer a dimensão destes ganhos é necessária mais investigação sobre os benefícios clínicos e relação custo-efectividade de estratégias para a redução da obesidade.

Firing and training costs and labour market segmentation

This dissertation consists of three essays on the labour market impact of firing and training costs. The modelling framework resorts to the search and matching literature. The first chapter introduces firing costs, both liner and non-linear, in a new Keynesian model, analysing business cycle effects for different wage rigidity degrees. The second chapter adds training costs in a model of a segmented labour market, accessing the interaction between these two features and the skill composition of the labour force. Finally, the third chapter analyses empirically some of the issues raised in the second chapter.

Fuel switching

The present Master dissertation is a project whose main objective is to identify value creation opportunities through fuel switching in the Portuguese industry, services, agriculture and fishing sectors. Fuel switching opportunities are characterized by type of fuel transition, type of technology transition, economy subsectors prone to have fuel switching and value created through fuel shift. Results suggest tomato concentrate, dairy, beer manufacturing and sugar refining subsectors is where prevalence of fuel oil steam boilers is high, for such cases conversion to natural gas steam boilers should result in operations having a ratio of NPV over CAPEX larger than ten and a payback period just under one year. Results further suggest food, beverages, textile, chemicals and wood subsectors currently operate between ten and twenty cogeneration Diesel engines that can be either modified to operate with natural gas or replaced by new natural gas cogeneration systems. Financial modeling indicates that both options have great value creation potential. The current analysis aims to be used by natural gas suppliers and energy project promoters to identify new potential deals as well as by heavy energy consumers to mitigate their energy related costs.