Short-Run Strategies For Attracting Foreign Direct Investment

This paper empirically investigates the effectiveness and feasibility of two FDI policies, fiscal incentives and deregulation, aimed at improving the attractiveness of a country in the short run. Using disaggregated data on sales by US MNEs’ foreign affiliates in 43 developed and developing countries over the 1982-1994 period, results show that the provision of fiscal incentives or the deregulation of the labour market would exert a positive impact on total FDI. Given the drawbacks frequently associated with the use of incentive packages, economy-wide policies which ease firing procedures and reduce severance payments would certainly be the best policy option. This paper also highlights the different aggregation and omitted variable biases that have affected results of previous studies and provides some support to recent theoretical models of FDI by showing that third country effects and spatial interdependence influence respectively the location of export-platform FDI and vertical FDI.

Optimal Martingales and American Option Pricing

Pricing American options is an interesting research topic since there is no analytical solution to value these derivatives. Different numerical methods have been proposed in the literature with some, if not all, either limited to a specific payoff or not applicable to multidimensional cases. Applications of Monte Carlo methods to price American options is a relatively new area that started with Longstaff and Schwartz (2001). Since then, few variations of that methodology have been proposed. The general conclusion is that Monte Carlo estimators tend to underestimate the true option price. The present paper follows Glasserman and Yu (2004b) and proposes a novel Monte Carlo approach, based on designing "optimal martingales" to determine stopping times. We show that our martingale approach can also be used to compute the dual as described in Rogers (2002).

Sex biased spatial strategies relying on the integration of multimodal cues in a rat model of schizophrenia: impairment in predicting future context?

Male and female Wistar rats were treated postnatally (PND 5-16) with BSO (l-buthionine-(S,R)-sulfoximine) to provide a rat model of schizophrenia based on transient glutathione deficit. In the watermaze, BSO-treated male rats perform very efficiently in conditions where a diversity of visual information is continuously available during orientation trajectories [1]. Our hypothesis is that the treatment impairs proactive strategies anticipating future sensory information, while supporting a tight visual adjustment on memorized snapshots, i.e. compensatory reactive strategies. To test this hypothesis, BSO rats' performance was assessed in two conditions using an 8-arm radial maze task: a semi-transparent maze with no available view on the environment from maze centre [2], and a modified 2-parallel maze known to induce a neglect of the parallel pair in normal rats [3-5]. Male rats, but not females, were affected by the BSO treatment. In the semi-transparent maze, BSO males expressed a higher error rate, especially in completing the maze after an interruption. In the 2-parallel maze shape, BSO males, unlike controls, expressed no neglect of the parallel arms. This second result was in accord with a reactive strategy using accurate memory images of the contextual environment instead of a representation based on integrating relative directions. These results are coherent with a treatment-induced deficit in proactive decision strategy based on multimodal cognitive maps, compensated by accurate reactive adaptations based on the memory of local configurations. Control females did not express an efficient proactive capacity in the semi-transparent maze, neither did they show the significant neglect of the parallel arms, which might have masked the BSO induced effect. Their reduced sensitivity to BSO treatment is discussed with regard to a sex biased basal cognitive style.

Local Currency Pricing, Foreign Monetary Shocks and Exchange Rate Policy

The implications of local currency pricing (LCP) for monetary regime choice are analysed for a country facing foreign monetary shocks. In this analysis expenditure switching is potentially welfare reducing. This contrasts with the existing LCP literature, which focuses on productivity shocks and thus analyses a world where expenditure switching is welfare enhancing. This paper shows that, when home and foreign producers follow LCP, expenditure switching is absent and a floating rate is preferred by the home country. But when only home producers follow LCP, expenditure switching is present and a fixed rate can be welfare enhancing for the home country.

Short-Run Strategies For Attracting Foreign Direct Investment

This paper empirically investigates the effectiveness and feasibility of two FDI policies, fiscal incentives and deregulation, aimed at improving the attractiveness of a country in the short run. Using disaggregated data on sales by US MNEs’ foreign affiliates in 43 developed and developing countries over the 1982-1994 period, results show that the provision of fiscal incentives or the deregulation of the labour market would exert a positive impact on total FDI. Given the drawbacks frequently associated with the use of incentive packages, economy-wide policies which ease firing procedures and reduce severance payments would certainly be the best policy option. This paper also highlights the different aggregation and omitted variable biases that have affected results of previous studies and provides some support to recent theoretical models of FDI by showing that third country effects and spatial interdependence influence respectively the location of export-platform FDI and vertical FDI.

Evaluating sampling strategies and logistic regression methods for modelling complex land cover changes

The role of land cover change as a significant component of global change has become increasingly recognized in recent decades. Large databases measuring land cover change, and the data which can potentially be used to explain the observed changes, are also becoming more commonly available. When developing statistical models to investigate observed changes, it is important to be aware that the chosen sampling strategy and modelling techniques can influence results. We present a comparison of three sampling strategies and two forms of grouped logistic regression models (multinomial and ordinal) in the investigation of patterns of successional change after agricultural land abandonment in Switzerland. Results indicated that both ordinal and nominal transitional change occurs in the landscape and that the use of different sampling regimes and modelling techniques as investigative tools yield different results. Synthesis and applications. Our multimodel inference identified successfully a set of consistently selected indicators of land cover change, which can be used to predict further change, including annual average temperature, the number of already overgrown neighbouring areas of land and distance to historically destructive avalanche sites. This allows for more reliable decision making and planning with respect to landscape management. Although both model approaches gave similar results, ordinal regression yielded more parsimonious models that identified the important predictors of land cover change more efficiently. Thus, this approach is favourable where land cover change pattern can be interpreted as an ordinal process. Otherwise, multinomial logistic regression is a viable alternative.

Spatial Interactions in Hedonic Pricing Models: The Urban Housing Market of Aveiro, Portugal

Spatial heterogeneity, spatial dependence and spatial scale constitute key features of spatial analysis of housing markets. However, the common practice of modelling spatial dependence as being generated by spatial interactions through a known spatial weights matrix is often not satisfactory. While existing estimators of spatial weights matrices are based on repeat sales or panel data, this paper takes this approach to a cross-section setting. Specifically, based on an a priori definition of housing submarkets and the assumption of a multifactor model, we develop maximum likelihood methodology to estimate hedonic models that facilitate understanding of both spatial heterogeneity and spatial interactions. The methodology, based on statistical orthogonal factor analysis, is applied to the urban housing market of Aveiro, Portugal at two different spatial scales.

Experimental evidence of a sunk–cost paradox: a study of pricing behavior in Bertrand–Edgeworth duopoly

A well–known implication of microeconomic theory is that sunk costs should have no effect on decision making. We test this hypothesis with a human–subjects experiment. Students recruited from graduate business courses, with an average of over six years of work experience, played the role of firms in a repeated price–setting duopoly game in which both firms had identical capacity constraints and costs, including a sunk cost that varied across experimental sessions over six different values. We find, contrary to the prediction of microeconomic theory, that subjects’ pricing decisions show sizable differences across treatments. The effect of the sunk cost is non–monotonic: as it increases from low to medium levels, average prices decrease, but as it increases from medium to high levels, average prices increase. These effects are not apparent initially, but develop quickly and persist throughout the game. Cachon and Camerer’s (1996) loss avoidance is consistent with both effects, while cost–based pricing predicts only the latter effect, and is inconsistent with the former.

The rise and fall of piecework–timework wage differentials: market volatility, labor heterogeneity, and output pricing

Based on detailed payroll data of blue collar male and female labor in Britain’s engineering and metal working industrial sectors between the mid-1920s and mid-1960s, we provide empirical evidence in respect of several central themes in the piecework-timework wage literature. The period covers part of the heyday of pieceworking as well as the start of its post-war decline. We show the importance of relative piece rate flexibility during the Great Depression as well as during the build up to WWII and during the war itself. We account for the very significant decline in the differentials after the war. Labor market topics include piecework pay in respect of compensating differentials, labor heterogeneity, and the transaction costs of pricing piecework output.

The Inflation Bias under Calvo and Rotemberg Pricing.

New Keynesian models rely heavily on two workhorse models of nominal inertia - price contracts of random duration (Calvo, 1983) and price adjustment costs (Rotemberg, 1982) - to generate a meaningful role for monetary policy. These alternative descriptions of price stickiness are often used interchangeably since, to a first order of approximation they imply an isomorphic Phillips curve and, if the steady-state is efficient, identical objectives for the policy maker and as a result in an LQ framework, the same policy conclusions. In this paper we compute time-consistent optimal monetary policy in bench-mark New Keynesian models containing each form of price stickiness. Using global solution techniques we find that the inflation bias problem under Calvo contracts is significantly greater than under Rotemberg pricing, despite the fact that the former typically significant exhibits far greater welfare costs of inflation. The rates of inflation observed under this policy are non-trivial and suggest that the model can comfortably generate the rates of inflation at which the problematic issues highlighted in the trend inflation literature emerge, as well as the movements in trend inflation emphasized in empirical studies of the evolution of inflation. Finally, we consider the response to cost push shocks across both models and find these can also be significantly different. The choice of which form of nominal inertia to adopt is not innocuous.

Monetary policy strategies, financial institutions and financial markets in the Middle East and North Africa: an overview

Three polar types of monetary architecture are identified together with the institutional and market infrastructure required for each type and the kinds of monetary policy feasible in each case: a ‘basic’ architecture where there is little or no financial system as such but an elementary central bank which is able to fix the exchange rate, as a substitute for a proper monetary policy; a ‘modern’ monetary architecture with developed banks, financial markets and central bank where policy choices include types of inflation targeting; and an ‘intermediate’ monetary architecture where less market-based monetary policies involving less discretion are feasible. A range of data is used to locate the various MENA countries with respect to these polar types. Five countries (Iran, Libya, Sudan, Syria and Yemen) are identified as those with the least developed monetary architecture, while Bahrain and Jordan are identified as the group at the other end of the spectrum, reaching beyond the intermediate polar type in some dimensions but not others. The countries in between vary on different dimensions but all lie between basic and intermediate architectures. The key general findings are that the MENA countries are both less differentiated and less ‘developed’ than might have been expected. The paper ends by calling for research on the costs and benefits of different types of monetary architecture.

Tolerance-inducing immunosuppressive strategies in clinical transplantation: an overview.

The significant development of immunosuppressive drug therapies within the past 20 years has had a major impact on the outcome of clinical solid organ transplantation, mainly by decreasing the incidence of acute rejection episodes and improving short-term patient and graft survival. However, long-term results remain relatively disappointing because of chronic allograft dysfunction and patient morbidity or mortality, which is often related to the adverse effects of immunosuppressive treatment. Thus, the induction of specific immunological tolerance of the recipient towards the allograft remains an important objective in transplantation. In this article, we first briefly describe the mechanisms of allograft rejection and immune tolerance. We then review in detail current tolerogenic strategies that could promote central or peripheral tolerance, highlighting the promises as well as the remaining challenges in clinical transplantation. The induction of haematopoietic mixed chimerism could be an approach to induce robust central tolerance, and we describe recent encouraging reports of end-stage kidney disease patients, without concomitant malignancy, who have undergone combined bone marrow and kidney transplantation. We discuss current studies suggesting that, while promoting peripheral transplantation tolerance in preclinical models, induction protocols based on lymphocyte depletion (polyclonal antithymocyte globulins, alemtuzumab) or co-stimulatory blockade (belatacept) should, at the current stage, be considered more as drug-minimization rather than tolerance-inducing strategies. Thus, a better understanding of the mechanisms that promote peripheral tolerance has led to newer approaches and the investigation of individualized donor-specific cellular therapies based on manipulated recipient regulatory T cells.

Promotion de l'activité physique chez les aînés: enjeux et stratégies spécifiques. [Promotion of exercise in older people: issues and strategies].

Regular physical activity is among the most effective interventions to prevent or delay functional decline and disability, even in older persons. Despite relatively strong scientific evidence supporting these benefits, the majority of older persons remain mostly sedentary. For these persons, concerns about injury or fear of negative consequences on their chronic diseases are among the most powerful barriers to participation in regular physical activity. Promotion of physical activity among older persons has therefore become one of the five main themes of the health promotion project "Via", a project that aims at promoting good practice in prevention and health promotion directed toward older adults in Switzerland. This paper summarizes the main recommendations issued from this national project supported by the Swiss Health Promotion Foundation.

Vaccine strategies against schistosomiasis

In this review the authors analyze the effector and regulatory mechanisms in the immune response to schistosomiasis. To study these mechanisms two animal models were used, mouse and rat. The mouse totaly permissive host like human, show prominent-T cell control in the acquisition of resistance. But other mechanisms like antibody mediated cytotoxity (ADCC) involving eosinophils and IgG antibodies described in humans, are observed in rats. Also in this animal, it is observed specific IgE antibody high production and blood and tisssue eosinophilia. Using the rat model and schistosomula as target, some ADCC features have emerged: the cellular population involved are bone marrow derived inflammatory cell (mononuclear phagocytes, eosinophils and platelets), interacting with IgE through IgE Fc receptors. Immunization has been attempted using the recombinant protein Sm28/GST. Protection has been observed in rodents with significant decrease of parasite fecundity and egg viability affecting the number, size and volume of liver egg granulomas. The association of praziquantel and immunization with with Sm28/GST increases the resistance to infection and decreases egg viability. The authors suggest the possibility of the stablishment of a future vaccine against Schistosoma mansoni.