Dev Vencappa

Trade Policy and Productivity Growth in Indian Manufacturing

This article explores the impact of trade policy reforms on total factor productivity (TFP) growth in the Indian manufacturing sectors. For a range of measures of TFP growth, it explores the pre- and post-trade liberalisation performance at the two-digit manufacturing industry level. The results indicate an increase in TFP growth on average and for the majority of manufacturing industries in the post-trade reform period.

Does the Entry Mode of Foreign Banks Matter for Bank Efficiency? Evidence from the Czech Republic,Hungary, and Poland

This paper investigates the impact of specific modes of entry of foreign banks, i.e. greenfield investment versus merger and acquisition, on bank performance in three transition economies ??? the Czech Republic, Hungary, and Poland. We use stochastic frontier analysis to model and measure the cost efficiency of banks. We adopt a maximum likelihood approach to estimation in which the variance of the one-sided error term is modeled jointly with the cost frontier, thus enabling us to retrieve efficiency scores, as well as estimating the various determinants of X-inefficiency. We first find that foreign banks are generally more cost efficient than their domestic counterparts, a result that confirms those of the existing empirical literature. We then turn our focus to comparative performance of greenfield banks versus merger and acquisition banks (M&As), and of M&As versus domestic banks. The results show that on average, M&As are surpassed in terms of efficiency by greenfields banks, but no cost efficiency difference is apparent between M&As and domestic banks. However, we find a strong age effect with respect to M&As which suggests that the evolution of M&As??? efficiency follows an inverse U-shape, that means M&As tend to get more inefficient following the acquisition, but approximately 4 years and a haft later, their efficiency starts to improve.

The Impact of Risk Management Standards on Patient Safety: The Determinants of MRSA Infections in Acute NHS Hospitals, 2001-08

We study a key part of National Health Service (NHS) policy to ensure high-quality health care: failure to supply such care cost the NHS £787m in clinical negligence payouts during 2009–10. The NHS uses risk management standards to incentivize care, and we examine their effects on methicillin resistant Staphylococcus aureus (MRSA) infections. Using a specially assembled data set, our GMM results suggest that improvements in the risk management standards attained by some hospitals are correlated with reductions in their MRSA infection rates. Moreover, the exogeneity of this relationship cannot be rejected for higher risk management levels, suggesting attainment of higher standards was instrumental in reducing infection rates.

Productivity Growth in the European Insurance Industry: Evidence from Life and Non-Life Companies

Abstract This paper estimates and decomposes productivity growth for a sample of European insurance companies using Standard and Poor’s Eurothesys panel data set of company accounts. We focus on a period (1995–2008) where substantial deregulation took place, as well as significant shocks to global capital markets and unforeseen climatic and terrorism-related events. We estimate parametric stochastic production frontiers for life and non-life insurance from which we decompose productivity growth using a derivative-based approach. In order to capture the inherent variability of productivity in the insurance sector, we explore the consequences of adopting three different proxy measures for insurance output. In each case, we observe temporal variations in overall productivity growth for both life and non-life insurance, corresponding to systematic shocks to the market. The decomposition of these fluctuations provides important lessons for the measurement of long-term productivity growth in insurance markets and more generally in sectors which are exposed to stochastic and market-wide systematic shocks to performance. Our findings cast doubt on many previous studies of productivity growth in the financial service sector where outputs are inevitably difficult to measure due to their contingent nature. The choice of output proxies appears to be critical, particularly when exploring long-term productivity trends.

Discretion in accounting for pensions under IAS 19: using the ‘magic telescope’?

We use a panel data set of UK-listed companies over the period 2005–2009 to analyse the actuarial assumptions used to value pension plan liabilities under IAS 19. The valuation process requires companies to make assumptions about financial and demographic variables, notably discount rate, price inflation, salary inflation and mortality/life expectancy of plan members/beneficiaries. We use regression analysis to analyse the relationships between these key assumptions (except mortality, where disclosures are limited) and company-specific factors such as the pension plan funding position and duration of pension liabilities. We find evidence of selective ‘management’ of the three assumptions investigated, although the nature of this appears to differ from the findings of US authors. We conclude that IAS 19 does not prevent the use of managerial discretion, particularly by companies whose pension plan funding positions are weak, thereby reducing the representational faithfulness of the reported pension figures. We also highlight that the degree of discretion used reflects the extent to which IAS 19 defines how the assumptions are to be determined. We therefore suggest that companies should be encouraged to justify more explicitly their choice of assumptions.

Changing experience of adverse medical events in the National Health Service: Comparison of two population surveys in 2001 and 2013

Care quality is important to patients and providers, but is hard to measure. This study aimed to examine changes in the frequency and severity of one quality measure - adverse events associated with medical care - in Great Britain over a 12-year period when available resources initially expanded and were subsequently constrained. Data on perceived adverse events, collected from two representative population surveys in 2001 and 2013, were analysed and compared. The samples consisted of 8202 adults aged 15 and over in 2001 and 19,746 adults aged 15 and over in 2013. The main outcome measures were self-reported illness, injury or impairment caused in the opinion of the respondent by medical treatment or care. Respondents were also asked about the perceived severity of harm in terms of health and work, and any actions taken in response. The proportion of all respondents reporting that over the last three years they had suffered some illness, injury or impairment that in their opinion was caused by their medical treatment or care was 2.5% (497/19746) in 2013, compared with 4.8% (391/8202) in 2001, a reduction of 33% after adjusting for age, gender, income and social class differences between the two surveys. Perceived impact on health and work of these events was similar in both surveys, as was the proportion of injured respondents who pursued a legal claim for financial compensation, at 11% (53/497) in 2013 and 10.5% (41/391) in 2001. We also report multivariate analyses of perceived harm rates and severity, and propensity to seek, and accept, compensation. Our results suggest that the NHS became significantly safer over this period when measured by patient perceived harm from medical care. Our survey method could provide a valuable contribution to the monitoring of trends in health-care related adverse events and the impact of patient safety initiatives.