Has Omicron Changed the Evolution of the Pandemic? (Preprint)

BACKGROUND Variants of the SARS-CoV-2 virus carry differential risks to public health. The Omicron (B.1.1.529) variant, first identified in Botswana on November 11, 2021, has spread globally faster than any previous variant of concern. Understanding the transmissibility of Omicron is vital in the development of public health policy. OBJECTIVE To compare SARS-CoV-2 outbreaks driven by Omicron to those driven by prior variants of concern in terms of both the speed and magnitude of an outbreak. METHODS We analyzed trends in outbreaks by variant of concern with validated surveillance metrics in several southern African countries. The region offers an ideal setting for observational studies given that most outbreaks thus far have been driven primarily by a single variant at a time. To control for differences in total vaccinations and prior infections during different outbreaks, we estimated dynamic panel regressions to assess whether Omicron has a different trajectory. RESULTS The observed Omicron outbreaks in this study reach the outbreak threshold within 5-10 days after first detection, whereas other variants of concern have taken at least 14 days and up to as many as 35 days. The Omicron outbreaks also reach peak rates of new cases that are roughly double those of prior variants of concern. Dynamic panel regression estimates confirm Omicron has created a statistically significant shift in viral spread. CONCLUSIONS The transmissibility of Omicron is markedly higher than prior variants of concern. At the population level, the Omicron outbreaks occurred more quickly and with larger magnitude, despite substantial increases in vaccinations and prior infections, which should have otherwise reduced susceptibility to new infections. Unless public health policies are substantially altered, Omicron outbreaks in other countries are likely to occur with little warning. CLINICALTRIAL NA

Do generous trade credit terms provide a competitive edge?

PurposeThe authors document a persistent negative link between contemporaneous trade credit provision and subsequent firm-level operating performance.Design/methodology/approachTextual analysis of firms' profile descriptions is used to study the role of market segmentation and product differentiation in intermediating the nexus between trade credit and corporate performance. The paper relies on dynamic panel regression modeling to investigate the postulated empirical relationships. This approach allows to address endogeneity issues and to test a number of different model specifications.FindingsDespite fueling short-term sales growth, the more generous trade credit terms are found to be associated with lower post hoc margins and declining overall business profitability. The market share is not affected by firms' proclivity to provide trade credit suggesting that the latter may not be effectively used as a long-term growth enhancement strategy. Firms' similarity to their competitors is found to play a salient role in altering the magnitude of the discovered negative relationship.Originality/valueThe authors find that the intensity of intra-industry competition measured by firms' similarity to their competitors magnifies the discovered negative trade credit-performance nexus. Therefore, generous trade credit may play a more important role in solidifying client–supplier relationships on the more segmented markets with a higher degree of product differentiation.

Nonlinear effects of board characteristics on China’s hotel firm performance

This study uses dynamic panel regression tests based on the estimation of the system generalized method of moments to examine the effects of board size (BS), board age (BA), and board education (BE) on China’s hotel firm performance (FP). Test results reveal that the effects of BS and BA on hotel FP are nonlinear, but BE has no effect. Specifically, BS has a cubic effect on hotel growth opportunities in terms of Tobin’s Q with turning points equal to 12 and 18, supporting both agency theory and resource dependence theory. Moreover, the impact of BA on hotel growth opportunities is quadratic (inverted U-shaped) with an optimal point of BA at 51, supporting both similarity–attraction theory and human capital theory. Empirical findings suggest that director-owned resources and experience are essential factors in a hotel’s success, providing strategic guidance for the Chinese hotel industry and making a pioneering addition to the hospitality finance literature.

Regional disparity of covid-19 infections: an investigation using state-level Indian data

Using the state-level panel data for India, we establish that Covid infections are clustered in more urbanized, and prosperous states. Poverty lowers cases showing evidence of herd immunity of poor which stands in sharp contrast with the developed part of the world. Our dynamic panel regression results indicate that Covid infections are persistent across states and unlocking has aggravated the infections. We also find that richer and more urbanised states with better health infrastructure and governance perform more tests. The policy lesson from this exercise is that the authorities should monitor immunization and Covid protocols in densely populated urban areas.

Debt Sustainability: Can EU Member States Use Environmental Taxes to Regain Fiscal Space?

The COVID-19 pandemic has taken its toll on the economies of the EU member states. While policymakers have been faced with rising government spending in an effort to combat the health crisis, this has led to unprecedented levels of government debt and budget deficits. Debt sustainability has been severely affected by decreasing fiscal space, and there are significant concerns that a debt crisis is looming on the horizon for the EU. The current study aims to analyze environmental taxes as a potential solution for rebuilding fiscal space and thus improving debt sustainability in the EU. The research method used to study the impact that the four types of environmental taxes may have on fiscal space is the dynamic panel regression model, estimated using the Generalized Method of Moments (GMM). The conclusions show that all four categories of environmental taxes can help the EU member states regain fiscal space and improve their debt sustainability. The research results show that the strongest positive impact on fiscal space will be achieved by energy taxes and transport taxes.

Estimation and Inference by Stochastic Optimization: Three Examples

This paper illustrates two algorithms designed in Forneron and Ng (2020): the resampled Newton-Raphson (rNR) and resampled quasi-Newton (rQN) algorithms, which speed up estimation and bootstrap inference for structural models. An empirical application to BLP shows that computation time decreases from nearly five hours with the standard bootstrap to just over one hour with rNR and to only 15 minutes using rQN. A first Monte Carlo exercise illustrates the accuracy of the method for estimation and inference in a probit IV regression. A second exercise additionally illustrates statistical efficiency gains relative to standard estimation for simulation-based estimation using a dynamic panel regression example.

A Regional Analysis of the Relationship Between Housing Affordability and Business Growth

Using U.S. Census data for the period 2010 to 2016, for 383 metropolitan statistical areas (MSAs) and 3,137 counties nationwide, the authors examine the relationship between housing affordability and business growth in three industrial sectors: Retail, Information, and Professional Services. Housing affordability is measured by the percentage of cost-burdened homeowners and renters, defined as the proportion of households paying 30% or more of gross income toward owners’ costs or rents. The results of a generalized method of moments dynamic panel regression analysis are mixed using MSA-level data. However, using county-level data, the authors find compelling evidence that an increase in homeowner and renter cost burden has a statistically significant adverse effect on business growth in all three business sectors. For instance, over a 7-year period, if housing unaffordability increases by 1 percentage point annually, the number of Professional Services establishments is expected to shrink by 90,248 across 3,137 counties nationwide.

Do party system parameters explain differences in legislative organization? Fragmentation, polarization, and the density of regulation in European parliaments, 1945–2009

The article studies whether the party system characteristics fragmentation and ideological polarization increase the density of institutional regulation in parliaments. It introduces a comprehensive time-series-cross-sectional dataset of standing orders in 15 Western European parliaments that allows studying how densely various fields of legislative activity such as lawmaking, controlling the government, and creating publicity were regulated over a period of more than 60 years. Descriptively, the data show increased regulation in all areas but also some variation between countries. Dynamic panel regression analyses for non-stationary time series find no systematic effect of fragmentation or polarization on the density of regulation indicating that large parts of legislative organization change for reasons unrelated to party system dynamics. We identify changes in the environment of legislatures such as increasing complexity and professionalization of politics, technological change, and Europeanization as potential drivers of such Pareto-efficient reforms.

Foreign Direct Investment Spillovers and Economic Growth: Evidence from Asian Emerging Countries

Research on FDI in promoting economic growth has been the focus of recent decades, especially in developing countries. Foreign direct investment can be one of the main objectives in increasing economic growth. FDI is assumed to indirectly contribute to economic growth through a spillover effect on the absorption capacity of a country by increasing the stock of human capital and the quality of institutions. This study aims to analyze the spillover effect of FDI on economic growth in Asian emerging markets. The data were analyzed using dynamic panel regression (GMM) during 2008-2017 period with STATA 14 software.The results in this study strongly indicate that the spillovers of FDI is proven to be able to drive economic growth through human capital and institutions in Asian emerging markets.

IMPACT OF INFORMATION TECHNOLOGIES’ INVESTMENTS ON THE PROFITABILITY OF TUNISIAN BANKS: PANEL DATA ANALYSIS

This study examines the relationship between Information Technology investment and the profitability of Tunisian banks, via static and dynamic panel regression models. Our study focused on 15 Tunisian banks for 19 years (2001-2019). To assess the profitability of these banks, three measures were used: two traditional accounting ratios and net interest margin. Our research has shown the importance of the role played by IT in Tunisian banks since IT investments improve their profitability. This finding contradicts the “Productivity Paradox” that high IT investments are not associated with better performance. Indeed, Tunisian banks are acting on their size to boost their performance, and the more the banks take the risk by granting more loans, the more profitable they are by increasing their Return on Assets. Finally, public banks are more profitable than private banks when considering their net interest margin. JEL Classification Codes: B21, C58, G21, G32, O32.