International Research Journal of Finance and Economics
 Issue 173
 May, 2019
Pharmaceutical Patenting in the U.S.A.: Evaluating the Impact of Global Competition
Gerald Simons and Sebastian Linde

The global pharmaceutical industry is a trillion dollar industry dominated by manufacturers in high income economies. However, in recent years a growing volume of pharmaceutical products have been produced in low and middle income economies. We analyse the impact that this change in production has had on the patenting output of pharmaceutical firms in the U.S.A. Traditional quality ladder models conclude that North firms would increase their innovation as competition increases from firms in both the South and in other North countries. We find that patenting by U.S. pharmaceutical firms does indeed increase as competition from low and middle income countries intensifies, but that it decreases as competition from other high income economies intensifies.
Keywords: Pharmaceuticals, Innovation, Patents
Modeling Driving Factors of Carbon Dioxide Emissions: Quantile Regression Evidence from Different Country Groups

The relationship between CO2 emissions and various macroeconomic variables has stimulated a large empirical literature. However, this literature has relied on a mean-based regression framework in which the analysis is focused on the mean effects of covariates on pollution level. In this paper, we use quantile regression to reexamine the determinants of CO2 emissions across different points of the distribution of CO2 emissions for 59 countries. The results support some findings in the literature, but also provide new conclusions. The impact of energy consumption is positive and larger in low pollution countries. Openness to trade increases pollution in African and American countries at the lower levels of pollution and in European countries at the lower and higher levels of pollution. On the contrary, foreign trade is good for environment in Asian countries, especially in those at the left tail of the distribution of CO2 emissions. Urbanization reduces pollution in African countries while it contributes to pollution in Asian and European countries. In American countries, urbanization increases CO2 emissions at the lower levels of pollution and reduces it at the higher levels of pollution. These findings suggest that pollution control policies should be tailored differently across low and high pollution countries.
Keywords: Carbon dioxide (CO2) emissions, Energy use, GDP, trade, quantile regression
JEL Classification: C23, F18, O50, Q53
Decomposition Baseball Team and Team-Type Efficiencies by Two-Stage DEA Model: Economic Views
Hsiang-Hsi Liu, Tser-Yieth Chen and Jheng-Ming Huang

This research conducted a two-stage data envelopment analysis (DEA) on resource operational efficiency and output valid efficiency, embedded with the decomposition of each efficiency to investigate the relationships between baseball team and baseball team-type efficiency in the Major League Baseball (MLB) in the US. According to this, we can effectively decompose teams into different efficiency levels, analyzing the efficiency of each level to discover the most efficient teams via the employment of efficiency decomposition approach. We can estimate that the efficient teams had the highest opportunity to win the championship and then compare if these teams can reach their expected economic performance by paying premium salaries to players. Additionally, we applied BCG matrix to illustrate the relationships between teams, based on resource operational efficiency and output valid efficiency under economic views, and proposed strategical implications for finding a “super star” team or teams with better managerial efficiency.
Keywords: Two-Stage Data Envelopment Analysis, Major League Baseball, Resource Operational Efficiency, Output Valid Efficiency, Efficiency Decomposition.
JEL Classification: L1, L10, L19, L60, L65
The Dilemma of the Link between Exchange Rate and Interest Rate and their Effects on the Egyptian Economy
Ashraf Helmy

This paper aims at determining the interdependence between exchange rates and interest rates and their simultaneous effect on the performance of Egyptian economy. In this context, this paper examined the behavior of exchange rate, domestic liquidity and inflation rate to determine the sources of successive inflationary pressures that the Egyptian economy exposed to after 25th of January revolution 2011and to assess the monetary policies aimed at mitigating these inflationary pressures. In addition, the mutual effect of exchange rate, interest rate and inflation rate on GDP growth has been examined in this paper.
The paper concluded that the devaluation of Egyptian pound stands behind the successive inflationary pressures that the Egyptian economy exposed to after 2011, and that the relationship between exchange rate and inflation rate differs in the short-term from the long-term, where high interest rates manage to sterilize the negative effect of the devaluation of Egyptian pound on GDP growth just in the short-term; however, in the long-term, the high rates of interest will be counterproductive and eventual decrease the rate of GDP growth. Accordingly, in the short-run, it can be said that the flotation of Egyptian pound is an expansionary devaluation and it turns to be a contractionary one in the long-run.
Keywords: Exchange rate, interest rate, inflation rate, velocity of money, pass-through effect, GDP, Egypt
JEL Classification: E31, E43, E52, E58
Evaluation of Small and Medium Enterprises Performance and Contributions to the Economic Growth of Nigeria
Wright, Olusegun Adekunle, Oluponmile, Olonilua O and Makinde, Abiola, O

This study assessed the roles of CBN, banks, and factors that influence the strategic performance of SMEs under SMEEIS. The study provides policy learning opportunity for all stakeholders and decision makers to create a more effective Scheme as an amendment to SMEEIS.Using Survey Research Design, this ex-post facto research adopted the post-positivist view. The population of the study consisted of funded SMEs, funding bank officials, and officials of the CBN. Using stratified sampling technique, samples were selected from various banking categories and SME sector. Questionnaires were administered to the officials of 20 banks, and Managing Directors of 160 funded projects with accurate physical addresses in Lagos. The response rate for CBN was 100%, 65% for banks, and 50% for SMEs. To test for the reliability and validity of the primary research instrument, questionnaires were pre-tested among similar subjects, peers and supervisors for this research and adjustments were made to remove perceived ambiguities.
Primary data were collected using structured questionnaires, while secondary data were gathered through content analysis of The SMEEIS Revised Guidelines. Data were analyzed using both descriptive statistic.
The result showed that SMEEIS significantly impacted contributions of SMEs to economic growth with P-value of 0.00 at 1% level of significance.
In conclusion, this study showed that SMEEIS significantly impacted on the strategic market of SMEs in Lagos. However, various factors need to be controlled for better performance in the future. SMEs did not understand equity funding and banks were reluctant to fund SMEs under equity. Banks encountered problems of inadequate openness and partial disclosure of genuine record books by SMEs; and SMEs needed essential infrastructure for better performance. This study therefore recommends clear documentation of roles of stakeholders in measurable terms as well as the provision of clear framework for collaboration through avenues such as workshops and training to build capacity and trust.
Financial Development, Exchange Rates and Economic Growth in Kyrgyzstan: A Cointegration Analysis
Fuat Sekmen and Hasan Demir

In this study, the relationship among financial development, economic growth, and exchange rate is examined through the Kyrgyzstan example. It is accepted that the fluctuations in exchange rates negatively affect the economic growth in countries where financial markets are not developed. Since countries with weak financial development level, uncertainties in exchange rate affect investment and economic growth adversely. In this study, the relationship between financial development, exchange rate, and economic growth will be examined in the short and long term.
Keywords: Financial Development, Exchange Rate, Economic Growth, Cointegration.
JEL Classification: G000, F410, E230