Economics - Journal Articles

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Addressing market segmentation and incentives for risk selection: how well does risk equalisation in the Irish private health insurance market work?
(Economic and Social Studies, 2017-03) Keegan, Conor; Teljeur, Conor; Turner, Brian; Thomas, Steve; Health Research Board
This study assesses the efficacy of Ireland’s recently introduced risk equalisation scheme in its voluntary health insurance market. Robust risk equalisation is especially important in an Irish context given acute risk segmentation and incentives for risk selection that have evolved within the market. Using uniquely acquired VHI data (N=1,235,922) this analysis assesses the predictive efficacy of both current and alternative risk equalisation specifications. Results suggest that the low predictive power of the current risk equalisation design (R2 = 6.8 per cent) is not appropriately correcting for anti-competitive incentives and asymmetries in the market. Improvements to the current design could be achieved through the introduction of diagnosis-based risk adjusters.
After the reforms: An analysis of the factors associated with the use of legal services in child welfare proceedings in Ireland
(IJMESS International Publishers, 2019) Walsh, Edel; Murphy, Aileen; Halton, Carmel; Harold, Gill; Irish Research Council
Against the backdrop of austerity measures and public sector reforms in Ireland, this paper examined legal costs incurred in child welfare proceedings by the State Child and Family Agency - Tusla, using a need-based allocation model. The direct financial costs of engaging with legal services, necessitated by the adversarial nature of child welfare proceedings, were scrutinized to determine if resources were allocated based on need. Adopting a cross-sectional research design, secondary data (obtained from the organization’s financial billing system. n =1032) were employed in an econometric analysis examining the factors influencing variations in Tusla’s legal expenditure. The dependent variable was total amount billed by legal firm per observation and the independent variables included type of legal activity involved (a proxy for need), geographical location and type of legal personnel (supply factor). Type of legal personnel, volume and type of legal activity have significant positive effects on legal spend. Administrative area does not significantly affect spending on legal services. We found that engagement with legal services, demanded by the adversarial nature of child welfare proceedings, has considerable cost implications; however, does seem to be allocated on the basis of need. The findings can be employed to increase the organization’s awareness of costs.
Agglomeration, urbanization and competitive performance: the natural experiment of English football
(Taylor & Francis, 2019-08-08) Jones, Calvin; Jordan, Declan
There are sound theoretical and empirical bases for expecting productivity and innovative benefits for businesses located in large urban areas, and for those located closer to others in the same or related industries. However, the size and precise origin of these effects remain uncertain and complicated by potential endogeneity from businesses’ location choice. English football is proposed as a natural experiment with immobile businesses and evidence is presented from the English Premier League (EPL) that suggests urban scale affects clubs’ relative performance. It is found that teams in larger conurbations perform relatively better, and it is suggested these benefits probably originate from the sport’s novel labour market.
Analysing national innovation capacity and its importance for competitiveness and growth
(Inderscience, 2018-04-25) Doran, Justin; McCarthy, Nóirín; O'Connor, Marie
This paper uses data from the OECD's Scientific and Technological database and the Global Competitiveness Report (GCR) to analyse the national innovation capacity of nineteen OECD countries over the time period 2001 to 2007. A total of three sub-indexes are constructed which rank the strength of the common innovation infrastructure, cluster specific environment and quality of linkages which exist within each of the countries. These sub-indexes form the basis of an overall index measuring countries' national innovation capacity. The results indicate that each of the three components considered are important in explaining the innovation output of the countries studied. Further to this, national innovation capacity is found to have a positive effect on GDP per capita and on a country's GCR ranking. However, national innovation capacity in 2001 is found to be negatively associated with the subsequent growth rate of GDP per capita. This counterintuitive result may arise due to determinants of growth other than innovation such as capital and labour accumulation.
An analysis of management practices across firm ownership: the case of standalone domestic firms, domestic groups and multinational enterprises
(World Scientific Publishing, 2020-06-25) Bourke, Jane; Crowley, Frank; Doran, Justin; McDonnell, Anthony
Management practices are important drivers of firm productivity [Bloom et al. (2019), What drives differences in management practices? American Economic Review, 109(5), 1648–1683]. While differences in the formalisation and sophistication of management practices are evident in comparisons of foreign multinationals and domestic firms [Bloom et al. (2012). Americans do IT better: US multinationals and the productivity miracle. American Economic Review, 102(1), 167–201. Bloom and Van Reenen (2007a). Measuring and explaining management practices across firms and countries, Quarterly Journal of Economics, 122(4), 1351–1408. Bloom and Van Reenen (2010). Why do management practices differ across firms and countries? Journal of Economic Perspectives, 24(1), 203–224], a striking omission from many studies is the failure to distinguish between domestic firms and domestically owned multinationals [McDonnell et al. (2012). Human resource management in multinational enterprises: Evidence from a late industrializing economy. Management International Review, 54(3), 361–380]. We merge the World Management Survey with the FAME dataset to examine the influence of firm ownership (standalone domestic firms; domestic groups; domestic owned multinationals; foreign owned multinationals) across a broad range of management practices. Foreign owned multinationals exhibit the highest formalisation and sophistication of management practices compared to all other firm types. However, significant asymmetries exist between different management practices across firm ownership. This is important as it raises questions as to whether there is sufficient learning and transfer of practices taking place across firms.
An analysis of the interdependence of demographic factors, labour effort and economic growth in Ireland
(Emerald Group Publishing Limited, 2012-03) Doran, Justin
Purpose – The purpose of this article is to analyse the effects of a declining birth rate and an increasing old age-population ratio on Ireland’s economic output. Design-Methodology/Approach – This paper utilises data on the birth rate, old-age population ratio, economic output and labour effort of the Irish economy to estimate a vector-autoregressive model. The results of this model are then analysed to test for the presence of Granger causality among these variables. In doing so it is possible to assess whether there are statistically significant causal relationships existing among these factors. Subsequently, impulse response functions are derived from this model in order to assess the magnitude of the causal relationships. Findings - The results suggest that declining fertility rates and increases in the old-age dependency ratio have a significant impact on labour effort and economic output. Labour effort is also found to explain variation in the fertility rate and economic output. Economic output is found to effect labour effort and the fertility rate. Social Implications – The results derived in this paper raise interesting policy implications. It is evident that Ireland’s declining birth rate and increasing old-age population ratio are creating a demographic situation which will have implications for future economic growth. Policies need to be put in place to mitigate the negative effects these factors will have on Irish growth. Originality/Value – This paper adopts modern econometric techniques to assess the causal relationships which exist between the demographic and economic factors considered. These have not previously been applied to the Irish situation. In doing this, this paper provides an important insight into the changing dynamics of the Irish economy.
Are different forms of innovation complements or substitutes?
(Emerald Group Publishing Limited, 2012) Doran, Justin
Purpose – The purpose of this paper is to provide an empirical analysis of whether differing forms of innovation act as complements or substitutes in Irish firms’ production functions. Design/methodology/approach – The approach adopted by this paper is empirical in nature. Data are obtained for approximately 582 firms from the Irish Community Innovation Survey 2004-2006. In total, four forms of innovation activity are identified: new to firm product, new to market product, process and organisational innovation. Formal tests for complementarity and substitutability are applied to these types of innovation to assess whether they have a complementary effect on firms’ turnover. Findings – The results suggest that there is a substantial degree of complementarity among different forms of innovation. Out of six possible innovation combinations, three are complementary while none exhibits signs of substitutability. Social implications – From a business perspective, the importance of organisational change to facilitate technological innovation is highlighted, while from a policy perspective the importance of the incentivisation of organisation and process innovation is also highlighted. Originality/value – To date, most research has focused on the impact of various forms of innovation, in isolation, on firms’ productivity. They do not consider whether these forms of innovation may in fact be linked, and that by implementing two or more innovations simultaneously, the combined benefits may be greater than the sum of the parts.
Asset price effects arising from sports results and investor mood: the case of a homogenous fan base area
(Dunker & Humblot, 2011) Gallagher, Robert; O'Sullivan, Niall; Irish Research Council for Humanities and Social Sciences
This paper contributes to the behavioural finance literature that examines the asset pricing impact of mood altering events such as sports results, sunshine levels, daylight hours, public holidays, temperature etc. Specifically, we investigate whether variations in investor mood arising from wins and losses in major sporting events have an impact on stock market returns. We examine the case of Ireland. Ireland is an interesting case because its people are passionate about sport, the domestic population is relatively homogenous (rather than divided) in terms of support for Irish competitors in international competition and domestic investors comprise a large proportion of owners of Irish stocks—all factors which suggest that if a mood effect exists it should show up in this case. Generally, we do not find a strong link between sport results and stock market returns. Initial results do suggest that in events of particularly high importance, such as the knock-out stages of major competitions, losses are associated with negative returns. However, on controlling for indirect economic effects of sporting wins and losses such as on tourism and travel we find the mood effect is no longer significant.
The asset pricing effects of UK market liquidity shocks: evidence from tick data
(Elsevier, 2014-03) Foran, Jason; Hutchinson, Mark C.; O'Sullivan, Niall; Irish Research Council for Humanities and Social Sciences; University College Cork
Using tick data covering a 12 year period including much of the recent financial crisis we provide an unprecedented examination of the relationship between liquidity and stock returns in the UK market. Previous research on liquidity using high frequency data omits the recent financial crisis and is focused on the US, which has a different market structure to the UK. We first construct several microstructure liquidity measures for FTSE All Share stocks, demonstrating that tick data reveal patterns in intra-day liquidity not observable with lower frequency daily data. Our asymptotic principal component analysis captures commonality in liquidity across stocks to construct systematic market liquidity factors. We find that cross-sectional differences in returns exist across portfolios sorted by liquidity risk. These are strongly robust to market, size and value risk. The inclusion of a momentum factor partially explains some of the liquidity premia but they remain statistically significant. However, during the crisis period a long liquidity risk strategy experiences significantly negative alphas.
Benchmarking UK mutual fund performance: the random portfolio experiment
(2015) Clare, Andrew; O'Sullivan, Niall; Sherman, Meadhbh
We formally test the age-old question of whether professionally managed equity funds outperform portfolios of stocks selected at random, also known as ‘dartboard’ or ‘monkey’ portfolios. We examine the case of UK equity mutual funds between 1980 and 2011. We employ alpha and the t-statistic of alpha as performance measures from CAPM, Fama-French and Carhart factor models. We find that around 5% to 25% of funds across alternative performance measures and models yield abnormal returns beyond that which can be explained by random chance or luck in performance. The t-statistic of alpha indicates a slightly higher percentage of skilful funds compared to alpha, most likely for statistical reasons around short-lived funds. The degree of skilful performance among managed funds is higher when evaluated by a single factor CAPM or Fama and French three factor alpha but a Carhart four factor model explains much of this performance..
Bonus incentives and team effort levels: Evidence from the “Field”
(John Wiley & Sons, Inc., 2020-05-22) Butler, Robert; Lenten, Liam J. A.; Massey, Patrick
This study explores the effect of bonus incentive mechanisms with a focus on how such a scheme influences aggregate production levels of teams of workers, specifically. We identify this using data from a highly competitive setting in professional sport, which involves a unique tournament design rule in an elite European rugby competition. The modelling results demonstrate qualified evidence that introducing bonuses to encourage teams to score via the most‐difficult, highest‐reward mode, incentivizes teams to increase effort to earn the bonus, and without reducing production after the bonus is achieved.
Borderline personality disorder: resource utilisation costs in Ireland
(Cambridge University Press (CUP), 2018-07-16) Bourke, Jane; Murphy, Aileen; Flynn, Daniel; Kells, Mary; Joyce, Mary; Hurley, Justin
Objectives: Borderline personality disorder (BPD) is characterised by recurring crises, hospitalisations, self-harm, suicide attempts, addictions, episodes of depression, anxiety and aggression and lost productivity. The objective of this study is to determine the use of direct health care resources by persons with BPD in Ireland and the corresponding costs. Methods: This prevalence-based micro-costing study was undertaken on a sample of 196 individuals with BPD attending publicly funded mental health services in Ireland. All health care costs were assessed using a resource utilisation questionnaire completed by mental health practitioners. A probabilistic sensitivity analysis, using a Monte Carlo simulation, was performed to examine uncertainty. Results: Total direct healthcare cost per individual was €10 844 annually (ranging from 5228 to 20 609). Based on a prevalence of 1% and an adult population (18–65 years) of 2.87 million, we derived that there were 28 725 individuals with BPD in Ireland. Total yearly cost of illness was calculated to be up to €311.5 million. Conclusions: There is a dearth of data on health care resource use and costs of community mental health services in Ireland. The absence of this data is a considerable constraint to research and decision-making in the area of community mental health services. This paper contributes to the limited literature on resource use and costs in community mental health services in Ireland. The absence of productivity loss data (e.g. absenteeism and presenteeism), non-health care costs (e.g. addiction treatment), and indirect costs (e.g. informal care) from study participants is a limitation of this study.
Broadcasting demand for Formula One: Viewer preferences for outcome uncertainty in the United States
(Routledge, 2023-07-17) Fahy, Ronan; Butler, David; Butler, Robert
We explore the determinants of broadcasting demand for Formula One racing in the United States of America and pay specific attention to the relationship between outcome uncertainty and television viewership figures. Using implied probabilities derived from betting odds, we offer an approach to measuring outcome uncertainty that differs from those currently established in the Formula One broadcasting demand literature. We do not find any evidence to support the uncertainty of outcome hypothesis. On the contrary, viewers display a preference for less closely contested races. We find that scheduling and accessibility to live races are important determinants of viewership. Our results have practical implications and can guide the sport's administrators and television broadcasters seeking to understand a growing national market for F1 broadcasting.
A budget impact analysis of a clinical medication review of patients in an Irish university teaching hospital
(Sage, 2018-11-08) Kearney, Alan; Walsh, Elaine K.; Kirby, Ann; Halleran, Ciaran; Byrne, Derina; Haugh, Jennifer; Sahm, Laura J.
To measure the net benefit of a pharmacist-led medication review in acute public hospitals. To identify and measure the resources used when completing a pharmacist-led medication review, an observational study was conducted in an acute urban university teaching hospital. Health Information and Quality Authority guidelines were used to value resources used in a pharmacist-led medication review. Model inputs included demographic data, probability of adverse drug events associated with the pharmacist interventions, estimates of future discharges and cost data. The cost of a pharmacist-led medication review and savings generated from avoidance of adverse drug events were estimated and projected over a 5-year period, using hospital discharge rates taken from the hospital inpatient enquiry system and the census of population. Using the per-patient cost of a medication review, the annual cost of delivering a bi-weekly medication review is projected to vary between ?6 m and ?6.4 m over a 5-year period from 2017 to 2021. The per-patient net benefit of a bi-weekly medication review is ?45.88. Therefore, the projected annual net benefit of a bi-weekly medication review is between ?29.5 m and ?31.2 m over the 5-year period of 2017 to 2021. Introducing a pharmacist-led medication review for each inpatient saves in the short and longer term. The results are consistent with previous findings. Substantial savings were estimated, regardless of variation in model parameters tested in sensitivity analysis.
Changing competition design and spectator turnout: evidence from the League of Ireland
(Economic and Social Studies, 2021-09-20) Butler, David; Butler, Robert; Mullane, Ewan
We contribute to the literature on demand for football by investigating the effect of variations in competition design on spectator turnout. We examine attendance in the League of Ireland Premier Division for two periods with alternative league formats, estimating club-fixed effects regressions. Our results show that the change did not increase average attendance. Many determinants of attendance are robust to the reorganisation and balance measures are consistent under both formats. Like past evidence from the League, habit, team form, scheduling and travel are important determinants. Our results speak to league administrators and club owners attempting to optimise revenues.
Childhood psychological health during the Great Recession in Ireland
(Economic and Social Studies, 2020-12-14) Burke, Lee-Ann
The aim of this paper is to quantify the effect of economic, parental and lifestyle factors on the psychological health of children at significant points in recent economic history in Ireland. The paper uses data from the Growing Up in Ireland study and employs a dynamic random effects ordered logistic regression model to test the magnitude of these effects.The results indicate that proxy income variables, such as ability to make ends meet and homeownership, are relevant in predicting child psychological health outcomes. Equally important are intergenerational health associations between the mother and the psychological health of children.
Clément Juglar and Algeria: three pillars of modern anti-colonial criticism
(Cambridge University Press (CUP), 2017-07-24) Parent, Antoine; Butler, Robert
The objective of this paper is to recall the forgotten opposition of Clément Juglar to the colonization of Algeria, the originality of this position, and his contributions to the genesis of analysing colonial institutions. Juglar was not a theoretician of colonialism, but a liberal economist who rejected the process of colonization on economic grounds. This paper provides evidence that conventional wisdom on French colonialism is indebted to his work. The issues of capital returns in the colonies, French colonialism as mercantilism and protectionism, and the role of colonial institutions in economic development were all addressed by Juglar. He identified property rights and colonial institutions as central issues in his explanation of the predictable failure of colonialism, and in doing so he can be regarded as a forerunner of neo-institutionalist analysis of colonialism.
Clustering in Ireland: Development cycle considerations
(Routledge, 2017-12-14) O'Connor, Sean; Doyle, Eleanor; Brosnan, Stephen; University College Cork
Motivated by ongoing research into the cluster concept that considers dynamic features of economic development and the cluster life cycle, differences between traded clusters and local activity across different spatial scales are examined for Ireland. Using recent cluster definitions for Europe, this paper presents clustering patterns within the Irish economy from 2008 to 2012. We report on data requirements when applying the benchmark cluster definitions to Irish data. Integrating small, open economy features with life-cycle concerns, we focus on specific clusters in Ireland, along with their export performance, noting that appropriate cluster boundaries are neither regional nor national. Analyses indicate that while Ireland hosts a number of internationally competitive clusters, foreign-owned firms remain substantially more productive than indigenous enterprises. We identify the geographical location of these prominent clusters at the NUTS-3 regional level and highlight the role of regional features for differences in adaptive cycles of clusters. We identify a substantial portion (60%) of Irish regional wage variation relates to the different cluster mixes across regions.
CO2 emissions, economic growth and urbanisation: Insights from vector error correction modelling
(IJSEES, 2017-01) Doran, Justin; Ryan, Geraldine
In this paper we analyse the impact of economic development and urbanisation on CO2 emissions in Ireland over the period 1970 to 2011. Using a vector error correction model and impulse response functions we pose two questions. Firstly, what role has economic development and urbanisation played in driving CO2 emissions in Ireland. Secondly, what impact might government regulations and directives which cut CO2 emissions have on future economic growth and urbanisation in Ireland. We use data from the World Bank and Penn World Tables to answer these questions. Our findings suggest that in the short run economic growth leads to higher levels of CO2 emissions but that in the long run economic growth lowers emissions. Regarding urbanisation, increasing urbanisation in Ireland has contributed to lower levels of CO2 emissions than might otherwise be observed. Our model suggests that cuts to CO2 emissions will have no impact on urbanisation but will have a negative impact on GDP.
Competition between organisational forms in Danish and Irish dairying around the turn of the twentieth century
(Taylor & Francis Group, 2019-04-04) McLaughlin, Eoin; Sharp, Paul
By 1914, Danish butter had captured a sizeable share of the British market, largely at the expense of Irish suppliers. This is usually attributed to a more successful adoption of the cooperative organisational form, where cultural and legal issues put the Irish at a disadvantage. We argue that there were also significant differences in the private sector in the two countries, where large incumbent proprietary creameries in Ireland were in a stronger position to defend their interests. Even if the cooperatives were able to operate like their Danish counterparts, they would still have faced much tougher competition from proprietary incumbents.

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