Impact of H1N1, H7N9, ASFV, dengue virus and COVID-19 on pharmaceutical manufacturing firms' R&D investments and economic consequences: Evidence from China

Objective:To determine the impact of major disease epidemics on pharmaceutical manufacturing firms'Research&Development(R&D)investments and economic consequences.Methods:The sample consists of 1582 firm-year observations from 2009 to 2022 in China,of which,26.6%of pharmaceutical companies are involved in the diagnosis and treatment of prevalent diseases.Linear models using R&D investments,patent applications,operating performances and stock returns as dependent variables are constructed separately to examine the response of pharmaceutical companies to disease epidemics and the resulting economic consequences.Results:The prevalence of five major diseases led to a 17.5%increase in the amount of R&D investment and an 87.8%rise in the ratio of R&D investment to total assets by disease-related pharmaceutical companies,compared to unrelated pharmaceutical companies.Further evidence indicated that the patent applications for disease-related firms increased by 44.3%relative to unrelated firms after the epidemics.Though the impacts of the epidemics on firms’operating performances were insignificant in the short term,a major disease epidemic was associated with an increase in stock returns of 67.4%and 44.6%,respectively,as measured by the capital asset pricing model and Fama-French five-factor model.Additional analysis revealed that the impacts of the epidemics on R&D investments and patent applications were more pronounced for non-state-owned enterprises than state-owned enterprises.Conclusions:This study demonstrates that disease-related pharmaceutical firms respond to the disease epidemics through increasing R&D investment.More patent applications and higher market value are the main gains from the firms’increased investments in R&D following the epidemic,rather than the improvements of short-term operating performances.

Neuron system shock superimposed response based on catastrophe dynamics

With the rapid development of computer science and artificial intelligence technology, the complexity and intelligence of the neural network models constructed by people have been greatly improved. When the complex neuron system is subjected to the impact of ＂catastrophic＂, its original characteristics may be changed, and the consequences are difficult to predict. Catastrophe dynamics mainly studies the source of the sudden violent change of nature and human society and its evolution. The impact of the system can be divided into endogenous and exogenous shocks. In this article, catastrophe theory is used to study the neuron system. Based on the mean field model of Hurst and Sornette, introducing the weight parameters, mathematical models are constructed to study the response characteristics of the neuron system in face of exogenous shocks, endogenous shocks, and integrated shocks. The time characteristics of the shock response of the neuron system are discussed too, such as the instantaneous and long-term response of the system in face of shocks, the different response forms according to the weight or linear superposition, and the influence of adjusting parameters on the neuron system. The research result shows that the authoritarian coefficient and weight coefficient have a very important influence on the response of neuron system; By adjusting the two coefficients, the purpose of disaster prevention, self-healing protection and response reducing can be well achieved.

Oil Crisis, Market Reforms, and Human Welfare： An Econometric Analysis of the Australian Economy

As an active trader in international crude oil and petroleum product markets, Australia＇s human welfare is affected by oil crisis and contagion from the perspectives of economic growth, income inequality, and environmental sustainability. This paper investigates the impacts of oil price shocks upon Australia＇s gross domestic product （GDP） growth, Gini coefficients, and carbon dioxide emissions per capita from 1970 to 2012 with yearly frequency. Hypotheses concerning whether Australia＇s economic immunity against oil crisis is affected after the deregulation of oil market and whether endogenous oil price shocks account for more variations in human welfare than exogenous oil price shocks are tested. The methodologies include a theoretic model and a series of econometric tests. For the short-run dynamics, oil price is integrated into the model both linearly and non-linearly. Oil price shocks are categorized into exogenous and endogenous shocks. The conclusions are that inflated oil prices exert mainly non-linear negative impacts upon human welfare indicators and exogenous shocks induce endogenous shocks through labor price, Consumer Price Index （CPI）, interest rate, and exchange rate. For the long-run equilibrium, non-linear shocks＇ effects decay more slowly than linear shocks and the impacts of endogenous shocks last longer than that of exogenous shocks. Finally, oil market policies are evaluated and proposed.