Appendix 4: The Transferability Factor 



/ Region index; 7 country index 



/ Number of countries in the sample 



/ Number of regions 



n- Number of countries in region / 



r-: The share of country ./in region /' 



A typical event (with probability \/J) is that paper is produced 

 in country k. Then /^^ of it is contributed to region /. The total 

 transfer potential of this part of the paper to the other countries in 

 the region is 



J 



To get the expected value of the borrowing potential for the 

 region /, calculate 



7T.[L'ij-'iki^iic 



and the expected value for the sample is 



I / rii /Hi >. 



J ^"^ [^ ''ij-^ikj ^ik^ ^^^ transferability factor. 



Note that the term in the parentheses is zero for regions with 

 only one country. 



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