nep-hme New Economics Papers
on Heterodox Microeconomics
Issue of 2011‒07‒27
twenty-one papers chosen by
Frederic S. Lee
University of Missouri-Kansas City

  1. Who Searches for Low Prices? Population Characteristics and Price Dispersion in the Market for Prescription Drugs By Adrienne M. Ohler
  2. Evolution of Globalised business R&D: Features, drivers, impacts By Pietro Moncada-Paterno-Castello; Peter Voigt; Marco Vivarelli
  3. How Gender Inequalities Hinder Development : Cross-Country Evidence By Gaëlle Ferrant
  4. Defending Mail Markets against New Entrants: An Application of the Defender Model By Christian Jaag; Helmut Dietl; Urs Trinkner; Oliver Fürst
  5. Pricing Policies at Public Universities in Hungary By Rappai, Gábor; Rekettye, Gábor
  6. The Social Enterprise. An Empirical Study for Romania By Matei, Lucica; Sandu, Cristina
  7. Work, Inequality, and the Dual Career Household By Dan Wheatley and Zhongmin Wu
  8. Mobilising female labour market reserves: What promotes women’s transitions from part-time to full-time work? By Ragni Hege Kitterød, Marit Rønsen and Ane Seierstad
  9. Socio-Economic Impact of Women Entrepreneurship in Sylhet City, Bangladesh By Chowdhury Abdullah Al-Hossienie
  10. Parallel Imports and Mandatory Substitution Reform - A Kick or A Muff for Price Competition in Pharmaceuticals? By Granlund, David; Köksal, Miyase Yesim
  11. New Start-ups and Firm In-migration - Evidence from the Swedish Wholesale Trade Industry By Daunfeldt, Sven-Olov; Elert, Niklas; Rudholm, Niklas
  12. Gender and Transport By Chantal Duchene
  13. Transitions to Long-Term Unemployment Risk Among Young People: Evidence from Ireland By Kelly, Elish; McGuinness, Seamus; O'Connell, Philip J.
  14. Asymmetric Phase Shifts in the U.S. Industrial Production Cycles By Yongsung Chang; Sunoong Hwang
  15. Do firms rely on sources of information for organizational innovation? By MOTHE Caroline; NGUYEN Thi Thuc Uyen
  16. Patent regimes, firms and the commodification of knowledge By Benjamin Coriat; Olivier Weinstein
  17. The Lure of Aggregates and the Pitfalls of the Patriarchal Perspective: A Critique of the High Wage Economy Interpretation of the British Industrial Revolution By Jane Humphries
  18. Equal Opportunities in Science? Evidence on Gender Pay Gaps amongst Scientists Working in the UK By Sara Connolly; Susan Long
  19. Competitive Price Coordination in Technology Sharing Agreements By Gallini, Nancy
  20. The Deterrence Effects of U.S. Merger Policy Instruments By Clougherty, Joseph A.; Seldeslachts, Jo
  21. Cross-National Evidence on Generic Pharmaceuticals: Pharmacy vs. Physician-Driven Markets By Patricia M. Danzon; Michael F. Furukawa

  1. By: Adrienne M. Ohler (Department of Economics, Illinois State University; Montana State University)
    Abstract: We examine the relationship between population characteristics and price dispersion for 75 prescription drugs in five markets. Based on models of price dispersion, we consider that search costs are likely lower for the elderly, who are repeat purchasers. Expected benefits from search are likely higher for low income households, who lack insurance. Our results are consistent with the hypothesis that for communities with a large percentage of elderly and poor population, search effort is greater for pharmaceutical drugs, causing lower price dispersion. By understanding the characteristics of who searches for low drug prices, we begin to identify the motives of consumers that might also lead to search for the lowest cost healthcare provider or lowest cost insurance. The results suggest that the 2004 Medicare legislation that closed the pharmaceutical donut hole may have reduced search by the elderly, increased price dispersion, and potentially increased the average price of prescription drugs.
    Keywords: search cost; price dispersion; prescription drugs
    JEL: D12 D83 I1
    Date: 2011–07
  2. By: Pietro Moncada-Paterno-Castello (JRC-IPTS); Peter Voigt (JRC-IPTS); Marco Vivarelli (Facoltà di Economia, Università Cattolica del Sacro Cuore, Piacenza, Italy; SPRU, University of Sussex, Brighton, UK; IZA, Bonn, Germany)
    Abstract: The globalisation of R&D activities has continued to grow as companies are increasingly trying to capture knowledge and market opportunities internationally. The rapid evolution of national economies and the ways to conduct knowledge-intensive businesses has brought researchers and analysts to pursue a deeper understanding of the globalisation of corporate R&D and the related driving factors and impacts. This Working Paper provides an overview of the evolution of globalised business R&D activities and an outline of trends is provided with quantitative information from 2001 to 2009. Thus, the literature on the main drivers and impacts of the research process is reviewed and controversial arguments are discussed and reflected upon in the light of recent empirical observations. In particular, the drivers for firms to undertake R&D in their home country, to internationalise their R&D operations and to select a particular location for R&D implementation are analysed according to both the perspective of S&T supply side and for goods and services demand side. Furthermore, the impact of the internationalisation of business R&D is analysed for firms' host or home countries, with a particular focus on the effects on competitiveness and employment. The conclusions and policy implications from the main results of this work are presented in the last section of the document.
    Keywords: Research and Development [R&D], Business Enterprise Expenditure on R&D [BERD], internationalisation, innovation, investment gap, R&D policies
    JEL: F F L O
    Date: 2011–05
  3. By: Gaëlle Ferrant (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Panthéon-Sorbonne - Paris I)
    Abstract: This paper assumes that gender inequality hinders economic and human development : a one standard deviation change in the Gender Inequality Index (GII) will increase long term income per capita by 9,1% and Human Development Index (HDI) by 4%. Gender inequality may be a explanation of economic development differences : 16% of the long term income difference between South Asia and East Asia & Pacific can be accounted for by the difference in gender inequality. Moreover, this paper provides evidence of a vicious circle between gender inequality and long term income. The multi-dimensional concept of gender inequality is measured by a composite index with endogenous weightings : the Gender Inequality Index (GII). To correct endogeneity and simultaneity problems, the two-stage and three-stage least square methods are used separately. In this way, the steady state per capita income and the human development levels are estimated for 109 developing countries.
    Keywords: Growth, Gender inequality, development economics.
    Date: 2011–02
  4. By: Christian Jaag; Helmut Dietl; Urs Trinkner; Oliver Fürst
    Abstract: In this paper we analyzed the strategic competition between incumbent postal operators and market entrants in liberalized letter markets based on the “defender consumer model” pioneered by Hauser and Shugan (1983) and derived qualitative normative implications on how an established firm should defend its profits when facing an attack by a new competitive product. Our results extend the literature on competition in liberalized mail markets by combining pricing and positioning strategies from a marketing perspective. Our analysis highlights that incumbent postal operators can defend their market shares by differentiating their services along one or more quality dimensions. Postal services are not necessarily homogenous. If postal operators focus solely on pricing strategies they will run into the more serious problems than if they compete on quality too.
    Keywords: Defender model, mail market, competition, postal sector
    JEL: L50 L87
    Date: 2011–07
  5. By: Rappai, Gábor; Rekettye, Gábor
    Abstract: The structure of higher education is constantly changing world-wide - including Hungary. The traditional view of Higher Education as a ‘public good' financed by the state, is weakening since it is becoming increasingly obvious that governments cannot afford to finance the growing demand for Higher education. The consequence of these trends in Hungary is that, whilst some students are financed by the government, the rest pay tuition fees. The paper discusses the possible methods which a public University may use when calculating its tuition fee for a given field of study. The advantages and disadvantages of cost-based pricing, ongoing pricing, and value-based pricing are discussed. The study introduces a model for calculating the life-cycle value of a degree, which may help in a comparison of the pricing methods of the competing institutions
    Keywords: value of a degree; ongoing pricing; cost-based pricing; tuition fee; Public Universities
    Date: 2011
  6. By: Matei, Lucica; Sandu, Cristina
    Abstract: The social enterprise knows a dynamic of organization and functioning, under different legal forms, starting from NGO to enterprise, covering the domain of public services, functioning independently or in public sector - private sector partnership. It plays a dominant role in the economic growth, in solving the social problems, in the process of knowing the needs for goods and public services with social impact on special groups. The aim of this paper is, starting from the theoretical concepts of social enterprise experiences, to analyze the forms of social enterprises developed through the projects undertaken in Romania and the ways of using social marketing in designing and developing these activities
    Keywords: public-private partnership; promotion; target groups; segmentation; social enterprise
    Date: 2011
  7. By: Dan Wheatley and Zhongmin Wu
    Abstract: Dual career households have the potential to be the most egalitarian of all households. However, while paid work is increasingly distributed evenly between career men and women, household time remains a social constraint for many women. This paper considers the distribution of work among dual career households, using weekly time-use trends, reflecting on the fit of household models and the effectiveness of current work-focused policy. Descriptive analysis, random-effects probit regression, and case households provide an empirical focus on a post-industrial economy - the UK - using the 1993-2009 British Household Panel Survey. Long hours, especially overtime, persist in managerial and professional occupations. Meanwhile, housework burdens women with up to fourteen hours of additional work per week. Preferences for shorter hours remain greater among women, reflecting the impact of household time on paid work. The evidence presented in this paper suggests that the distribution of household labor renders dual career households less than egalitarian.
    Keywords: Dual career households, time-use, equality, work-time, household time
    JEL: J16 J22
    Date: 2011–07
  8. By: Ragni Hege Kitterød, Marit Rønsen and Ane Seierstad (Statistics Norway)
    Abstract: Considering the high female part-time rates in Norway, one may envisage a sizeable additional labour supply if more part-time working women would switch to full time. In view of an ageing population and increased demand for labour in the future, we investigate this issue by studying married and cohabiting women’s transitions from part-time to full-time work based on panel data from 2003-2009. Contrary to evidence from other countries with well-established support for working mothers, we find that young children in the household still restrain Norwegian women’s mobility to full-time work. On the other hand, there is a strong trend of higher full-time transition rates over our study period, which may reflect a vast expansion of the day care sector with more and cheaper day care, as well as a booming economy. Part timers who work in typical female occupations such as nursing, and sales and services are also less likely to switch to full time. Whether this is a result of true preferences or constraints is difficult to say, but previous research suggest that involuntary part time may be substantial. Voluntariness may further be a matter of degree, and “chosen” part timers may also switch to full time if conditions were right.
    Keywords: Female labour supply; part-time; full-time transitions
    JEL: J21 J22 J24 J13 J16
    Date: 2011–07
  9. By: Chowdhury Abdullah Al-Hossienie (Shahjalal University of Science and Technology)
    Abstract: This paper focuses on exploring the socio-economic impact of women entrepreneurship. Based on primary and secondary sources, it is found that nearly three quarters of the women entrepreneurs in Sylhet city are married and that they are mainly involved in tailoring and beauty parlor businesses. About half of the women entrepreneurs use their income for family purposes and most of them do not need permission of their husbands in using their income. Women entrepreneurship typically brings a positive change in attitude and behavior of family members and society towards them. Women?s involvement in economic activities is greatly needed, not only for their own development but also for the overall economic growth of the country. Though the Bangladeshi government has taken significant initiatives through different ministries to enhance women entrepreneurship, these initiatives are not always effective. This paper provides also some recommendations for policy makers to undertake suitable and effective policies towards women development.
    Keywords: Women Entrepreneurship, Development, Sylhet City, Bangladesh
    Date: 2011–07
  10. By: Granlund, David (The Swedish Retail Institute (HUI)); Köksal, Miyase Yesim (University of Gothenburg)
    Abstract: What has been the effect of competition from parallel imports on prices of locally-sourced onpatent drugs? Did the 2002 Swedish mandatory substitution reform increase this competition? To answer these questions, we carried out difference-in-differences estimation on monthly data for a panel of all on-patent prescription drugs sold in Sweden during the 40 months from January 2001 through April 2004. On average, facing competition from parallel imports caused a 15-17% fall in price. While the reform increased the effect of competition from parallel imports, it was only by 0.9%. The reform, however, did increase the effect of therapeutic competition by 1.6%.
    Keywords: parallel imports; pharmaceutical drugs; price competition; reference pricing; therapeutic competition
    JEL: I11 L51 L65
    Date: 2011–04–01
  11. By: Daunfeldt, Sven-Olov (HUI Research); Elert, Niklas (The Ratio Institute); Rudholm, Niklas (HUI Research)
    Abstract: The purpose of this paper is to distinguish between the determinants of new start-ups and in-migration of firms using a data-set that covers 13,471 limited liability firms in the Swedish wholesale trade industries during the period 2000-2004. Our results indicate that the presence of a university more than doubles the expected number of entrants and increases the expected number of in-migrating firms with 30%. A large share of educated workers and a high local unemployment rate is also associated with more start-ups and firm in-migration.
    Keywords: Firm growth; firm size; job creation; small firms
    JEL: L11 L25 L26
    Date: 2011–07–01
  12. By: Chantal Duchene
    Abstract: While greater account is increasingly being taken of gender in a variety of areas, little progress has been made in this respect in the transport sector. In both developed and developing countries, our societies are gendered in that women and men play different roles, notably because household chores and children are mainly the preserve of women, which reduces the time they have available for activities for which they are responsible and for the trips they need to make in order to perform these activities.
    Date: 2011–04
  13. By: Kelly, Elish; McGuinness, Seamus; O'Connell, Philip J.
    Abstract: Many young people have short spells of unemployment during their transition from school to work; however, some often get trapped in unemployment and risk becoming long-term unemployed (OECD, 2009). Much research has been undertaken on the factors that influence unemployment risk for young people during their school-to-work transition. However, very little is known about the factors associated with long-term unemployment risk for those youths that become unemployed. This paper attempts to fill this gap in the literature by identifying the characteristics associated with young peoples' long-term unemployment risk in Ireland. The research, which is conducted using multivariate statistical analysis, uses a combination of unemployment register data and information gathered from a specially designed claimant questionnaire that was issued to all jobseekers making an unemployment benefit claim between September and December 2006. The results indicate that factors such as a recent history of long-term unemployment, a lack of basic literacy/numeracy skills and low levels of educational attainment, all have a significant impact on the likelihood that young people will remain unemployed for 12 months or more. A number of attributes are gender specific, such as the presence of children, additional welfare benefits and spousal earnings for females, and apprenticeship training and participation in a public sector job creation scheme for males. Comparisons with the characteristics associated with older welfare claimants long-term unemployment risk, reveal some interesting difference between younger and older unemployed individuals.
    Keywords: children/data/Gender/Individuals/Ireland/Long-term Unemployment/risk/school to work/skills/unemployment
    Date: 2011–07
  14. By: Yongsung Chang (University of Rochester); Sunoong Hwang (Korea Institute for Industrial Economics & Trade)
    Abstract: We identify the cyclical turning points of 74 U.S. manufacturing industries and uncover new empirical regularities: (i) Cyclical phase shifts are highly concentrated around the aggregate turning points; (ii) In contrast to the conventional notion of a Ôsudden stop and slow recovery,Õ troughs are much more concentrated than peaks; (iii) Occurrences of phase shifts across industries support the spillovers through input-output linkages; (iv) The common macroeconomic shocks, such as exogenous changes in the federal funds rate, government spending, and oil prices, are significant drivers of industrial phase shifts; (v) Both monetary and fiscal policy shocks are more effective in recessions.
    Keywords: Business cycles; Comovement; Turning points; Asymmetries
    JEL: C14 C33 C35 E23 E32
    Date: 2011–07
  15. By: MOTHE Caroline; NGUYEN Thi Thuc Uyen
    Abstract: The growing literature on knowledge and information has focused on the impact of information sources on technological innovation. Our objective was to explore the use made by firms of internal and external (market, research and generally available) sources of information for their organizational innovation practices’ implementation. Furthermore, we studies whether these sources may vary according to whether the firm operates in the manufacturing or service industry. Multivariate probit models’ results on 2008 Community Innovation Survey (CIS) data show notable differences between services and manufacturing, for instance that employees’ skill levels are more important for manufacturing than for services. Overall, this paper provides strong evidence of the heterogeneity in firms’ sources of information to engage in organizational innovation. On one hand, differences appear in the sources of innovation used for the various types of organizational innovation, indicating the appropriateness to differentiate organizational innovation practices rather than using an aggregated measure of organizational innovation. On the other hand, the sources of information vary according to the type of industry, even though some similarities appear. Managerial and theoretical implications for organizational innovation are provided.
    Keywords: CIS; manufacturing/services; organizational innovation; sources of information
    Date: 2011–07
  16. By: Benjamin Coriat; Olivier Weinstein
    Abstract: This paper analyses the evolution of the intellectual property regime (IPR), and more precisely the patent regime, in the USA since the 19-th century. To do so, we consider intellectual property laws within the context of wider changes in capitalism, focusing on two main historical phases: firstly, the period covering the formation and development of 'corporate capitalism' dominated by large corporations and then the new phase, which opened up in the 1980s, marked by the rise to power of finance. From a perspective of institutional complementarities, we seek to show how the characteristics and implications of patent regimes can only be understood in relation to changes in the main institutional forms of capitalism: forms of the firm, the status of labour (the 'wage-labour nexus') and market forms.
    Keywords: firms, financialization, institutional complementarities, knowledge based economy, labor law, property rights
    JEL: O34 P1
    Date: 2011–07–19
  17. By: Jane Humphries (University of Oxford)
    Abstract: The newly dominant interpretation of the British industrial revolution contends that Britain was a high wage economy (HWE) and that the high wages themselves caused industrialization by making profitable labour-saving inventions that were economically inefficient in the context of other relative factor prices. Once adopted these macro inventions put Britain on a growth path that transcended the trajectories associated with more labour-intensive production methods. This account of the HWE economy is misleading because it focuses on men and male wages, underestimates the relative caloric needs of women and children and bases its views of living standards on an ahistorical and false household economy. A more realistic depiction of the working-class family in these times provides an alternative explanation of inventive and innovative activity based on the availability of cheap and amenable female and child labour and thereby a broader interpretation of the industrial revolution.
    Date: 2011–07–19
  18. By: Sara Connolly (School of Economics, University of East Anglia); Susan Long (School of Economics, University of East Anglia)
    Abstract: The groundbreaking MIT report (1999) was the first study to quantify the disadvantages faced by female scientists. This has been followed by studies of gender pay differentials amongst academics working in the humanities (US), economics (UK and US) and the sciences (US). This paper provides the first detailed study of gender pay differentials amongst scientists working in the UK. Our data allows us to contrast the experiences of scientists working in Higher Education (academic scientists) with those working in Research Institutes (research scientists). We find that there is a gender pay differential of 22% (?6-7,000), most of which can be accounted for in terms of age, grade, subject, research esteem, workplace and domestic responsibilities, but a significant proportion remains unexplained (19% in academic and 30% in research science). Our results suggest that across grades, if female scientists were to receive the same returns as male scientists, the gender pay gap would narrow significantly and would close at the bottom end of the distribution.
    Keywords: occupation, pay, decomposition, institutions
    JEL: J16 J31 J44 J71
    Date: 2011–07–18
  19. By: Gallini, Nancy
    Abstract: This paper examines technology-sharing arrangements, the incentives to join them and the type of products that develop when they are anticipated. Particular attention is given to patent pools that admit members with overlapping ownership; that is, patentees with a stake in both complementary pooled inputs and downstream products that do not depend on the pool but compete with products that do. We ask whether this ownership structure under which pool members are vertically and horizontally related, facilitates anticompetitive price collusion. In a Bertrand framework it is shown that if the downstream products inside and outside the pool are strategic complements, then technology-sharing agreements are both privately and socially efficient in making the market more competitive, although prices increase in the degree to which pool members are involved in competing products. For strong substitutes and asymmetric outside ownership, efficient patent pools may not be profitable in which case allowing full coordination in which the pool sets the prices of both inside and outside products owned by its members will encourage the formation of efficient pools and, possibly, the selection of more complementary products. In analyzing the efficiencies of cooperative agreements for sharing technologies, this paper makes a case for incorporating private incentives to cooperate, as well as to innovate and litigate, into the debate on effective systems for encouraging innovation and its diffusion.
    Keywords: Patent Pools, Intellectual Property, Antitrust Policy
    JEL: L2 L44
    Date: 2011–07–14
  20. By: Clougherty, Joseph A.; Seldeslachts, Jo
    Abstract: We estimate the deterrence effects of U.S. merger policy instruments with respect to the composition and frequency of future merger notifications. Data from the Annual Reports by the U.S. DOJ and FTC allow industry based measures over the 1986-1999 period of the conditional probabilities for eliciting investigations, challenges, prohibitions, court-wins and court-losses: deterrence variables akin to the traditional conditional probabilities from the economics of crime literature. We find the challenge-rate to robustly deter future horizontal (both relative and absolute) merger activity; the investigation-rate to slightly deter relative-horizontal merger activity; the court-loss-rate to moderately affect absolute-horizontal merger activity; and the prohibition-rate and court-win-rate to not significantly deter future horizontal mergers. Accordingly, the conditional probability of eliciting an antitrust challenge (i.e., remedies and prohibitions) involves the strongest deterrence effect from amongst the different merger policy instruments.
    Keywords: antitrust; deterrence; merger policy
    JEL: K21 L40 L49
    Date: 2011–07
  21. By: Patricia M. Danzon; Michael F. Furukawa
    Abstract: This paper examines the role of regulation and competition in generic markets. Generics offer large potential savings to payers and consumers of pharmaceuticals. Whether the potential savings are realized depends on the extent of generic entry and uptake and the level of generic prices. In the U.S., the regulatory, legal and incentive structures encourage prompt entry, aggressive price competition and patient switching to generics. Key features are that pharmacists are authorized and incentivized to switch patients to cheap generics. By contrast, in many other high and middle income countries, generics traditionally competed on brand rather than price because physicians rather than pharmacies are the decision-makers. Physician-driven generic markets tend to have higher generic prices and may have lower generic uptake, depending on regulations and incentives. Using IMS data to analyze generic markets in the U.S., Canada, France, Germany, U.K., Italy, Spain, Japan, Australia, Mexico, Chile, Brazil over the period 1998-2009, we estimate a three-equation model for number of generic entrants, generic prices and generic volume shares. We find little effect of originator defense strategies, significant differences between unbranded and unbranded generics, variation across countries in volume response to prices. Policy changes adopted to stimulate generic uptake and reduce generic prices have been successful in some E.U. countries.
    JEL: I11 I18 K2 L5 L65
    Date: 2011–07

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