Explaining Early Adoption on New Medicines: Regulation, Innovation and Scale

Understanding how price regulations affect the adoption of new patent-protected pharmaceutical technologies is a crucial question in designing health systems. This paper addresses this question by examining how price expectations shape the probability of launch, controlling for competition, market size expectations, firm and molecule heterogeneity across the major OECD markets during 1999-2008. Due to the censoring of launch data we use discrete time duration modelling with parametric and semi-parametric duration dependence specification. A sub-sample analysis including only EU countries also investigates the impact of price interdependencies and potential firm strategies in launch and pricing decisions. The empirical analysis of the global set of molecules which have diffused across more than 10 markets in the OECD, suggests there is a statistically significant and robust price effect in the adoption of new pharmaceutical technologies; low-prices result in reduced and slower adoption. Concentrated therapeutic subgroups, reflecting market crowding constitutes a significant barrier to entry. Sub-sample findings from the EU market suggest strategic firm behaviour with firms delaying launch in low-priced markets and attempts to maintain price differentials across interdependent markets to a minimum due to price complementarities. Firm economies of scale and the therapeutic importance of innovations are other important drivers of adoption speed.pharmaceutical innovation, regulation, adoption, duration analysis

The Effect of Strategic Industry factor innovation on incumbent reaction, survival, and performance

An industry is in constant evolution. Competitors, innovators, or other industry stakeholders can introduce new (hitherto ‘unknown’) resources or capabilities that increase the basis of competition in an industry. Resources and capabilities that form the basis of industry competition and that drive company performance are called ‘strategic industry factors’. The introduction of new resources or capabilities as strategic industry factors is called ‘strategic industry factor innovation’. However, there are also strategic industry factor innovations associated with ‘known’ resources and capabilities. When considering new business models like Netflix, Zara, Dell, iPod/iTunes, amongst many others, the innovation is not necessarily applying ‘new’ resources or capabilities to the industry. Instead, these examples show that new combinations of existing, ‘known’ resources and capabilities can also be difficult for incumbents to respond to

Optimizing Two Sided Promotion for IS Enabled Transportation Network: A Conditional Bayesian Learning Model

This paper investigates whether taxi apps provide attribute value for taxi driver, and how two-sided sales promotion interacted with consumer learning about attribute value to influence taxi drivers’ decision of adoption of taxi app. We propose a conditional Bayesian learning model to allow learning about multiple attributes. We find the evidence of taxi driver’s learning about attribute of app, transaction successful rate and the probability of earning cash back from app provider. We also find measurable evidence that sales promotion during product introduction has indirect effect through learning

Managing a Profitable Interactive Email Marketing Program: Modeling and Analysis

Despite the popularity of mobile and social media, email continues to be the marketing tool that brings the highest ROI, according to the Direct Marketing Association’s “Power of Direct” (2011) study. An important reason for email marketing’s success is the application of an idea— “Permission Marketing,” which asks marketers to seek consent from customers before sending them messages. Permission-based email marketing seeks to build a two-way interactive communication channel through which customers can engage with firms by expressing their interests, responding to firms’ email messages and making purchases. This thesis consists of two essays that address several key questions that are related to the management of a profitable interactive permission-based email marketing program. Existing research has examined the drivers of customers’ opt-in and opt-out decisions, but it has investigated neither the timings of two decisions nor the influence of transactional activity on the length of time a customer stays with an email program. In the first essay, we adopt a multivariate copula model using a pair-copula construction method to jointly model opt-in time (from a customer’s first purchase to opt-in), opt-out time (from customer opt-in to opt-out) and average transaction amount. Through such multivariate dependences, this model significantly improves the predictive performance of the opt-out time in comparison with several benchmark models. The study offers several important findings (1) marketing intensity affects opt-in and opt-out times (2) customers with certain characteristics are more or less likely to opt-in or opt-out (3) firms can extend customer opt-out time and increase customer spending level by strategically allocating resources. Firms are using email marketing to engage with customers and encourage active transactional behavior. Extant research either focuses only on how customers respond to email messages or looks at the “average” effect of email on transactional behavior. In the second essay, we consider not only customers’ response to emails and their correlated transactional behavior, but also the dynamics that govern the evolving of the two types of customer relationship: email-response and purchase relationships. We model the email open count with a Binomial distribution and the purchase count with a zero-inflated negative binomial model. We capture the dependence between the two discrete distributions using a copula approach. In addition, we develop a hidden Markov model to model the effects of email contacts on purchase behavior. We also allow the relationship that represents customers’ responsiveness to email marketing to evolve flexibly along with the relationship of purchase. In the second essay, we apply the proposed model in a non-contractual context where a retailer operates a large-scale email marketing program. Through the empirical study, we capture a positive dependence between the opening of emails and purchase behavior. We identify three purchase-behavior states along with three email-response states. The empirical finding suggests that the customers who are in the medium relationship state have the highest intrinsic propensity to open an email, followed by the customers in the lowest and highest relationship state. Furthermore, we derive a dynamic email marketing resource allocation policy using the hidden Markov model, the purchase and email open model estimates. We demonstrate that a forward-looking agent could maximize the long-term profits of its existing email subscribers

Mean Field Equilibria for Competitive Exploration in Resource Sharing Settings

We consider a model of nomadic agents exploring and competing for time-varying location-specific resources, arising in crowdsourced transportation services, online communities, and in traditional location based economic activity. This model comprises a group of agents, and a set of locations each endowed with a dynamic stochastic resource process. Each agent derives a periodic reward determined by the overall resource level at her location, and the number of other agents there. Each agent is strategic and free to move between locations, and at each time decides whether to stay at the same node or switch to another one. We study the equilibrium behavior of the agents as a function of dynamics of the stochastic resource process and the nature of the externality each agent imposes on others at the same location. In the asymptotic limit with the number of agents and locations increasing proportionally, we show that an equilibrium exists and has a threshold structure, where each agent decides to switch to a different location based only on their current location's resource level and the number of other agents at that location. This result provides insight into how system structure affects the agents' collective ability to explore their domain to find and effectively utilize resource-rich areas. It also allows assessing the impact of changing the reward structure through penalties or subsidies.Comment: 17 pages, 1 figure, 1 table, to appear in proceedings of the 25th International World Wide Web Conference(WWW2016

Dynamic stochastic analysis of the farm subsidy-efficiency link : evidence from France

The existing literature on the subsidy-efficiency nexus is almost exclusively based on static modelling and thus ignores the inter-temporal nature of production decisions. The present paper contributes to this literature by developing a dynamic stochastic frontier model, which is then estimated using a sample of French farms over the period 1992-2011. For comparison purposes, the static counterpart of the dynamic model is also estimated. The results indicate that, in the dynamic case as well as in the static one, public subsidies are negatively associated with farm technical efficiency. Nevertheless, these linkages are found to be weak, and they are much weaker when dynamic aspects are taken into account.Peer reviewe

Self-employment at the Macro-Level: drivers, inhibitors and fluctuations

Esta tesis consta de seis ensayos auto contenidos estructurados de la siguiente manera. El capítulo 2 se puede considerar como una introducción a las técnicas utilizadas en el análisis de series temporales de autoempleo, donde se analiza la dinámica del ciclo económico en la Unión Europea (UE28) durante las últimas décadas y se analizan los posibles cambios en los vínculos cíclicos entre países introducidos tras la Gran Recesión en base a las similitudes en sus características cíclicas y de sincronización. Aplicamos una metodología para detectar los puntos de inflexión en las series temporales del PIB y, a continuación, datamos las expansiones y recesiones de cada país, lo que nos permite analizar la duración, la profundidad y la forma de los distintos ciclos, además de la sincronización. El capítulo 3 explora y comprueba si el sector de los autónomos responde de la misma manera en que lo hizo en anteriores episodios de recuperación económica, analizando el caso del Reino Unido. Utilizando el índice de confianza empresarial y la tasa de desempleo como indicadores, aportamos evidencia sobre i) el datado de los puntos de inflexión de las series temporales de la tasa de autoempleo para establecer un ciclo de autoempleo; ii) las características de las diferentes fases del ciclo; iii) un análisis de la sincronización entre el ciclo del autoempleo y los ciclos del desempleo y de confianza empresarial; y iv) un análisis de causalidad no lineal entre estos conjuntos de variables. Nuestro análisis empírico muestra que la evolución de la tasa de autoempleo no está causada por la evolución del mercado laboral, sino que ahora lo está por el clima empresarial, es decir, la confianza en la economía. El capítulo 3 presenta pruebas de raíces unitarias y estima un modelo de componentes no observados para comprobar la existencia de histéresis en la tasa de autoempleo en el Reino Unido. Definiendo la histéresis en términos de la evolución interdependiente de una tasa natural no estacionaria y de un componente cíclico estacionario, distinguiendo así la histéresis de las perturbaciones de la tasa natural, los resultados proporcionan pruebas sólidas de la histéresis en el autoempleo. Esto implica que las perturbaciones económicas y/o no económicas tienen efectos cíclicos y permanentes sobre el autoempleo El capítulo 5 reevalúa la relación entre las etapas de desarrollo económico y el espíritu empresarial, a nivel macro. Para sortear los problemas relacionados con la incertidumbre del modelo, utilizamos el promediado bayesiano de modelos para evaluar la solidez de los determinantes del autoempleo en un conjunto de datos de 117 países, investigando la existencia de heterogeneidad que permite las interacciones entre el PIB, como variable central, y un conjunto de 20 determinantes potenciales del espíritu empresarial. Nuestro análisis empírico muestra entonces que la variación de las tasas de autoempleo entre países está determinada principalmente por las variaciones en el desempleo, la etapa de desarrollo económico y las variaciones en las fricciones del mercado laboral. Cuando se tienen en cuenta las interacciones, los resultados confirman que existe un efecto diferencial de las fricciones del mercado laboral en países con diferentes niveles de renta. Las fricciones del mercado laboral pueden fomentar el trabajo por cuenta propia en los países más ricos. El capítulo 6 retoma la cuestión de los determinantes de la actividad empresarial/autoempleo a nivel macro, centrándose en los efectos del mayor o menor rigor de la legislación de protección del empleo (LPE, en adelante), junto con su cumplimiento y aplicación. Utilizamos series temporales de macrodatos para una muestra de muestra de 28 países de la OCDE, y aplicamos un enfoque de modelos bayesianos promediados como forma de sortear los problemas relacionados con la elección de los mejores predictores y de considerar la interacción entre las instituciones y el cumplimiento/flexibilidad. Encontramos apoyo empírico a nuestra hipótesis principal según la cual la legislación de protección del empleo puede impulsar o contraer la tasa de autoempleo en función del grado de cumplimiento práctico de la legislación laboral. El capítulo 7 proporciona una categorización empírica de las economías en términos de emprendimiento productivo utilizando un compendio de datos transnacionales mediante un panel de 120 países durante 1991-2019. Utilizando un enfoque bayesiano para la agrupación de series temporales, proporcionamos pruebas de la existencia de tres grupos de países definidos en términos de la productividad de sus sectores de autoempleo y de los factores económicos e institucionales que conducen las transiciones entre grupos. Estos grupos podrían identificarse con tres grandes grupos de países habitualmente considerados en la literatura sobre el emprendimiento: países factordriven, efficiency-driven o innovation-driven.This thesis consists of six self-contained essays structured as follows. Chapter 2 can be considered as an introduction to the techniques used on the analysis of self-employment time series, where we analyze the business cycle dynamics in the European Union (EU28) during recent decades and analyze possible changes in cyclical linkages among countries introduced after the Great Recession based on the similarities in their cyclical features and synchronization. We apply a methodology for detecting turning points in GDP time series, then date expansions and recessions of every country, which allows us to analyze the length, depth and shape for different cycles, in addition to the synchronization. Chapter 3 explores and checks whether the self-employed sector is responding in the same way as entrepreneurship in previous economic recovery episodes by analysing the case of the UK. By using the business confidence index and the unemployment rate as indicators, we provided evidence on i) turning points dating of self-employment rate time series to establish a selfemployment cycle; ii) the characteristics of the cycle phases; iii) an analysis of the synchronization between the selfemployment cycle and the cycles of unemployment and business confidence; and iv) a nonlinear causality analysis between these sets of variables. our empirical analysis shows that self-employment rate development is not caused by labour market evolution; rather, it is now caused by the business climate, that is, confidence in the economy. Chapter 3 reports evidence of unit roots and estimates an unobserved components model for testing the existence of hysteresis in the self-employment rate in the United Kingdom. Defining hysteresis in terms of the interdependent evolution of a nonstationary natural rate and a stationary cyclical component, thereby distinguishing hysteresis from natural rate shocks, the results provide robust evidence of hysteresis in entrepreneurship. This implies that economic and/or non-economic shocks have cyclical and permanent effects on rates of entrepreneurship. Chapter 5 re-evaluates the relationship between stages of economic development and entrepreneurship, at the macro level. To circumvent problems related to model uncertainty we use Bayesian Model Averaging to evaluate the robustness of determinants of self-employment in a dataset of 117 countries, investigating the existence of heterogeneity allowing interactions between GDP, as focus variable, and a set of 20 potential entrepreneurship determinants. Our empirical analysis then shows that the variation of self-employment rates across countries are mainly determined by variations in the unemployment, the stage of economic development and the variations in labor market frictions. When interactions are taken into account, results confirm that there is a differential effect of labor market frictions in countries with different levels of income. Frictions in labor market may encourage becoming self-employed in richer countries. Chapter 6 revisits the issue on the determinants of entrepreneurship/self-employment at the macro-level focusing on the effects of the greater or lesser employment protection legislation (EPL, henceforth) stringency in conjunction with compliance/enforcement. We use time series of cross-national macro data of entrepreneurship, from a sample of 28 OECD countries and apply a Bayesian Model Averaging approach as a way to circumvent problems related to the choice of the best predictors and considering the interaction between institutions and enforcement/flexibility. We find empirical support of our main hypothesis according to which employment protection legislation can either boost or contract the self-employment rate depending on the degree of practical compliance with employment legislation. Chapter 7 provides an empirical categorization of economies in terms of productive entrepreneurship by using a compendium of cross-national data by using a panel of 120 countries during 1991-2019. Using a Bayesian approach for clustering time series, we provide evidence of the existence of three clusters of countries defined in terms of the productivity of its selfemployment sectors and the economic and institutional factors which lead the transitions between groups. These groups might be identified with three major groups of countries usually considered in the entrepreneurship literature: factor-, efficiency-, and innovation-driven countries

Environmentally-Oriented Innovative Strategies and Firm Performances in Services. Micro-Evidence from Italy

This paper aims at analysing the role of the environment in innovative strategies based on firm economic performance indicators such as employment, turnover, and labour productivity growth. We exploit a unique dataset of 773 Italian service firms with 20 or more employees comprising 1993-1995 CIS II data on firm innovation strategic motivations and 1995-1998 data on employment, turnover, and labour productivity from the System of the Enterprise Account (SEA). We specify a Gibrat-like empirical model in which the covariates include firm strategies (innovation and environmental), and a set of other explanatory variables and controls. Our econometric findings show a negative link between environmental motivations and growth in employment and turnover and a consequent not significant effect on labour productivity growth. The effect on employment is partly in line with past evidence and may derive from efficiency improvements (dematerialization processes) which also impact on efficiency by reducing workforce number. It is plausible that the net effect derives from the absence of low skilled employment and a creation of high skilled jobs, as a consequence of increased environmental awareness. The effect on turnover shows a negative impact from environmental innovation strategy, implying either a short-medium effect, possibly balanced in the long run by net benefits in terms of higher added value, or a real negative impact, which may be contingent on the observed period, when environmental strategies where not at the heart of strategic management policies. However, productivity-related effects (the core of performance indicators) are not significant. Mainstream hypotheses related to eventual negative impacts are thus not confirmed, although Porter-like effects and virtuous circles between environmentally strategies and performance do not seem to be present.Services, Firm Environmental Strategies, Firm Growth, CIS Survey, Innovation