Corporate Demography and Empirical Industrial Organization: A Critical Appraisal

The emerging field of corporate demography views corporations and industries in a similar way to human or animal individuals and groups. In spite of a surprisingly large overlap of subject matter with economics, corporate demography is not well-known by, nor easily accessible to economists. An extremely useful recent book, The Demography of Corporations and Industries, by Glenn R. Carroll and Michael T. Hannan (2000) should change that. This review essay critically examines corporate demography from an economic viewpoint. The very different view of competition in corporate demography gets particular attention.Entry, Exit, Demography, Survivor Analysis, Firm Growth,

Pricing of Pollution: The Coase Theorem in the Long Run

In an earlier article in The Bell Journal, Tybout argues that even in a zero transaction costs model, bribery to reduce pollution and compensation charges for it result in different total profits, and thus in different long-run behavior. Therefore, the Coase Theorem is refuted for the long-run case.

Spatial Interaction, Spatial Multipliers and Hospital Competition

Abstract The hospital competition literature shows that estimates of the effect of local market structure (concentration) on pricing (competition) are sensitive to geographic market definition. Our spatial lag model approach effects smoothing of the explanatory variables across the discrete market boundaries, resulting in robust estimates of the impact of market structure on hospital pricing, which can be used to estimate the full effect of changes in prices inclusive of spillovers that cascade through the neighboring hospital markets. The full amount, generated by the spatial multiplier effect, is a robust estimate of the impacts of market factors on hospital competition. We contrast ordinary least squares and spatial lag estimates to demonstrate the importance of robust estimation in analysis of hospital market competition. In markets where concentration is relatively high before a proposed merger, we demonstrate that Ordinary Least Squares (OLS) can lead to the wrong policy conclusion while the more conservative lag estimates do not.Spatial Econometrics, Hospital Competition, Market Size, Market Extent, Market Boundary, L11, L13, I11, R13,