The effects of entry on incumbent innovation and productivity

How does firm entry affect innovation incentives in incumbent firms? Microdata suggest that there is heterogeneity across industries. Specifically, incumbent productivity growth and patenting is positively correlated with lagged greenfield foreign firm entry in technologically advanced industries, but not in laggard industries. In this paper we provide evidence that these correlations arise from a causal effect predicted by Schumpeterian growth theory—the threat of technologically advanced entry spurs innovation incentives in sectors close to the technology frontier, where successful innovation allows incumbents to survive the threat, but discourages innovation in laggard sectors, where the threat reduces incumbents' expected rents from innovating. We find that the empirical patterns hold using rich micro panel data for the United Kingdom. We control for the endogeneity of entry by exploiting major European and U.K. policy reforms, and allow for endogeneity of additional factors. We complement the analysis for foreign entry with evidence for domestic entry and entry through imports

Unraveling the Phylogenetic Relationships of the Eccoptochilinae, an Enigmatic Array of Ordovician Cheirurid Trilobites

The Cheiruridae are a diverse group of trilobites and several subfamilies within the clade have been the focus of recent phylogenetic studies. This paper focuses on the relationships of one of those subfamilies, the Ordovician Eccoptochilinae. We analyze sixteen species from six genera within the traditionally defined group, using the pilekiid Anacheirurus frederici as an outgroup. To assess the monophyly of the Eccoptochilinae seven sphaerexochine species, Kawina arnoldi, Sphaerexochus arenosus, S. atacius, S. latifrons, S. mirus, S. parvus, and S. scabridus were included in the analysis as well. The results of this analysis show that the genus Eccoptochile represents a paraphyletic grade and species traditionally assigned to Parasphaerexochus and Skelipyx plot within Pseudosphaerexochus. Also, representative species of Sphaerexochinae plot within the traditionally defined Eccoptochilinae, suggesting Eccoptochilinae itself is paraphyletic. To resolve this, we propose all species of Pseudosphaerexochus be placed within Sphaerexochinae and Eccoptochilinae be restricted to a monotypic Eccoptochile clavigera.This research was supported by NSF DEB-0716162

Natalizumab treatment shows low cumulative probabilities of confirmed disability worsening to EDSS milestones in the long-term setting.

Abstract Background Though the Expanded Disability Status Scale (EDSS) is commonly used to assess disability level in relapsing-remitting multiple sclerosis (RRMS), the criteria defining disability progression are used for patients with a wide range of baseline levels of disability in relatively short-term trials. As a result, not all EDSS changes carry the same weight in terms of future disability, and treatment benefits such as decreased risk of reaching particular disability milestones may not be reliably captured. The objectives of this analysis are to assess the probability of confirmed disability worsening to specific EDSS milestones (i.e., EDSS scores ≥3.0, ≥4.0, or ≥6.0) at 288 weeks in the Tysabri Observational Program (TOP) and to examine the impact of relapses occurring during natalizumab therapy in TOP patients who had received natalizumab for ≥24 months. Methods TOP is an ongoing, open-label, observational, prospective study of patients with RRMS in clinical practice. Enrolled patients were naive to natalizumab at treatment initiation or had received ≤3 doses at the time of enrollment. Intravenous natalizumab (300 mg) infusions were given every 4 weeks, and the EDSS was assessed at baseline and every 24 weeks during treatment. Results Of the 4161 patients enrolled in TOP with follow-up of at least 24 months, 3253 patients with available baseline EDSS scores had continued natalizumab treatment and 908 had discontinued (5.4% due to a reported lack of efficacy and 16.4% for other reasons) at the 24-month time point. Those who discontinued due to lack of efficacy had higher baseline EDSS scores (median 4.5 vs. 3.5), higher on-treatment relapse rates (0.82 vs. 0.23), and higher cumulative probabilities of EDSS worsening (16% vs. 9%) at 24 months than those completing therapy. Among 24-month completers, after approximately 5.5 years of natalizumab treatment, the cumulative probabilities of confirmed EDSS worsening by 1.0 and 2.0 points were 18.5% and 7.9%, respectively (24-week confirmation), and 13.5% and 5.3%, respectively (48-week confirmation). The risks of 24- and 48-week confirmed EDSS worsening were significantly higher in patients with on-treatment relapses than in those without relapses. An analysis of time to specific EDSS milestones showed that the probabilities of 48-week confirmed transition from EDSS scores of 0.0–2.0 to ≥3.0, 2.0–3.0 to ≥4.0, and 4.0–5.0 to ≥6.0 at week 288 in TOP were 11.1%, 11.8%, and 9.5%, respectively, with lower probabilities observed among patients without on-treatment relapses (8.1%, 8.4%, and 5.7%, respectively). Conclusions In TOP patients with a median (range) baseline EDSS score of 3.5 (0.0–9.5) who completed 24 months of natalizumab treatment, the rate of 48-week confirmed disability worsening events was below 15%; after approximately 5.5 years of natalizumab treatment, 86.5% and 94.7% of patients did not have EDSS score increases of ≥1.0 or ≥2.0 points, respectively. The presence of relapses was associated with higher rates of overall disability worsening. These results were confirmed by assessing transition to EDSS milestones. Lower rates of overall 48-week confirmed EDSS worsening and of transitioning from EDSS score 4.0–5.0 to ≥6.0 in the absence of relapses suggest that relapses remain a significant driver of disability worsening and that on-treatment relapses in natalizumab-treated patients are of prognostic importance

Patent rights, product market reforms, and innovation

In this paper, we provide empirical evidence to the effect that strong patent rights may complement competition-increasing product market reforms in fostering innovation. First, we find that the product market reform induced by the large-scale internal market reform of the European Union in 1992 enhanced, on average, innovative investments in manufacturing industries of countries with strong patent rights since the pre-sample period, but not so in industries of countries with weaker patent rights. Second, the positive response to the product market reform is more pronounced in industries where, in general, innovators tend to value patent protection higher than in other industries, except for the manufacture of electrical and optical equipment. The observed complementarity between competition and patent protection can be rationalized using a Schumpeterian growth model with step-by-step innovation. In such a model, better patent protection prolongs the period over which a firm that successfully escapes competition by innovating, actually enjoys higher monopoly rents from its technological upgrade.Economic