Competitive, but too small - productivity and entry-exit determinants in European business services

The paper investigates whether scale effects, market structure, and regulation determine the poor productivity performance of the European business services industry. We apply parametric and nonparametric methods to estimate the productivity frontier and subsequently explain the distance of firms to the productivity frontier by market characteristics, entry- and exit dynamics and national regulation. The frontier is assessed using detailed industry data panel for 13 EU countries. Our estimates suggest that most scale advantages are exhausted after reaching a size of 20 employees. This scale inefficiency is persistent over time and points to weak competitive selection. Market and regulation characteristics explain the persistence of X-inefficiency (sub-optimal productivity relative to the industry frontier). More entry and exit are favourable for productivity performance, while higher market concentration works out negatively. Regulatory differences also appear to explain part of the business services' productivity performance. In particular regulation-caused exit and labour reallocation costs have significant and large negative impacts on the process of competitive selection and hence on productivity performance. Overall we find that the most efficient scale in business services is close to 20 employees and that scale inefficiencies show a hump-shape pattern with strong potential scale economies for the smallest firms and diseconomies of scale for the largest firms. The smallest firms operate under competitive conditions, but they are too small to be efficient. And since this conclusion holds for about 95 out of every 100 European business services firms, this factor weighs heavily for the overall productivity performance of this industry

Small firms captive in a box like lobsters

The paper empirically investigates whether a lack of competition determines the poor productivity performance of the European business services. It uses detailed panel data for 13 EU countries over the period 2000-2005. We apply parametric and nonparametric methods to estimate the productivity frontier and subsequently explain the distance to the productivity frontier by market characteristics, entry and exit dynamics and national regulation. We find that the most efficient scale in business services is close to 20 employees. Scale inefficiencies show a hump-shape pattern with strong potential scale economies for the smallest firms. Nonetheless, some 95% of the firms operate at a scale below the minimal optimal scale. While they are competitive in the sense that their productivities are very similar, they have strong scale diseconomies compared to the larger firms. Their scale inefficiency is persistent over time, which points to growth obstacles that hamper the achievement of scale economies. Regulation characteristics explain this inefficiency; in particular, regulation-caused exit and labour reallocation costs are found to have a large negative impact on productivity performance.

Competitive, but too small - productivity and entry-exit determinants in European business services

The paper investigates whether scale effects, market structure, and regulation determine the poor productivity performance of the European business services industry. We apply parametric and nonparametric methods to estimate the productivity frontier and subsequently explain the distance of firms to the productivity frontier by market characteristics, entry- and exit dynamics and national regulation. The frontier is assessed using detailed industry data panel for 13 EU countries. Our estimates suggest that most scale advantages are exhausted after reaching a size of 20 employees. This scale inefficiency is persistent over time and points to weak competitive selection. Market and regulation characteristics explain the persistence of X-inefficiency (sub-optimal productivity relative to the industry frontier). More entry and exit are favourable for productivity performance, while higher market concentration works out negatively. Regulatory differences also appear to explain part of the business services' productivity performance. In particular regulation-caused exit and labour reallocation costs have significant and large negative impacts on the process of competitive selection and hence on productivity performance. Overall we find that the most efficient scale in business services is close to 20 employees and that scale inefficiencies show a hump-shape pattern with strong potential scale economies for the smallest firms and diseconomies of scale for the largest firms. The smallest firms operate under competitive conditions, but they are too small to be efficient. And since this conclusion holds for about 95 out of every 100 European business services firms, this factor weighs heavily for the overall productivity performance of this industry.productivity; frontier models; scale; industry dynamics; regulation; European Union; business services

Market structure, productivity and scale in European business services

Using data from 11 EU countries, the paper investigates the impact of scale economies on labour productivity in European business services. Moreover, it analyses whether the incidence of scale sub-optimality is related to characteristics of the market or to national regulation characteristics. The econometric analysis is based on a production function model in combination with a distance-to-the-frontier model. We find evidence for the existence of increasing returns to scale in business services firms. A result is that throughout the EU, business-services firms with less than 20 employed persons have a significantly lower level of labour productivity than the rest of the business-services industry. Two factors explain the scale inefficiencies. The first is the level of policy-caused firm-entry costs; higher start-up costs for new firms go along with more scale inefficiency. Secondly, business-services markets tend to be segmented by firm size: firms tend to compete predominantly with firms in their own size segment of the markets. Scale-related inefficiencies are to some extent compensated by more competition within a firm's own size segment. If a firm operates in a more “crowded” segment this has a significant and positive impact on its labour productivity. We derive some policy implications from our findings.EU, business services, scale efficiency, labour productivity, regulation, entry costs

Patterns of biologic agent utilization among patients with rheumatoid arthritis: a retrospective cohort study

<p>Abstract</p> <p>Background</p> <p>The role of biologic therapies in the treatment of rheumatoid arthritis has expanded, but dosing patterns in the first versus subsequent lines of therapy have not been thoroughly explored.</p> <p>Methods</p> <p>In order to describe patterns of biologic agent utilization among patients with rheumatoid arthritis, health care claims data on use of abatacept, rituximab, or the anti-tumor necrosis factor (TNF) agents etanercept, adalimumab, and infliximab in first- or subsequent-line settings were used to form patient cohorts. Variables included: starting dose (first administration or fill), maintenance dose (third administration or fill), average dose, dose escalation, inter-infusion interval, and discontinuation (gap in therapy > 60 days or switch). Time to discontinuation was assessed with Kaplan-Meier curves and Cox proportional hazards models.</p> <p>Results</p> <p>Over 1 year, average (SD) doses of first-line etanercept (N = 1593; 45.4 [8.8] mg/week), adalimumab (N = 1040; 40.7 [10.4] mg/2 weeks), and abatacept (N = 360; 715.4 [214.5] mg/4 weeks) were similar to the starting and maintenance doses; the average infliximab dose (N = 538; 441.0 [209.2] mg/8 weeks) was greater than the starting and maintenance doses. Trends in the subsequent-line anti-TNF cohorts were similar. The percentages with a dose escalation or discontinuation were greater in the subsequent-line anti-TNF cohorts. The proportion with a dose escalation was greatest for the infliximab cohorts (61.2% first-line and 80.2% subsequent-line). The average period between abatacept infusions was 4.8 [1.4] weeks (4-week approved schedule); and 6.8 [2.6] months between rituximab courses (currently approved schedule is 6 months). Time to discontinuation was significantly shorter for subsequent-line than first-line anti-TNF therapy (median 9.7 vs. 12.5 mo; p < 0.001). The hazard ratio for discontinuing subsequent-line versus first-line anti-TNF therapy was 1.177 (p < 0.001).</p> <p>Conclusions</p> <p>Subsequent-line anti-TNF therapy cohorts had higher rates of discontinuation, dose escalation, and shorter time to discontinuation than first-line anti-TNF cohorts.</p

Mortality associated with gastrointestinal bleeding events: Comparing short-term clinical outcomes of patients hospitalized for upper GI bleeding and acute myocardial infarction in a US managed care setting

C Mel Wilcox1, Byron L Cryer2, Henry J Henk3, Victoria Zarotsky3, Gergana Zlateva41University of Alabama, Birmingham, AL, USA; 2University of Texas Southwestern Medical School, Dallas, TX; 3i3 Innovus, Eden Prairie, MN, USA; 4Pfizer, Inc., New York, NY, USA Objectives: To compare the short-term mortality rates of gastrointestinal (GI) bleeding to those of acute myocardial infarction (AMI) by estimating the 30-, 60-, and 90-day mortality among hospitalized patients.Methods: United States national health plan claims data (1999&amp;ndash;2003) were used to identify patients hospitalized with a GI bleeding event. Patients were propensity-matched to AMI patients with no evidence of GI bleed from the same US health plan.Results: 12,437 upper GI-bleed patients and 22,847 AMI patients were identified. Propensity score matching yielded 6,923 matched pairs. Matched cohorts were found to have a similar Charlson Comorbidity Index score and to be similar on nearly all utilization and cost measures (excepting emergency room costs). A comparison of outcomes among the matched cohorts found that AMI patients had higher rates of 30-day mortality (4.35% vs 2.54%; p&amp;nbsp;&amp;lt; 0.0001) and rehospitalization (2.56% vs 1.79%; p = 0.002), while GI bleed patients were more likely to have a repeat procedure (72.38% vs 44.95%; p&amp;nbsp;&amp;lt; 0.001) following their initial hospitalization. The majority of the difference in overall 30-day mortality between GI bleed and AMI patients was accounted for by mortality during the initial hospitalization (1.91% vs 3.58%).Conclusions: GI bleeding events result in significant mortality similar to that of an AMI after adjusting for the initial hospitalization.Keywords: gastrointestinal, bleeding, mortality, acute myocardial infarction, claims analysi

Leishmania species and clinical characteristics of Pacific and Amazon cutaneous leishmaniasis in Ecuador and determinants of health-seeking delay: a cross-sectional study

Ecuador; Leishmaniasis; PhylogenyEquador; Leishmaniosi; FilogèniaEcuador; Leishmaniosis; FilogeniaBackground Cutaneous Leishmaniasis (CL) affects up to 5.000 people in Ecuador each year. L. guyanensis and L. braziliensis are the most common of the eight CL-causing Leishmania species. Earlier CL research concentrated on the easily accessible Pacific region. This study aims to describe the Leishmania species in Pacific and Amazon ecoregions, to analyze regional differences in CL patient clinical presentation, and to identify determinants of health-seeking delay. Methods All cases in this cross-sectional study were diagnosed using smear slide microscopy, PCR, or both. Cytochrome B gene sequencing was used to identify the causative Leishmania species in qPCR-positive samples. Results This study included 245 patients, with 154 (63%) infected in the Pacific region and 91 (37%) infected in the Amazon. Causative Leishmania species were identified in 135 patients (73% of qPCR positives). L. guyanensis was identified in 76% (102/135) of the samples and L. braziliensis in 19% (26/135). The Pacific region had a low prevalence of 6% (5/89) of L. braziliensis. For the first time, we report L. guyanensis from the central Amazon, L. braziliensis from the northern Pacific, and L. lainsoni from both the central Amazon and northern Pacific. Amazon cases had a longer median health-seeking delay in months (2.0, IQR 3.0) than Pacific cases (1.0, IQR 1.5). Prolonged health-seeking delay was associated with older age, Amerindian ethnicity, infection at lower altitudes, non-ulcerative lesions, and lesions on the lower limbs. Conclusions In the Pacific region, health-seeking delay is relatively short and L. braziliensis prevalence remains low. Limited access to health care and stigma might explain the prolonged health-seeking delay in the Amazon. We recommend larger studies on the distribution of Leishmania species in Amazon CL cases and additional regional research into diagnostic test accuracy. Furthermore, the determinants of health-seeking delay in Ecuador should be investigated further.Foundation Latin Link Nederland provided funding for the current study