Internet-based communications technologies appear to be integral to the diffusion of social movements today. This column looks back at the Protestant Reformation – the first mass movement to use the new technology of the printing press to drive social change. It argues that diffusion of the Reformation was not driven by technology alone. Competition and openness in the media were also crucial, and delivered their biggest effects in cities where political freedom was most limited.
Jeremiah Dittmar, Skipper Seabold, Wednesday, August 19, 2015
Andrew W. Lo, Richard T. Thakor, Tuesday, March 24, 2015
R&D-intensive firms such as biopharmaceutical companies operate in a competitive and risky environment. This column presents new evidence on how competition affects the investment decision of R&D-intensive firms. An increase in competition will make the firm increase the R&D investment, and as a response the firm will carry more cash and reduce its debt. Also, more competition will increase the idiosyncratic risk of R&D-intensive firms.
Jon Danielsson, Eva Micheler, Katja Neugebauer, Andreas Uthemann, Jean-Pierre Zigrand, Monday, February 23, 2015
The proposed EU capital markets union aims to revitalise Europe’s economy by creating efficient funding channels between providers of loanable funds and firms best placed to use them. This column argues that a successful union would deliver investment, innovation, and growth, but it depends on overcoming difficult regulatory challenges. A successful union would also change the nature of systemic risk in Europe.
Daniel Bennett, Wes Yin, Thursday, August 14, 2014
Many drugs sold in poor countries are counterfeit or substandard, endangering patients’ health and fostering drug resistance. Since drug quality is difficult to observe, pharmacies in weakly regulated markets may have little incentive to improve quality. However, larger markets allow firms to reorganise production and invest in technologies that reduce the marginal cost of quality. This column discusses how the entry of a new pharmacy chain in India led incumbents to both cut prices and raise drug quality.
Joan Costa-i-Font, Alistair McGuire, Nebibe Varol, Saturday, May 10, 2014
Generic medicines are cheaper than their branded counterparts, offering potential savings in healthcare budgets. Medicine-price regulation plays an important role in the expansion of the market for generic medicines. This column presents new evidence that higher levels of price regulation, by lowering the expected price to generic manufacturers, lead (ceteris paribus) to greater delays in generic entry.
Mario Mariniello, Sunday, September 22, 2013
Cartel fines imposed by the European Commission routinely reach hundreds of millions of euro, having increased since the new 2006 fining policy. This column argues that they are still below their optimal level and come too slowly. Fines were often lower than the additional cartel profits and imposed 10 to 20 years after making the law-breaking decision was made – sometimes after the responsible managers had retired. To speed investigations, the Commission should Increase resources dedicated to inquiries; fines should also be raised.
Jerónimo Carballo, Gianmarco I.P. Ottaviano, Christian Volpe Martincus, Sunday, August 11, 2013
The authors use highly disaggregated firm-level export data from Costa Rica, Ecuador, and Uruguay over the period 2005-08 to provide a precise characterization of firms' export margins, across products, destination countries, and crucially customers. They show that a firm's number of buyers and the distribution of sales across them systematically vary with the characteristics of its destination markets.
Allan Collard-Wexler, Jan De Loecker, Sunday, February 3, 2013
This paper measures the impact of the minimill, a drastic new technology for producing steel. The authors find that the sharp increase in the industry's productivity is linked to this new technology, and operates through two distinct mechanisms. First, minimills displaced the older technology, called vertically integrated production, and this reallocation of output was responsible for a third of the increase in the industry's productivity. Second, increased competition, due to the expansion of minimills, drove a substantial reallocation process within the group of vertically integrated producers, driving a resurgence in their productivity, and consequently of the industry's productivity as a whole.
Rob Simmons, Monday, September 3, 2012
As the new football season kicks off, Europe’s top clubs are preparing to abide by UEFA’s Financial Fair Play initiative, designed to ensure financial discipline and make European football more competitive. But this column argues that the new rules could end up doing just the opposite.
Hans Degryse, Martin Brown, Daniel Hoewer, María Fabiana Penas, Tuesday, June 5, 2012
Might bank consolidation and the increasing reliance on external credit ratings harm access to credit for start-up firms, especially those in high-tech industries? This column examines how the availability of credit for start-ups in Germany is related to their external credit rating as well as the size and expertise of their main bank.
Lorenzo Forni, Andrea Gerali, Massimiliano Pisani, Tuesday, April 3, 2012
How to jump-start productivity growth in Europe’s economies is a question at the heart of debate over economic policy in the Eurozone. This column explores the effect of a decrease in mark-ups in the Italian services sector. Using simulations, it suggests that the potential macroeconomic gains from pursuing competition-friendly reforms could be substantial.
Noboru Kawahama, Thursday, March 22, 2012
Competition may drive down prices but it also drives down profits – and some would argue innovation as well. How should policymakers balance the short-term need for competition with the the long-term need for innovation? This column explores the idea of ‘innovation and competition policy’ rather than just ‘competition poliicy’.
Alison Booth, Patrick Nolen, Lina Cardona Sosa, Monday, February 20, 2012
Some blame women’s under-representation in high-level jobs on differences between the sexes in risk aversion and competition. But are these differences in behaviour hardwired or learned? This column describes a study that tackles this thorny question with a controlled experiment in single-sex and mixed classrooms in a British university. Women are found to become far less nervous about uncertainty over time with the men out of the room.
Robert H. Frank, Friday, December 23, 2011
Robert Frank of Cornell University talks to Romesh Vaitilingam about his book, ‘The Darwin Economy: Liberty, Competition and the Common Good’. He argues that Charles Darwin's understanding of competition – in which individual and group interests often diverge sharply – describes economic reality far more accurately than Adam Smith's. They discuss the implications of this view for current debates about inequality, taxation, and policies to get out of economic stagnation. The interview was recorded in London in November 2011. [Transcript available]
Andrew Healy, Friday, December 9, 2011
At this week’s summit on the future of the euro, Angela Merkel will be one of few women in a room full of men. This column provides experimental evidence to suggest that women are often less driven by the desire to compete and have less belief in their abilities than men. The result is that even the highest ranks of power may be bereft of the most able of candidates.
Carol Propper, Friday, February 11, 2011
Britain’s coalition government is proposing significant healthcare reforms, which include promoting greater competition between providers and changing the way that care is commissioned. Carol Propper of the Centre for Market and Public Organisation talks to Romesh Vaitilingam about the evidence for some of the claims and counterclaims about the likely impact of the reforms. The interview was recorded at the University of Bristol in February 2011.<i> [Also read the transcript] </i>
Ludger Woessmann, Martin West, Thursday, December 2, 2010
Does private competition work in the schooling sector? This column presents evidence that countries with more privately operated schools perform substantially better on international tests of student achievement. To isolate the causal effect of private competition, the column focuses on variation in private school shares that has deep historical roots – Catholic opposition to state-run education systems in the 19th century.
Carmine Guerriero, Sunday, November 21, 2010
When is regulation more efficient than competition? This column provides a theoretical framework for thinking about these issues and explores its implications using electricity data from the US. It argues regulation can be more efficient than competition when investment inducement is salient, and that deregulation can be inefficiently implemented when consumer groups are too politically powerful.
Christopher Cotton, Frank McIntyre, Joseph Price, Thursday, October 21, 2010
Around the world, the pay and achievement gap between men and women remains significant, as shown by last week’s Global Gender Gap Report. This column explores whether this gap can be explained by attitudes towards competition. Using experimental evidence from math quiz competitions in primary schools, it finds that while males respond better to competition initially, this advantage is short-lived, as females are just as responsive over time.
Marty Gaynor, Carol Propper, Monday, August 23, 2010
Governments faced with rising costs and growing demand are constantly searching for methods of delivering higher productivity in healthcare. This column suggests that the introduction of competition among UK hospitals – yet with a fixed price – has lowered death rates without a commensurate increase in costs.