Pub Date : 2020-05-03DOI: 10.1080/13571516.2019.1681789
Francisco Jareño, Marta Tolentino, M. González, M. Á. Medina
Abstract This paper focuses on analysing the sensitivity and behaviour of some of the leading insurers currently operating in the Euro area to changes in benchmark interest rates. The methodology used is the Quantile Regression (QR) approach and the period analysed covers from 2003 to 2015 around the recent global financial crisis. The empirical results show that European insurance market returns have a statistically significant sensitivity to interest rate variations and that there are important differences according to the period analysed, being the sensitivity most pronounced in extreme market conditions.
{"title":"Interest rate exposure of European insurers","authors":"Francisco Jareño, Marta Tolentino, M. González, M. Á. Medina","doi":"10.1080/13571516.2019.1681789","DOIUrl":"https://doi.org/10.1080/13571516.2019.1681789","url":null,"abstract":"Abstract This paper focuses on analysing the sensitivity and behaviour of some of the leading insurers currently operating in the Euro area to changes in benchmark interest rates. The methodology used is the Quantile Regression (QR) approach and the period analysed covers from 2003 to 2015 around the recent global financial crisis. The empirical results show that European insurance market returns have a statistically significant sensitivity to interest rate variations and that there are important differences according to the period analysed, being the sensitivity most pronounced in extreme market conditions.","PeriodicalId":45470,"journal":{"name":"International Journal of the Economics of Business","volume":null,"pages":null},"PeriodicalIF":1.2,"publicationDate":"2020-05-03","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"88984898","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2020-05-03DOI: 10.1080/13571516.2019.1684093
Inès Ben Dkhil, Khaïreddine Jebsi
Abstract This paper explores whether the differences in national regulatory policy practices explain gaps in the fixed broadband uptake across countries worldwide. In doing this, we consider a dataset covering 107 developed and developing countries during 2004–2015. Based on data about regulatory practices gathered from several relevant sources, we compute an index to quantify the degree of regulation in the fixed telecommunication segment. Overall, our findings exhibit clearly an inverted U-shape relationship, meaning that high degrees of regulation harm broadband investment. However, isolating the behavior of the least developing countries from the rest of our worldwide panel, we obtain different results. In fact, access regulation is a relatively recent practice in many developing countries. Moreover, the use of this novel data set has allowed us to investigate the specific impact of each one of these regulatory policies. We argue that most findings are in line with the theoretical predictions.
{"title":"Access Regulation and Broadband Deployment: Evidence from a Worldwide Dataset","authors":"Inès Ben Dkhil, Khaïreddine Jebsi","doi":"10.1080/13571516.2019.1684093","DOIUrl":"https://doi.org/10.1080/13571516.2019.1684093","url":null,"abstract":"Abstract This paper explores whether the differences in national regulatory policy practices explain gaps in the fixed broadband uptake across countries worldwide. In doing this, we consider a dataset covering 107 developed and developing countries during 2004–2015. Based on data about regulatory practices gathered from several relevant sources, we compute an index to quantify the degree of regulation in the fixed telecommunication segment. Overall, our findings exhibit clearly an inverted U-shape relationship, meaning that high degrees of regulation harm broadband investment. However, isolating the behavior of the least developing countries from the rest of our worldwide panel, we obtain different results. In fact, access regulation is a relatively recent practice in many developing countries. Moreover, the use of this novel data set has allowed us to investigate the specific impact of each one of these regulatory policies. We argue that most findings are in line with the theoretical predictions.","PeriodicalId":45470,"journal":{"name":"International Journal of the Economics of Business","volume":null,"pages":null},"PeriodicalIF":1.2,"publicationDate":"2020-05-03","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"90170037","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2020-05-03DOI: 10.1080/13571516.2019.1664835
A. Kasman, Saadet Kasman, G. Gökalp
Abstract This paper examines the impact of competition and concentration on stability in the Turkish insurance sector over the period 2002–2014. The main results indicate that non–life insurers are more stable in a less competitive and highly concentrated environment. This finding provides support for the competition–fragility view in the Turkish non–life insurance sector. In contrast, life/pension insurers are more stable in a highly competitive and more concentrated market. Hence, our findings provide support for the competition–stability view for Turkish life/pension insurers. The results further indicate that higher market power decreases (increases) earnings volatility in the non–life (life/pension) insurance sector. A quadratic term of the competition measures was also used in this study to capture a possible nonlinear relationship between competition and risk. The results suggest an inverse U-shaped pattern for the non–life insurer’s case. That is, market power increases insurer stability until a threshold level. As for the life/pension insurer’s case, the results also support a U-shaped relationship between market power and stability. The results further show that there is no nonlinear relationship between competition and stability.
{"title":"Stability, Competition, and Concentration in the Turkish Insurance Sector","authors":"A. Kasman, Saadet Kasman, G. Gökalp","doi":"10.1080/13571516.2019.1664835","DOIUrl":"https://doi.org/10.1080/13571516.2019.1664835","url":null,"abstract":"Abstract This paper examines the impact of competition and concentration on stability in the Turkish insurance sector over the period 2002–2014. The main results indicate that non–life insurers are more stable in a less competitive and highly concentrated environment. This finding provides support for the competition–fragility view in the Turkish non–life insurance sector. In contrast, life/pension insurers are more stable in a highly competitive and more concentrated market. Hence, our findings provide support for the competition–stability view for Turkish life/pension insurers. The results further indicate that higher market power decreases (increases) earnings volatility in the non–life (life/pension) insurance sector. A quadratic term of the competition measures was also used in this study to capture a possible nonlinear relationship between competition and risk. The results suggest an inverse U-shaped pattern for the non–life insurer’s case. That is, market power increases insurer stability until a threshold level. As for the life/pension insurer’s case, the results also support a U-shaped relationship between market power and stability. The results further show that there is no nonlinear relationship between competition and stability.","PeriodicalId":45470,"journal":{"name":"International Journal of the Economics of Business","volume":null,"pages":null},"PeriodicalIF":1.2,"publicationDate":"2020-05-03","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"86580681","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2020-05-03DOI: 10.1080/13571516.2020.1752044
Atanu Saha, Heather Roberts
Abstract Using a panel dataset of 82 drugs that lost exclusivity between 2009 and 2018, we examine three key variables: the number of generic entrants, the generic-to-brand price ratio, and generic share. We also undertake a comparative analysis of these variables using an earlier dataset of 40 drugs that lost exclusivity in 1992–1998. Our principal findings are: a marked decrease in the number of generic manufacturers per drug, higher generic concentration, and higher generic-to-brand price ratios in the more recent years. Despite higher generic-to-brand price ratios, however, the generics have garnered higher market share, reflecting their rising market power and the ongoing major structural changes in the pharmaceutical industry.
{"title":"Pharmaceutical industry’s changing market dynamics","authors":"Atanu Saha, Heather Roberts","doi":"10.1080/13571516.2020.1752044","DOIUrl":"https://doi.org/10.1080/13571516.2020.1752044","url":null,"abstract":"Abstract Using a panel dataset of 82 drugs that lost exclusivity between 2009 and 2018, we examine three key variables: the number of generic entrants, the generic-to-brand price ratio, and generic share. We also undertake a comparative analysis of these variables using an earlier dataset of 40 drugs that lost exclusivity in 1992–1998. Our principal findings are: a marked decrease in the number of generic manufacturers per drug, higher generic concentration, and higher generic-to-brand price ratios in the more recent years. Despite higher generic-to-brand price ratios, however, the generics have garnered higher market share, reflecting their rising market power and the ongoing major structural changes in the pharmaceutical industry.","PeriodicalId":45470,"journal":{"name":"International Journal of the Economics of Business","volume":null,"pages":null},"PeriodicalIF":1.2,"publicationDate":"2020-05-03","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"74577660","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2020-04-03DOI: 10.1080/13571516.2019.1674491
Ajay Sharma
Abstract In this article, we analyse misleading advertising competition between private firms (profit oriented) and consumer-oriented firms (concerned about consumer welfare) in the context of mixed markets. The nature of advertising in this article is assumed to be non-rival in nature and is beneficial to all the firms in the market. We find that, both private and consumer-oriented firms incur positive expenditure on misleading advertising. Further, the profit of consumer-oriented firms is higher than that of private firms. Moreover, irrespective of whether firms are concerned about consumer welfare or not, the level of misleading advertising is socially excessive.
{"title":"Misleading advertising in mixed markets: non-profit orientation and welfare outcomes","authors":"Ajay Sharma","doi":"10.1080/13571516.2019.1674491","DOIUrl":"https://doi.org/10.1080/13571516.2019.1674491","url":null,"abstract":"Abstract In this article, we analyse misleading advertising competition between private firms (profit oriented) and consumer-oriented firms (concerned about consumer welfare) in the context of mixed markets. The nature of advertising in this article is assumed to be non-rival in nature and is beneficial to all the firms in the market. We find that, both private and consumer-oriented firms incur positive expenditure on misleading advertising. Further, the profit of consumer-oriented firms is higher than that of private firms. Moreover, irrespective of whether firms are concerned about consumer welfare or not, the level of misleading advertising is socially excessive.","PeriodicalId":45470,"journal":{"name":"International Journal of the Economics of Business","volume":null,"pages":null},"PeriodicalIF":1.2,"publicationDate":"2020-04-03","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"72646120","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2020-03-03DOI: 10.1080/13571516.2020.1747853
Naoshi Doi, Hitoshi Hayakawa
Abstract This paper reviews existing studies investigating online communication on products and services, also known as, electronic word-of-mouth (eWOM). The first half of the paper summaries what is known about eWOM in the literature. Existing studies largely relate to the marketing field and are generally conducted from a marketing firms' point of view. To investigate eWOM from the perspective of social welfare, the latter half of the paper discusses theoretical frameworks of economics that are potentially applicable to the context of eWOM, especially focusing on theories about social learning and signaling. We discuss implications obtained by applying these theories to eWOM and outline possible directions for future research.
{"title":"Electronic word-of-mouth: a survey from an economics perspective","authors":"Naoshi Doi, Hitoshi Hayakawa","doi":"10.1080/13571516.2020.1747853","DOIUrl":"https://doi.org/10.1080/13571516.2020.1747853","url":null,"abstract":"Abstract This paper reviews existing studies investigating online communication on products and services, also known as, electronic word-of-mouth (eWOM). The first half of the paper summaries what is known about eWOM in the literature. Existing studies largely relate to the marketing field and are generally conducted from a marketing firms' point of view. To investigate eWOM from the perspective of social welfare, the latter half of the paper discusses theoretical frameworks of economics that are potentially applicable to the context of eWOM, especially focusing on theories about social learning and signaling. We discuss implications obtained by applying these theories to eWOM and outline possible directions for future research.","PeriodicalId":45470,"journal":{"name":"International Journal of the Economics of Business","volume":null,"pages":null},"PeriodicalIF":1.2,"publicationDate":"2020-03-03","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"76187146","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2020-02-26DOI: 10.1080/13571516.2020.1718460
M. Glaser, M. Jirásek, Josef Windsperger
Abstract This study provides a new explanation of the ownership structure of franchise firms by highlighting a trade-off between adaptation and control under increasing uncertainty. Franchise chains are formed to reduce transaction costs by combining franchisee outlets as an adaptation mechanism and company-owned outlets as a control mechanism. We argue that under low to moderate uncertainty, franchisors prioritize local responsiveness to profit opportunities by operating a lower proportion of company-owned outlets (PCO); by contrast, under high environmental uncertainty, franchisors prefer more central control through a higher PCO to coordinate interdependent local market outlets better. Hence, the franchisor must find an optimal PCO by balancing the PCO decreasing effect of higher local adaptation with the PCO increasing effect of higher central coordination under increasing uncertainty. Therefore, we posit a U-shaped relationship between the PCO and environmental uncertainty. Data from German and Swiss franchise systems provide support for the study’s hypotheses.
{"title":"Ownership Structure of Franchise Chains: Trade-Off Between Adaptation and Control","authors":"M. Glaser, M. Jirásek, Josef Windsperger","doi":"10.1080/13571516.2020.1718460","DOIUrl":"https://doi.org/10.1080/13571516.2020.1718460","url":null,"abstract":"Abstract This study provides a new explanation of the ownership structure of franchise firms by highlighting a trade-off between adaptation and control under increasing uncertainty. Franchise chains are formed to reduce transaction costs by combining franchisee outlets as an adaptation mechanism and company-owned outlets as a control mechanism. We argue that under low to moderate uncertainty, franchisors prioritize local responsiveness to profit opportunities by operating a lower proportion of company-owned outlets (PCO); by contrast, under high environmental uncertainty, franchisors prefer more central control through a higher PCO to coordinate interdependent local market outlets better. Hence, the franchisor must find an optimal PCO by balancing the PCO decreasing effect of higher local adaptation with the PCO increasing effect of higher central coordination under increasing uncertainty. Therefore, we posit a U-shaped relationship between the PCO and environmental uncertainty. Data from German and Swiss franchise systems provide support for the study’s hypotheses.","PeriodicalId":45470,"journal":{"name":"International Journal of the Economics of Business","volume":null,"pages":null},"PeriodicalIF":1.2,"publicationDate":"2020-02-26","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"86506933","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2020-02-03DOI: 10.1080/13571516.2020.1718472
Paula Sarmento, A. Brandão
Abstract Some utilities such as postal services, gas and electricity are facing significant decline in demand within several of their business segments. In this context, an important matter for regulators, firms and consumers is to consider if maintaining price regulation is welfare enhancing compared with the no regulation alternative. From a model with one firm that is simultaneously monopolist in a regulated market and is in competition in a liberalized market, we conclude that welfare can be higher when price regulation is preserved.
{"title":"Networks in Decline: Should Price Regulation Be Abolished?","authors":"Paula Sarmento, A. Brandão","doi":"10.1080/13571516.2020.1718472","DOIUrl":"https://doi.org/10.1080/13571516.2020.1718472","url":null,"abstract":"Abstract Some utilities such as postal services, gas and electricity are facing significant decline in demand within several of their business segments. In this context, an important matter for regulators, firms and consumers is to consider if maintaining price regulation is welfare enhancing compared with the no regulation alternative. From a model with one firm that is simultaneously monopolist in a regulated market and is in competition in a liberalized market, we conclude that welfare can be higher when price regulation is preserved.","PeriodicalId":45470,"journal":{"name":"International Journal of the Economics of Business","volume":null,"pages":null},"PeriodicalIF":1.2,"publicationDate":"2020-02-03","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"72900660","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2020-01-02DOI: 10.1080/13571516.2019.1653719
Joel Stiebale, Nicole Wößner
Abstract We use a panel data set of European firms to analyse the effects of domestic and international M&As on target firms’ investment, growth and financial constraints. Combining propensity score matching with a difference-in-differences estimator, our results indicate that upon acquisition, target firms obtain better access to external finance, are characterized by higher levels of tangible and intangible assets, and display lower dependence of investments and cash savings on the availability of internal funds. We also provide evidence that these effects are driven by acquisitions during the 2007–2009 financial crisis and relatively small target firms.
{"title":"M&As, Investment and Financing Constraints","authors":"Joel Stiebale, Nicole Wößner","doi":"10.1080/13571516.2019.1653719","DOIUrl":"https://doi.org/10.1080/13571516.2019.1653719","url":null,"abstract":"Abstract We use a panel data set of European firms to analyse the effects of domestic and international M&As on target firms’ investment, growth and financial constraints. Combining propensity score matching with a difference-in-differences estimator, our results indicate that upon acquisition, target firms obtain better access to external finance, are characterized by higher levels of tangible and intangible assets, and display lower dependence of investments and cash savings on the availability of internal funds. We also provide evidence that these effects are driven by acquisitions during the 2007–2009 financial crisis and relatively small target firms.","PeriodicalId":45470,"journal":{"name":"International Journal of the Economics of Business","volume":null,"pages":null},"PeriodicalIF":1.2,"publicationDate":"2020-01-02","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"82305747","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2020-01-02DOI: 10.1080/13571516.2019.1651150
Z. J. Lu, W. Comanor, Elliot Cherkas, Llad Phillips
Abstract Between 1960 and 2016 per capita expenditures on retail pharmaceuticals increased from $85.12 to $922.50 in 2009 prices, while the share of spending covered by insurance programs grew to 86%. The introduction of new molecular entities followed only a weak upward trend. Following passage of the Hatch Waxman Act in 1984, the share of retail prescriptions dispensed as generics has expanded from 19% to almost 90%. By employing a three-equation Vector Auto-Regressive (VAR) model and Granger causality, this paper assesses empirically the interdependence among these variables. Our most important finding is that increases in insurance coverage on pharmaceuticals contributed significantly to the spending growth, which in turn led to further insurance expansion. In addition, introduction of new drugs also has contributed to enhanced insurance coverage. While the expansion of generic prescribing has had a strong negative effect on spending, this effect has been largely offset by rapid increases in coverage.
{"title":"U.S. Pharmaceutical Markets: Expenditures, Health Insurance, New Products and Generic Prescribing from 1960 to 2016","authors":"Z. J. Lu, W. Comanor, Elliot Cherkas, Llad Phillips","doi":"10.1080/13571516.2019.1651150","DOIUrl":"https://doi.org/10.1080/13571516.2019.1651150","url":null,"abstract":"Abstract Between 1960 and 2016 per capita expenditures on retail pharmaceuticals increased from $85.12 to $922.50 in 2009 prices, while the share of spending covered by insurance programs grew to 86%. The introduction of new molecular entities followed only a weak upward trend. Following passage of the Hatch Waxman Act in 1984, the share of retail prescriptions dispensed as generics has expanded from 19% to almost 90%. By employing a three-equation Vector Auto-Regressive (VAR) model and Granger causality, this paper assesses empirically the interdependence among these variables. Our most important finding is that increases in insurance coverage on pharmaceuticals contributed significantly to the spending growth, which in turn led to further insurance expansion. In addition, introduction of new drugs also has contributed to enhanced insurance coverage. While the expansion of generic prescribing has had a strong negative effect on spending, this effect has been largely offset by rapid increases in coverage.","PeriodicalId":45470,"journal":{"name":"International Journal of the Economics of Business","volume":null,"pages":null},"PeriodicalIF":1.2,"publicationDate":"2020-01-02","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"81733672","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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