Innovative productivity and returns to scale in the pharmaceutical industry

This study shows that firms in the pharmaceutical industry experience decreasing returns to scale in R & D as the level of R & D expenditures rises. The paper presents the results of our study of the innovative output of 16 pharmaceutical firms over a 19 year period. Given the strong correlation between R & D budgets and firm size, our study suggests the wave of mergers in the industry may yield less innovative productivity than managers expect.     

Sustaining Collusion in Growing Markets

The impact of demand growth on the collusion possibilities is investigated in a Cournot supergame where market growth may trigger future entry and the collusive agreement is enforced by the most profitable ‘grim trigger strategies’ available. It is shown that even in situations where perfect collusion can be sustained after entry, coping with a potential entrant in a market which is growing over time may completely undermine any pre‐entry collusive plans of the incumbent firms. This is because, before entry, a deviation and the following punishment phase may become more attractive thanks to their additional effect in terms of delaying entry.     

Public-Private Partnerships and Prices: Evidence from Water Distribution in France

We use an original database of 5000 French local public authorities to explore the impact of organizational choice and performance as measured by consumer prices. In quantifying the impact of the choice of public-private partnerships (PPPs) on performance, we consider the related issue of the determinants of organizational choice. We estimate a switching regressions model to account for the endogeneity of organizational choice, and find that in our sample, (i) the choice by local public authorities to engage in a PPP is not random, and (ii) conditional on the choice of a PPP, consumer prices are significantly higher on average.     

The Effect of Earnings–Announcement Timing on Earnings Management

This paper examines whether firms which delay earnings announcements engage in earnings management. The cross–sectional version of the modified Jones 1995 model is used to estimate 'normal' accruals. Prior research has documented that, on average, delayed earnings announcements are associated with negative earnings surprises. Our evidence suggests that the market anticipates unfavorable earnings news when it observes reporting delays. As a consequence, late reporters appear to make the most of a bad situation by employing income–decreasing accruals in big–bath–type earnings management and in contractual renegotiations. We find that the magnitude of income–reducing abnormal accruals is related to the reporting lag.     

Assessing Applied Protection across the World*

This paper presents MAcMap–HS‐6, a database providing a consistent, ad valorem equivalent measure of tariff duties and tariff rate quotas for 163 countries and 208 partners, at the six‐digit level of the Harmonized System (5111 products), accounting for all preferential agreements. We describe the methodology used to compute and aggregate an ad valorem equivalent of applied protection. Emphasis is placed on minimizing the endogeneity bias in the aggregation procedure, while acknowledging structural differences in export specialization. The resulting quantitative assessment is illustrated by giving an overview of applied protection across the world in 2001, in terms of average as well as distribution.     

A model depicting the relations among perceived stressors,role conflict and organizational commitment: A comparative analysis of Hong Kong and the United States

As managers and employees from different cultures begin to encounter one another in the workplace, the need arises to understand how organizational variables relate differentially based on one's culture. This study attempts to provide a preliminary examination of the relationship between stressors, sources of conflict and job commitment across two differing cultures, specifically the United States and Hong Kong. Although more similarities than differences between the two cultures were found, this study provides at least preliminary evidence that members of different cultures may perceive some stressors differently and exhibit different relationships between stressors and work attitudes.     

The impact of skewness in the hedging decision

The impact of skewness in the hedger's objective function is tested using a model of hedging derived from a third‐order Taylor Series approximation of expected utility. To determine the effect of price skewness upon hedging and speculation, analytical results are derived using an example of cotton storage. Findings suggest that when forward risk premiums and price skewness in the spot asset have opposite signs, speculation increases relative to the mean‐variance model. When the signs are identical, speculation will decrease, contradicting findings of mean‐variance models. © 2006 Wiley Periodicals, Inc. Jrl Fut Mark 26:503–520, 2006     

International health law and consumer autonomy

Today, international health law and international consumer law are developing in the same direction and with much interaction. But the developments are not uniform. As international health law takes consumer protection into account, it tends to increase the gap between a Western international law and a Third World international law, and to emphasize the negative harmonization approach towards international health protection.Another problem concerns the unification of the rules of international health law and those of international consumer law. This problem is particularly difficult to solve, as the rules of international consumer law themselves are still far from being unified.

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Internationales Gesundheitsrecht und Verbraucherautonomie

Zusammenfassung Internationales Gesundheitsrecht und internationales Verbraucherrecht entwickeln sich heute in gleicher Richtung, obwohl sie anderen Quellen entspringen. Die wechselseitige Durchdringung nimmt zu, auch wenn die Enwicklung nicht einheitlich vor sich geht. Je mehr das internationale Gesundheitsrecht den Verbraucherschutz in sich aufnimmt, destomehr trennt es sich in ein Recht für entwickelte Staaten und ein solches für Dritte Welt-Länder. Ein vorwiegend negativ-abwehrender Zugang herrscht vor.Ein anderes Problem beinhaltet die Harmonisierung der Regeln des internationalen Gesundheits- und des internationalen Verbraucherrechts. Dies ist schon deshalb schwer erreichbar, weil das Verbraucherrecht selbst nicht einheitlich vorgeht. Die Probleme verschärfen sich, wenn man — ohne eine internationale Verbraucherinstitution wie die WHO — eine gemeinsame positive Gesundheitspolitik für Verbraucher erreichen will.

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Michel Bélanger teaches health law at the U.F.R. de Droit Public et Science Politique, Université de Bordeaux I, Avenue Léon Duguit, F 33604 Pessac, France.     

In search of the meaning of entrepreneurship

This paper is an attempt to build a bridge between the popular and the academic usage of the terms entrepreneur and entrepreneurship, and to identify the raw materials needed to construct an interpretive framework capable of illuminating the nature of entrepreneurship and its role in economic theory. We review briefly the contributions made to this topic by Cantillon, Schumpeter, Schultz and Kirzner. We advance a synthetic definition of the entrepreneur as someone who specializes in taking responsibility for and making judgemental decisions that affect the location, the form, and the use of goods, resources, or institutions. We then conclude with some observations on the basic choice confronting economics regarding the place of entrepreneurship in economic analysis.