Surviving the gales of creative destruction: the determinants of product turnover

Innovative industries are often characterized by rapid product turnover. Product longevity may be driven by both a product's position within a market as well as its position within a firm's larger product portfolio. However, we have little understanding of the relative importance of these factors in determining product turnover and how they interact as an industry evolves. Although researchers have invested substantial effort in analyzing firm survival and turnover, there are far fewer studies of the determinants of product survival and turnover. We use hazard rate models and count regression models to describe the behavior of firms and their products with a new and detailed database on the laser printer industry. We show, first, that competition and market structure variables have a large impact on both speeding product exit and delaying product entry. Second, there is some evidence that firms that have maintained a high market share for a number of years keep their products on the market longer than those with lower market share. Finally, firms with high innovative capacity tend to enter markets frequently, but withdraw their products at average rates. Firms with strong brands tend to introduce few products and withdraw their products slowly. With these findings, the paper links product entry and exit decisions to the broader literature on firm strategic and product management. Copyright © 2006 John Wiley & Sons, Ltd.     

Erratum to Multilateral trade negotiations, bilateral opportunism and the rules of GATT/WTO

Trade negotiations occur through time and between the governments of many countries. An important issue is thus whether the value of concessions that a government wins in a current negotiation may be eroded in a future bilateral negotiation to which it is not party. We identify rules of negotiation that serve to protect the welfare of governments that are not participating in the bilateral negotiation. Our main finding is that the two central principles of GATT/WTO—nondiscrimination (MFN) and reciprocity—preserve the welfare of nonparticipating governments and therefore offer a “first-line of defense” against bilateral opportunism.     

Beliefs and (in)stability in normal-form games

Experimental Economics - In this paper, we use experimental data to study players’ stability in normal-form games where subjects have to report beliefs and choose actions. Subjects saw each...     

Retail margins, price transmission and price asymmetry in urban food markets: the case of Kinshasa (Zaire)

Some African food markets can still seem to operate inefficientlyafter price liberalisation. This seems mainly due to the existenceof significant transaction costs because of small-scale operations,and is influenced by lack of grading, deficient infrastructureand information systems. It is shown in the case of retail marketsin Kinshasa that search, supervision and other difficult-to-measuretransactions costs are more important in the margin of foodproducts than the measurable marketing costs (e.g., storage,transport). It is also shown through time series analysis thatmost of the price transmission between wholesale and retailhappens in the same week and that price asymmetry, i.e., thedifferent transmission of price increases compared with pricedecreases, is present for most products. Products characterisedby relatively more standardisation and homogeneity are shownto have lower retail margins and to behave symmetrically. Amodel based on kinked demand curves and search costs might explainthis asymmetric price behaviour.     

Disclosure and the outcome of securities litigation

Review of Accounting Studies - We examine the impact of disclosure by defendant firms on the outcome of securities fraud class actions. We hypothesize that firms issuing a higher quantity of...     

An analysis of bundle pricing: the case of biotech seeds

Biotechnology has provided opportunities for strategic management and pricing of patented products. This article analyzes the economics and strategy of bundling and bundle pricing of biotech traits in seeds. When the bundling of genes/traits is decided by biotech firms, firms may choose among subadditive pricing, component pricing, or superadditive pricing strategies. We argue that complementarity among component genes contributes to subadditive pricing, while substitution among components contributes to superadditive pricing. The nature of bundle pricing is explored empirically using U.S. seed corn data from 2000 to 2007. We document that subadditive bundle pricing of traits is commonly found in the seed corn market. However, we also present evidence of superadditive pricing and component pricing. The presence of different pricing and bundling strategies suggests a rapidly advancing and complex market. The preponderance of subadditive pricing suggests that trait bundling offers benefits to farmers exhibiting strong demand for multiple complementary genetic traits.     

Name Dropping and Product Mentions: Branding in Popular Music Lyrics

Product placement provides a unique advantage over traditional advertising as it can be integrated into program content through a symbiotic relationship. A content analysis of the Billboard year-end top 20 songs for Rap, Country, R&B/Hip-Hop, Adult Contemporary, Rock, and Pop over five years (2009–2013) was conducted to determine the use of celebrities, product placement, and nonbranded product mentions in song lyrics. Results found male artists used celebrity mentions and product placement more than females, Rap contained the most mentions (73% of songs), clothing and shoes was the most prevalent product category, musicians were the most common type of celebrity mentioned, and nonbranded product mentions were in 54.5% of songs. The paper concludes by discussing practical implications of utilizing branded, nonbranded, and celebrity mentions in song lyrics.     

Resource use in patients hospitalized with complicated skin and soft tissue infections in Europe and analysis of vulnerable groups: the REACH study

Background:

Hospitalized patients with complicated skin and soft tissue infections (cSSTI) present a substantial economic burden, and resource use can vary according to the presence of comorbidities, choice of antibiotic agent, and the requirement for initial treatment modification. REACH (NCT01293435) was a retrospective, observational study aimed at collecting empirical data on current (year 2010–2011) management strategies of cSSTI in 10 European countries.

Methods:

Patients (n?=?1995) were aged ≥18 years, hospitalized with a cSSTI and receiving intravenous antibiotics. Data, collected via electronic Case Report Forms, detailed patient characteristics, medical history, disease characteristics, microbiological diagnosis, disease course and outcomes, treatments before and during hospitalization, and health resource consumption.

Results:

For the analysis population, mean length of hospital stay (including duration of hospitalizations for patients with recurrences) was 18.5 days (median 12.0). Increased length of hospital stay was found for patients with comorbidities vs those without (mean?=?19.9; [median?=?14.0] days vs 13.3 [median?=?8.0] days), for patients with methicillin-resistant Staphylococcus aureus compared with patients with methicillin-sensitive S. aureus (mean?=?27.7 [median?=?19.5] days vs 18.4 [median?=?13.0] days) and for patients requiring surgery (mean?=?24.4 [median?=?16.0] days vs 15.0 [median?=?11.0] days). Patients requiring modification of their initial antibiotic treatment had an associated increase in mean length of hospital stay of 10.9 days (median?=?6.5) and additional associated hospital resource use. A multivariate analysis confirmed the association of nosocomial infections, comorbidities, directed treatment, recurrent infections, diabetes, recent surgery, and older age (≥65 years), with longer hospital stay.

Conclusions:

This study provides real-life data on factors that are expected to impact length of hospital stay, to guide clinical decision-making to improve outcomes, and reduce resource use in patients with cSSTI.     

Government Revenue and Child and Maternal Mortality

Open Economies Review - Most maternal and child deaths result from inadequate access to the critical determinants of health: clean water, sanitation, education and healthcare, which are also among...