Ufuk Akcigit, 23 November 2018

Firms like to be politically connected, because it makes it easier for them to do business. But is it good for the rest of us? Ufuk Akcigit of the University of Chicago tells Tim Phillips about the consequences of connecting to power.

Esteban Rossi-Hansberg, Pierre-Daniel Sarte, Nicholas Trachter, 19 October 2018

Recent literature has documented increasing US product-market concentration at the national level. This column argues that when measured at the more relevant local level, concentration has actually decreased over the last 25 years on average and in all major sectors. In the many industries with diverging national and local trends, top firms are bringing down local concentration even as they increase national concentration. These findings support the idea that top firms expand their national market share by opening establishments in new locations, thereby increasing local competition. 

Ufuk Akcigit, Sina T. Ates, Giammario Impullitti, 02 July 2018

The optimal set of industrial policies to tackle increased competition from global technological rivals is once again the centre of a heated debate, with protectionist policies now gaining traction. Drawing on US experience three decades ago, this column examines the effects of import tariffs and R&D subsidies on domestic firms’ global competitiveness, aggregate growth, and welfare. It argues that import tariffs generate large dynamic productivity losses and may enhance welfare only for a short time horizon and when trading partners do not retaliate. By contrast, R&D subsidies stimulate domestic innovation and increase welfare, especially over longer time horizons, without jeopardising the gains from trade. 

Alminas Žaldokas, 21 June 2018

Investors ask companies for greater information disclosure in order to make better investment decisions. Alminas Žaldokas discusses his research on whether increased disclosure to investors may be helping firms collude on prices, harming consumers. This video was recorded at CEPR's Third Annual Spring Symposium.

Stephen Cecchetti, Kim Schoenholtz, 08 June 2018

Global remittances total $600 billion annually - equivalent to about four times the value of development assistance. Yet despite huge innovations in the underlying technology, the cost of remittances remains persistently high, at around 7% on average. Stephen Cecchetti and Kim Schoenholtz discuss the causes of this, and suggest some options available to policymakers to lower costs. The G8, G20 and Sustainable Development Goals targetting lower remittance costs could be realised by a two-pronged approach of educating consumers on the one hand and fostering competition among providers on the other.

Dan Andrews, Peter Gal, William Witheridge, 11 May 2018

Low inflation at the same time as rising global competition has led to a debate on the importance of globalisation for domestic inflation. This column suggests that greater participation in global value chains has placed downward pressure on inflation. The current higher level of global value chain integration may also dampen inflation by accentuating the impact of global economic slack on domestic inflation. There is a risk that stalling globalisation since the crisis, coupled with stronger aggregate demand and declining market contestability, could lead to inflationary pressures in the medium term.

Stephen Cecchetti, Kim Schoenholtz, 27 March 2018

Despite recent technological advances, the costs for migrants to send money across borders to their families remain extremely expensive, with fees often surpassing 5%. This column explores the various factors shaping remittance prices and identifies two key avenues for cost reduction: consumer education and competition. In particular, expanding mobile technology is helping to displace banks and squeeze remittance costs.

John Van Reenen, 23 March 2018

Competition can foster productivity by eliminating unproductive firms out of the market. John Van Reenen discusses the impact of management quality on productivity - and how this is influenced by market forces. This video was published by the CORE Project.

Jean Tirole, John Vickers, Eric Maskin, 21 March 2018

Jean Tirole's work on industrial organisation led to him being awarded the 2014 Nobel Prize in Economics. In this video, Eric Maskin and John Vickers discuss the significance of Tirole's work in understanding market regulation. This video was originally published by the European Economic Association.

Giorgio Barba Navaretti, Giacomo Calzolari, Alberto Pozzolo, 01 March 2018

Financial technology companies have spurred innovation in financial services while fostering competition amongst incumbent players. This column argues that although incumbents face rising competitive pressure, they are unlikely to be fully replaced by FinTechs in many of their key functions. Traditional banks will adapt to technological innovations, and the scope for regulatory arbitrage will decline.

Christopher Pissarides, 15 November 2017

The European economy is recovering from the crisis. Christopher Pissarides argues that supply side economics need to be addressed to increase competitiveness and productivity. This video was recorded at the 6th Lindau Meeting on Economic Sciences in September 2017.

Leonardo Iacovone, Mariana Pereira-López, Marc Schiffbauer, 30 October 2017

In spite of its potential, the use of digital technology is still basic in most developing countries. This column presents evidence that firms in Mexico facing higher external competition have used IT more intensively and efficiently. External competition has encouraged them to make the necessary complementary investments in innovation and organisational changes.

Mark Schankerman, Florian Schuett, 27 October 2017

Critics of the patent system argue that ineffective patent office screening is posing an impediment to innovation. This column develops a model to examine the effect of examination, fees, and court litigation on patent quality. Results show that frontloading fees (i.e. higher fees for application versus approval), capping litigation costs, and intensifying patent office examination all lead to increases in social welfare. Simulations calibrated with existing data suggest that about 65-85% of granted patents are invalid.

Murillo Campello, Daniel Ferrés, Gaizka Ormazabal, 07 September 2017

Strategies for cartel detection and prosecution differ across countries. This column uses a US dataset to show that independent directors of cartel-indicted firms favour the implementation of corrective actions in order to mitigate damage to their personal reputations. Firms with a larger fraction of independent directors on their boards observe smaller value losses and lower cartel duration during cartel-busting episodes.

Laurent Gobillon, Carine Milcent, 21 July 2017

It is widely believed that the goal of keeping health expenditures under control while increasing the quality of the healthcare system can best be achieved by giving a greater role to market forces. This column evaluates the effect of a pro-competition reform implemented in France over 2004-2008 on hospital quality. It finds that the impact on quality depends on the managerial autonomy of hospitals. And due to the French healthcare market structure, the overall effect of the reform has been limited.

Ejaz Ghani, Arti Grover Goswami, Sari Pekkala Kerr, William Kerr, 06 May 2017

Developing countries around the world are implementing structural reforms and pro-competitive policies to promote growth, but the impact of this on gender equity is unclear. This column examines the case of India, one of the world’s fastest growing countries, and finds that gender equality has not improved. Policymakers must do more to eliminate gender discrimination. They have an opportunity to not only improve the allocative efficiency of factors and increase growth, but also create an environment of equal opportunity for all, by targeting domestic market competition. 

Alison Booth, Eiji Yamamura, 14 March 2017

Differences in attitudes to competition or risk may contribute to explaining gender gaps in wages and other labour market outcomes. This column analyses performance data from speedboat races in Japan revealing that women tend to race more slowly against men than against other women only, while men are faster in mixed-sex races. This finding may be driven by the skewed gender balance towards men in mixed-sex races triggering awareness of gender identity for both men and women, with implications for other activities in which men and women compete and women are outnumbered, such as the STEM disciplines.

Micael Castanheira, Carmine Ornaghi, Georges Siotis, 01 March 2017

Conventional wisdom holds that increased competition improves market outcomes. This column argues that the link from competitiveness to allocative efficiency is weaker than this wisdom would suggest. Using evidence of generic substitutes of previously patent-protected drugs, it shows that firms can use non-price instruments which affect – or even reverse – the way competitive shocks alter market outcomes, with significant welfare implications.

Sean Dougherty, Sarra Ben Yahmed, 20 January 2017

Globalisation offers many benefits, some of which cannot be separated from other types of policy. This column examines how the benefits from removing regulations that impede competition are partly contingent on openness to import competition. Using recent firm-level analyses of productivity growth, it argues that those firms that contribute the most to overall growth could also be held back by reduced openness, harming overall advances in incomes.

Maria Cubel, 08 January 2017

Recent explanations for the persistence of both the gender wage gap and the under-representation of women in top jobs have focused on behavioural aspects, in particular on differences in the responses of men and women to competition. This column suggests that it may not be competition itself that affects women, but the gender of their opponent. Analysis of data from thousands of expert chess games shows that women are less likely to win compared with men of the same ability, and that this is driven by women making more errors specifically when playing against men.

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