We present a Hotelling model of price and advertising competition between prescription drugs that differ in quality/side effects. Advertising results in the endogenous formation of two consumer groups: brand loyal and non-brand loyal ones. We show that advertising strategies are strategic...

The aims of this paper are to study the effects of mergers on the R&D activity of consolidated firms and to explore the relationship between ex-ante relatedness of merging parties and their ex-post performances. The analysis is conducted using data of the pharmaceutical industry for the period...

type="main" <p>Is there any evidence that innovation and technological progress are constrained by competition and fostered by monopoly power? Our results, based on a constructed dataset of U.S. manufacturing industries observed over more than two decades, suggest that this is not the case. On the...</p>

"This paper addresses the following two questions: (i) Is there any evidence that firms, like human beings, prefer to partner with alike? (ii) Is there any relationship between the ex ante technological and product relatedness of merging parties and the postmerger performances? Using data of...

The use of industry indices to deflate nominal revenues and expenditure in intermediary inputs has been found to lead to lower scale estimates of the production function. This paper proposes a new approach to solve the estimation biases due to the use of industry deflators which relies on the...

This article explores to what extent the poor results that are often found when estimating parameters of production functions can be attributed to measurement errors, due to the use of common price deflators across firms. Because of the lack of detailed micro-economic data, econometricians have...

The use of proxy variables to control for unobservables when estimating a production function has become increasingly popular in empirical works in recent years. The present paper aims to contribute to this literature in three important ways. First, we provide a structured review of the...

We present a Hotelling model of price and advertising competition between prescription drugs that differ in quality/side e¤ects. Advertising results in the endogenous formation of two consumer groups: brand loyal and non-brand loyal ones. We show that advertising strategies are strategic...