tariff structure trade expansion and canadian protectionism 1870 1910 canada s trade policy at the end of the 19th century is commonly viewed as protectionist and extremely costly in this paper we employ the anderson neary trade restrictiveness index to re examine this view based on product level customs data we show that canadian trade policy between 1870 and 1910 was more restrictive than previously understood but created smaller welfare losses than previously believed these results are primarily driven by high tariffs on inelastic non competing import goods although canada s tariff structure becomes more restrictive over the period our findings indicate it was not as protectionist or as costly as once thought structure tarifaire expansion du commerce et protectionnisme canadien entre 1870 et 1910 la politique commerciale canadienne a la fin du 19e siecle est habituellement consideree comme protectionniste et extremement couteuse dans ce memoire on emploie l indice de restriction du commerce de anderson neary pour reexaminer ce point de vue a partir de donnees du service des douanes au niveau du produit on montre que la politique commerciale canadienne entre 1870 et 1910 a ete plus restrictive que ce qu on avait pense autrefois mais qu elle a cree des pertes de bien etre moindres que ce qu on avait cru anterieurement ces resultats sont d abord engendres par des droits de douanes eleves sur des biens d importation qui ne concurrencent pas les biens domestiques et dont la demande est inelastique meme si la structure tarifaire du canada devient plus restrictive au cours de cette periode les resultats montrent qu elle n est ni aussi protectionniste ni aussi couteuse qu on l a deja pense

entry in monopoly market this paper develops new empirical models of market concentration from game theoretic models of entry we construct our models from inequality conditions that describe entrants equilibrium strategies in simultaneous move and sequential move games and use them to study the effects of entry in isolated monopoly markets for new automobiles from estimates of the market size necessary to support one and two dealers we conclude that monopoly dealers do not block the entry of a second dealer we also find that entry does not cause price cost margins to fall by much

protection for maturing industries evidence from canadian trade patterns and trade policy 1870 1913 as industries mature experience is accumulated productivity increases trade performance improves on domestic and international markets and learning potential dissipates using theory consistent empirical specifications i find a strong robust negative relationship linking tariff rates to trade performance for manufactured products that matured during the first decade after canada prioritized protectionist policy objectives in 1879 this relationship also holds at a more aggregate industry level where i can use other measures of maturity control for import penetration use historically contemporaneous trade elasticity estimates link trade performance to trade restrictiveness and effective rates of protection and where i can instrument for import penetration and trade performance using a two stage iv gmm estimation approach the results suggest that after 1890 the canadian government carefully cut tariffs on products produced by maturing canadian producers and this retreat from protectionism significantly lowered the static deadweight losses resulting from canadian trade policy during the post 1890 period protection des industries en phase de maturite illustration par les modeles commerciaux et les politiques commerciales du canada entre 1870 et 1913 a mesure que les industries gagnent en maturite l experience s accumule la productivite croit les performances commerciales s ameliorent sur les marches nationaux et internationaux et le potentiel d apprentissage se dissipe a l aide de modeles empiriques conformes a cette theorie j ai degage une relation negative robuste entre les droits tarifaires et les performances commerciales pour les produits manufactures arrives a maturite au cours de la premiere decennie suivant la decision du canada de prioriser les objectifs de politique protectionniste en 1879 cette correlation est egalement valable a un niveau industriel plus general dans le cadre duquel il est possible d utiliser d autres mesures d evaluation de la maturite de controler la penetration des importations d utiliser des estimations historiquement contemporaines relatives a l elasticite des echanges de correler les performances commerciales aux restrictions des echanges et aux taux de protection effectifs et ou il est egalement possible de mesurer la penetration des importations et les performances commerciales gr ce a une approche estimative en deux etapes iv gmm les resultats suggerent qu apres 1890 le gouvernement canadien a pris soin de diminuer les droits tarifaires sur les produits fabriques par des entreprises canadiennes en phase de maturite et que ce renoncement au protectionnisme diminua significativement les pertes de poids mort statiques resultant des politiques commerciales du canada posterieures a 1890

entry into pharmaceutical submarkets a bayesian panel probit analysis summary we study entry into pharmaceutical submarkets by using a dynamic panel probit model we develop a bayesian version of wooldridge s approach to dealing with unobserved heterogeneity we distinguish between greenfield entry entry with first product and undifferentiated entry which may take the form of introducing further products we extend the standard reduced form model to consider company size in the submarket and across all submarkets we find that greenfield and undifferentiated entries have different determinants that global and submarket size measures have different effects and that sunk costs often have positive effects on entry due to a commitment mechanism copyright 2012 john wiley sons ltd

determinants of household electricity demand a two stage probit approach considerable interest on the part of policy makers in both the public and private sectors has spawned numerous studies of the determinants of residential electricity demand as a result of increased attention given to the possibility of adjusting household electricity consumption patterns through price manipulation as in the various peak load pricing experiments particular emphasis has been placed on obtaining an accurate estimate of the price elasticity of demand unfortunately ols applied to the conventional linear or log linear demand specification is biased and inconsistent when the sample includes households that face declining block rate schedules the inconsistency results from the fact that in the presence of declining block rates observed marginal price is a stochastic regressor that is negatively correlated with the regression error term some researchers have suggested that consistent ols estimation can be achieved by merely respecifying the demand equation to include particular combinations of marginal price average price rate of decline of the price schedule and real income corrected for intra marginal price differences 1 7 8 others realizing the futility of such an approach have developed and applied instrumental variable iv techniques 4 6 11 these iv methods however all involve an artificial linearization of the rate schedule which produces spurious negative correlation between the price variable and the random error term as a result such iv methods tend to overcompensate for actual correlation consequently the iv estimated coefficients of the various demand determinants will exhibit biases opposite in sign to those of their ols counterparts for example in the presence of declining block rates ols tends to overestimate the price elasticity of demand in absolute value while iv methods produce elasticity estimates that are downward biased a two stage probit tsp method developed by terza and welch 10 is not subject to the bias that plagues iv methods because tsp does not require a linear approximation to the rate schedule instead the discrete and discontinuous nature of household responses to declining block pricing is captured by incorporating an ordinal probit model that is based on a theory of consumer choice in the present paper a linear electricity demand model is estimated using the tsp ols and iv methods to demonstrate the effectiveness of the tsp method

estimation of a model of entry in the airline industry this paper considers the effect of an airline s scale of operation at an airport on the profitability of routes flown out of that airport the empirical methodology uses the entry decisions of airlines as indicators of underlying profitability the results extend the empirical literature on airport presence by providing a new set of estimates of the determinants of city pair profitability these estimates imply that city pair profits increase in airport presence and decrease rapidly in the number of entering firms the literature on empirical models of oligopoly entry is also extended via a focus on the role of differences between firms

absorptive capacity coauthoring behavior and the organization of research in drug discovery we examine the interface between for profit and publicly funded research in pharmaceuticals firms access upstream basic research through investments in absorptive capacity in the form of in house basic research and pro publication internal incentives some firms also maintain extensive connections to the wider scientific community which we measure using data on coauthorship of scientific papers between pharmaceutical company scientists and publicly funded researchers connectedness is significantly correlated with firms internal organization as well as their performance in drug discovery the estimated impact of connectedness on private research productivity implies a substantial return to public investments in basic research

measuring protection a cautionary tale abstract this paper comments on a theoretically based index of protection recently developed by anderson and neary the index must be calculated within the context of a specific cge model anderson and neary propose a generic model and have found that the index is robust to changes in the elasticities embedded within that model is the index also robust to changes in the specification of the model the paper identifies one historical instance where the index is extremely sensitive to the specification of the model s demand side there are important methodological lessons to be learnt from this example

pharmaceutical price controls and entry strategies abstract this paper finds that the use of price controls has a statistically and quantitatively important effect on the extent and timing of the launch of new drugs firms headquartered in countries that regulate price reach fewer markets than those in countries without price controls companies avoid price controlled markets and are less likely to introduce products in additional markets after entering a price controlled country launches into low price european countries are further delayed following legalization of parallel imports the results suggest that price regulation in one country affects entry into other countries and may affect the strategies of domestic firms

free entry and social inefficiency our goal is to provide a simple yet general exposition of the conditions under which the number of entrants in a free entry equilibrium is excessive insufficient or optimal our analysis compares the number of firms that enter a market when there is free entry with the number that would be desired by a social planner who is unable to control the behavior of firms once they are in the market that is we consider the second best problem of choosing the welfare maximizing number of firms while we take as given their noncompetitive behavior after entry we demonstrate that the crucial conditions for establishing the presence of an entry bias can be stated quite simply in terms of the outcome of the postentry game played by entrants in contrast to previous work we do not need to model this postentry game explicitly

characteristics of demand for pharmaceutical products an examination of four cephalosporins we model demand for four cephalosporins and compute own and cross price elasticities between branded and generic versions of the four drugs we model demand as a multistage budgeting problem and we argue that such a model is appropriate to the multistage nature of the purchase of pharmaceutical products in particular the prescribing and dispensing stages we find quite high elasticities between generic substitutes and also significant elasticities between some therapeutic substitutes

cross national price differences for pharmaceuticals how large and why bilateral drug price and quantity indexes based on comprehensive data for seven countries us canada france germany italy japan and the uk refute the conventional wisdom that us drug prices are much higher than elsewhere for laspeyres us weighted indexes previous drug price comparisons are biased by unrepresentative samples and unweighted indexes quasi hedonic regression shows that cross national price differences reflect differences in product characteristics and in their implicit prices which reflect the regulatory regime strict price regulation systematically lowers prices for older molecules and globally diffused molecules generic competition lowers prices in less regulated regimes which also have more price elastic demand

does regulation drive out competition in pharmaceutical markets abstract most countries regulate pharmaceutical prices either directly or indirectly on the assumption that competition is at best weak in this industry this paper tests the hypothesis that regulation of manufacturer prices and retail pharmacy margins undermines price competition we use data from seven countries for 1992 to examine price competition between generic competitors different manufacturers of the same compound and therapeutic substitutes similar compounds under different regulatory regimes we find that price competition between generic competitors is significant in unregulated or less regulated markets united states united kingdom canada and germany but that regulation undermines generic competition in strict regulatory systems france italy and japan regulation of retail pharmacy further constrains competition in france germany and italy regulation thus undermines the potential for significant savings on off patent drugs which account for a large and growing share of drug

measuring the restrictiveness of trade policy this article provides an introduction to the trade restrictiveness index tri which equals the uniform tariff that is welfare equivalent to a given pattern of trade protection unlike standard measures of trade restrictiveness the tri has a solid theoretical basis can incorporate both tariffs and quantitative restrictions and can be adapted to construct the trade policy equivalent of domestic distortions the article compares a number of applications and describes procedures for operationalizing the tri on a personal computer the authors conclude that the tri has considerable potential in empirical work

entry and patenting in the software industry to what extent are firms kept out of a market by patents covering related technologies do patents held by potential entrants make it easier to enter markets we estimate the empirical relationship between market entry and patents for 27 narrowly defined categories of software products during the period 1990 2004 controlling for demand market structure average patent quality and other factors we find that a 10 increase in the number of patents relevant to market reduces the rate of entry by 3 8 and this relationship intensified following expansions in the patentability of software in the mid 1990s however potential entrants with patent applications relevant to a market are more likely to enter it finally patents appear to substitute for complementary assets in the entry process because patents have both greater entry deterring and entry promoting effects for firms without prior experience in other markets this paper was accepted by bruno cassiman business strategy

the role of firm characteristics in pharmaceutical product launches this paper examines the determinants of new pharmaceutical launches since 1980 in the g7 nations using discrete time hazard models despite the obvious incentive to amortize the large sunk costs of drug development over many markets entry occurs in only 4 of the opportunities the results indicate that firm characteristics such as domestic status and experience in the local market are important in explaining product launches in addition to market characteristics also the interaction between the innovating firm and target country is a critical component of profitability new drugs are 1 5 times more likely to be launched in markets that share a border or a language of a drug company s country of headquarters even for multinational firms the effect of competition depends on the characteristics of both the potential entrant and the incumbents domestic entrants prefer to compete with domestic incumbents although this is an industry with the potential for ubiquitous licensing and low transportation costs the specific match quality between the innovating firm and market conditions remains an important determinant of entry

tariffs and growth in the late 19th century the paper estimates the correlation between tariffs and economic growth in the late 19th century in the context of three types of growth equation unconditional convergence equations conditional convergence equations and factor accumulation models it does so for a panel of ten countries between 1875 and 1914 tariffs were positively correlated with growth in these countries during this period economic theory is ambiguous as regards the relationship between trade policy and growth the growth literature of the past decade has produced an impressive array of models in which protection can either increase or reduce long run growth rates grossman and helpman 1991 rivera batiz and romer 1991 stokey 1991 young 1991 such theoretical ambiguity invites empirical research while new growth theory is ambiguous on the subject the new empirical growth literature has produced a consensus that free trade is positively associated with growth based on evidence from the late 20th century but see rodrlguez and rodrik 1999 for a sceptical review of the literature the clear

contributions to canadian economic history the last 30 years the cliometric revolution that transformed economic history in the us in the 1960s was soon embraced by canadian economic historians many of the important issues surrounding canadian development remained the same the role of resources the place of international trade immigration capital accumulation and interactions with native americans among others but beginning in the 1960s and certainly over the last 30 years economic historians of canada have addressed them with the tools of modern economics both theoretical and empirical we highlight the recent work emphasizing not just the methods but also the fundamental ways our understanding of canadian history has been changed