This thesis studies the impact of entry agreements in the pharmaceutical industry on competition in the market for generic drugs. Entry agreements between an originator drug producer and one or more potential generic entrants modify the expected entry date of generics and result in anticipated or delayed generic entry. They have become increasingly common and are of concern to competition agencies. In a pay for delay deal for example, an originator and a generic producer settle an ongoing patent litigation by agreeing on a delayed entry of the generic in return of some financial compensation. This deprives consumers of a timely availability of generics and therefore of lower drug prices.
This thesis focuses on a less known but as common type of entry agreement: early entry agreements. Instead of delaying generic entry, these agreements anticipate generic entry. We show that contrary to common belief, the early availability of a generic through an entry agreement is not always procompetitive and can raise antitrust concerns.
In the first chapter of the thesis, we generate a theoretical model designed to study the incentives of firms to enter such an agreement. We find that the originator company may use early entry as a means to circumvent the uncertainty of generic entry at patent expiry. By anticipating some generic entry, the originator firm can eliminate this uncertainty and deter more entry.
The second chapter looks for empirical evidence in support of this theory. We use drug and regulatory data from 11 European countries to study the impact of entry agreements on the level of competition in the generic drug market. Our results suggest that early entry is associated with more generic entry, though we are not able to fully isolate the effect of entry agreements.
The third and last chapter assesses the existing case law concerning entry agreements. The two previous chapters show how entry agreements may be used by the originator in an attempt to deter generic entry and are not solely motivated by a temporary shift in the timeline of generic entry. I therefore advocate for a more comprehensive assessment of entry agreements by competition authorities and courts and the use of the notion of abuse of dominance.
This thesis studies three topics on the fields of trade and development economics.
The first chapter analyzes land markets amid civil conflicts. The empirical results show two economic consequences of violence on land markets during Colombia’s conflict. On the one hand, violence reduces the possibility for owners of selling their land since potential buyers’ valuation of land is more affected by violence than owners’ valuation, lowering the volume of land sales. On the other hand, this need not be true if illegal groups have interests in obtaining land titles. I find a positive effect of paramilitary violence on the volume of land sales in regions suited for palm oil production. Consistent with anecdotal evidence, this suggests a systematic use of violence to obtain rural land for further palm oil production, or violent land grab.
The second chapter identifies the effect of international trade in agricultural commodities on the production of cocaine in Colombia. We find evidence suggesting an increase in coffee prices deterring coca cultivation, especially in the proximity of seaports. This suggests a two-fold effect of international trade on the production of crop-based illegal drugs. While an increase in coffee prices encourages the farmers’ transition from illegal to legal crops, this transition is relatively easier if farmers have more access to international markets. Accordingly, we suggest that public policies aiming to ease market access need to be considered in the fight against the production of illegal drugs.
Lastly, the third chapter identifies the effect of trade policy on market power. Using customs information for 12 developing countries, this chapter identifies market power by observing how exporting firms price discriminate across markets in reaction to variations in exchange rates. The results show that while tariffs reduce market power, non-tariff measures alter market structure and reinforce the market power of non-exiting firms. Therefore, non-tariff measures need to be considered both as a trade policy issues and a competition issue, and not mere surrogates of tariffs.
The ambition of this thesis is to quantitatively assess research questions of high policy-relevance relating to conflict. The results presented in all three chapters stem from analyses making use of cutting-edge econometric and spatial methods which - in conjunction - offer a powerful tool set for causal inference.
The first chapter investigates the impact of newly-constructed dams on local conflict around the world. Large-scale infrastructure projects are a frequent source of local protest, which can escalate into violent combats. The analysis reveals that once new dams are built, they disrupt the local economy and increase the likelihood of conflict in the regions surrounding dams. Long-standing antistate grievances and low political competition appear to be closely related to the causes of conflict.
The second chapter, joint with Dominic Rohner and Mathias Thoenig studies conflict between settlers and nomads in Africa. The paper finds that in years of drought, resource scarcity forces nomadic herders to migrate towards the fringes of deserts where they compete with settled farmers over fertile land, resulting in violent conflict. Institutional features such as land dispute resolution mechanisms and secure property rights appear to be effective towards preventing these issues.
The thematic sphere of the third chapter of my thesis focuses on the link between ethnic diversity, social tensions and urbanization. This work is joint with Vernon Henderson, Dominic Rohner and Kurt Schmidheiny. The global analysis at the province-level finds that increased ethno-linguistic fractionalization and polarization are associated with lower urbanization and an increased role for secondary cities relative to the primate city of a province. Policy makers should spend special attention on intermediately democratised countries, as those nations appear to be most prone to experience the adverse effects of ethnic diversity on urbanisation.
My dissertation consists of three self-contained essays in macroeconomics. The first essay extends the semi-open model to a 2-country model, which generates an endogenous global interest rate corresponding to China's role in the world and makes it possible to test the optimal exchange rate policy and spillover effects. The results could guide the cooperation policy in an international view. The second essay explores the liquidity channel of government bonds between the core and periphery countries in the euro-zone crises through a New Keynesian DSGE 2-country model with liquidity frictions. We find that an external negative liquidity shock can explain some part of the recession and the exchange rate performance. We also test the effect of the fiscal policy, currency policy, and unconventional monetary policy. The third essay is about related party transfer (RPT) in China. We show that RPT is generated from the stimulus and increases with the widening cost difference between State-owned entrepreneurs (SOEs) and Entrepreneur-firms (EFs). Finally, this paper provides a growth model with heterogeneous firms to explain the transition channel between the stimulus package and shadow banking surging.
This thesis is a collection of three distinct essays in the fields of behavioral economics and labor economics.
The first essay aims to further our understanding and improve our predictions of decision under risk. Through a joint test of two prominent theories in decision under risk, the essay shows that both theories play a role at describing aggregate choices and uncovers substantial heterogeneity by classifying the subjects into types according to which theory describes best their behavior under risk.
The second essay is set in a context of a rigid labor market with high graduate unemployment. Using the quasi-experimental variation in education created by a centralized allocation mechanism of high school graduates into university programs, I find evidence that selective track graduates struggle to find their first jobs suggesting that the labor market is unable to quickly absorb even the most able university graduates.
The third essay studies the effect of extended unemployment benefits duration on individual health during the Great Recession. I find that the individuals of who stayed unemployed the longest have a negative health response to the introduction and expiry of a program that extends unemployment benefits duration. Because they have been unemployed for more than a year, they might been unaware of their potential eligibility and therefore the program introduction was a letdown. The expiry of the program affected them directly by cutting their income source.
This doctoral thesis is focused to shed some light on mechanisms affecting our world where globalization might benefit or damage us. My work aims to enrich research but also contribute to the world outside academia. To do so, I focus on the topic with current policy implications. In the first three chapters, I studied conflict at different levels: internal conflicts, interstate conflicts, and local conflicts.
First, I showed for the first time the causal effect of weapons transfers on the internal violence in the destination country. The transfers increase conflicts, deaths, the number of refugees and the civilians are the first victims. This work reinforces the legitimacy of arms control.
Second, we show how countries fight to control central positions in the natural gas pipeline network to extract more rents. This work allows predicting interstate dispute risk based on future pipeline projects or price changes.
Third, we study the impact of closeness to strategic positions on water routes on local conflict. Then we show how globalization mitigate the effect by incentivizing other countries to protect those areas valuable for trade.
Fourth, we studied the effect of lockdowns on the spread of the COVID-19. We found that within-country measures were efficient (rather than blocking the borders) and most importantly only in developed countries. Moreover, we discovered, the population, anticipating the lockdown, increase the contact in the days before (e.g: going to the pharmacy or grocery shopping), which contribute to the spread of the virus. Hence, we recommend to focus on within-country lockdowns and to implement quickly those measures to reduce the anticipation effect.
This thesis consists of three studies on economic behavior. The first two studies analyze the impact overconfidence on market outcomes and effort provision whereas the last one focuses on the impact of dishonesty on individual decision making.
The first chapter uses a laboratory experiment to study the causal impact of self-confidence on bargaining with joint production. Self-confidence is exogenously manipulated by the means of an easy or a hard task. Relative performance in such task generates the joint surplus. The results of this chapter show that, when the joint surplus is low, overconfidence leads to bargaining failures, whereas most people settle on an equal split when the joint surplus is high.
The second chapter analyses theoretically the impact of overconfidence on effort provision in an asymmetric tournament with heterogeneous agents. When overconfidence is small, the effort provision of an overconfident agent increases, whereas the effort provision of an unbiased agent decreases; when overconfidence is large, the effort provision of all agents decreases, compared to a symmetric equilibrium with unbiased workers. For a given prize spread, a firm is better off when overconfidence is small since profits are higher on average.
The third chapter studies experimentally the determinants of lying behavior in absence of strategic interactions. In this context, it is shown that observing lying increases lying. The chapter also suggests that those who expect others to be truthful but observe lying, lie more than those who expect others to be truthful and observe truth telling. Yet, it is not the case that those who expect others to lie but observe truth telling lie less than those who expect lying and observe lying.