Abstract Primary health care is the doorkeeper for individual health and the cornerstone of universal health coverage. Despite global efforts to promote universal health coverage, the underuse of primary health‐care services remains prevalent in rural areas, resulting in significant health concerns for rural residents. As a part of the policy to strengthen primary health care, the Chinese government has established a rural physician program to deliver immediate and convenient health‐care services. This paper provides the first evaluation of the effects of the rural physician program. We find that although most rural physicians have limited education and lack professional training, the program significantly improves rural residents' health outcomes. The improvement is mainly attributed to changes in health awareness and health‐seeking behaviours among rural residents, enhanced accessibility to nearby health‐care providers, regular health examinations and the diagnosis of simple diseases. However, the program demonstrates limited effect in addressing complex chronic diseases. Moreover, a cost‐benefit analysis indicates that the benefits derived from the program outweigh the associated costs. Therefore, this paper highlights a relatively cost‐effective way to improve the health status of rural and impoverished populations, particularly in developing countries and regions.
Abstract Suppose that expert witnesses appearing in litigation are, generically, either honest in their assessment of a fact situation or are advocates who testify in favour of their retaining party, regardless of new information. The type of a witness is known to law firms, who engage with them repeatedly, but not to courts. If the only way an honest witness can credibly reveal their type to a court is by agreeing with some of the position of the opposing party, then the question arises of why a law firm would ever retain an honest expert. We show that it can act as a signalling device in a game between the law firms to communicate private information regarding a party's confidence in winning the case. Our results indicate, inter alia, that the “English” rule of costs allocation can make a socially desirable separating equilibrium less likely, compared to the “American” rule.
Abstract The seminal 1987 paper by Mathewson and Winter demonstrates that the competitive effects of exclusive dealing depend on firm asymmetries. Revisiting their model with linear demand and constant marginal costs, we show that the equilibrium adoption and welfare impact of exclusive dealing are fully characterized by two sufficient statistics: the standalone surplus ratio (capturing the dominant firm's competitive advantage) and the geometric mean of demand diversion ratios (measuring product substitutability). Exclusive dealing is more likely to arise and harm consumer surplus when competitive advantage is stronger and products are closer substitutes. A stronger competitive advantage also raises the likelihood that exclusive dealing reduces social welfare, while the effect of substitutability on welfare is non‐monotonic. We also show that both competitive advantage and substitutability can be empirically recovered from diversion ratios and market shares under the no‐exclusive dealing regime.
Abstract We estimate the peer effects of paternity leave‐taking among male co‐workers using the 2006 Quebec paternity leave reform. Using high‐quality administrative data, we closely follow the birth date regression discontinuity research design of Dahl et al. (2014) who studied a similar reform in Norway in 1993 which resembles the Quebec reform. Depending on the length of follow‐up, we estimate that having a male co‐worker take paternity leave increases the probability that a father of a newborn takes leave by 3 to 6 percentage points. While the statistical significance of our findings differ from Dahl et al. (2014) using Norwegian data, these estimates are nevertheless consistent with the 11 percentage point increase they report.
Abstract In this article, we assess the effect of the French disability benefits program on the employment of low‐skilled youth. Using the French Labour Force Survey, we exploit the age discontinuity in the program eligibility to instrument the effect of this allowance on employment. The results show that receipt of the French disability benefits program reduces the probability of employment for low‐skilled youth with disabilities. However, the effect differs markedly by gender: it is significantly higher for women, while no effect is detectable in men.
Abstract We study household‐level food inflation rates during low‐inflation, pandemic and postpandemic inflation surge periods using Canadian homescan data for 2012Q4–2023Q4. Our results about household inflation rates during low inflation are consistent with evidence for the United States (Kaplan and Schulhofer‐Wohl 2017). During the postpandemic inflation surge, we find that the dispersion in household‐level inflation rates increased and that the correlation between household‐level inflation rates and aggregate inflation became stronger. Households shopping more frequently, shopping at more stores or buying more on sale experienced lower food inflation, and households relied more on these strategies to lower their inflation in the high‐inflation period. Consumers substituted more toward lower‐priced products with the postpandemic increase in inflation. Lower‐income households experienced higher food inflation rates. These findings have implications for the welfare costs of inflation.
Abstract We analyze innovation incentives under price‐cap regulation by examining scenarios with endogenous price caps, both with and without regulatory commitment. In a setting without informational imperfections, our analysis reveals two principal conclusions. First, there is no trade‐off between static and dynamic efficiency. Strengthening firm incentives by allowing it to charge higher prices, and thus realize greater profits, leads to less innovation because it reduces output. The optimal strategy to boost innovation and maximize welfare is to set a low price (and thus, a low profit) target because innovation incentives are proportional to output. Second, the benefits of regulatory commitment for innovation and welfare are not unambiguously clear: commitment neither consistently outperforms nor underperforms non‐commitment. Under demand uncertainty, when the firm is risk‐averse, the static–dynamic efficiency trade‐off reappears, and the firm may prefer non‐commitment due to risk‐shielding. Under asymmetric information about firm demand type, the trade‐off between static and dynamic efficiency becomes inherent (due to information rents and contract distortions), and commitment becomes unambiguously crucial for fostering innovation by preventing the “ratchet effect.”
China's overseas patents grew rapidly in the past two decades at the same time as China became the world's largest exporter of merchandise goods. This paper investigates the effects of overseas patents on the volume and prices of Chinese firms' exports. We consider two channels. First, patents prevent imitation and rival entry, leading to higher quantities and prices. Second, patents reduce the likelihood of litigation and can allow firms to price more aggressively if they are keeping prices high to deter potential litigation in the export market. We find evidence of both. Both channels predict a higher quantity of exports, and we find evidence of that in the data. We also compile evidence consistent with patents allowing Chinese firms to price more aggressively (lower prices). Expansion des march & eacute;s et effet dissuasif des brevets sur les litiges : donn & eacute;es probantes d'exportateurs chinois. Au cours des vingt derni & egrave;res ann & eacute;es, le nombre de brevets & eacute;trangers d & eacute;tenus par la Chine a connu une croissance rapide, parall & egrave;lement & agrave; l'essor du pays comme premier exportateur mondial de marchandises. Le pr & eacute;sent article examine les effets des brevets & eacute;trangers sur le volume et les prix des exportations de soci & eacute;t & eacute;s chinoises. Nous consid & eacute;rons deux m & eacute;canismes. Premi & egrave;rement, les brevets pr & eacute;viennent l'imitation et l'entr & eacute;e de concurrents sur le march & eacute;, ce qui entra & icirc;ne une hausse des quantit & eacute;s export & eacute;es et des prix. Deuxi & egrave;mement, les brevets r & eacute;duisent la probabilit & eacute; de litiges et permettent aux entreprises d'adopter une tarification plus offensive si elles maintiennent autrement des prix & eacute;lev & eacute;s afin de dissuader d'& eacute;ventuelles poursuites sur les march & eacute;s d'exportation. Nos constats confirment l'existence de ces deux m & eacute;canismes. Tous deux pr & eacute;disent une augmentation des quantit & eacute;s export & eacute;es, ce que corroborent les donn & eacute;es. Nous r & eacute;unissons & eacute;galement des & eacute;l & eacute;ments probants indiquant que les brevets permettent aux entreprises chinoises d'adopter une tarification plus offensive, se traduisant par des prix plus faibles.
As far back as 1755, Richard Cantillon analyzed how changes in the money supply affected relative prices in the economy. In times of monetary infusion, prices of certain types of goods and services could be expected to rise, depending upon the initial distribution of the money and therefore initial spending. Cantillon emphasized the case of new money falling into the hands of wealthy agents, driving up spending on luxuries, such as artworks (as well as financial assets), and causing their relative prices to increase. We present new evidence on the "Cantillon effect" as a potential explanation for movements in the prices of Canadian and Australian paintings since the mid-1970s. We econometrically analyze the relationship between time series of the money supply and art prices in each country. Both countries represent peripheral art markets dominated by domestic private and corporate collectors, and they should thus be more responsive to domestic rather than international economic and monetary conditions. For both markets, we distinguish and separately analyze different tiers of the market, separating the very top from a lower segment. We find that prices for top Canadian artists follow the money supply relatively well over the long term, with a similar but slightly weaker result for the top Australian segment; notably, Australian middlebrow prices move more in line with the Consumer Price Index. These results suggest that national art markets are not homogeneous and that segmenting them for analytical purposes may be useful. Specifically, we find stronger evidence of a Cantillon effect in the upper end of the market, while prices of lower-prestige paintings move more in line with consumer goods prices. Comparaison des effets Cantillon sur les march & eacute;s de l'art au Canada et en Australie. D & egrave;s 1755, Richard Cantillon analysait l'effet des variations de la masse mon & eacute;taire sur les prix relatifs dans l'& eacute;conomie. En p & eacute;riode d'injection mon & eacute;taire, on pouvait s'attendre & agrave; ce que les prix de certains biens et services augmentent, selon la r & eacute;partition initiale de la masse mon & eacute;taire et donc les premi & egrave;res d & eacute;penses. Cantillon mettait en lumi & egrave;re le cas o & ugrave; la nouvelle monnaie tombait entre les mains d'agents fortun & eacute;s, stimulant ainsi les d & eacute;penses en biens de luxe, comme les oe uvres d'art et les actifs financiers, ce qui entra & icirc;nait une hausse de leurs prix relatifs. Nous pr & eacute;sentons ici de nouvelles donn & eacute;es sur & laquo; l'effet Cantillon & raquo; comme explication possible des variations de prix des tableaux canadiens et australiens depuis le milieu des ann & eacute;es 1970. Nous analysons & eacute;conom & eacute;triquement la relation entre les s & eacute;ries temporelles de la masse mon & eacute;taire et les prix des oe uvres d'art dans chaque pays. Ces deux pays repr & eacute;sentent des march & eacute;s p & eacute;riph & eacute;riques de l'art domin & eacute;s par des collectionneurs priv & eacute;s et d'entreprises nationaux, ce qui les rendrait plus sensibles aux conditions & eacute;conomiques et mon & eacute;taires internes qu'aux conditions internationales. Pour les deux march & eacute;s, nous distinguons et analysons s & eacute;par & eacute;ment diff & eacute;rents segments, en opposant le tr & egrave;s haut de gamme & agrave; un segment inf & eacute;rieur. Nous constatons que les prix des oe uvres d'artistes canadiens de premier plan suivent relativement bien l'& eacute;volution de la masse mon & eacute;taire & agrave; long terme, avec un r & eacute;sultat semblable, mais l & eacute;g & egrave;rement plus faible pour le segment sup & eacute;rieur du march & eacute; australien. En revanche, les prix des oe uvres australiennes de milieu de gamme & eacute;voluent davantage en fonction de l'indice des prix & agrave; la consommation. Ces r & eacute;sultats sugg & egrave;rent que les march & eacute;s nationaux de l'art ne sont pas homog & egrave;nes et qu'il peut & ecirc;tre utile de les segmenter & agrave; des fins d'analyse. Plus pr & eacute;cis & eacute;ment, nous observons une preuve plus marqu & eacute;e de l'effet Cantillon dans le segment sup & eacute;rieur du march & eacute;, tandis que les prix des tableaux de moindre prestige & eacute;voluent davantage comme ceux des biens de consommation.
This paper investigates the hypothesis that lower trade policy uncertainty (TPU) reduces the share of intrafirm trade in total trade. A significant change in US-China TPU occurred in 2001 when China joined the WTO, providing a natural experiment to test this hypothesis. Using a difference-in-differences approach with industry-level US data, I examine the trade effects of this change. The results indicate that the reduction in TPU between the US and China led to a significant increase in both US arm's-length and intrafirm imports from China compared to pre-WTO levels. Notably, the effect of TPU on arm's-length trade is approximately twice that on intrafirm trade, with the disparity largely attributed to sunk costs. A simple model of production location and ownership choice under policy uncertainty provides a conceptual framework for understanding these findings. Incertitude li & eacute;e & agrave; la politique commerciale, organisation des entreprises et forme du commerce international Cet article se penche sur l'hypoth & egrave;se selon laquelle une faible incertitude en mati & egrave;re de politique commerciale (TPU) r & eacute;duit la part du commerce intrasoci & eacute;t & eacute; dans les & eacute;changes commerciaux totaux. Un changement important de la TPU entre les & Eacute;tats-Unis et la Chine s'est produit en 2001, lorsque cette derni & egrave;re a adh & eacute;r & eacute; & agrave; l'OMC, ce qui fournit une exp & eacute;rience naturelle pour tester cette hypoth & egrave;se. & Agrave; l'aide de la m & eacute;thode des doubles diff & eacute;rences appliqu & eacute;e aux donn & eacute;es & eacute;tats-uniennes & agrave; l'& eacute;chelle des industries, j'examine les effets de ce changement sur le commerce. Les r & eacute;sultats indiquent que la diminution de la TPU entre les & Eacute;tats-Unis et la Chine entra & icirc;ne une hausse notable des importations & eacute;tats-uniennes, tant en conditions de pleine concurrence que pour le commerce intrasoci & eacute;t & eacute;, en provenance de la Chine par rapport aux niveaux observ & eacute;s avant l'adh & eacute;sion de cette derni & egrave;re & agrave; l'OMC. Notamment, l'effet de la TPU sur le commerce de pleine concurrence est environ deux fois plus important que celui sur le commerce intrasoci & eacute;t & eacute;, cette disparit & eacute; & eacute;tant largement attribu & eacute;e aux co & ucirc;ts irr & eacute;cup & eacute;rables. Un mod & egrave;le simple de localisation de la production et de choix de la propri & eacute;t & eacute; en cas d'incertitude politique fournit un cadre conceptuel pour comprendre ces r & eacute;sultats.
This paper uses linked Census records from 1871 to 1901 to compute intergenerational mobility for Canadian regions and census divisions. The results reveal sharp differences in mobility over space: Ontario featured high relative and absolute mobility, Quebec low relative and absolute mobility and the Maritimes low absolute mobility. Local differences in human capital endowments and labour market inequality are correlated with division mobility patterns but do not account for regional differences, where migration and structural change toward industry and services appear important. Comparing spatial patterns of Canadian mobility in the 19th century to today shows substantial changes for Quebec districts. La g & eacute;ographie de la mobilit & eacute; & eacute;conomique dans le Canada du 19 e si & egrave;cle. Cet article utilise des dossiers de recensement appari & eacute;s de 1871 & agrave; 1901 pour mesurer la mobilit & eacute; interg & eacute;n & eacute;rationnelle dans les r & eacute;gions et divisions de recensement canadiens. Les r & eacute;sultats r & eacute;v & egrave;lent de fortes disparit & eacute;s g & eacute;ographiques : l'Ontario pr & eacute;sente une mobilit & eacute; relative et absolue & eacute;lev & eacute;e, le Qu & eacute;bec une mobilit & eacute; relative et absolue faible, et les provinces maritimes une faible mobilit & eacute; absolue. Les & eacute;carts locaux en capital humain et les in & eacute;galit & eacute;s du march & eacute; du travail sont en corr & eacute;lation avec les profils de mobilit & eacute; des divisions, mais ne suffisent pas & agrave; expliquer les diff & eacute;rences r & eacute;gionales, o & ugrave; les migrations et les transformations structurelles vers l'industrie et les services semblent jouer un r & ocirc;le central. La comparaison entre les profils g & eacute;ographiques de la mobilit & eacute; au 19e si & egrave;cle et ceux d'aujourd'hui met en & eacute;vidence des changements importants dans les districts du Qu & eacute;bec.
We study income tax competition in a structure of two adjacent two-tier (federal-regional) fiscal federations, where both upper-tier and lower-tier authorities tax income in the presence of income shifting within and between the federations. We show that when the federations are symmetric, horizontal competition leads to income-shifting flows from rich regions (setting higher income tax rates) to poor regions (setting lower tax rates), both within and between federations. Moreover, income-shifting facilities intensify tax competition, potentially increasing income redistribution from wealthier to poorer regions. However, in the case of asymmetric federations, the relationship between regional income tax rate and tax base and the resulting direction of inter-regional income-shifting flows are ambiguous due to the operation of vertical and diagonal fiscal externalities.
We study the competition and welfare effects of upstream partial ownerships (UPO) in a framework with two competing supply chains and downstream firms choosing their product positionings strategically. We find that UPO reduces downstream product differentiation and thus intensifies downstream competition. Unlike the standard results of Bertrand competition, we find that downstream prices can be strategic substitutes even when downstream firms compete in Bertrand fashion. More importantly, we show that UPO increases consumer surplus and social welfare, even when double marginalization increases downstream prices. The competition and welfare results from downstream partial ownerships (DPO) are just the opposite to those from UPO. Our findings have clear managerial and policy implications. Concurrence dans la cha & icirc;ne d'approvisionnement et effets de la propri & eacute;t & eacute; partielle sur le bien-& ecirc;tre. Nous & eacute;tudions les effets de la propri & eacute;t & eacute; partielle (PP) en amont sur la concurrence et le bien-& ecirc;tre dans un cadre o & ugrave; deux cha & icirc;nes d'approvisionnement sont en concurrence et o & ugrave; les entreprises en aval choisissent strat & eacute;giquement le positionnement de leurs produits. Nous montrons que la PP en amont r & eacute;duit la diff & eacute;renciation des produits en aval, ce qui intensifie la concurrence en aval. Contrairement aux r & eacute;sultats classiques associ & eacute;s & agrave; la concurrence de Bertrand, nous constatons que les prix en aval peuvent & ecirc;tre des substituts strat & eacute;giques, m & ecirc;me lorsque les entreprises en aval se livrent & agrave; une concurrence de Bertrand. Plus important encore, nous montrons que la PP en amont accro & icirc;t le surplus des consommateurs ainsi que le bien-& ecirc;tre collectif, y compris dans les cas o & ugrave; la double marginalisation entra & icirc;ne une hausse des prix en aval. & Agrave; l'inverse, les effets d'une PP en aval sur la concurrence et le bien-& ecirc;tre sont diam & eacute;tralement oppos & eacute;s & agrave; ceux de la PP en amont. Ces r & eacute;sultats apportent un & eacute;clairage utile aux gestionnaires d'entreprises et aux d & eacute;cideurs publics.
This paper examines the significance of including a company's location of origin in its name, a practice known as using an eponymous location name. Our theory demonstrates that signalling an origin from a prestigious location is an appealing strategy for relatively weaker companies, whereas stronger companies tend to avoid it. We empirically test this theory on a sample of UK university spin-outs from 2010 to 2021. Eponymous location names are particularly prevalent among spin-outs from Oxbridge (i.e., Oxford and Cambridge). As predicted by our theory, eponymous location names are negatively related to measures of fundraising success after controlling for spin-out origin. Nommer son entreprise d'apr & egrave;s Oxbridge ou non, telle est la question! Cet article examine l'importance d'inclure le lieu d'origine d'une entreprise dans son nom, une pratique aussi d & eacute;sign & eacute;e par nom g & eacute;ographique & eacute;ponyme. Notre mod & egrave;le th & eacute;orique montre que le fait d'indiquer une origine g & eacute;ographique prestigieuse constitue une strat & eacute;gie attrayante pour les entreprises relativement faibles, tandis que les entreprises solides tendent & agrave; l'& eacute;viter. Nous testons empiriquement cette th & eacute;orie & agrave; partir d'un & eacute;chantillon de jeunes pousses issues d'universit & eacute;s britanniques entre 2010 et 2021. Les noms & eacute;voquant le lieu d'origine sont particuli & egrave;rement fr & eacute;quents chez les entreprises d & eacute;riv & eacute;es des universit & eacute;s d'Oxford et de Cambridge. Comme le pr & eacute;dit notre th & eacute;orie, les noms g & eacute;ographiques & eacute;ponymes sont associ & eacute;s n & eacute;gativement aux indicateurs de succ & egrave;s en mati & egrave;re de financement, une fois l'universit & eacute; d'origine prise en compte.
This paper examines the effects of monetary policy in a small open economy participating in the global value chains by constructing a model with firm heterogeneity and production fragmentation. Liquidity constraints and terms-of-trade externality distort the sorting of firms into different operations. Under a flexible exchange-rate regime, changes in domestic interest rate can affect the distribution of firms across different trade modes, the economy's processing and ordinary trade flows, and economic welfare. The presence of processing trade is shown to alter the monetary policy trade-off. When the domestic interest rate is the only policy instrument available, the second-best optimal interest rate will be zero (positive) in the case with a sufficiently low (high) output elasticity of imported input in the production of final-good export. The ability of the Friedman rule to address the distortions from the terms-of-trade externality hinges on the relatively higher labour intensity in processing than in ordinary production.
