Business, Government & the International Economy

- January 2021
- Case
Hester Pharmaceuticals (A): A Pricing Dilemma

By: Dante Roscini and John Masko

In August 2019, the leadership of Hester Pharmaceuticals (Hester) had a problem. Italy promised to be a key market for their new breakthrough oncology drug Akrozumab, but for almost two years, its single-payer healthcare system had been unable to agree with Hester on a price. With only a few years before a competing drug to Akrozumab was due to hit the market, company leaders felt mounting pressure to compromise with Italian negotiators. At the same time, they realized that compromising on a low price might jeopardize the higher prices Hester had already negotiated with other European nations, if these countries bought up extra supply from Italy or referenced Italy’s low price when they renegotiated their own prices the following year. Should Hester settle for a low price, stall for more time, or walk away? This case introduces students to the process of bringing new prescription drugs to market and the factors that go into pricing drugs in both single-payer and multi-payer healthcare systems. Students will wrestle with the complex strategy behind pricing their drugs internationally.
- January 2021
- Case
Hester Pharmaceuticals (A): A Pricing Dilemma

By: Dante Roscini and John Masko

In August 2019, the leadership of Hester Pharmaceuticals (Hester) had a problem. Italy promised to be a key market for their new breakthrough oncology drug Akrozumab, but for almost two years, its single-payer healthcare system had been unable to agree with Hester on a price. With only a few years before a competing drug to Akrozumab was due to...
- January 2021
- Case
Stagflation: the 1970s and the Crisis of the Postwar System

By: Jeremy Friedman and Jonathan Schlefer
- January 2021
- Case
Stagflation: the 1970s and the Crisis of the Postwar System

By: Jeremy Friedman and Jonathan Schlefer
- 2020
- Working Paper
Hate Crime Increases with Minoritized Group Rank

By: Mina Cikara, Vasiliki Fouka and Marco Tabellini

People are on the move in unprecedented numbers across the globe. How does migration affect local intergroup dynamics? In contrast to accounts that emphasize stereotypical features of groups as determinants of their treatment, we propose the social group reference dependence hypothesis: violence and negative attitudes toward each minoritized group will depend on the number and size of other minoritized groups in a community. Specifically, as groups increase in rank in their relative size (e.g., to largest minority within a community), discriminatory behavior and attitudes toward them should increase accordingly. We test this hypothesis across U.S. counties between 1990 and 2010. Consistent with this prediction we find that, as Black, Hispanic/Latinx, Asian, and Arab populations increase in rank relative to one another, they become more likely to be targeted with hate crimes and more negative attitudes. The rank effect holds above and beyond group size/proportion, growth rate, and a number of other alternative explanations. This framework makes novel predictions about how demographic shifts may affect coalitional structures in the coming years and helps explain previous findings in the literature. More broadly, our results complement the existing literature by indicating that attitudes and behaviors toward social categories are not fixed or driven only by features associated with those groups, such as stereotypes.
- 2020
- Working Paper
Hate Crime Increases with Minoritized Group Rank

By: Mina Cikara, Vasiliki Fouka and Marco Tabellini

People are on the move in unprecedented numbers across the globe. How does migration affect local intergroup dynamics? In contrast to accounts that emphasize stereotypical features of groups as determinants of their treatment, we propose the social group reference dependence hypothesis: violence and negative attitudes toward each minoritized group...

About the Unit

The BGIE Unit conducts research on, and teaches about, the economic, political, social, and legal environment in which business operates. The Unit includes scholars trained in economics, political science, and history; in its work, it draws on perspectives from all three of these disciplines.

The following demonstrates one way of classifying the approaches the Unit takes to learning and teaching.

The Unit examines the “rules” and policies established by government and other non-business institutions that affect business in the United States.
The Unit turns to history to understand the origins of today’s business environment as well as some of the alternatives that have emerged from time to time.
The Unit examines other countries’ business environments and their historical development.
The BGIE group is deeply interested in the impact of globalization and the way rules are emerging to govern international economic transactions as globalization proceeds.

Recent Publications

Hester Pharmaceuticals (A): A Pricing Dilemma

By: Dante Roscini and John Masko

January 2021 |
Case |
Faculty Research

In August 2019, the leadership of Hester Pharmaceuticals (Hester) had a problem. Italy promised to be a key market for their new breakthrough oncology drug Akrozumab, but for almost two years, its single-payer healthcare system had been unable to agree with Hester on a price. With only a few years before a competing drug to Akrozumab was due to hit the market, company leaders felt mounting pressure to compromise with Italian negotiators. At the same time, they realized that compromising on a low price might jeopardize the higher prices Hester had already negotiated with other European nations, if these countries bought up extra supply from Italy or referenced Italy’s low price when they renegotiated their own prices the following year. Should Hester settle for a low price, stall for more time, or walk away? This case introduces students to the process of bringing new prescription drugs to market and the factors that go into pricing drugs in both single-payer and multi-payer healthcare systems. Students will wrestle with the complex strategy behind pricing their drugs internationally.

Keywords: Macroeconomics; Trade; Price; Global Range; Global Strategy; Globalized Markets And Industries; Health Care And Treatment; Patents; Monopoly; Negotiation; Business And Government Relations; Risk And Uncertainty; Human Needs; Business Strategy; Commercialization; Pharmaceutical Industry; Italy

Citation

Educators

Stagflation: the 1970s and the Crisis of the Postwar System

By: Jeremy Friedman and Jonathan Schlefer

January 2021 |
Case |
Faculty Research

Citation

Educators

Purchase

Hate Crime Increases with Minoritized Group Rank

By: Mina Cikara, Vasiliki Fouka and Marco Tabellini

2020 |
Working Paper |
Faculty Research

People are on the move in unprecedented numbers across the globe. How does migration affect local intergroup dynamics? In contrast to accounts that emphasize stereotypical features of groups as determinants of their treatment, we propose the social group reference dependence hypothesis: violence and negative attitudes toward each minoritized group will depend on the number and size of other minoritized groups in a community. Specifically, as groups increase in rank in their relative size (e.g., to largest minority within a community), discriminatory behavior and attitudes toward them should increase accordingly. We test this hypothesis across U.S. counties between 1990 and 2010. Consistent with this prediction we find that, as Black, Hispanic/Latinx, Asian, and Arab populations increase in rank relative to one another, they become more likely to be targeted with hate crimes and more negative attitudes. The rank effect holds above and beyond group size/proportion, growth rate, and a number of other alternative explanations. This framework makes novel predictions about how demographic shifts may affect coalitional structures in the coming years and helps explain previous findings in the literature. More broadly, our results complement the existing literature by indicating that attitudes and behaviors toward social categories are not fixed or driven only by features associated with those groups, such as stereotypes.

Keywords: Prejudice; Minority

Citation

Socialism

By: Jeremy Friedman

December 2020 |
Background Note |
Faculty Research

Citation

Educators

Made In Space, Expectations Management, and the Business of In-Space Manufacturing

By: Matthew C. Weinzierl and Mehak Sarang

December 2020 |
Case |
Faculty Research

After having proven its base technology (3D printing) through NASA solicitations and contracts, Made In Space was searching for a viable commercial application. But the business case for the leading candidate, high-quality fiber optic cable for use on Earth, remained uncertain. In 2019, Made In Space secured a major contract from NASA for early work on a much grander project, called Archinaut, to build architectures in space that would enable off-Earth habitation. Was that opportunity a more promising path for Made In Space, or did its ambition risk distracting Made In Space from its more managed, incremental strategy? Which strategy would enable MIS to retain its central place in facilitating the development of the space economy?

Keywords: Aerospace; Space; Space Economy; 3d Printing; Manufacturing; Public-private Partnership; Partners And Partnerships; Strategy; Business And Government Relations; Aerospace Industry; Manufacturing Industry

Citation

Educators

The Political Effects of Immigration: Culture or Economics?

By: Alberto Alesina and Marco Tabellini

2020 |
Working Paper |
Faculty Research

We review the growing literature on the political effects of immigration. After a brief summary of the economics of immigration, we turn to the main focus of the paper: how immigrants influence electoral outcomes in receiving countries, and why. We start from the "standard'' view that immigration triggers political backlash and raises support for nativist, anti-immigrant political parties. We present evidence from a variety of studies that the causes of natives' political discontent are unlikely to have (solely) economic roots, but are instead more tightly linked to cultural and social concerns. Next, we discuss works that paint a more nuanced picture of the effects of immigration, which, in some cases, can move natives' preferences in a more liberal direction. We also consider the factors that can explain a seemingly puzzling empirical regularity: the anti-immigration rhetoric has become a banner of right wing parties. We conclude by outlining what, to us, are promising avenues for future research.

Keywords: Political Backlash; Cultural Beliefs; Immigration; Political Elections; Outcome Or Result

Citation

Read Now

Faith and Assimilation: Italian Immigrants in the U.S.

By: Stefano Gagliarducci and Marco Tabellini

2020 |
Working Paper |
Faculty Research

Citation

Party-State Capitalism in China

By: Margaret Pearson, Meg Rithmire and Kellee Tsai

2020 |
Working Paper |
Faculty Research

The “state capitalism” model, in which the state retains a dominant role as owner or investor-shareholder amidst the presence of markets and private firms, has received increasing attention, with China cited as the main exemplar. Yet as models evolve, so has China’s “state capitalism.” We argue that a resurgent party-state, motivated by a logic of political survival, has generated political-economic dynamics that better resemble “party-state capitalism” than familiar conceptualizations of state capitalism. We demonstrate this by examining three prominent manifestations of China’s unique model: party-state encroachment on markets; a blending of functions and interests of state and private ownership; and politicized interactions with foreign capital. Nevertheless, there remain deficits in the party-state’s hold over capital, some of which themselves result from Beijing’s logic of control. By probing the comparative and historical context of this evolution of China’s model, we suggest directions for further inquiry on the consequences of party-state capitalism.

Keywords: Capitalism; State Capitalism; Economic Systems; China

Citation

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