In missing data analysis, there is often a need to assess the sensitivity of key inferences to departures from untestable assumptions regarding the missing data process. Such sensitivity analysis often requires specifying a missing data model which commonly assumes parametric functional forms for the predictors of missingness. In this paper, we relax the parametric assumption and investigate the use of a generalized additive missing data model. We also consider the possibility of a non-linear relationship between missingness and the potentially missing outcome, whereas the existing literature commonly assumes a more restricted linear relationship. To avoid the computational complexity, we adopt an index approach for local sensitivity. We derive explicit formulas for the resulting semiparametric sensitivity index. The computation of the index is simple and completely avoids the need to repeatedly fit the semiparametric nonignorable model. Only estimates from the standard software analysis are required with a moderate amount of additional computation. Thus, the semiparametric index provides a fast and robust method to adjust the standard estimates for nonignorable missingness. An extensive simulation study is conducted to evaluate the effects of misspecifying the missing data model and to compare the performance of the proposed approach with the commonly used parametric approaches. The simulation study shows that the proposed method helps reduce bias that might arise from the misspecification of the functional forms of predictors in the missing data model. We illustrate the method in a Wage Offer dataset.

This paper uses a natural experiment to test the impact of counterfeiting under weak intellectual property rights. I collect new panel data from Chinese shoe companies from 1993–2004. By exploiting the discontinuity of government enforcement efforts for the footwear sector in 1995 and the differences in authentic companies' relationships with the government, I identify and measure the effects of counterfeit entry on authentic prices, qualities, and other market outcomes. The results show that brands with less government protection differentiate their products through innovation, self-enforcement, vertical integration of downstream retailers, and subtle high-price signals. These strategies push up authentic prices and are effective in reducing counterfeit sales.

This paper evaluates the effects of patent protection on pharmaceutical innovations for twenty-six countries that established pharmaceutical patent laws during 1978-2002. Controlling for country characteristics through matched sampling techniques to establish two proper comparison sets among ninety-two sampled countries and through country-pair fixed-effects regressions, this study yields robust results. National patent protection alone does not stimulate domestic innovation, as estimated by changes in citation-weighted U.S. patent awards, domestic R&D, and pharmaceutical industry exports. However, domestic innovation accelerates in countries with higher levels of economic development, educational attainment, and economic freedom. Additionally, there appears to be an optimal level of intellectual property rights regulation above which further enhancement reduces innovative activities.

This paper combines a natural policy experiment and randomized lab experiments to estimate the differential impacts of counterfeiting on the sales and purchase intent of branded products of various quality levels. I collect new product-line level panel data from Chinese shoe companies from 1993-2004. Exploiting the discontinuity of government enforcement efforts for the footwear sector in 1995 and the differences in authentic companies' relationships with the government, I identify heterogeneous effects of counterfeit entry on sales of authentic products of three quality levels. In particular, counterfeits have both advertising effects for the brand and substitution effects for authentic products. The advertising effect dominates substitution effect for high-end authentic product sales, and the substitution effect outweighs advertising effect for low-end product sales. I build a theoretical model with multi-product producers to generalize such impacts due to counterfeits. The aforementioned heterogeneous effects of counterfeits on branded products are also discovered in lab experiments where the presence of counterfeits is randomly assigned to a subsample of respondents. Responses allude to the fact that counterfeits can increase brand awareness and affinity, as well as substitute for lower-end shoes.

Using a unique panel dataset and a new model, this article investigates the dynamic effects of counterfeit sales on authentic-product price dynamics. We propose a Bayesian random-changepoint simultaneous equation model that simultaneously takes into account three important features in empirical studies: (1) Endogeneity of a market entry, (2) Nonstationarity of the entry effects and (3) Heterogeneity of the firms’ response behaviors. Besides accounting for the endogeneity of counterfeiting, the proposed methodology improves the estimation of dynamic effects under heterogeneous response times by firms. We identify both a temporary negative short-term effect and a stable positive long-term effect of counterfeit sales on the authentic prices. Such effect estimates are biased in the OLS model and attenuated in a standard IV model. The findings help to unify two strands of I.O. theories on the pricing effects of competition. Finally, our analysis identifies considerable heterogeneity in authentic firms’ response behaviors (both response time and magnitude), and the hierarchical structure of our model enables a study of the drivers of the heterogeneity. This study casts managerial insights on effective brand protection and management strategies that can be tailored to each type of firms. The method illustrated provides a new approach to use field data to study the determinants of a firm’s response time, an important dimension of management strategy. In particular, firms with more human capital or less diversification from infringed markets were faster in responding and differentiating from counterfeits. The proposed framework can be widely applied to study dynamic and heterogeneous causal effects of marketing variables.

Using a comprehensive sample of all FDI firms in China, we explore the question whether ethnicity enhances operating performance. While there has been a sizable theoretical literature studying ethnicity and foreign investments, the prediction of the impact of ethnicity on firm profitability is far from clear. We demonstrate empirically that ethnic firms do not command an operational advantage over non-ethnic firms in the overall sample. Further tests suggest that while ethnic firms command an operational advantage over nonethnic firms initially, such advantage declines over time. We then explore what might have caused the decline of the ethnic advantage, and our results suggest that lack of investment in intangible and human capital by ethnic firms is driving the pattern we observe. Overall, our results suggest that ethnicity does not pay or that ethnicity does not confer a permanent operating advantage on a firm.

Using a unique census dataset on all industrial firms (with more than 5 million yuan in sales), we document a phenomenon of missing entrepreneurship in Shanghai. Entrepreneurship is defined as private, new entrants in our paper. Specifically, in terms of business density, the size of employment and a host of other measures, the relative ranking of Shanghai was always near the bottom in the country. All these empirical findings took place against a backdrop of the presumably huge locational advantages of Shanghai - the substantial human capital, rapid GDP growth, and a long and stellar - but pre-communist - history of entrepreneurship. We propose a hypothesis that Shanghai adopted a particularly rigorous version of industrial policy model of economic development and this industrial policy proclivity may have led to the atrophy of entrepreneurship in Shanghai.

The Joyoung brand was launched in 1994 when a group of recent college graduates invented the world’s first automatic hot soymilk-maker home appliance. After some ups and downs, the Joyoung manufacturer founded the Shandong Joyoung Electric Appliances Co., Ltd. in 2002. It was further reorganized to the current Joyoung Company Limited in September 2007. Joyoung’s sales grew rapidly from RMB 6 million in 1994 to 120 million in 1999, and this trend has continued into the new century. By the first quarter in 2006, the signature product of Joyoung—the soymilk makers—alone have already surpassed the sales by Philips Home Appliances in the Chinese market.

Contrary to its current success, however, Joyoung Soymilk Maker’s launch did not go smoothly. When the first model of the automatic soymilk maker was introducted in 1994, people had no idea what this new creature was supposed to do. The first 2,000 units of Joyoung products remained stacked in storage for months. Joyoung then decided to conduct some marketing research.

Joyoung’s repositioning strategies and new product developments based on their marketing research have been evidently successful, and they have defined a new product category in China and in the world.