Entry Deregulation Research Articles

The effects of entry deregulation: evidence from interurban passenger transport

The effects of entry deregulation: evidence from interurban passenger transport

The effectiveness of entry deregulation: Novel evidence from removing minimum capital requirements

Although minimum paid-in capital requirements impede firm entry, governments worldwide have only recently started to reduce or remove such requirements. This study is among the first to examine the effectiveness of an entry deregulation reform in China that eliminated such requirements. We exploit city–year–month variation in reform implementation and employ a large nationwide administrative dataset of firm registrations, finding that the deregulation strongly encourages firm and job creation. Moreover, we find that the deregulation exerts a pro-competitive effect by encouraging the entry of small and medium-sized firms, private firms, and single-shareholder firms, which diversifies the industrial bases and reduces the industrial concentration of economic activity. Finally, we provide suggestive evidence that the deregulation promotes economic growth in the deregulated cities.

Entry deregulation and labor share: Evidence from China

Based on the Negative List Policy (NLP) implemented in China, this paper uses Chinese A-share listed companies from 2007 to 2021 as sample and employs the staggered difference-in-differences (DID) method to examine the impact of entry deregulation on labor share. We find that after the implementation of NLP, enterprises in the treatment group experience a 4.4 % increase in labor share. Specifically, in the goods market, NLP will increase labor share by weakening market power and reducing monopoly profits. In the factor market, NLP will boost labor share by impeding capital deepening and increasing labor inputs.

Market entry deregulation and corporate vertical specialization: Evidence from China

Market entry deregulation can contribute to a freer and more dynamic market environment. It not only increases entry opportunities for market participants but also has the potential to stimulate multi-node investments by firms in the industry chain. However, the effect of these market changes on the selection of the division of labor mode remains relatively unknown. Leveraging a quasi-experiment on the negative market entry list system, we utilize a staggered difference-in-differences approach to investigate the impact of market entry deregulation on corporate vertical specialization. Our findings robustly demonstrate that market entry deregulation increases corporate vertical specialization. This effect is primarily achieved through the reduction of entry barriers, the increase in sources of information, and the enhancement of the competition mechanism to reduce external transaction costs. Further, this effect is particularly pronounced among firms with higher asset specialization, operating in more competitive industries, and situated in regions with well-developed informatization system.

Presence of Extracellular Alpha-Synuclein Aggregates Trigger Astrocytic Degeneration Through Enhanced Membrane Rigidity and Deregulation of Store-Operated Calcium Entry (SOCE) into the Endoplasmic Reticulum.

α-Synuclein has a critical role in Parkinson's disease, but the mechanism of how extracellular α-synuclein aggregates lead to astrocytic degeneration remains unknown. Our recent study in astrocytes highlighted that α-synuclein aggregates undergo lower endocytosis than the monomeric-form, even while displaying a higher impact on glutathione-machinery and glutamate-metabolism under sublethal conditions. As optimal intracellular calcium levels are essential for these functions, we aimed to study the effect of extracellular α-synuclein aggregates on ER calcium entry. We assessed the association of extracellular aggregated-α-synuclein (WT and A30P/A53T double-mutant) with the astrocytic membrane (lipid rafts) and studied its effects on membrane fluidity, ER stress, and ER calcium refilling in three systems-purified rat primary midbrain astrocyte culture, human iPSC-derived astrocytes, and U87 cells. The corresponding timeline effect on mitochondrial membrane potential was also evaluated. Post-24h exposure to extracellular WT and mutant α-synuclein aggregates, fluorescence-based studies showed a significant increase in astrocyte membrane rigidity over control, with membrane association being significantly higher for the double mutant aggregates. α-Synuclein aggregates also showed preferentially higher association with lipid rafts of astrocytic membrane. A simultaneous increase in ER stress markers (phosphorylated PERK and CHOP) with significantly higher SOCE was also observed in aggregate-treated astrocytes, with higher levels for double mutant variant. These observations correlate with increased expression of SOCE markers, especially Orai3, on plasma membrane. Alterations in mitochondrial membrane potential were only noted post-48h of exposure to α-synuclein aggregates. We therefore suggest that in astrocytes, α-synuclein-aggregates preferentially associate with lipid rafts of membrane, altering membrane fluidity and consequently inducing ER stress mediated by interaction with membrane SOCE proteins, resulting in higher Ca2+ entry. A distinct cascade of events of sequential impairment of ER followed by mitochondrial alteration is observed. The study provides novel evidence elucidating relationships between extracellular α-synuclein aggregates and organellar stress in astrocytes and indicates the therapeutic potential in targeting the association of α-synuclein aggregates with astrocytic membrane.

Identifying the impact of bank competition on corporate shadow banking: Evidence from China

The surge of corporate shadow banking activities in China has drawn much attention from academia and policymakers; yet very little is known about whether bank competition matters for corporate shadow banking activities. Using a large sample of Chinese listed non-financial enterprises (NFEs) over the period of 2003–2019, we identify the impact of bank competition on corporate shadow banking activities. We find a negative relation of bank competition with corporate shadow banking activities. Greater bank competition reduces corporate shadow banking activities by relaxing the firms’ financing constraints, alleviating information asymmetries, and improving their investment efficiency. Our results are robust to alternative metrics of core variables, controlling for regional characteristics, instrumental variable analysis, and the difference-in-differences estimation. Our findings suggest that a deregulation of bank entry, which increases bank competition, is an effective way to restrain corporate shadow banking activities without sacrificing economic growth.

Winners and Losers of Entry Deregulation: Evidence from Ambulatory Surgery Centers

Winners and Losers of Entry Deregulation: Evidence from Ambulatory Surgery Centers

Efficiency of Indian General Insurance Companies

In the current millennium, the Indian general insurance market has witnessed major structural changes because of the establishment of a market regulator and the initiation of entry deregulation. The present study evaluates the efficiency performance of fifteen Indian general insurance companies for the period 2011/12 - 2016/17 using a robust nonparametric approach. The study also seeks to explain efficiency by considering the influence of environmental variables on the efficiency scores. The results indicate that efficiency is positively related to ownership, insurer age, market share, and return on equity but negatively related to size.

Foreign bank entry deregulation and stock market stability: Evidence from staggered regulatory changes

Exploring staggered quasi-exogenous regulatory changes in China, we find that the foreign bank entry deregulation significantly reduces the likelihood of stock price crashes of domestic listed firms. The effect is more pronounced among firms with worse ex-ante agency problems and performances, consistent with a monitoring spillover effect from foreign banks. Supportive evidence suggests that foreign bank entry reduces overall financing costs and extends loan maturity. Domestic firms’ corporate governance, fundamentals, and stock price efficiency improve as well. Overall, our findings highlight an unexplored role of banking sector deregulation in curtailing price crash risks and improving the stability of stock markets.

Entry Deregulation, Market Turnover, and Efficiency: China’s Business Registration Reform

Entry Deregulation, Market Turnover, and Efficiency: China’s Business Registration Reform

The Effectiveness of Entry Deregulation: Novel Evidence from Removing Minimum Capital Requirements

The Effectiveness of Entry Deregulation: Novel Evidence from Removing Minimum Capital Requirements

Excessive entry and investment in deregulated markets: Evidence from the electricity sector

The staggered and partial restructuring of state electricity markets beginning in 1996 is leveraged to identify the effect of entry deregulation on investment in generation capacity during the U.S. Gas Boom. Using synthetic control to construct the counterfactual outcome, this paper finds restructuring led to a 17 percent increase in capacity beyond the counterfactual in the seven years following restructuring. The overinvestment of the electricity industry is consistent with market coordination failure, contagion and low real interest rates, leading to an environmental welfare gain of $27.6 billion but overall net welfare loss of $18.85 billion.

Entry deregulation, firm organization, and wage inequality

This paper identifies a causal link between changes in product market competition, firm reorganization and within-firm wage inequality. We exploit a unique episode of comprehensive firm entry deregulation as a quasi-natural experiment and use exceptionally detailed linked employer-employee data for the universe of private sector firms and workers in Portugal. Following deregulation affected firms flatten their hierarchies: the number of layers is reduced and managers’ span of control increased. Dropping a hierarchy layer is accompanied by a significant reduction in wage inequality within the firm, by 8% for the average pay ratio between the top and the bottom layer and 4.4% for the 90-50 percentile wage ratio, showing that there are real changes arising from firm reorganization. Overall wage dispersion, measured by the standard deviation of hourly pay, is also reduced. We discuss mechanisms and interpretations for these changes.

Rise of Bank Competition: Evidence from Banking Deregulation in China

Using proprietary individual level loan data, this paper explores the economic consequences of the 2009 bank entry deregulation in China. Such deregulation leads to higher screening standards, lower interest rates, and lower delinquency rates for corporate loans from entrant banks. Consequently, in deregulated cities, private firms with bank credit access increase asset investments, employment, net income, and ROA. In contrast, the performance of state-owned enterprises (SOEs) does not improve following deregulation. Deregulation also amplifies bank credit from productive private firms to inefficient SOEs due mainly to SOEs’ soft budget constraints. This adverse effect accounts for 0.31% annual GDP losses.

FOREIGN ENTRY LIBERALIZATION AND EXPORT QUALITY: EVIDENCE FROM CHINA

This paper examines the impact of foreign entry deregulation in China on the export price and quality of manufacturing firms through input–output linkage. We create a unique dataset describing the extent of regulatory control over foreign entry across approximately 900 industries covering all primary, manufacturing and services sectors. Results suggest foreign entry deregulation encourages firms to improve product quality and increase export prices. Deregulation in the manufacturing sectors has more impact on downstream export price and quality, compared with services sectors. Moreover, firms having larger imported inputs benefit more from foreign entry deregulation. These effects are robust to alternative specifications. (JEL F1, D2, O2)

Entry Costs, Task Variety, and Skill Flexibility: A Simple Theory of (Top) Income Skewness

Abstract This paper develops a simple model that provides a unified explanation for both an increase in below-top skewness and a much larger increase in within-top skewness of wage income distribution. It relies on a single mechanism based on the fixed costs of firm entry. A decrease in entry costs increases the variety of goods/tasks and thus the demand for higher-skilled workers who are more flexible in handling a variety of tasks, which increases both types of skewness. Differences in flexibility are modeled as differences in the fixed labor setup costs required to handle a given number of tasks. Our numerical experiments in a calibrated model show that a decrease in entry costs – entry deregulation – can be a quantitatively important source of both the increase in below-top skewness and the much larger increase in within-top skewness observed in the U.S. Moreover, the experiments imply that the observed differences in entry deregulation can cause significant differences in the top skewness across countries that have similar technological change. This can provide an answer to Piketty and Saez’s (2006) question: Why have top wages surged in English speaking countries in recent decades but not in continental Europe or Japan, which have gone through similar technological change?

Correction: The deregulation of STIM1 and store operative calcium entry (SOCE) impaired aortic smooth muscle cells contractility in aortic medial degeneration.

The authors of the original paper “The deregulation of STIM1 and store operative calcium entry (SOCE) impaired aortic smooth muscle cells contractility in aortic medial degeneration” (Biosci Rep. (2019), 39(1), DOI: 10.1042/BSR20181504), would like to provide the following correction statement:The picture in Figure 3D was replaced by a new set of images.Due to our carelessness, the image of transwell experiment of 0.4μM (40×) were the magnify of that of DMSO group (100×).We apologise for this mistake. We have repeated this experiment, and present the correct image in this revised version. We confirm that it does not affect the conclusions of the study.

A Simple Model of Competition Policies, Trade, and the Skill Premium

How competition policies interact with international trade has been one of the so-called new issues in the WTO. We develop a simple, general equilibrium model to examine the possible interaction between domestic competition policies and trade. In the model, cartels are allowed in that a certain set of firms collude in decision-making, and efficiency gains from a cartel exist in that the fixed costs are shared within a cartel. Then we first show, in a closed economy model, that entry deregulation that reduces the fixed costs of entry can increase the skill premium by increasing the number of firms and decreasing firm size, while an antitrust policy that reduces the size of cartels can decrease the skill premium by decreasing the number of firms and increasing firm size. We next extend the model to a two-country model. In the case of asymmetric countries, though the effects are not clear, our numerical examples show a possibility that entry deregulation and antitrust policy in one country, respectively, can increase and decrease the skill premia in both countries through trade; however, the domestic skill premium is changed by a greater percentage than the foreign one. Finally, available U.S. data show that our model does appear to be empirically relevant.

The (Un)intended Consequences of Lowering Entry Barriers: Evidence from an Entry Deregulation Reform

Research has focused on institutional changes that reduce barriers to entrepreneurship, but studies have mostly documented their beneficial influence. Focusing on gender disparities, we propose tha...

Abstract 4410: Predictive model of palbociclib response reveals indications in which CDK4/6 inhibitor can be a potential combination partner

Abstract CDK4/6 inhibitors are a promising class of targeted therapies, with three molecules (palbociclib, ribociclib, and abemaciclib) approved for advanced hormone-receptor positive (HR+) breast cancers. With hope of building on this success, clinical trials across multiple oncology indications have been initiated. The determinants of response to CDK4/6 inhibitors, beyond pRb-deficiency and Cyclin-E amplification, remain unclear as limited clinical data have been published in indications other than HR+ breast cancers. Here, we measured the response to palbociclib across a panel of tumor cell lines from multiple indications and were able to build a computational model predictive of drug response using the expression of a handful of transcripts. This model revealed cellular states that are related to palbociclib resistance, such as G1-S entry deregulation, or sensitivity, such as competent p53 pathway and high KRAS signaling. As validation of our model, we compared its predictions with dependency scores from Project Achilles and found good correlations between predicted sensitivity and dependence on CDK4 and CCND1. By applying the predictive model on TCGA data, our analysis uncovered indications, disease subtypes, and genomic alterations that are related to the predicted response to palbociclib in addition to Rb-deficiency and Cyclin-E amplification. As expected, HR+ breast cancer was predicted to be among the most sensitive diseases, along with prostate, thyroid, and some renal cancers. Among non-small cell lung cancers, squamous-cell tumors are predicted to be more resistant than adenocarcinomas. In adenocarcinomas, BRAF and KRAS mutations are predicted to be associated with increased responsiveness. Combining these results with published biomarkers of resistance to standard of care therapies reveals indications in which CDK4/6 inhibitors can be potential combination partners. These results may guide the design of new trials for CDK4/6 therapies and the evaluation of better stratification biomarkers. Citation Format: Marc Hafner, Nicholas Dompe, Wei Zhou, Eva Lin, Milena Durrbaum, Anneleen Daemen, Melissa R. Junttila, Ciara Metcalfe, Karl Merrick. Predictive model of palbociclib response reveals indications in which CDK4/6 inhibitor can be a potential combination partner [abstract]. In: Proceedings of the American Association for Cancer Research Annual Meeting 2019; 2019 Mar 29-Apr 3; Atlanta, GA. Philadelphia (PA): AACR; Cancer Res 2019;79(13 Suppl):Abstract nr 4410.