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published research papers in marketing

  • 17 Oct 2023

With Subscription Fatigue Setting In, Companies Need to Think Hard About Fees

Subscriptions are available for everything from dental floss to dog toys, but are consumers tiring of monthly fees? Elie Ofek says that subscription revenue can provide stability, but companies need to tread carefully or risk alienating customers.

published research papers in marketing

  • 29 Aug 2023
  • Cold Call Podcast

As Social Networks Get More Competitive, Which Ones Will Survive?

In early 2023, TikTok reached close to 1 billion users globally, placing it fourth behind the leading social networks: Facebook, YouTube, and Instagram. Meanwhile, competition in the market for videos had intensified. Can all four networks continue to attract audiences and creators? Felix Oberholzer-Gee discusses competition and imitation among social networks in his case “Hey, Insta & YouTube, Are You Watching TikTok?”

published research papers in marketing

  • 26 Jun 2023
  • Research & Ideas

Want to Leave a Lasting Impression on Customers? Don't Forget the (Proverbial) Fireworks

Some of the most successful customer experiences end with a bang. Julian De Freitas provides three tips to help businesses invest in the kind of memorable moments that will keep customers coming back.

published research papers in marketing

  • 31 May 2023

With Predictive Analytics, Companies Can Tap the Ultimate Opportunity: Customers’ Routines

Armed with more data than ever, many companies know what key customers need. But how many know exactly when they need it? An analysis of 2,000 ridesharing commuters by Eva Ascarza and colleagues shows what's possible for companies that can anticipate a customer's routine.

published research papers in marketing

  • 30 May 2023

Can AI Predict Whether Shoppers Would Pick Crest Over Colgate?

Is it the end of customer surveys? Definitely not, but research by Ayelet Israeli sheds light on the potential for generative AI to improve market research. But first, businesses will need to learn to harness the technology.

published research papers in marketing

  • 24 Apr 2023

What Does It Take to Build as Much Buzz as Booze? Inside the Epic Challenge of Cannabis-Infused Drinks

The market for cannabis products has exploded as more states legalize marijuana. But the path to success is rife with complexity as a case study about the beverage company Cann by Ayelet Israeli illustrates.

published research papers in marketing

  • 07 Apr 2023

When Celebrity ‘Crypto-Influencers’ Rake in Cash, Investors Lose Big

Kim Kardashian, Lindsay Lohan, and other entertainers have been accused of promoting crypto products on social media without disclosing conflicts. Research by Joseph Pacelli shows what can happen to eager investors who follow them.

published research papers in marketing

  • 10 Feb 2023

COVID-19 Lessons: Social Media Can Nudge More People to Get Vaccinated

Social networks have been criticized for spreading COVID-19 misinformation, but the platforms have also helped public health agencies spread the word on vaccines, says research by Michael Luca and colleagues. What does this mean for the next pandemic?

published research papers in marketing

  • 02 Feb 2023

Why We Still Need Twitter: How Social Media Holds Companies Accountable

Remember the viral video of the United passenger being removed from a plane? An analysis of Twitter activity and corporate misconduct by Jonas Heese and Joseph Pacelli reveals the power of social media to uncover questionable situations at companies.

published research papers in marketing

  • 06 Dec 2022

Latest Isn’t Always Greatest: Why Product Updates Capture Consumers

Consumers can't pass up a product update—even if there's no improvement. Research by Leslie John, Michael Norton, and Ximena Garcia-Rada illustrates the powerful allure of change. Are we really that naïve?

published research papers in marketing

  • 29 Nov 2022

How Much More Would Holiday Shoppers Pay to Wear Something Rare?

Economic worries will make pricing strategy even more critical this holiday season. Research by Chiara Farronato reveals the value that hip consumers see in hard-to-find products. Are companies simply making too many goods?

published research papers in marketing

  • 26 Oct 2022

How Paid Promos Take the Shine Off YouTube Stars (and Tips for Better Influencer Marketing)

Influencers aspire to turn "likes" into dollars through brand sponsorships, but these deals can erode their reputations, says research by Shunyuan Zhang. Marketers should seek out authentic voices on YouTube, not necessarily those with the most followers.

published research papers in marketing

  • 25 Oct 2022

Is Baseball Ready to Compete for the Next Generation of Fans?

With its slower pace and limited on-field action, major league baseball trails football in the US, basketball, and European soccer in revenue and popularity. Stephen Greyser discusses the state of "America's pastime."

published research papers in marketing

  • 18 Oct 2022

When Bias Creeps into AI, Managers Can Stop It by Asking the Right Questions

Even when companies actively try to prevent it, bias can sway algorithms and skew decision-making. Ayelet Israeli and Eva Ascarza offer a new approach to make artificial intelligence more accurate.

published research papers in marketing

  • 08 Aug 2022

Building an 'ARMY' of Fans: Marketing Lessons from K-Pop Sensation BTS

Few companies can boast a customer base as loyal and engaged as BTS fans. In a case study, Doug Chung shares what marketers can learn from the boyband's savvy use of social media and authentic connection with listeners.

published research papers in marketing

  • 30 Jun 2022

Peloton Changed the Exercise Game. Can the Company Push Through the Pain?

When COVID-19 closed gyms, seemingly everyone rushed to order a Peloton bike and claim a spot on the company's signature leader board. And then things quickly went downhill. A case study by Robert Dolan looks at the tough road the exercise equipment maker faces.

published research papers in marketing

  • 30 Nov 2021

TikTok: Super App or Supernova?

TikTok’s parent company, ByteDance, was launched in 2012 around the simple idea of helping users entertain themselves on their smartphones while on the Beijing Subway. By May 2020, TikTok operated in 155 countries and had roughly 1 billion monthly active users, placing it in the top ranks of digital platforms globally. But the app had drawn the attention of competitors, regulators, and politicians, especially in the US, where commercial success was critical to its long-term enterprise value. Would TikTok become the first “Super App” with a global footprint, or did it run the risk of becoming a supernova that shone brightly only for a passing moment? Harvard Business School senior lecturer Jeffrey Rayport discusses these strategic challenges in his case, “TikTok in 2020: Super App or Supernova?” Open for comment; 0 Comments.

published research papers in marketing

  • 29 Sep 2021

For Entrepreneurs, Blown Deadlines Can Crush Big Ideas

After a successful launch, entrepreneurs struggle to anticipate the complexities of product upgrades, says research by Andy Wu and Aticus Peterson. They offer three tips to help startups avoid disastrous delays. Open for comment; 0 Comments.

published research papers in marketing

  • 13 Jul 2021

Outrage Spreads Faster on Twitter: Evidence from 44 News Outlets

When it comes to social sharing, doom-and-gloom tweets beat sunshine and rainbows, says research by Amit Goldenberg. Is it time to send in the positivity police? Open for comment; 0 Comments.

published research papers in marketing

  • 04 Jan 2021
  • Working Paper Summaries

The Twofold Effect of Customer Retention in Freemium Settings

Many digital products offer “freemiums”: that is, part of the product for free, often with advertising, and an enhanced customer experience for payment. This research, in a mobile game context, shows the importance of recognizing the short- and long-term effects on customer retention when managing the tradeoffs between free and paid aspects of freemium products.

  • Review Paper
  • Published: 18 August 2018

Research in marketing strategy

  • Neil A. Morgan 1 ,
  • Kimberly A. Whitler 2 ,
  • Hui Feng 3 &
  • Simos Chari 4  

Journal of the Academy of Marketing Science volume  47 ,  pages 4–29 ( 2019 ) Cite this article

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Marketing strategy is a construct that lies at the conceptual heart of the field of strategic marketing and is central to the practice of marketing. It is also the area within which many of the most pressing current challenges identified by marketers and CMOs arise. We develop a new conceptualization of the domain and sub-domains of marketing strategy and use this lens to assess the current state of marketing strategy research by examining the papers in the six most influential marketing journals over the period 1999 through 2017. We uncover important challenges to marketing strategy research—not least the increasingly limited number and focus of studies, and the declining use of both theory and primary research designs. However, we also uncover numerous opportunities for developing important and highly relevant new marketing strategy knowledge—the number and importance of unanswered marketing strategy questions and opportunities to impact practice has arguably never been greater. To guide such research, we develop a new research agenda that provides opportunities for researchers to develop new theory, establish clear relevance, and contribute to improving practice.

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published research papers in marketing

We follow Varadarjan’s (2010) distinction, using “strategic marketing” as the term describing the general field of study and “marketing strategy” as the construct that is central in the field of strategic marketing—just as analogically “strategic management” is a field of study in which “corporate strategy” is a central construct.

Following the strategic management literature (e.g., Mintzberg 1994 ; Pascale 1984 ), marketing strategy has also been viewed from an “emergent” strategy perspective (e.g. Hutt et al. 1988 ; Menon et al. 1999 ). Conceptually this is captured as realized (but not pre-planned) tactics and actions in Figure 1 .

These may be at the product/brand, SBU, or firm level.

These strategic marketing but “non-strategy” coding areas are not mutually exclusive. For example, many papers in this non-strategy category cover both inputs/outputs and environment (e.g., Kumar et al. 2016 ; Lee et al. 2014 ; Palmatier et al. 2013 ; Zhou et al. 2005 ), or specific tactics, input/output, and environment (e.g., Bharadwaj et al. 2011 ; Palmatier et al. 2007 ; Rubera and Kirca 2012 ).

The relative drop in marketing strategy studies published in JM may be a function of the recent growth of interest in the shareholder perspective (Katsikeas et al. 2016 ) and studies linking marketing-related resources and capabilities directly with stock market performance indicators. Such studies typically treat marketing strategy as an unobserved intervening construct.

Since this concerns integrated marketing program design and execution, marketing mix studies contribute to knowledge of strategy implementation–content when all four major marketing program areas are either directly modeled or are controlled for in studies focusing on one or more specific marketing program components.

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Kelley School of Business, Indiana University, 1309 E. Tenth St., Bloomington, IN, 47405-1701, USA

Neil A. Morgan

Darden School of Business, University of Virginia, 100 Darden Boulevard, Charlottesville, VA, 22903, USA

Kimberly A. Whitler

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Alliance Manchester Business School, University of Manchester, Booth Street West, Manchester, M15 6PB, UK

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Morgan, N.A., Whitler, K.A., Feng, H. et al. Research in marketing strategy. J. of the Acad. Mark. Sci. 47 , 4–29 (2019). https://doi.org/10.1007/s11747-018-0598-1

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Received : 14 January 2018

Accepted : 20 July 2018

Published : 18 August 2018

Issue Date : 15 January 2019

DOI : https://doi.org/10.1007/s11747-018-0598-1

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Journal of Public Policy & Marketing ( JPP&M ) is a forum for understanding the nexus of marketing and public policy, with each issue featuring a wide-range of topics, including, but not limited to, ecology, ethics and social responsibility, nutrition and health, regulation and deregulation, security and privacy. Learn more about JPP&M here .

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JPP&M chronicles and analyzes the joint impact of marketing and governmental actions on economic performance, consumer welfare, and business decisions. This page catalogs  JPP&M ‘s contributions on the topic of race and its intersection with marketing and public policy.

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Journal of International Marketing ( JIM ) is dedicated to advancing international marketing practice, research and theory. This journal’s prime objective is to bridge the gap between theory and practice in international marketing for business scholars and practitioners. Learn more about JIM here .

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Journal of Interactive Marketing aims to identify issues and frame ideas associated with the rapidly expanding field of interactive marketing, which includes both online and offline topics related to the analysis, targeting, and service of individual customers. We strive to publish leading-edge, high-quality, and original research that presents results, methodologies, theories, concepts, models, and applications on any aspect of interactive marketing. Learn more about the journal here .

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The role of marketing metrics in social media: A comprehensive analysis

The primary objective of this article is to delve into the significance of marketing metrics in the realm of social media. The scope of this article encompasses a comprehensive analysis of key marketing metrics, including reach and impressions, engagement metrics, conversion metrics, customer satisfaction metrics, brand awareness metrics, and influence and authority metrics.

Marketing strategies in response to tough times – lessons from India during a global crisis

This study contributes to the extant literature by highlighting the marketing strategies and tactics adopted by organizations during during the Covid-19 pandemic. The themes indicate that, by and large, the response of firms to the current pandemic is in line with the marketing strategies adopted during previous environmental disruptions, as substantiated by various examples.

Sustainable tourism development: Insights from accommodation facilities in Bukhara along the silk road

The study aimed to investigate their perceptions of the Silk Road brand, involvement in sustainable development initiatives, collaboration with the public sector, and the status of their service offerings. Based on the results, the paper concludes and offers specific recommendations.

Brand seduction as a tool for brand’s success: Conceptualizing the term

The concept of seduction has been conceptualized based on this literature review by qualitative coding techniques. The key stakeholders experiencing brand seduction were interviewed to verify the suitability of the theoretical concept. The results show the correspondence of the concept of brand seduction with the stakeholder´s experience.


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Decoding Intentions

Artificial intelligence and costly signals.

Andrew Imbrie

Owen Daniels

Helen Toner

How can policymakers credibly reveal and assess intentions in the field of artificial intelligence? Policymakers can send credible signals of their intent by making pledges or committing to undertaking certain actions for which they will pay a price—political, reputational, or monetary—if they back down or fail to make good on their initial promise or threat. Talk is cheap, but inadvertent escalation is costly to all sides.

Executive Summary

How can policymakers credibly reveal and assess intentions in the field of artificial intelligence? AI technologies are evolving rapidly and enable a wide range of civilian and military applications. Private sector companies lead much of the innovation in AI, but their motivations and incentives may diverge from those of the state in which they are headquartered. As governments and companies compete to deploy evermore capable systems, the risks of miscalculation and inadvertent escalation will grow. Understanding the full complement of policy tools to prevent misperceptions and communicate clearly is essential for the safe and responsible development of these systems at a time of intensifying geopolitical competition.

In this brief, we explore a crucial policy lever that has not received much attention in the public debate: costly signals. Costly signals are statements or actions for which the sender will pay a price —political, reputational, or monetary—if they back down or fail to make good on their initial promise or threat. Drawing on a review of the scholarly literature, we highlight four costly signaling mechanisms and apply them to the field of AI (summarized in Table 1):

  • Tying hands involves the strategic deployment of public commitments before a foreign or domestic audience, such as unilateral AI policy statements, votes in multilateral bodies, or public commitments to test and evaluate AI models;
  • Sunk costs rely on commitments whose costs are priced in from the start, such as licensing and registration requirements for AI algorithms or large-scale investments in test and evaluation infrastructure, including testbeds and other facilities;
  • Installment costs are commitments where the sender will pay a price in the future instead of the present, such as sustained verification techniques for AI systems and accounting tools for the use of AI chips in data centers;
  • Reducible costs are paid up front but can be offset over time depending on the actions of the signaler, such as investments in more interpretable AI models, commitments to participate in the development of AI investment standards, and alternate design principles for AI-enabled systems.

We explore costly signaling mechanisms for AI in three case studies. The first case study considers signaling around military AI and autonomy. The second case study examines governmental signaling around democratic AI, which embeds commitments to human rights, civil liberties, data protection, and privacy in the design, development, and deployment of AI technologies. The third case study analyzes private sector signaling around the development and release of large language models (LLMs).

Costly signals are valuable for promoting international stability, but it is important to understand their strengths and limitations. Following the Cuban Missile Crisis, the United States benefited from establishing a direct hotline with Moscow through which it could send messages. In today’s competitive and multifaceted information environment, there are even more actors with influence on the signaling landscape and opportunities for misperception abound. Signals can be inadvertently costly. U.S. government signaling on democratic AI sends a powerful message about its commitment to certain values, but it runs the risk of a breach with partners who may not share these principles and could expose the United States to charges of hypocrisy. Not all signals are intentional, and commercial actors may conceptualize the costs differently from governments or industry players in other sectors and countries. While these complexities are not insurmountable, they pose challenges for signaling in an economic context where private sector firms drive innovation and may have interests at odds with the countries in which they are based.

Given the risks of misperception and inadvertent escalation, leaders in the public and private sectors must take care to embed signals in coherent strategies. Costly signals come with tradeoffs that need to be managed, including tensions between transparency for signaling purposes and norms around privacy and security. The opportunities for signaling credibly expand when policymakers and technology leaders consider not only whether to “conceal or reveal” a capability, but also how they reveal and the specific channels through which they convey messages of intent. Multivalent signaling, or the practice of sending more than one signal, can have complementary or contradictory effects. Compatible messaging from public and private sector leaders can enhance the credibility of commitments in AI, but officials may also misinterpret signals if they lack appropriate context for assessing capabilities across different technology areas. Policymakers should consider incorporating costly signals into tabletop exercises and focused dialogues with allies and competitor nations to clarify assumptions, mitigate the risks of escalation, and develop shared understandings around communication in times of crisis. Signals can be noisy, occasionally confusing some audiences, but they are still necessary.

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Scientists paid large publishers over $1 billion in four years to have their studies published with open access

A study reveals that academic megajournals ‘scientific reports’ and ‘nature communications’ have cornered the market.

A woman consults the website of 'Scientific Reports,' the magazine that publishes the most studies each year: about 22,000 articles in 2022.

For the last half century, scientists have followed the same method to publish their research . For example, a scientist discovers a treatment for cancer, other researchers check that the data is correct, and the final results are published in a study in an academic journal. If it is not published, it is not science. However, in recent years the system has undergone a transformation. It is no longer the readers who pay to read the studies, but the authors themselves who pay for their research to be published in digital journals with open access. Led by German expert Stefanie Haustein , a group of scientists has now calculated the turnover of the “oligopoly” that controls this new market. Using mainly public funds, the scientific community paid the five large publishers $1.06 billion in four years . And according to this estimate, the sum covers only the fees to publish open access studies.

It is a bubble that is about to burst. Since 2021 public institutions that invest in science have required authors to publish their studies with open access. And in evaluations that their salaries, promotions, and research budgets depend on, scientists are judged by the number of studies they have published. This system, known as “publish or perish,” has given rise to a huge business with perverse incentives to produce more and more insubstantial studies; publishers earn more money, and researchers pad their resumes with little to no effort. The most prolific scientist in Spain, José Manuel Lorenzo , head of research at the Meat Technology Center of the Xunta de Galicia, published 176 papers last year. That means he published one study every two days, even on topics unrelated to his field of expertise, such as how hospitals have managed monkeypox.

Stefanie Haustein’s team from the University of Ottawa (Canada) has spent “years” collecting data from the period 2015-2018. According to their calculations, Springer Nature took the lion’s share, with $589.7 million, followed by Elsevier ($221.4 million), Wiley ($114.3 million), Taylor & Francis ($76.8 million), and Sage ($31.6 million). The fees required for a study to be made available with open access are officially called “article processing charges,” and on average, authors or their institutions have to pay more than $2,500 per study. French sociologist Pierre Bataille refers to the publishers’ charges as “research vampirization.”

Haustein’s study reveals that two scientific journals, Scientific Reports and Nature Communications , accounted for this income, with $105.1 million and $71.1 million, respectively. Both belong to the British publisher Springer Nature, of which the Holtzbrinck Group controls 53% . The German family company was founded after the Second World War by repentant Nazi Georg von Holtzbrinck. The British publishing house owns the prestigious weekly journal Nature , as well as 4,600 others. Haustein’s analysis confirms that Scientific Reports and Nature Communications are two megajournals converted into profit-making machines through open access fees. Scientific Reports is the journal that publishes the most studies in the world — almost 22,000 papers last year — and charges $2,490 for each one . Nature Communications publishes about 7,500 articles a year and demands $6,490 for each of them . To be published in Nature , the jewel in the crown of scientific publications, the price is $11,690.

Stefanie Haustein considers it “obscene” that the profit margins of the main publishers “reach between 30% and 40%, well above most industries.” The researcher gives the example of the Dutch giant Elsevier, which last year published 600,000 studies , a quarter of which were open access. Elsevier’s annual income was $3.5 billion, with $1.3 billion in profit, according to its 2022 accounts . “This means that for every $1,000 that the academic community spends on publishing in Elsevier, about $400 go into the pockets of its shareholders,” Haustein explains.

The German researcher points out the paradoxes of the current system. The scientific community pays to publish its own studies and works for publishers reviewing the work of other colleagues for free. To top it off, institutions must still pay annual subscriptions to read journals that are not open access. “This means that the academic community has to pay to access the content they have provided for free. And, on top of that, the general public faces a paywall, when it is often their taxes that finance these studies and their publication. It is an unsustainable model that is depleting research budgets around the world,” says Haustein, who has published her results in the journal of the International Society for Scientometrics and Informetrics .

The author warns that these five large publishers have tripled their number of open access studies since 2018 and have increased their prices, so the current expenditure will be well above $1 billion. In addition, other actors have entered the scene. One of these is the MDPI publishing house. Founded in Switzerland by the Chinese chemist Shu-Kun Lin, the publisher is accused of lowering the bar to increase its income. Approximately one in six Spanish studies have published their studies in MDPI journals. Researcher Lin Zhang , from Wuhan University (China), has calculated that the scientific community of just six countries — the United States, China, the United Kingdom, France, the Netherlands, and Norway — pays over $2 billion each year to a dozen publishers to publish their work with open access.

Stefanie Haustein, scientific research

Susie Winter , a spokeswoman for Springer Nature, considers that the new analysis uses “very outdated” data and “poor” methodology, since it does not take into account discounts and exemptions from publishers, like those intended for scientists in countries that spend less on scientific research. She maintains that “the main reason” for Springer Nature’s higher income is that the group opted for open access before its rivals. The British publisher published almost 85,000 open access studies in 2018, according to its own accounts, compared to 33,000 for Elsevier.

Chemist Luis González, a professor at the Complutense University of Madrid, maintains that the calculation of $1.06 billion in four years is “very little” compared to the current disbursement. The professor has settled his own accounts in Spain. “I started studying this issue because it was costing me a lot of money to publish my results in good journals. Publication costs ate up half of my research budget,” he recalls. González says that Spanish universities and the largest Spanish scientific organization, the CSIC, are going to pay around $120 million between 2021 and 2024 to just three publishers — Elsevier, Wiley, and Springer Nature — to have their studies published with open access.

The professor insists that there are alternatives. In fields such as mathematics and physics, a high percentage of studies are first published in Arxiv, a repository managed by Cornell University (U.S.). “Publishing on Arxiv is completely free for authors. The expenses are about $15 per article and are covered by donations from the university and foundations,” says González. Academic journals usually justify their high rates by having a team of independent experts review the studies before publishing them, but the professor points out that these reviewers do not charge a fee. “We scientists do the review work for Nature and for all journals for free. There is no way to justify the increase in costs. It seems unbelievable that they have foisted this system onto a body of such highly educated people. We are really at a loss,” González laments.

However, the Springer Nature spokeswoman maintains that the new analysis “ignores the costs associated with publishing primary research articles [with original data].” She cites figures handled by James Butcher — former vice president of Springer Nature and now a consultant at the American firm Clarke & Esposito. These figures include 147 editors hired at the Nature Communications magazine, their assistants, computer scientists, lawyers, accountants, publicists, and others. According to Winter, their rates reflect these costs and other costs, such as improvements to their technological platforms.

Haustein responds to criticism. “If publishers believe our estimates are not accurate, we would appreciate it if they would publish their data and be transparent. Their lack of transparency is precisely what has made our work so slow and difficult. Our methodology is solid and very exhaustive, with quite conservative estimates,” the expert explains. Haustein also points out that the real costs of publishing a study range between $200 and $1,000 , according to calculations by German expert Alexander Grossmann . “For comparison, Nature Communications charged on average more than $4,000 between 2015 and 2018 and now charges $6,490 ,” he points out.

Two Spanish researchers fueled the debate in July with an open letter they sent to Nature . The letter was titled: “No-pay publishing: use institutional repositories.” In it Isabel Bernal from the Scientific Information Resources Unit for Research at the CSIC and Pandelis Perakakis from the Complutense explained their alternative model; they would publish in Psicológica , the Spanish Experimental Psychology Society’s flagship publication. Until last year the journal was managed by the German publishing house De Gruyter. Now it is published with open access in CSIC’s institutional repository. The publication costs are around $30 per study.

“Our case shows that it is a feasible model, but there are some missing pieces, such as incentives for academic communities,” says Perakakis. The National Agency for Quality Assessment and Accreditation (ANECA), the Spanish university quality watchdog, has just published a proposal to modify the evaluation criteria for researchers, with the aim of stopping them being judged solely on the number of studies they have had published. The psychologist Pandelis Perakakis considers it “a step in the right direction”, to leave behind “the system of paid journals and easy publication.” The researcher issues a warning: “I fear that, as has already happened in the past, if we do not correctly channel this momentum, the future could be even darker than the present.”

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A researcher who publishes a study every two days reveals the darker side of science

Rubén González Crespo is a computer scientist and the vice-chancellor of the International University of La Rioja in Spain.

Spanish university administrator and colleagues linked to ‘factory’ producing fraudulent scientific studies

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Maestría en línea en Inteligencia Artificial

International Trade Responses to Labor Market Regulations

This paper studies how differences in labor market regulations shape countries' comparative advantage in the cross-border provision of labor-intensive services, using administrative data in Europe for the last two decades. I exploit exogenous variation in labor taxes and minimum wages faced by exporting firms engaged in a large European trade program. Firms from different countries compete to supply the same physical service in the same location but their employees are subject to different payroll taxes and minimum wages. These rules varied across countries, sectors, and over time. Reduced-form country case-studies as well as model-implied gravity estimates show evidence of large trade responses to lower labor taxes and minimum wages, with an elasticity that is around one. The Bolkestein directive, by exempting foreign firms from all labor regulations in the destination country, would have doubled exports of physical services from Eastern European countries, rationalizing the wave of protests in high-wage countries that led to the withdrawal of the proposal.

I thank Yossef Benzarti, Benjamin Faber, Oleg Itskhoki, Antoine Levy, Thierry Mayer, Jim Poterba, Joseph Shapiro, Jonathan Vogel and Reed Walker as well as seminar participants at the LSE, University of Chicago, UCL, UCLA, UC Berkeley, University of Minnesota, the Richmond Fed, University of Michigan and the University of Warwick for their comments. The views expressed herein are those of the author and do not necessarily reflect the views of the National Bureau of Economic Research.


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