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IE Business School strategy expert Luis Diestre awarded European Union ERC grant

13 /06 /2017 Faculty
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Professor Luis Diestre, Director of the Strategy Department of IE Business School, has been selected by the European Research Council to receive an ERC Starting Grant to fund his research on competitive dynamics in the informal economy.

The European Council awarded the grant, which totals 1.3 million euros over 5 years, in recognition of the work undertaken by Professor Diestre, a top young European researcher, and of his innovative and groundbreaking contributions to his field.

ERC grants are the most prestigious within the European science community, being awarded to outstanding researchers dedicated to pioneering research projects in their areas of specialization. Past recipients of these grants include winners of a broad range of international science prizes, including Nobel Prizes and International Mathematical Union Prizes.

His work on “Competitive Dynamics in the Informal Economy; the Case of Illegal Pharmaceutical Drugs” is aimed at developing a theory about the dynamics of competition among informal firms, by means of a conceptual and empirical analysis of how a perception of legitimacy influences three specific dimensions of dynamic competition in the informal market, namely entry into the market, product pricing, and product quality. The study centers on illegal pharmaceutical businesses in the US, a sizeable market with a marked social impact. His research will permit the creation of a database of informal transactions that will provide empirical evidence of suggested relations and produce findings which can be applied to other industries and geographical regions.

The contributions the project makes from an administration sciences viewpoint will also help other sciences such as economics, sociology, psychology, medicine and law, by providing a conceptual theory which can provide studies with information related to the informal economy from their own particular perspective. The findings will also permit politicians to monitor trends in the informal pharmaceutical business and the informal economy in general, enabling them to better know and understand the environment in order to design better management systems.