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on Business Economics |
| By: | Ben S. Bernanke; Carol Bertaut; Laurie Pounder DeMarco; Steven Kamin |
| Abstract: | A broad array of domestic institutional factors--including problems with the originate-to-distribute model for mortgage loans, deteriorating lending standards, deficiencies in risk management, conflicting incentives for the GSEs, and shortcomings of supervision and regulation--were the primary sources of the U.S. housing boom and bust and the associated financial crisis. In addition, the extended rise in U.S. house prices was likely also supported by long-term interest rates (including mortgage rates) that were surprisingly low, given the level of short-term rates and other macro fundamentals--a development that Greenspan (2005) dubbed a "conundrum." The "global saving glut" (GSG) hypothesis (Bernanke, 2005 and 2007) argues that increased capital inflows to the United States from countries in which desired saving greatly exceeded desired investment--including Asian emerging markets and commodity exporters--were an important reason that U.S. longer-term interest rates during this period were lower than expected. ; This essay investigates further the effects of capital inflows to the United States on U.S. longer-term interest rates; however, we look beyond the overall size of the inflows emphasized by the GSG hypothesis to examine the implications for U.S. yields of the portfolio preferences of foreign creditors. We present evidence that, in the spirit of Caballero and Krishnamurthy (2009), foreign investors during this period tended to prefer U.S. assets perceived to be safe. In particular, foreign investors--especially the GSG countries--acquired a substantial share of the new issues of U.S. Treasuries, Agency debt, and Agency-sponsored mortgage-backed securities. The downward pressure on yields exerted by inflows from the GSG countries was reinforced by the portfolio preferences of other foreign investors. We focus particularly on the case of Europe: Although Europe did not run a large current account surplus as did the GSG countries, we show that it leveraged up its international balance sheet, issuing external liabilities to finance substantial purchases of apparently safe U.S. "private-label" mortgage-backed securities and other fixed-income products. The strong demand for apparently safe assets by both domestic and foreign investors not only served to reduce yields on these assets but also provided additional incentives for the U.S. financial services industry to develop structured investment products that "transformed" risky loans into highly-rated securities. ; Our findings do not challenge the view that domestic factors, including those listed above, were the primary sources of the housing boom and bust in the United States. However, examining how changes in the pattern of international capital flows affected yields on U.S. assets helps provide a deeper understanding of the origins and dynamics of the crisis. |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedgif:1014&r=bec |
| By: | Céline Louche; Emmanuelle Michotte |
| Abstract: | L’objectif de cet article vise à dresser l’état des lieux des connaissances sur la RSE en PME afin d’identifier les manquements et de formuler des stratégies de recherche. L’étude se base sur l’analyse de 52 articles qui ont été publiés dans des revues académiques entre 2006 et avril 2009. L’étude est organisée autour de trois questions de recherche afin d’explorer le ‘quoi’, ‘pourquoi’ et ‘comment’ de la RSE en PME. Premièrement nous nous sommes intéressés à ‘Qu’est-ce que la RSE en PME ?’. Deuxièmement nous avons recherché les facteurs explicatifs :‘Quels sont les facteurs qui influencent (moteurs/freins) la RSE en PME ?’. Et troisièmement, nous avons collecté toutes les informations nous permettant de comprendre les impacts de la RSE sur la PME :’Quels sont les impacts (positifs versus négatifs/internes versus externes) de la RSE en PME ?’. L’analyse révèle que le nombre de publications académiques s’est accru de manière significative ces dernières années, ce qui témoigne d’un intérêt croissant pour ce champ de recherche. Cependant, la recherche sur la RSE dans les PME en est encore à ses débuts. De nombreuses questions restent à explorer et l’apport théorique est encore à développer. |
| Date: | 2011–02 |
| URL: | http://d.repec.org/n?u=RePEc:sol:wpaper:2013/75242&r=bec |
| By: | Heiko Karle (ECARES, Universit´e Libre de Bruxelles); Tobias J. Klein (CentER, Netspar, TILEC, Tilburg University); Konrad O. Stahl (University of Mannheim, CEPR) |
| Abstract: | We study a differentiated product market in which an investor initially owns a controlling stake in one of two competing firms and may acquire a non-controlling or a controlling stake in a competitor, either directly using her own assets, or indirectly via the controlled firm. While industry profits are maximized within a symmetric two product monopoly, the investor attains this only in exceptional cases. Instead, she sometimes acquires a noncontrolling stake. Or she invests asymmetrically rather than pursuing a full takeover if she acquires a controlling one. Generally, she invests indirectly if she only wants to affect the product market outcome, and directly if acquiring shares is profitable per se. |
| Keywords: | Differentiated products, separation of ownership and control, private benefits of control |
| JEL: | L13 L41 |
| Date: | 2011–02 |
| URL: | http://d.repec.org/n?u=RePEc:trf:wpaper:350&r=bec |
| By: | Pierre-Richard Agénor; Luiz A. Pereira da Silva |
| Date: | 2011–01 |
| URL: | http://d.repec.org/n?u=RePEc:bcb:wpaper:234&r=bec |
| By: | Marco Bellucci |
| Abstract: | Il lavoro analizza il processo di riallocazione della proprietà nei settori manifatturieri di 16 paesi europei nel biennio 2006-2007, concentrandosi sullo studio dei fattori istituzionali, settoriali e tecnologici alla base di fusioni ed acquisizioni. In particolare si esaminano le determinanti e gli effetti di tali operazioni in termini di performance per le imprese acquirenti. Dai risultati ottenuti emerge che le operazioni di fusione ed acquisizione risultano più frequenti nei paesi in cui la proprietà azionaria è frammentata e il mercato per il controllo societario, come previsto dall’ampia letteratura sulla corporate governance, agisce da meccanismo correttivo nei casi di inefficiente gestione delle imprese. Dal punto di vista settoriale, la frequenza dei takeover è maggiore nelle industrie meno tradizionali, quali la chimica e l’elettronica, e più in generale nei settori in cui il ruolo chiave ai fini dell’innovazione è giocato dall’attività interna di R&S. Inoltre emerge che la maggior parte delle società acquirenti europee è di grande dimensione in termini di fatturato, e sono proprio le imprese più grandi ad intraprendere con maggior frequenza operazioni di M&A. A parità di condizioni, un paese con una base industriale ampia e frammentata in tante piccole e medie unità aziendali risulta quindi meno attivo di altri nel mercato delle acquisizioni societarie. Le imprese acquirenti europee presentano prima dell’acquisizione profili reddituali e finanziari migliori e risultano più dotate di intangible assets delle imprese del campione di controllo; l’acquisizione, inoltre, non sembra avere, in generale, nel breve periodo, effetti positivi sulle performance delle imprese acquirenti. Tuttavia, l’acquisizione appare produrre effetti positivi sul versante della produttività e degli intangible assets, segnalando che uno degli obiettivi delle imprese nell’intraprendere un’acquisizione è quello di sfruttare complementarietà o sinergie nelle attività “invisibili”. |
| Keywords: | Mergers and Acquisitions, Innovation, Technological regimes, Corporate governance |
| JEL: | O16 O32 G34 |
| Date: | 2010–11–01 |
| URL: | http://d.repec.org/n?u=RePEc:pia:wpaper:80/2010&r=bec |
| By: | Jean-Marie Dufour; René Garcia; Abderrahim Taamouti |
| Abstract: | In this paper, we provide evidence on two alternative mechanisms of interaction between returns and volatilities: the leverage effect and the volatility feedback effect. We stress the importance of distinguishing between realized volatility and implied volatility, and find that implied volatilities are essential for assessing the volatility feedback effect. The leverage hypothesis asserts that return shocks lead to changes in conditional volatility, while the volatility feedback effect theory assumes that return shocks can be caused by changes in conditional volatility through a time-varying risk premium. On observing that a central difference between these alternative explanations lies in the direction of causality, we consider vector autoregressive models of returns and realized volatility and we measure these effects along with the time lags involved through short-run and long-run causality measures proposed in Dufour and Taamouti (2010), as opposed to simple correlations. We analyze 5-minute observations on S&P 500 Index futures contracts, the associated realized volatilities (before and after filtering jumps through the bispectrum) and implied volatilities. Using only returns and realized volatility, we find a strong dynamic leverage effect over the first three days. The volatility feedback effect appears to be negligible at all horizons. By contrast, when implied volatility is considered, a volatility feedback becomes apparent, whereas the leverage effect is almost the same. These results can be explained by the fact that volatility feedback effect works through implied volatility which contains important information on future volatility, through its nonlinear relation with option prices which are themselves forward-looking. In addition, we study the dynamic impact of news on returns and volatility. First, to detect possible dynamic asymmetry, we separate good from bad return news and find a much stronger impact of bad return news (as opposed to good return news) on volatility. Second, we introduce a concept of news based on the difference between implied and realized volatilities (the variance risk premium) and we find that a positive variance risk premium (an anticipated increase in variance) has more impact on returns than a negative variance risk premium. <P> |
| Keywords: | Volatility asymmetry, leverage effect, volatility feedback effect, risk premium, variance risk premium, multi-horizon causality, causality measure, high-frequency data, realized volatility, bipower variation, implied volatility., |
| JEL: | G1 G12 G14 C1 C12 C15 C32 C51 C53 |
| Date: | 2011–02–01 |
| URL: | http://d.repec.org/n?u=RePEc:cir:cirwor:2011s-27&r=bec |
| By: | Véronique Fournier; François Vaillancourt |
| Abstract: | <P>Au courant des années 1990, plusieurs pays de l’OCDE ont connu un déclin significatif de l’épargne du secteur privé telle que mesurée par le taux d’épargne, ce déclin étant concentré principalement chez les ménages . Ce phénomène a généré une littérature abondante (parmi laquelle on retrouve les articles de Carroll et Summers (1987), de De Serres et Pelgrin (2003), et de Klyuev et Mills (2007)) se penchant sur les causes de ce déclin et, par le fait même, sur les déterminants de l’épargne. Les études de nature macroéconomique parvenant difficilement à identifier clairement la source de ce changement, un nombre croissant de ces études se sont tournées vers les données microéconomiques recueillies auprès des ménages pour éclairer leur analyse. <p> Les études examinant la situation de l’épargne des ménages canadiens ont été nombreuses au courant des années 1990 (on note entre autres les études de Bosworth, Burtless et Sabelhaus (1991), de Burbidge et Davies (1994), de Engelhardt (1996), et de Shamsuddin et DeVoretz (1998)) mais le sujet a été quelque peu délaissé par les chercheurs depuis. De surcroît, aucune étude à notre connaissance n’aborde directement la question des déterminants de l’épargne au Québec dans la période récente. La présente recherche s’inscrit donc dans la continuité par rapport aux recherches passées tout en cherchant à apporter un éclairage nouveau sur ces questions. Cette analyse vise ainsi dans un premier temps à faire un état de la situation de l’épargne des ménages en 2007 au Québec, ainsi qu’à mettre ces résultats en perspective en les comparant à ceux de l’Ontario et de l’ensemble du Canada. Dans un second temps, cette étude a aussi pour objectif d’évaluer empiriquement au moyen de régressions linéaires quels sont les déterminants microéconomiques de l’épargne des ménages québécois, et d’identifier des différences potentielles dans l’effet de ces déterminants par rapport à leur effet pour l’ensemble du Canada et l’Ontario. À cette fin, l’enquête canadienne sur les dépenses des ménages de 2007 est employée. <p> Afin de répondre à ces questions, les théories de la détermination de l’épargne des ménages, ainsi que les études empiriques canadiennes antérieures ayant pour objet l’épargne des ménages seront d’abord présentées. Ensuite, les données utilisées et le modèle à estimer seront détaillés. Ceci sera suivi par une description statistique de la situation de l’épargne au Québec en 2007. Enfin, les résultats de l’estimation par régression linéaire du modèle de détermination de l’épargne seront présentés, et comparés avec ceux obtenus pour l’ensemble du Canada et pour l’Ontario. |
| Date: | 2011–02–01 |
| URL: | http://d.repec.org/n?u=RePEc:cir:cirpro:2011rp-05&r=bec |
| By: | Cláudia Maria Ferreira Pereira Lopes (Instituto Superior de Contabilidade e Administração do Porto); António Cerqueira (Faculdade de Economia da Universidade do Porto); Elísio Brandão (Faculdade de Economia da Universidade do Porto) |
| Abstract: | This paper analyses whether accounting quality produces any impact on firm performance using only accounting data: the abnormal accruals methodology to evaluate accounting quality and ROA to determine firm performance. This is important because accounting information guides investment decisions (Bradshaw et al., 2004 and Verdi, 2006). For 17 European countries, findings confirm the mechanical relationship between accruals and accounting measures of performance: income increasing abnormal accruals, which mean decreasing accounting quality, will increase ROA and vice-versa. In addition, the lag effect is analysed, as per Chan et al. (2004). When current performance is compared with the abnormal accruals of the previous year, results suggest that the reverse effect does not occur for two consecutive years. |
| Keywords: | Accounting quality, firm performance, abnormal accruals |
| JEL: | M41 |
| Date: | 2011–02 |
| URL: | http://d.repec.org/n?u=RePEc:por:fepwps:403&r=bec |
| By: | Heinrich Ursprung (Department of Economics, University of Konstanz, Germany) |
| Abstract: | Modern societies are characterized by competing organizations that rely predominantly on incentive schemes to align the behavior of their members with the organizations’ objectives. This study contributes to explaining why in so many cases incentive schemes have gradually crowded out cooperation as an organization device. Our explanation does not draw on free-riding, the obvious Achilles’ heel of cooperation, but relies completely on fundamental group contest mechanisms. By investigating a canonical rent seeking model and adopting an evolutionary perspective, the analysis identifies shortcomings in previous results, sets the record straight, and explains why the process of incentivizing organizations is protracted. |
| Keywords: | group contests, rent-seeking, sharing rules, cooperation |
| JEL: | D72 D74 M52 |
| Date: | 2011–02–21 |
| URL: | http://d.repec.org/n?u=RePEc:knz:dpteco:1102&r=bec |
| By: | Totzek, Alexander |
| Abstract: | In the last two decades a body of literature highlights the role of financial frictions for explaining the development of key macroeconomic variables. Moreover, the financial crisis 2007-2009 again sheds light on the importance of this topic. In this paper, we contribute to the literature by simultaneously explaining two empirical observations. First, mark-ups on the loan market react counter-cyclical. Second, the number of banks operating in the economy significantly co-moves with GDP. Therefore, we develop a DSGE model which incorporates an oligopolistic banking sector with endogenous bank entry. The resulting model generates significant accelerating effects which are even larger than those obtained in the famous financial accelerator model of Bernanke et al. [Bernanke, B., Gertler, M., Gilchrist, S., 1999. The financial accelerator in a quantitative business cycle framework. In: Handbook of Macroeconomics. North-Holland, Amsterdam] and performs remarkable well when comparing the generated second moments of real and financial variables with those observed in the data. -- |
| Keywords: | Oligopolistic competition,Bank entry,Financial accelerator |
| JEL: | E44 E32 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:cauewp:201102&r=bec |
| By: | Bukowski, Samy K. J. |
| Abstract: | This study investigates the relationship between a firm’s investment-cash flow sensitivity and the degree of financing constraints utilising a novel, overlapping subsample class derivation classification scheme for large, non-financial firm panels from the United States and the United Kingdom. An original proof is derived that substantiates the novel methodology to be comparable to the procedures used within the existing literature, arguing that the results of which, can be subsequently used in parallel. The findings articulate a persistent abandonment of the traditional monotonicity condition for both samples, in favour of an inherent, inverse U-shaped non-monotonicity. Additionally, difference in mean testing indicates that the proxies used to gauge a firm as financially constrained have an accurate capacity in determining a firm’s financial status, enhancing the legitimacy of the resulting relationship. |
| Keywords: | Investment-cash flow sensitivity; financing constraints; financial constraints; capital market imperfections |
| JEL: | G3 G0 C33 |
| Date: | 2010–09–20 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:25272&r=bec |
| By: | Karl E. Case (Wellesley College); John M. Quigley (University of California, Los Angeles); Robert J. Shiller (Cowles Foundation, Yale University) |
| Abstract: | We re-examine the link between changes in housing wealth, financial wealth, and consumer spending. We extend a panel of U.S. states observed quarterly during the seventeen-year period, 1982 through 1999, to the thirty-one year period, 1978 through 2009. Using techniques reported previously, we impute the aggregate value of owner-occupied housing, the value of financial assets, and measures of aggregate consumption for each of the geographic units over time. We estimate regression models in levels, first differences and in error-correction form, relating per capita consumption to per capita income and wealth. We find a statistically significant and rather large effect of housing wealth upon household consumption. This effect is consistently larger than the effect of stock market wealth upon consumption. This reinforces the conclusions reported in our previous analysis. In contrast to our previous analysis, however, we do find -- based on data which include the recent volatility in asset markets -- that the effects of declines in housing wealth in reducing consumption are at least as large as the effects of increases in housing wealth in increasing the course of household consumption. |
| Keywords: | Consumption, Nonfinancial wealth, Housing market, Real estate |
| JEL: | E2 G1 |
| Date: | 2011–02 |
| URL: | http://d.repec.org/n?u=RePEc:cwl:cwldpp:1784&r=bec |
| By: | Guido Maretto |
| Abstract: | I study two way effects between financial markets and other contractual agreements, such as compensation packages within a firm, or mortgages and loans. I construct a model with many Units, in which one of the contracting individuals, the Agent, has private information, while the uninformed individual, the Principal, has the opportunity to trade with those in the other Units. I give general conditions under which financial markets induce a transfer of risk from Agents to Principals. These conditions boil down to a limited amount of correlation among Units' returns. Under the same conditions, I show that markets induce a transfer of welfare from the best Agents to Principals. Conversely, the information problem within firms leads to excessive aggregate risk. However, this problem vanishes in a large economy. |
| Date: | 2011–02 |
| URL: | http://d.repec.org/n?u=RePEc:eca:wpaper:2013/76053&r=bec |
| By: | Askitas, Nikos (IZA); Zimmermann, Klaus F. (IZA and University of Bonn) |
| Abstract: | Nowcasting has been a challenge in the recent economic crisis. We introduce the Toll Index, a new monthly indicator for business cycle forecasting and demonstrate its relevance using German data. The index measures the monthly transportation activity performed by heavy transport vehicles across the country and has highly desirable availability properties (insignificant revisions, short publication lags) as a result of the innovative technology underlying its data collection. It is coincident with production activity due to the prevalence of just-in-time delivery. The Toll Index is a good early indicator of production as measured for instance by the German Production Index, provided by the German Statistical Office, which is a well-known leading indicator of the Gross National Product. The proposed new index is an excellent example of technological, innovation-driven economic telemetry, which we suggest should be established more around the world. |
| Keywords: | production forecasting, transportation, new products, macroeconomic forecasting, evaluating forecasts, data mining, business cycles, nowcasting, telemetry |
| JEL: | C82 E01 E32 E37 L92 |
| Date: | 2011–02 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5522&r=bec |
| By: | Robert Stehrer (The Vienna Institute for International Economic Studies, wiiw); Sandra M. Leitner |
| Abstract: | This paper looks at the influence globalization exerts on wage negotiation processes and outcomes. Specifically, it establishes whether, compared to their purely domestically oriented counterparts, exporters share a higher fraction of the rents they generate with their employees. The analysis uses a panel of Austrian manufacturing firms between 2002 and 2006 and demonstrates that, in general, Austrian exporters do not share a higher part of their rents with their employees. Moreover, the analysis also takes into account that exporters are a very heterogeneous group, broadly differing in terms of the degree to which they trade internationally or to which they earn rents from their export activities. Against that backdrop, it determines whether rent-sharing systematically differs by the degree of internationalization of exporters. The results emphasize that particularly the most export-oriented firms are able to cut down on rent-sharing which corroborates the idea that exporters can credibly and effectively exploit their threat-points of either outsourcing or offshoring part of their production which induces employees to concede to more moderate wage changes so as to avert the potential loss of employment. |
| Keywords: | wage determination, rent-sharing, internationalization, firm-level analysis |
| JEL: | F16 J31 L6 |
| Date: | 2011–02 |
| URL: | http://d.repec.org/n?u=RePEc:wii:wpaper:73&r=bec |
| By: | Alessio, Moro; Rodolfo, Stucchi |
| Abstract: | We use a Dixit-Stiglitz setting to show that aggregate productivity fluctuations can be generated through changes in the dispersion of firms' productivity. When the elasticity of substitution among goods is larger than one, an increase in the dispersion raises aggregate productivity because firms at the top of the distribution produce most of output. When the elasticity is smaller than one, an increase in the dispersion reduces aggregate productivity because firms at the bottom of the distribution use most of inputs. We use individual firm data from Spanish manufacturing sectors to test the relationship between the dispersion of firms' productivity and aggregate productivity. The estimated coefficients are consistent with the predictions of the model: we find that an increase in the coefficient of variation of firms productivity of 1% increases aggregate productivity by 0.59% in sectors with an elasticity of substitution larger than one while the same increase in the coefficient of variation reduces aggregate productivity by 0.07% in sectors with an elasticity of substitution smaller than one. |
| Keywords: | Heterogeneous Productivity Shocks; Elasticity of Substitution; Volatility; Aggregate Productivity. |
| JEL: | E32 E30 E13 E20 |
| Date: | 2011–02 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:29032&r=bec |
| By: | Mario Forni; Luca Gambetti; Luca Sala |
| Abstract: | This paper uses a structural, large dimensional factor model to evaluate the role of 'news' shocks (shocks with a delayed effect on productivity) in generating the business cycle. We find that (i) existing small-scale VECM models are affected by 'non-fundamentalness' and therefore fail to recover the correct shock and impulse response functions; (ii) news shocks have a limited role in explaining the business cycle; (iii) their effects are in line with what predicted by standard neoclassical theory; (iv) the bulk of business cycle fluctuations are explained by shocks unrelated to technology. |
| Keywords: | structural factor model, news shocks, invertibility, fundamentalness. |
| JEL: | C32 E32 E62 |
| Date: | 2011–02–21 |
| URL: | http://d.repec.org/n?u=RePEc:aub:autbar:862.11&r=bec |
| By: | Saroj Bhattarai; Raphael Schoenle |
| Abstract: | In this paper, we establish three new facts about price-setting by multiproduct firms and contribute a model that can explain our findings. Our findings have important implications for real effects of nominal shocks and provide guidance for how to model pricing decisions of firms. On the empirical side, using micro-data on U.S. producer prices, we first show that firms selling more goods adjust their prices more frequently but on average by smaller amounts. Moreover, the higher the number of goods, the lower is the fraction of positive price changes and the more dispersed the distribution of price changes. Second, we document substantial synchronization of price changes within firms across products and show that synchronization plays a dominant role in explaining pricing dynamics. Third, we find that within-firm synchronization of price changes increases as the number of goods increases. On the theoretical side, we present a state-dependent pricing model where multiproduct firms face both aggregate and idiosyncratic shocks. When we allow for firm-specific menu costs and trend inflation, the model matches the empirical findings. |
| Keywords: | Price levels ; Productivity |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:fip:feddgw:73&r=bec |
| By: | Sasan Bakhtiari (School of Economics, The University of New South Wales) |
| Abstract: | A general framework for the study of outsourcing is introduced that incorporates dynamics and heterogeneity among both upstream and downstream producers to mimic an exit approach (Hirschman, 1970) to building vertical relations. The environment is one of search friction and incomplete contracts, where final-good producers require a specialized input and, upon matching with a supplier, can only contract the quantity of input. The results imply an assorted matching between producers and suppliers, so that more productive producers pair with more productive suppliers in the long run. It is shown that most efficient producers have some propensity to outsource, but only when there is a thick enough density of highly productive suppliers. Average employment in this model might increase or decrease with outsourcing, which is an observed pattern in the data. Some other diversities in plant-level behavior are also present in the results. |
| Keywords: | Outsourcing; Productivity; Heterogeneity; Search Friction; Incomplete Contracts; Exit Strategy |
| JEL: | D21 D23 L21 L24 |
| Date: | 2011–01 |
| URL: | http://d.repec.org/n?u=RePEc:swe:wpaper:2011-03&r=bec |
| By: | Gil, Ricard (IESE Business School) |
| Abstract: | This paper empirically examines the relation between product market competition and vertical integration in the Spanish local TV industry. For this reason, I use a data set of Spanish local TV stations that provides station level information on vertical integration and product market competition, as well as other station and market characteristics, for the years 1996, 1999 and 2002. During this period, changes in regulation in this industry had a strong impact on the level of market competition faced by local TV stations. I use differences in market structure across markets and years to empirically study the relation between vertical integration and competition. My results show that there exists a negative relation between vertical integration and market competition. I also find that despite the fact that private stations are less likely to integrate content production, they are more likely to do so the higher the number of competing stations in their coverage area. Private stations do so because by increasing the percentage of content produced in-house they differentiate themselves from competition and therefore soften competition and maximize profits. |
| Keywords: | market competition; local TV Industry; product; vertical integration; |
| Date: | 2011–01–11 |
| URL: | http://d.repec.org/n?u=RePEc:ebg:iesewp:d-0893&r=bec |
| By: | MOTOHASHI Kazuyuki |
| Abstract: | This paper presents the results of a comprehensive analysis of the innovative activities of the entire population of Japanese firms by using a linked dataset of Establishment and Enterprise Census and the IIP Patent Database (JPO patent application data). As of 2006, it was found that about 1.4% of about 4.5 million firms filed patents, and substantial patenting activities were found not only in the manufacturing field but also in a wide range of fields such as B2B services and financial sectors. In addition, a firmfs survival and growth are regressed with patenting and open innovation (measured by joint patent application with other firms and universities), and it is shown that innovative activities measured by patenting are positively correlated with such firm performance. It is also found that the relationship between patents and the survival rate is stronger for larger firms, while that between patents and firm growth is stronger for smaller firms. |
| Date: | 2011–02 |
| URL: | http://d.repec.org/n?u=RePEc:eti:dpaper:11007&r=bec |
| By: | Gil, Ricard (IESE Business School); Riera-Crichton, Daniel (Bates College) |
| Abstract: | In this paper, we empirically test the relation between price discrimination and product market competition in a two-sided market setting using a new data set of Spanish local TV stations that provides information on subscription and advertising prices per station for 1996, 1999 and 2002. During these years, changes in regulation in this sector had a deep impact on the degree of local market competition. We use differences in market structure across markets and across years to study the relation between competition and price discrimination in this setting. Our findings suggest that stations in more competitive markets are less likely to use price discrimination. We also find evidence that stations price discriminating in a market are also more likely to price discriminate on the other market. Finally, cable subscription fees and advertising prices are higher in more competitive markets which suggests that tougher competition may increase market segmentation through station differentiation, driving stations to charge higher uniform prices to more loyal customers. This may indicate that less price discrimination may be associated with lower consumer surplus in all markets. |
| Keywords: | Price discrimination; market competition; Local TV Industry; product; subscription; advertising; |
| Date: | 2011–01–13 |
| URL: | http://d.repec.org/n?u=RePEc:ebg:iesewp:d-0894&r=bec |
| By: | Salies, Evens |
| Abstract: | Economists have long recognized that in free markets, incentives to innovate will be diluted unless some factors grant innovators with a temporary monopoly. Patenting is the most cited factor in the economic literature. This survey concentrates on another factor that confers innovators with first-mover advantage over their competitors, namely consumer switching costs, whereby a consumer makes an investment specific to her current seller, that must be duplicated for any new seller. In this survey, we list several components of switching costs that are relevant as regards to firm innovation behaviour. The aim of this classification is twofold. First, consumer switching cost theory has matured to the point that some classification of switching costs for both understanding innovative firm behaviour and building policy-oriented models is necessary. Second, the classification included in this paper addresses the confusion that has been existing so far regarding the distinction between ‘good’ or ‘bad’ switching costs, perceived or paid switching costs, and between switching and search costs. This paper then surveys the existing literature on the effect of switching costs on product innovation by firms and the way they compete for consumers. We also raise several important regulation and competition policy questions, using examples from the real world. |
| Keywords: | Consumer switching costs; Search costs; Product innovation; Competition policy; Economic methodology |
| JEL: | L14 L96 B21 L13 L52 D83 D4 |
| Date: | 2010–09–17 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:28884&r=bec |