nep-bec New Economics Papers
on Business Economics
Issue of 2011‒06‒18
thirty papers chosen by
Christian Calmes
Universite du Quebec en Outaouais

  1. Entry deterrrence via renegotiation-proof non-exclusive contracts By Aggey Semenov; Julian Wright
  2. Geographic Concentration of Business Services Firms: A Poisson Sorting Model By Hans Koster; Jos N. van Ommeren; Piet Rietveld
  3. Are credit default swaps associated with higher corporate defaults? By Stavros Peristiani; Vanessa Savino
  4. Vertical Limit pricing By Aggey Semenov; Julian Wright
  5. Career concerns : a human capital perspective By Camargos, Braz Ministério de; Pastorino, Elena
  6. Dating U.S. Business Cycles with Macro Factors By Fossati, Sebastian
  7. A simple decomposition of the variance of output growth across countries By Christopher Reicher
  8. Regulatory Competition in European Corporate and Capital Market Law: An Empirical Analysis By Hornuf, Lars
  9. Are Self-Employed Really Happier than Employees?: An Approach Modelling Adaptation and Anticipation Effects to Self-Employment and General Job Changes By Dominik Hanglberger; Joachim Merz
  10. Shifting the risk in pricing and reimbursement schemes? A model of risk-sharing agreements for innovative drugs By Stefano Capri; Rosella Levaggi
  11. Do financial constraints threat the innovation process? Evidence from Portuguese firms By Filipe Silva; Carlos Carreira
  12. A Model of Shadow Banking By Nicola Gennaioli; Andrei Shleifer; Robert W. Vishny
  13. Optimal Unemployment Insurance for Older Workers By Hairault, Jean-Olivier; Langot, François; Ménard, Sébastien; Sopraseuth, Thepthida
  14. The Skill Balancing Act: Determinants of and Returns to Balanced Skills By Elisabeth Bublitz; Florian Noseleit
  15. Demand for OJ, by Product Form, in a Conditional Demand System for Beverages, and Sensitivity of Product Forms to Supply By Brown, Mark G.
  16. Productivity gains and spillovers from offshoring By Klaus-Bernhard Michel; François Rycx
  17. Competing Mechanism Games of Moral Hazard: Communication and Robustness By Andrea Attar; Eloisa Campioni; Gwenael Piaser; Uday Rajan
  18. The Contribution of Small and Medium-sized Businesses to Gross Domestic Product: A Canada-United States Comparison By Leung, Danny; Rispoli, Luke
  19. Separating the ex post effects of mergers: an analysis of structural changes on the Hungarian retail gasoline market By Gergely Csorba; G bor Koltay; D vid Farkas
  20. Does Importing more Inputs Raise Exports? Firm Level Evidence from France By Maria Bas; Vanessa Strauss-Kahn
  21. International harmonization of product standards and firm heterogeneity in international trade By Reyes, Jose-Daniel
  22. Product innovation when consumers have switching costs By Evens Salies
  23. Productivity and Local Workforce Composition By Maré, David. C; Fabling, Richard
  24. Where is an oil shock? By Engemann, Kristie; Owyang, Michael T.; Wall, Howard J.
  25. Exports, imports and profitability: First evidence for manufacturing enterprises By Joachim Wagner
  26. Vers une nouvelle forme de concurrence dans les marchés de l'électricité ? By Evens Salies
  27. Dynamic Multilateral Markets By Arnold Polanski; Emiliya A. Lazarova
  28. The Determinants and Performance Implications of Change in Inter-Organizational Relations. By Cuypers, Y.K.
  29. Open Innovation in a Dynamic Cournot Duopoly By I. Hasnas; L. Lambertini; A. Palestini
  30. The Effects of High Skilled Immigration in a Dual Labour Market with Union Wage Setting and Fiscal Redistribution By Moritz Bonn

  1. By: Aggey Semenov (Department of Economics, University of Ottawa, Ottawa, ON); Julian Wright (Department of Economics, National University of Singapour)
    Abstract: We establish the entry-deterring role of vertical contracts in a setting that does not rely on asymmetric information, the exclusivity of the incumbent’s contracts, limits on distribution channels, or restrictions on the ability to renegotiate contracts in case of entry. The optimal contract we describe is a three-part quantity discounting contract that involves the payment of an allowance to the downstream firm and a marginal wholesale price below the incumbent’s marginal cost for sufficiently large quantities
    Keywords: entry, vertical contracts, exclusivity, renegotiation
    JEL: D21 L42
    Date: 2011
  2. By: Hans Koster (VU University Amsterdam); Jos N. van Ommeren (VU University Amsterdam); Piet Rietveld (VU University Amsterdam)
    Abstract: This paper examines the effects of specialisation (within-sector clustering) and diversity (between-sector clustering) on business services profitability and location choice. We apply a semiparametric Poisson sorting model allowing for firm-specific effects. We find that for most firms, profitability of business services firms is substantially higher close to specialised clusters of business services firms. A standard deviation increase in business services specialisation leads to on average a 40 percent increase in the probability that a business services firm locates there, supporting theories of Marshall, Arrow and Romer. It is also profitable for most business services firms to locate near a group of firms that belong to the same sector, not necessarily business services firms, so diversity is negatively related to location decisions. Almost all firms either benefit from within-sector clustering or between-sector clustering. Within-sector clusters are particularly profitable for large mature firms, whereas between-sector clusters are relatively more profitable for smaller innovative firms.
    Keywords: Sorting; Agglomeration Economies; Specialisation; Diversity; Heterogeneity; Semiparametric Estimation
    JEL: R12 R14 R39
    Date: 2011–06–06
  3. By: Stavros Peristiani; Vanessa Savino
    Abstract: Are companies with traded credit default swap (CDS) positions on their debt more likely to default? Using a proportional hazard model of bankruptcy and Merton’s contingent claims approach, we estimate the probability of default for U.S. nonfinancial firms. Our analysis does not generally find a persistent link between CDS and default over the entire period 2001-08, but does reveal a higher probability of default for firms with CDS over the last few years of that period. Further, we find that firms trading in the CDS market exhibited a higher Moody’s KMV expected default frequency during 2004-08. These findings are consistent with those of Henry Hu and Bernard Black, who argue that agency conflicts between hedged creditors and debtors would increase the likelihood of corporate default. In addition, our paper highlights other explanations for the higher defaults of CDS firms. Consistent with fire-sale spiral theories, we find a positive link between institutional ownership exposure and corporate distress, with CDS firms facing stronger selling pressures during the recent financial turmoil.
    Date: 2011
  4. By: Aggey Semenov (Department of Economics, University of Ottawa, Ottawa, ON); Julian Wright (Department of Economics, National University of Singapour)
    Abstract: A new theory of limit pricing is provided which works through the vertical contract signed between an incumbent manufacturer and a retailer. We establish conditions under which the incumbent can obtain full monopoly profits, even if the potential entrant is more efficient. A key feature of the optimal vertical contract we describe is quantity discounting, typically involving three-part incremental-units or all-units tariffs, with a marginal wholesale price that is below the incumbent’s marginal cost for sufficiently large quantities.
    Keywords: limit pricing, vertical contracts, multi-part tariffs.
    JEL: L12 L42
    Date: 2011
  5. By: Camargos, Braz Ministério de; Pastorino, Elena
    Abstract: We introduce human capital accumulation, in the form of learning{by{doing, in alife cycle model of career concerns and analyze how human capital acquisition a ectsimplicit incentives for performance. We show that standard results from the careerconcerns literature can be reversed in the presence of human capital accumulation.Namely, implicit incentives need not decrease over time and may decrease with thedegree of uncertainty about an individual's talent. Furthermore, increasing the pre-cision of output measurement can weaken rather than strengthen implicit incentives.Overall, our results contribute to shed new light on the ability of markets to disciplinemoral hazard in the absence of explicit contracts linking pay to performance.
    Date: 2011–06–02
  6. By: Fossati, Sebastian (University of Alberta, Department of Economics)
    Abstract: A probit model is used to show that latent common factors estimated by principal components from a large number of macroeconomic time series have important predictive power for NBER recession dates. A pseudo out-of-sample forecasting exercise shows that predicted recession probabilities consistently rise during subsequently declared NBER recession dates. The latent variable in the factor-augmented probit model is interpreted as an index of real business conditions which can be used to assess the strength of an expansion or the depth of a recession.
    Keywords: business cycle; forecasting; factors; probit model; Bayesian methods
    JEL: C01 C22 C25 E32 E37
    Date: 2011–05–01
  7. By: Christopher Reicher
    Abstract: This paper outlines a simple regression-based method to decompose the variance of an aggregate time series into the variance of its components, which is then applied to measure the relative contributions of productivity, hours per worker, and employment to cyclical output growth across a panel of countries. Measured productivity contributes more to the cycle in Europe and Japan than in the United States. Employment contributes the largest proportion of the cycle in Europe and the United States (but not Japan), which is inconsistent with the idea that higher levels of employment protection in Europe dampen cyclical employment fluctuations
    Keywords: Intensive margin, extensive margin, productivity, business cycles, variance decomposition
    JEL: C32 E24 E32
    Date: 2011–05
  8. By: Hornuf, Lars
    Date: 2011–06–01
  9. By: Dominik Hanglberger; Joachim Merz
    Abstract: Empirical analyses using cross-sectional and panel data found significantly higher levels of job satisfaction for self-employed than for employees. We argue that those estimates in previous studies might be biased by neglecting anticipation and adaptation effects. For testing we specify several models accounting for anticipation and adaptation to self-employment and job changes. Based on data from the German Socio-Economic Panel Survey (SOEP) we find that becoming self-employed is associated with large negative anticipation effects. In contrast to recent literature we find no specific long term effect of self-employment on job satisfaction. Accounting for anticipation and adaptation to job changes in general, which includes changes between employee jobs, reduces the effect of self-employment on job satisfaction by 70%. When controlling for anticipation and adaptation to job changes, we find no further anticipation effect of self-employment and a weak positive but not significant effect of self-employment on job satisfaction for three years. Thus adaptation wipes out higher satisfaction within the first three years being self-employed. According to our results previous studies at least overestimated possible positive effects of self-employment on job satisfaction.
    Keywords: job satisfaction, self-employment, hedonic treadmill model, adaptation, anticipation, fixed-effects panel estimations, German Socio-Economic Panel (SOEP)
    JEL: J23 J28 J8
    Date: 2011
  10. By: Stefano Capri; Rosella Levaggi (Department of Economics, University of Brescia,Italy)
    Abstract: Risk sharing is becoming an increasingly popular instrument to regulate the price of new drugs. In the recent past, forms of risk-sharing agreements between the public regulator and the industry have been proposed and implemented, but their effects on price and profits are still controversial. in this paper we propose a model aimed at studying the effects on price and expected profit of several risk-sharing agreements between a regulator and the industry, based on the ex post effectiveness of the drug (i.e. the efficacy resulted in the real medical practice). We assume that the probability of being listed (approved and reimbursed) depends on the relative performance of the new drug in terms of effectiveness and budget required. The price is set according to the declared efficacy of the new drug, but if ex post the effectiveness falls short of what declared, several forms of penalties may be used by the regulator. We show that the number of patients that are treated is not necessarily affected by risk-sharing/risk-shifting mechanisms; the price for which the drug is listed may be higher than without risk-sharing, but the expected profit of the industry is: a) always lower for risk-shifting schemes; b) for true risk-sharing it depends on the bargaining power of the company. This result is however valid only if the listing process is not affected by risk sharing. If this is not the case, risk sharing mechanisms may increase the expected profit of the industry.
    Keywords: : Drug pricing, Risk-sharing, Efficacy, Effectiveness
    JEL: I11 I18 D45
    Date: 2011–05
  11. By: Filipe Silva (Faculdade de Economia/GEMF, Universidade de Coimbra); Carlos Carreira (Faculdade de Economia/GEMF, Universidade de Coimbra)
    Abstract: This paper investigates the extent to which R&D investment and innovation are financially constrained. For that purpose, we resort to the estimation of a selection model of R&D investment, a simultaneous equations probit model of innovation and constraints and cash to cash-flow sensitivities upon an unique and newly assembled dataset that comprises information on firms' characteristics, balance sheet information and data on firms' innovation activity. Our findings suggest that firms that do not invest in R&D and those that do not receive public funding are financially constrained. Finally, controlling for endogeneity, financial constraints severely reduce the amounts invested in R&D and seriously hamper innovation.
    Keywords: Innovation; R&D investment; Financial constraints; Firm-level studies; Portugal.
    JEL: O30 D92 G32 L00 L2
    Date: 2011–05
  12. By: Nicola Gennaioli; Andrei Shleifer; Robert W. Vishny
    Abstract: We present a model of shadow banking in which financial intermediaries originate and trade loans, assemble these loans into diversified portfolios, and then finance these portfolios externally with riskless debt. In this model: i) outside investor wealth drives the demand for riskless debt and indirectly for securitization, ii) intermediary assets and leverage move together as in Adrian and Shin (2010), and iii) intermediaries increase their exposure to systematic risk as they reduce their idiosyncratic risk through diversification, as in Acharya, Schnabl, and Suarez (2010). Under rational expectations, the shadow banking system is stable and improves welfare. When investors and intermediaries neglect tail risks, however, the expansion of risky lending and the concentration of risks in the intermediaries create financial fragility and fluctuations in liquidity over time.
    JEL: E44 G21
    Date: 2011–06
  13. By: Hairault, Jean-Olivier; Langot, François; Ménard, Sébastien; Sopraseuth, Thepthida
    Abstract: This paper shows that optimal unemployment insurance contracts are age-dependent. Older workers have only a few years left on the labor market prior to retirement. This short horizon implies a more decreasing replacement ratio. However, there is a sufficiently short distance to retirement for which flat unemployment benefits can be the optimal contract. It is the result of the inability to reconcile both incentives and insurance for the soon-to-be-retired unemployed workers. We show that the unemployment benefit agency could take advantage of the retirement period to tax pensions in order to optimize the trade-off between insurance and incentives at the end of working life.
    Keywords: Unemployment insurance; Retirement; Recursive contracts; Moral Hazard
    JEL: C61 J64 J65
    Date: 2011–06
  14. By: Elisabeth Bublitz (School of Economics and Business Administration, Friedrich-Schiller-University Jena); Florian Noseleit (School of Economics and Business Administration, Friedrich-Schiller-University Jena)
    Abstract: Entrepreneurs are found to have balanced skill sets and most have worked in small firms before starting their own business. In light of this, we compare the skill sets of employees working in businesses of different size to the skill sets of entrepreneurs using a rich data set on the applied skills of individuals. This data set allows us to construct an indicator that measures skill balance in the uantity (skill scope) and quality (skill level) dimension. Our results show that employees working in large businesses tend to have a lower skill balance than those working in small businesses; yet, the skill balance of entrepreneurs remains the largest. The impact of human capital formation on skill balance also varies among employees of different business sizes and entrepreneurs. Finally, the estimated returns to balanced skills are largest for entrepreneurs whereas, for employees, these returns decrease as business size increases. However, we find no relationship between balancing skills at lower skill levels and income, indicating that both dimensions - skill level and skill scope - are relevant. We end by discussing the policy implications that can be drawn from our results in regard to skill balance.
    Keywords: entrepreneurship, returns to human capital, balanced skill set, jack-of-all-trades
    JEL: J24 J31 L26 M13
    Date: 2011–06–07
  15. By: Brown, Mark G.
    Abstract: Demands for orange juice by product form are estimated, and own- and cross-price elasticity estimates are used to examine how supply changes impact retail prices and quantity sales, by form.
    Keywords: conditional demand system, beverage, supply, Agribusiness,
    Date: 2010–01–31
  16. By: Klaus-Bernhard Michel; François Rycx
    Abstract: Offshoring is generally believed to be productivity-enhancing and this belief is underpinned by economic theory. This article contributes to the growing literature that tests empirically whether offshoring does indeed help to improve productivity. Estimating the impact of materials and business services offshoring on productivity growth with industry-level data for Belgium over the period 1995-2004, we examine this issue separately for manufacturing and market services. The results show that there is no productivity effect of materials offshoring, while business services offshoring leads to productivity gains in manufacturing. In addition, this is the first article to investigate the possibility of spillovers from offshoring. Productivity gains from offshoring in one industry may feed through to other industries that purchase its output for intermediate use if, due to offshoring, the user value exceeds the price of the output. There is only scarce evidence of positive spillovers from materials offshoring in manufacturing in the data, which suggests that most firms effectively manage to internalise all efficiency gains from offshoring.
    Keywords: offshoring; productivity; spillovers; manufacturing and services; gmm
    JEL: J00 O10
    Date: 2011–06
  17. By: Andrea Attar (Faculty of Economics, University of Rome "Tor Vergata"); Eloisa Campioni (Faculty of Economics, University of Rome "Tor Vergata"); Gwenael Piaser (IPAG Business School, Paris;); Uday Rajan (Ross School of Business, University of Michigan;)
    Abstract: We consider multiple-principal multiple-agent models of moral hazard: principals compete through mechanisms in the presence of agents who take unobservable actions. In this context, we provide a rationale for restricting principals to make use of simple mechanisms, which correspond to direct mechanisms in the standard framework of Myerson (1982). Our results complement those of Han (2007) who analyzes a complete information setting where agents’ actions are fully contractible.
    Keywords: Moral hazard, multiple-principal multiple-agent, simple mechanisms
    JEL: D82 D86
    Date: 2011–06–10
  18. By: Leung, Danny; Rispoli, Luke
    Abstract: Adopting the methodology used to produce estimates of gross domestic product (GDP) by size for the United States, this paper estimates GDP for small and medium-sized businesses versus large businesses for the Canadian non-agricultural business sector in 2005. In the entire non-agricultural business sector, small and medium-sized businesses with less than 500 employees account for 54.2% of GDP in Canada and for 50.7% of GDP in the United States. When two industries with heavy government ownership in Canada (health and education) are excluded, the results are 52.9% and 50.3%, respectively.
    Keywords: Business performance and ownership, Economic accounts, Gross domestic product
    Date: 2011–06–13
  19. By: Gergely Csorba (Institute of Economics - Hungarian Academy of Sciences); G bor Koltay (; D vid Farkas (
    Abstract: This paper develops an empirical method to identify the price effects of simultaneous mergers and to separate the different effects on the prices of the buyer and seller firms and on the prices of their respective competitors. Our difference-in-differences approach exploits variation in the presence of merging firms across local markets to form different treatment-control group pairs in order to estimate separate effects for each type of firms affected by the mergers. We apply this method to provide an ex post evaluation of two almost simultaneous mergers in the Hungarian retail gasoline market. We show that both mergers resulted in a significantly positive but economically negligible price effect, but while the first merger affected only the prices of buyer firm's stations, the second had an effect on the prices of seller's stations and of its competitors. We also demonstrate that the results are not sensitive to the assumed dates when the mergers effectively change the firms' pricing policy.
    Keywords: ex post evaluation, mergers, difference-in-differences estimation, treatment effects, retail gasoline
    JEL: D43 L13 L49
    Date: 2011–05
  20. By: Maria Bas; Vanessa Strauss-Kahn
    Abstract: Why would an increase in imported inputs rise exports? We argue that importing more varieties of intermediate inputs increases firm’s productivity and thereby makes the firm able to overcome the export fixed costs. Whereas the literature evidences the positive effect of an increase in imported inputs on firms’ productivity and shows that only the most productive firms export, the link between imported intermediate inputs and export scope has not been made. This paper bridges the gap by studying the impact of imported inputs on the margins of exports. We use a firms’ level database of imports at the product (HS6) level provided by French Customs for the 1995-2005 period. Access to new varieties of inputs may increase productivity, and thereby exports, through better complementarity of inputs and transfer of technology. We test for these different mechanisms by distinguishing the origin of imports (developing vs. developed countries). We find a significant impact of higher diversification and increased number of imported inputs varieties on firm’s TFP and export scope. Both the complementarity and transfer of technology mechanisms seem to matter.
    Keywords: Firm heterogeneity; imported inputs; TFP; export scope; varieties; firm-level data
    JEL: F10 F12
    Date: 2011–06
  21. By: Reyes, Jose-Daniel
    Abstract: As free trade areas have proliferated and statutory tariffs have been dramatically reduced in recent decades, non-tariff barriers (NTBs) to international trade have risen in importance. Destination-specific product standards are one of the major types of NTBs as they impose additional costs on exporters and increase the time required to bring a product to market. This paper examines the response of U.S. manufacturing firms to a reduction of this NTB by looking at the harmonization of European product standards to international norms in the electronics sector. Using a highly detailed dataset that links U.S. international trade transactions to U.S. firms and a new industry-level database of EU product standards, the author finds that harmonization increases U.S. exports to the EU and that this increase is due to more U.S. firms entering the EU market –the extensive margin of trade. New entrants to the EU region are drawn mainly from the most productive set of firms already exporting to developing markets before harmonization -the extensive margin of trade composition. These firms are characterized by being smaller and less productive than the firms that were already exporting to the EU before harmonization. Furthermore, harmonization decreases export sales at existing exporters -the intensive margin of trade. These findings are consistent with a model featuring the role of product standards heterogeneity across market destinations and productivity heterogeneity across firms. These results suggest that working toward a harmonization of product rules across markets could be a supportive policy to encourage small and medium size firms'ability to enter new export markets.
    Keywords: Markets and Market Access,E-Business,Information Security&Privacy,Economic Theory&Research,Labor Policies
    Date: 2011–06–01
  22. By: Evens Salies (Observatoire Français des Conjonctures Économiques)
    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 firstmover advantage over their competitors, namely consumer switching costs, whereby a consumer makes an investment specific to her current seller, which 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: Business Economics, Cognitive & Behavioural Economics, Competition policy, Consumer switching cost, Game Theory, History of Economic Thought, Industrial Competition, Innovation, Marketing, Microeconomics, Regulation, Search costs
    JEL: B21 D4 D83 L13 L14 L52 L96
    Date: 2011–03
  23. By: Maré, David. C (Motu Economic and Public Policy Research); Fabling, Richard (Reserve Bank of New Zealand)
    Abstract: This chapter examines the link between firm productivity and the population composition of the areas in which firms operate. We combine annual firm-level microdata on production, covering a large proportion of the New Zealand economy, with area-level workforce characteristics obtained from population censuses. Overall, the results support the existence of agglomeration effects that operate through labour markets. We find evidence of productive spillovers from operating in areas with high-skilled workers, and with high population density. A high-skilled local workforce benefits firms in high-skilled and high-research and development industries, and small firms. The benefits of local population density are strongest for firms in dense areas, and for small and new firms. Firms providing local services are more productive in areas with high shares of migrants and new entrants, consistent with local demand factors.
    Keywords: productivity, agglomeration, workforce composition
    JEL: R1 R3 D24
    Date: 2011–05
  24. By: Engemann, Kristie; Owyang, Michael T.; Wall, Howard J.
    Abstract: Much of the literature examining the effects of oil shocks asks the question “What is an oil shock?” and has concluded that oil-price increases are asymmetric in their effects on the US economy. That is, sharp increases in oil prices affect economic activity adversely, but sharp decreases in oil prices have no effect. We reconsider the directional symmetry of oil-price shocks by addressing the question “Where is an oil shock?”, the answer to which reveals a great deal of spatial/directional asymmetry across states. Although most states have typical responses to oil-price shocks—they are affected by positive shocks only—the rest experience either negative shocks only (5 states), both positive and negative shocks (5 states), or neither shock (5 states).
    Keywords: State-Level Oil Shocks
    JEL: C31 R12 E37
    Date: 2011–06–01
  25. By: Joachim Wagner (Institute of Economics, Leuphana University of Lüneburg, Germany)
    Abstract: This paper documents for the first time the relationship between profitability and three types of international trade activities – exports, imports and two-way trade. It uses unique new representative data for manufacturing enterprises from Germany, one of the leading actors on the world market for goods, that merge information from surveys performed by the Statistical Offices and administrative data collected by the Tax Authorities. Descriptive statistics and regression analysis (with and without controlling for unobserved firm heterogeneity and the role of outliers) point to the absence of any statistically significant and economically large effects of trade activities on profits. This demonstrates that any productivity advantages of trading firms are eaten up by extra costs related to selling and buying on foreign markets.
    Keywords: exports, imports, profitability
    JEL: F14
    Date: 2011–06
  26. By: Evens Salies (Observatoire Français des Conjonctures Économiques)
    Abstract: La loi de nouvelle organisation des marchés de l'électricité s'inscrit dans le prolongement du processus d'ouverture à la concurrence du secteur européen de l'énergie électrique engagé par les États membres de l'Union européenne en 1996. Cette nouvelle loi, qui modifie et complète celle de février 2000, est notamment une réponse du Gouvernement à la mise en cause par les autorités européennes de la compatibilité des tarifs réglementés français avec le droit de l'Union européenne et, plus généralement, de la configuration du secteur français qui bloquerait le développement de la concurrence. C'est en réalité EDF qui est visée avec cette loi, car, du fait de sa situation historique, l'entreprise produit plus de 85 % de l'électricité et sert la quasi-totalité des clients de la France métropolitaine. Sur le marché des petits professionnels ouvert le 1er juillet 2004 (seuls 7% d'entre eux avaient quitté leur entreprise historique d'électricité trois ans plus tard), puis sur le marché résidentiel (les particuliers) ouvert le 1er juillet 2007 (environ 5% étaient en 2010 servis par des fournisseurs alternatifs), peu de clients semblent vouloir passer à la concurrence, ce qui était prévisible.
    Keywords: Business Economics, Cognitive & Behavioural Economics, Industrial Competition, European Economics, Energy Economics, Innovation, Marketing, Regulation
    JEL: D2 D4 D83 H4 L4 L5 L94
    Date: 2011–03
  27. By: Arnold Polanski (School of Economics, University of East Anglia); Emiliya A. Lazarova (University of Birmingham)
    Abstract: We study dynamic multilateral markets, in which players’ payoffs result from coalitional bargaining. In this setting, we establish payoff uniqueness of the stationary equilibria when players exhibit some degree of impatience. We focus on market games with different player types, and derive under mild conditions an explicit formula for each type’s equilibrium payoff as market frictions vanish. The limit payoff of a type depends in an intuitive way on the supply and the demand for this type in the market, adjusted by the type-specific bargaining power. Our framework may be viewed as an alternative to the Walrasian price-setting mechanism. When we apply this methodology to the analysis of labor markets, we can determine endogenously the equilibrium firm size and remuneration scheme. We find that each worker type in a stationary market equilibrium is rewarded her marginal product, i.e. we obtain a strategic underpinning of the neoclassical wage. Interestingly, we can also replicate some standardized facts from the search-theoretical literature such as positive equilibrium unemployment.
    Keywords: Multilateral Bargaining, Dynamic Markets, Labor Markets
    JEL: C71 C72 C78 J30 L20
    Date: 2011–06
  28. By: Cuypers, Y.K. (Universiteit van Tilburg)
    Date: 2011
  29. By: I. Hasnas; L. Lambertini; A. Palestini
    Abstract: We analyze an Open Innovation process in a Cournot duopoly using a differential game approach where knowledge spillovers are endogenously determined via the R&D process. The game produces multiple steady states, allowing for an asymmetric solution where a firm may trade off the R&D investment against information absorption from the rival.
    JEL: C73 L13 O31
    Date: 2011–05
  30. By: Moritz Bonn
    Abstract: We study the effects of high skilled immigration on employment and net income in the receiving economy where the market for low skilled labour is distorted by union wage setting and a redistributive unemployment benefit scheme. Based on the empirical fact that high and low skilled workers are close albeit imperfect substitutes, we show that high skilled immigration can either be beneficial or harmful, both in terms of employment and net income. More precisely, we conclude that a Pareto improvement can be achieved if the unemployment benefit level remains unaffected by high skilled immigration whereas an overall loss in net income cannot be ruled out if we suggest unemployment benefits to be funded by an exogenous egalitarian tax rate.
    Keywords: Immigration, Imperfect Labour Markets, Fiscal Redistribution
    JEL: F22 H53 J51 J61
    Date: 2011

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