nep-com New Economics Papers
on Industrial Competition
Issue of 2007‒07‒20
five papers chosen by
Russell Pittman
US Department of Justice

  1. What Do Nonprofits Maximize? Nonprofit Hospital Service Provision and Market Ownership Mix By Jill R. Horwitz; Austin Nichols
  2. How Does Income Inequality Affect Market Outcomes in Vertically Differentiated Markets? By Yurko, Anna
  3. The Impact of Mergers on Regional Systems - The Case of North Carolina By Anna Glaser
  4. The design of bank loan syndicates in Emerging Markets Economies By Godlewski, Christophe
  5. La "questione dimensionale" come problema organizzativo By A. Arrighetti; F. Traù

  1. By: Jill R. Horwitz; Austin Nichols
    Abstract: Conflicting theories of the nonprofit firm have existed for several decades yet empirical research has not resolved these debates, partly because the theories are not easily testable but also because empirical research generally considers organizations in isolation rather than in markets. Here we examine three types of hospitals -- nonprofit, for-profit, and government -- and their spillover effects. We look at the effect of for-profit ownership share within markets in two ways, on the provision of medical services and on operating margins at the three types of hospitals. We find that nonprofit hospitals' medical service provision systematically varies by market mix. We find no significant effect of for-profit market share on the operating margins of nonprofit hospitals. These results fit best with theories in which hospitals maximize their own output.
    JEL: H1 I1 L1 L13 L22 L3
    Date: 2007–07
  2. By: Yurko, Anna
    Abstract: The distribution of consumer incomes is a key factor in determining the structure of a vertically differentiated industry when consumer's willingness to pay depends on his income. This paper computes the Shaked and Sutton (1982) model for a general specification of consumers' income distribution to investigate the effect of inequality on firms' entry, product quality, and pricing decisions. The main findings are that greater inequality in consumer incomes leads to the entry of more firms and results in more intense quality competition among the entrants. This is due to the elasticity of consumer demand for quality being higher in more inegalitarian economies. More intense quality competition among firms causes them to locate their products in higher ranges of the quality spectrum, closer to each other, decreasing the degree of product differentiation. Competition between more similar products tends to reduce their prices. However, when income inequality is very high, the top quality producer chooses to serve only the rich segment of the market, and the low price elasticity of demand of these consumers allows him to charge a higher price. The conclusion is that income inequality has important implications for the degree of product differentiation, price level, industry concentration, and consumer welfare.
    Keywords: vertical differentiation; income inequality; computational game theory
    JEL: C61 L13 L11
    Date: 2006–05
  3. By: Anna Glaser
    Date: 2007–07–13
  4. By: Godlewski, Christophe
    Abstract: We empirically explore the influence of loan characteristics, banking and financial structure, and regulatory and institutional factors on the design of 10,930 bank loan syndicates in emerging market economies from 1990 to 2006. Our results show that the structure of syndicates is adapted to enhance monitoring of the borrower and to increase the efficiency of re-contracting process in case of borrower's distress. Main syndication motives, such as loans portfolio diversification, regulatory pressure and management costs reduction, influence syndicate design in emerging markets economies.
    Keywords: Bank; Loan; Syndication; Syndicate Structure; Emerging Markets; Poisson Regressions.
    JEL: G21 C25
    Date: 2007–07
  5. By: A. Arrighetti; F. Traù
    Keywords: Firm Size Structure, Firm Growth and Organisation, Medium-Sized Firms, Division of Labour, Markets vs. Hierarchies, Organisational Change
    JEL: D21 D23 L11 L22 L23
    Date: 2007

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