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on Industrial Competition |
| By: | Ken-Ichi Shimomura (Research Institute for Economics and Business Administration, Kobe University, Nada-ku, Kobe, Japan); Jacques-François Thisse (CORE-Université catholique de Louvain (Belgium), CREA-Université du Luxembourg and CEPR) |
| Abstract: | Many industries are made of a few big firms, which are able to manipulate the market outcome, and of a host of small businesses, each of which has a negligible impact on the market. We provide a general equilibrium framework that encapsulates both market structures. Due to the higher toughness of competition, the entry of big firms leads them to sell more through a market expansion effect generated by the shrinking of the monopolistically competitive fringe. Furthermore, social welfare increases with the number of big firms because the pro-competitive effect associated with entry dominates the resulting decrease in product diversity. |
| Keywords: | oligopoly, monopolistic competition, product differentiation, welfare |
| JEL: | L13 L40 |
| Date: | 2012–02 |
| URL: | http://d.repec.org/n?u=RePEc:kob:dpaper:dp2012-03&r=com |
| By: | Gu, Yiquan; Wenzel, Tobias |
| Abstract: | This paper introduces price-dependent individual demand into the circular city model of product differentiation. We show that for any finite number of firms, a unique symmetric price equilibrium exists provided that demand functions are not too convex. As in the case of unit demand, the number of firms under free entry decreases in the fixed cost of entry while increases in the transportation cost of consumers. However, this number is no longer always in excess of the socially optimal level. Insufficient entry occurs when the fixed and transportation costs are high. -- |
| Keywords: | spatial models,price-dependent demand,horizontal product differentiation,demand elasticity,excess entry theorem |
| JEL: | L11 L13 R1 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:dicedp:43&r=com |
| By: | Gallini, Nancy |
| Abstract: | The paper examines technology agreements and the standards process from which they emerge when members supply inputs to the alliance while simultaneously competing with it. Under this overlapping ownership structure, pool members are horizontally related. I show that strategic complementarity between the downstream products owned by a member and those arising from the collaboration is sufficient for a pool to be pro-competitive. Although patent pools are more efficient than uncoordinated pricing, consumers are better off if an outside firm rather than a pool member owns the non-pool competing product. Antitrust rules facilitating efficient IP agreements under overlapping ownership and their implications for the direction of technological change are derived. |
| Keywords: | Patent Pools, Intellectual Property, Antitrust Policy |
| Date: | 2012–02–07 |
| URL: | http://d.repec.org/n?u=RePEc:ubc:bricol:nancy_gallini-2012-5&r=com |
| By: | Éric Avenel, University of Rennes 1 - CREM-CNRS, France; Stéphane Caprice, Toulouse School of Economics (GREMAQ, INRA) |
| Abstract: | We analyse the impact of an entry threat at the downstream level on the ability of a pair of vertically integrated incumbents to collude. We present an original model of horizontal product differentiation on the final market and characterize the structures of this market for which an entry threat facilitates collusion between incumbents. While the entry threat leaves collusion and deviation profits unchanged, it lowers profits in punishment periods. Consequently, an entry threat discourages deviations and facilitates collusion, thus benefiting incumbents. |
| Keywords: | collusion, foreclosure, entry, vertical integration |
| JEL: | D43 L13 L23 L40 |
| Date: | 2012–01 |
| URL: | http://d.repec.org/n?u=RePEc:tut:cremwp:201208&r=com |
| By: | Karle, Heiko; Klein, Tobias J.; Stahl, Konrad O. |
| 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 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:11071&r=com |
| By: | Berg, Anita Helena Johanna van den (Maastricht University) |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ner:maastr:urn:nbn:nl:ui:27-28090&r=com |
| By: | Bouckaert, J.M.C.; Degryse, H.A.; Dijk, T. van (Tilburg University, Center for Economic Research) |
| Abstract: | Abstract: We study the competitive and welfare consequences when only one firm must commit to uniform pricing while the competitor’s pricing policy is left unconstrained. The asymmetric no-discrimination constraint prohibits both behaviour-based price discrimination within the competitive segment and third-degree price discrimination across the monopolistic and competitive segments. We find that an asymmetric no-discrimination constraint only leads to higher profits for the unconstrained firm if the monopolistic segment is large enough. Therefore, a regulatory policy objective of encouraging entry is not served by an asymmetric no-discrimination constraint if the monopolistic segment is small. Only when the monopolistic segment is small and rivalry exists in the competitive segment does the asymmetric no-discrimination constraint enhance welfare. |
| Keywords: | Dominant firms;price discrimination;competition policy;regulation. |
| JEL: | D11 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:kubcen:2012009&r=com |
| By: | Slivko, Olga; Theilen, Bernd |
| Abstract: | This article provides a theoretical and empirical analysis of a firm's optimal R&D strategy choice. In this paper a firm's R&D strategy is assumed to be endogenous and allowed to depend on both internal firms. characteristics and external factors. Firms choose between two strategies, either they engage in R&D or abstain from own R&D and imitate the outcomes of innovators. In the theoretical model this yields three types of equilibria in which either all firms innovate, some firms innovate and others imitate, or no firm innovates. Firms'equilibrium strategies crucially depend on external factors. We find that the efficiency of intellectual property rights protection positively affects firms'incentives to engage in R&D, while competitive pressure has a negative effect. In addition, smaller firms are found to be more likely to become imitators when the product is homogeneous and the level of spillovers is high. These results are supported by empirical evidence for German .rms from manufacturing and services sectors. Regarding social welfare our results indicate that strengthening intellectual property protection can have an ambiguous effect. In markets characterized by a high rate of innovation a reduction of intellectual property rights protection can discourage innovative performance substantially. However, a reduction of patent protection can also increase social welfare because it may induce imitation. This indicates that policy issues such as the optimal length and breadth of patent protection cannot be resolved without taking into account specific market and firm characteristics. Journal of Economic Literature Classification Numbers: C35, D43, L13, L22, O31. Keywords: Innovation; imitation; spillovers; product differentiation; market competition; intellectual property rights protection. |
| Keywords: | Empreses -- Innovacions tecnològiques, Diferenciació de productes, Propietat intel·lectual, 33 - Economia, 65 - Gestió i organització. Administració i direcció d'empreses. Publicitat. Relacions públiques. Mitjans de comunicació de masses, |
| Date: | 2011–09 |
| URL: | http://d.repec.org/n?u=RePEc:urv:wpaper:2072/179618&r=com |
| By: | Varela-Irimia, Xosé-Luís |
| Abstract: | Solving multi-stage oligopoly models by backward induction can easily become a com- plex task when rms are multi-product and demands are derived from a nested logit frame- work. This paper shows that under the assumption that within-segment rm shares are equal across segments, the analytical expression for equilibrium pro ts can be substantially simpli ed. The size of the error arising when this condition does not hold perfectly is also computed. Through numerical examples, it is shown that the error is rather small in general. Therefore, using this assumption allows to gain analytical tractability in a class of models that has been used to approach relevant policy questions, such as for example rm entry in an industry or the relation between competition and location. The simplifying approach proposed in this paper is aimed at helping improving these type of models for reaching more accurate recommendations. |
| Keywords: | Oligopolis, 334 - Formes d'organització i cooperació en l'economia, |
| Date: | 2011–10–13 |
| URL: | http://d.repec.org/n?u=RePEc:urv:wpaper:2072/179616&r=com |
| By: | Englmaier, Florian; Gratz, Linda; Reisinger, Markus |
| Abstract: | We analyze the profitability of third degree price discrimination under consideration of consumers' fairness concerns within an experiment and explain the results within a theoretical framework. We find that with an increase in the price differential negative reciprocal reactions by disadvantaged consumers become stronger compared to positive reciprocal reactions by advantaged consumers. Consequently, the profit maximizing price differential lies below the one predicted to be optimal by standard theory. Further, profitability increases when consumers who are regarded as poorer are charged lower prices compared to when the wealth of the different consumer groups is unknown. |
| Keywords: | price discrimination; reciprocal fairness; inequity aversion; experimental economics |
| JEL: | D11 D12 E3 |
| Date: | 2012–02 |
| URL: | http://d.repec.org/n?u=RePEc:lmu:muenec:12735&r=com |
| By: | Francesco DI COMITE (UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES) and European Commission ,DGECFIN); Jacques-François THISSE (UNIVERSITE CATHOLIQUE DE LOUVAIN, Center for Operations Research and Econometrics (CORE)); Hylke VANDENBUSSCHE (UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES) and Center for Operations Research and Econometrics (CORE), National Bank of Belgium and KULeuven,Licos) |
| Abstract: | The pattern of trade observed from firm-product-country data calls for a new generation of models. To address the unexplained variation in the data, we propose a new model of monopolistic competition where varieties enter preferences non-symmetrically, capturing both horizontal and vertical differentiation in an unprecedented way. Together with a variable elasticity of substitution, competition effects, varying markups and prices across countries, this results in a tractable model whose predictions differ from existing ones. Using the population of Belgian exporters, our model succeeds in explaining the hitherto unexplained variation. The implications call for a re-thinking of earlier results and measurement practices. |
| Keywords: | Heterogeneous firms, Horizontal differentiation, Vertical differentiation, Monopolistic competition, Non-symmetric varieties |
| JEL: | D43 F12 F14 L16 |
| Date: | 2011–12–06 |
| URL: | http://d.repec.org/n?u=RePEc:ctl:louvir:2011046&r=com |
| By: | Gratz, Linda; Reisinger, Markus |
| Abstract: | Antitrust scholars have argued that exclusive contracts have anticompetitive, or at best neutral effects, if no efficiencies are generated. In contrast, this paper shows that exclusive contracts can have procompetitive effects, provided buyers are imperfect downstream competitors and contract breach is feasible. In that case an efficient entrant is not necessarily foreclosed through exclusive contracting but induces buyers to breach. Because breaching buyers have to pay expectation damages to the incumbent, the downstream profits they obtain when breaching must be large enough. Therefore, the entrant needs to set a lower wholesale price than absent exclusive contracting, leading to lower final consumer prices and higher welfare. |
| Keywords: | Exclusive Contracting; Naked Exclusion; Contract Breach; Antitrust Policy |
| JEL: | D43 K21 L12 L42 |
| Date: | 2012–02 |
| URL: | http://d.repec.org/n?u=RePEc:lmu:muenec:12733&r=com |
| By: | Hüschelrath, Kai; Veith, Tobias |
| Abstract: | Cartel detection is usually viewed as a key task of either competition authorities or compliance officials in firms with an elevated risk of cartelization. We argue that customers of hard core cartels can have both incentives and possibilities to detect such agreements on their own initiative through the use of market-specific data sets. We apply a unique data set of about 340,000 market transactions from 36 smaller and larger customers of German cement producers and show that a price screen would have allowed particularly larger customers to detect the upstream cement cartel before the competition authority. The results not only suggest that monitoring procurement markets through screening tools has the potential of substantial cost reductions - thereby improving the competitive position of the respective user firms - but also allow the conclusion that competition authorities should view customers of potentially cartelized industries as important allies in their endeavour to fight hard core cartels. -- |
| Keywords: | business economics,procurement,antitrust policy,cartels,detection,screening |
| JEL: | D24 L41 L61 M11 M21 K21 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:11066&r=com |
| By: | Gratz, Linda |
| Abstract: | In this paper, we ask whether courts should continue to rule settlements in the context of pharmaceutical claims per se legal, when these settlements comprise payments from originator to generic companies, potentially delaying generic entry compared to the underlying litigation. Within a theoretical framework we compare consumer welfare under the rule of per se legality with that under alternative standards. We find that the rule of per se legality induces maximal collusion among settling companies. In comparison, the rule of per se illegality entirely prevents collusion and the rule of reason induces limited collusion when antitrust enforcement is subject to error. Contrary to intuition, limited collusion can be welfare enhancing as it increases companies' expected settlement profits and thus fosters generic entry. Generic companies obtain additional incentives to challenge probabilistic patents, which potentially leads to overall increased competition. We further show that generic entry is fostered more effectively by inducing limited collusion than by rewarding first generic entrants with an exclusivity right. |
| Keywords: | antitrust and intellectual property law; patent settlements; collusion; per se rule; rule of reason; Hatch-Waxman Act |
| JEL: | I18 K40 L40 O34 |
| Date: | 2012–02 |
| URL: | http://d.repec.org/n?u=RePEc:lmu:muenec:12734&r=com |
| By: | Hüschelrath, Kai; Veith, Tobias |
| Abstract: | Although the pricing dynamics of hardcore cartels have been studied intensively from a theoretical perspective, empirical evidence is still rare. We combine publicly available data with a unique private data set of about 340,000 market transactions from 36 smaller and larger customers of German cement producers to study the pricing dynamics during and after the breakdown of a German cement cartel. We find that, first, after the breakdown of the cartel, cartel members reduce net prices to a far larger extent than gross prices and that, second, noncartel members slip under the price umbrella of the cartel to increase profits. Our results have important implications for both the design of screening tools to detect cartels as part of public enforcement and the calculation of damages as part of private enforcement of competition law. -- |
| Keywords: | antitrust policy,cartels,umbrella pricing,net prices,cement,screening,damages |
| JEL: | L41 L61 K21 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:11067&r=com |
| By: | Nikogosian, Vigen; Veith, Tobias |
| Abstract: | The literature on vertical integration in markets with regulated upstream prices suggests that the integrated upstream firm might engage in non-price discrimination. Several studies provide policy recommendations derived either from case study approaches or based on theoretical modeling which addresses the unbundling issue. In this study we analyze the impact of vertical integration of retail incumbent and network operator on retail prices and upstream charges. As the vertical structure is heterogeneous across the 850 German electricity submarkets for residential customers (there exist legally unbundled, vertically integrated or fully separated firms), we use firm level data to analyze the effects of different vertical structures and regulation schemes on retail electricity prices. We find significantly higher prices in markets with vertically integrated firms compared to markets with fully separated firms. This finding could indicate non-price discrimination. Furthermore, we find no evidence that legal unbundling eliminates the incentives for non-price discrimination because the prices do not differ from prices in markets under vertical integration. -- |
| Keywords: | electricity,regulation,vertical integration,legal and total unbundling,non-price discrimination |
| JEL: | L1 L5 L9 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:11069&r=com |
| By: | Nikogosian, Vigen; Veith, Tobias |
| Abstract: | In German electricity submarkets for residential customers standard contracts offered by former monopolists are the more costly option for customers who have not switched to an alternative contract yet. As most German households are served with this contract type we follow the Limit Pricing theory and show that standard contract price could be used as an instrument to affect competition, in terms of market entries, in the related market. We theoretically derive the optimal price-setting behavior of a price-discriminating incumbent provider and show that under particular circumstances reducing the standard contract price could increases the incumbent's profit. We then analyze our theoretical findings employing data for German retail electricity submarkets using simultaneous equation approach and can find support for our hypothesis. In particular for customers with low consumption and high relative switching costs the results show that the standard contract price can affect market entry whereas for high consumption level customers we have to reject our hypothesis. -- |
| Keywords: | barrier to entry,first-mover advantage,price discrimination |
| JEL: | L11 L13 L43 L94 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:11068&r=com |
| By: | Clemens Haftendorn |
| Abstract: | Before 2004 South Africa was the dominant steam coal exporter to the European market. However a new market situation with rising global demand and prices makes room for a new entrant: Russia. The hypothesis investigated in this paper is that the three incumbent dominant firms located in South Africa and Colombia reacted to that new situation by exerting market power and withheld quantities from the market in 2004 and 2005. Three market structure scenarios of oligopoly with a competitive fringe are developed to investigate this hypothesis: a Stackelberg model with a cartel, a Stackelberg model with a Cournot-oligopoly as leader and a Nash-bargaining model. The model with a Cournot oligopoly as leader delivers the best reproduction of the actual market situation meaning that the dominant players exert market power in a non-cooperative way without profit sharing. Furthermore some methodological clarifications regarding the modeling of markets with dominant players and a competitive fringe are made. In particular we show that the use of mixed aggregated conjectural variations can lead to outcomes that are inconsistent with the actions of rational profit-maximizing players. |
| Keywords: | Atlantic coal market, partial equilibrium modeling, market power |
| JEL: | L13 L72 C69 C72 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwwpp:dp1185&r=com |
| By: | Braak, A.M. ter (Tilburg University) |
| Abstract: | Private labels have witnessed considerable growth in grocery retailing. While existing academic studies have provided valuable insights concerning the evolution of private labels, several issues remain largely unexplored. First, in the face of these large private-label volumes, private-label production opportunities arise. Due to increased private-label competition, national-brand manufacturers increasingly pursue a dual-branding strategy and engage in private-label production next to their national-brand activities. In chapter two of this dissertation, a major motivation for national-brand manufacturers to engage in private-label production, namely whether it creates retailer goodwill, is investigated. It shows that private-label production is indeed rewarded: national-brand manufacturers involved in private-label production for a discounter have a higher likelihood of obtaining national-brand shelf presence at that discounter. The third chapter focuses on one of the main reasons why retailers push private labels, i.e. because they generate high margins, and considers how a retailer’s private-label margins vary within categories. It demonstrates that a retailer’s private-label margins depend on the nature of the private-label supplier-retailer relationship, that they differ across quality tiers and package sizes, and that they are affected by a supplier’s extent of national-brand focus next to its private-label production for the retailer. Finally, this dissertation concentrates on the recent premium private-label trend. Even though premium private labels are seen as “one of the hottest trends in retailing,” retailers are selective in picking their battles with top-quality national brands and do not feel the need to extend their standard private label with a premium private label in every category. The fourth chapter provides insight into why retailers offer premium private labels in some categories, but not in others. The research presented in this dissertation is among the first to empirically investigate the phenomenon of private-label production, and to shed light on the recent trend of premium private labels. |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:ner:tilbur:urn:nbn:nl:ui:12-5242207&r=com |
| By: | Jason Allen; Robert Clark; Jean-François Houde |
| Abstract: | This paper examines the impact of bank consolidation on mortgage rates in order to evaluate the extent to which mortgage markets are competitive. Mortgage markets are decentralized and so rates are determined through a search and negotiation process. The primary effect of a merger therefore is to reduce the number of partners available with whom to negotiate, although it can also change the characteristics of the product, and impact the search effort of consumers. Using a Canadian merger as a case study, we find that, overall, consolidation had little effect on rates suggesting that, on average, the mortgage market is fairly competitive. However, a decomposition of the aggregate treatment effect reveals important heterogeneity in the impact of the merger. We find that consumers gathering multiple quotes are affected by the merger, while those who do not search are not. These results suggest that market power originates in large part from the presence of asymmetric search costs. |
| Keywords: | Financial institutions; Financial services; Interest rates |
| JEL: | L1 G2 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:bca:bocawp:12-4&r=com |
| By: | Cândida Ferreira |
| Abstract: | The relationships between bank market concentration and bank efficiency are of particular relevance in the European Union (EU), but they remain controversial. Using a panel Granger causality approach, this paper contributes to the literature, testing not only the causality running from bank market concentration to bank efficiency, but also the reverse causality running from efficiency to concentration. The results obtained confirm the relative complexity of these causality relationships, although they generally point to a negative causation running both from concentration to efficiency and from efficiency to concentration. These findings are in line with the Structure Conduct Performance (SCP) paradigm and the suggestions that the increase of the banks’ market power will contribute to inefficiency, since these banks will face less competition to obtain more output results with less input costs. Our results suggest that within this panel of all 27 EU countries over a relatively long time period, from 1996 to the onset of the 2008 financial crisis, the more cost-efficient commercial and savings banks operated in less concentrated markets. |
| Keywords: | Concentration, Efficiency, Granger causality, European banks. |
| JEL: | G21 F36 D24 L11 |
| Date: | 2012–01 |
| URL: | http://d.repec.org/n?u=RePEc:ise:isegwp:wp032012&r=com |
| By: | Burak Dindaroglu (Department of Economics, Izmir University of Economics) |
| Abstract: | Using firm level panel data from the U.S., I explore the relationship between firm size and R&D productivity for two important and R&D-intensive industries: Semiconductors and Pharmaceuticals. I employ two measures of a firm's R&D performance: the number of citations received per patented innovation, and the number of citations received per dollar of R&D expenditures. The former is a measure of the average quality of a firm's patents, and the latter is a measure of total R&D output obtained per dollar of investments. I find that the average quality of patents (citations received per patent) falls with firm size in Pharmaceuticals, but there is no relationship between patent quality and firm size in Semiconductors. Citations received per R&D dollar decrease with size in both industries, which is due to the well-documented negative relationship between patents per R&D and firm size. |
| Keywords: | R&D Productivity, Firm size, Patents, Citations, Semiconductors, Pharmaceuticals, Panel data |
| JEL: | L1 L2 |
| Date: | 2011–11 |
| URL: | http://d.repec.org/n?u=RePEc:izm:wpaper:1101&r=com |
| By: | Hackl, Franz; Kummer, Michael E.; Winter-Ebmer, Rudolf; Zulehner, Christine |
| Abstract: | We investigate the effect of market structure on market performance in the market for consumer electronics. This research is novel, because we exploit product life cycle information to build an instrumental variable for the number of firms in a market, a variable which hitherto had to be treated as exogenous in comparable studies on seller-behavior in e-commerce. We combine data from Austria's largest online site for price comparisons with retail-data on whole sale prices provided by a major hardware producer for consumer electronics. We observe input prices of firms, and all their moves in the entry and the pricing game. Using this information for 80 digital cameras, we generate instrumental variables based on the shops' entry decisions in the past. We find that instrumenting is particularly important for estimating the effect of competition on the markup of the price-leader. -- |
| Keywords: | retailing,product life cycle,market structure,market performance,markup,price dispersion |
| JEL: | L11 L13 L81 D43 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:11084&r=com |
| By: | Felli, Leonardo; Koenen, Johannes; Stahl, Konrad O. |
| Abstract: | We explore the determinants and effects of trust relationships between upstream suppliers and downstream producers. Using unique survey data on individual supplier-buyer relationships in the German automotive industry, we show, by means of different measures of supplier-buyer trust, that higher levels of trust mitigate relationship-specific underinvestment in a classical hold-up situation. Moreover, contrary to the extant literature, we show that higher levels of supplier's trust are reflected in the buyer's choice of a more competitive procurement strategy among potential suppliers. -- |
| Keywords: | trust,hold-up problem,competition,specific investment,suppliers,car manufacturers,German automotive industry |
| JEL: | D86 D22 L22 L62 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:11072&r=com |
| By: | Michael Zschille |
| Abstract: | The German potable water supply industry is regarded as being highly fragmented, thus inhibiting high potentials for efficiency improvements through consolidation. Focusing on a hypothetical restructuring of the industry, we apply Data Envelopment Analysis (DEA) to analyze the potential efficiency gains from mergers between water utilities at the county level. A conditional efficiency framework is used to account for the operating environment. Highest efficiency improvement potentials turn out to result from reducing individual inefficiencies. The majority of the 84 merger cases is characterized by merger gains, which are decomposed into a technical efficiency effect, a harmony effect and a scale effect. The results suggest to improve incentives for efficient operations in water supply and a consolidation of the industry structure. |
| Keywords: | Water Supply, Horizontal Integration, Data Envelopment Analysis, Conditional Efficiency, Nonparametric Estimation |
| JEL: | C14 L22 L25 L95 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwwpp:dp1187&r=com |
| By: | Doan, Tinh |
| Abstract: | Understanding the degree and evolution of competition across industries is an important step towards understanding the impact of economic reform and competition on economic growth in Vietnam during the economic transition. In this paper, the author investigates the evolution of competition in Vietnam during the economic transition using the price-cost margin (PCM) or mark-up that has been widely applied in the economic literature and the profit elasticity (PE) recently developed by Boone in his paper Competition (2000). This paper provides the first empirical study of intensity and evolution of competition across selected industries in Vietnam in the last decade using firm-level data from the Vietnam Enterprise Census (VEC) conducted annually since 2000 by the Vietnam General Statistical Office (GSO). -- |
| Keywords: | Competition,industry,economic transition,Vietnam |
| JEL: | D40 L5 L11 P20 P30 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:ifwedp:201212&r=com |