nep-com New Economics Papers
on Industrial Competition
Issue of 2017‒09‒17
25 papers chosen by
Russell Pittman
United States Department of Justice

  1. Upstream horizontal mergers and vertical integration By Ioannis N. Pinopoulos
  2. The Effect of Horizontal Mergers, when Firms Compete in Prices and Investments By Massimo Motta; Emanuele Tarantino
  3. Informative Advertising in a Monopoly with Network Externalities By Azamat Valei
  4. Partial Cartels and Mergers with Heterogeneous Firms : Experimental Evidence By Gomez Martinez, Francisco
  5. Firm Dynamics, Dynamic Reallocation, Variable Markups, and Productivity Behaviour By Anthony Savagar
  6. The Value of Transparency in Dynamic Contracting with Entry By Gülen Karakoç; Marco Pagnozzi; Salvatore Piccolo
  7. Pricing when Customers Care about Fairness but Misinfer Markups By Erik Eyster; Kristof Madarasz; Pascal Michaillat
  8. Strategic Investment in Innovation: Capacity and Timing Decisions under Uncertainty By Huberts, Nick
  9. Scalable Price Targeting By Jean-Pierre Dubé; Sanjog Misra
  10. Why Do Firms Sell Out? Separating Targets’ Motives from Bidders’ Selection of Targets in M&A By Zha Giedt, Jenny
  11. Economic Consequences of Announcing Strategic Alternatives By Zha Giedt, Jenny
  12. Walrasian equilibrium as limit of competitive equilibria without divisible goods By Michael Florig; Jorge Rivera
  13. Mixed Duopoly: Differential Game Approach By Koichi Futagami; Toshihiro Matsumura; Kizuku Takao
  14. The Impact of Airline Mergers on Quality: Why Do Different Mergers Have Such Different Effects? By Daniel Rijken; Vincent (V.A.C.) van den Berg
  15. The Analysis of Impact of Larger Aircraft A-380 on Frequency of Flights By Isabelle Laplace; Chantal Latgé-Roucolle; Aliya Ussinova
  16. Rail freight development in Europe: how to deal with a doubly-imperfect competition? By Yves Crozet
  17. Relational Contracts, Competition and Innovation: Theory and Evidence from German Car Manufacturers By Calzolari, Giacomo; Felli, Leonardo; Koenen, Johannes; Spagnolo, Giancarlo; Stahl, Konrad
  18. Vertical Foreclosure with Product Choice and Allocation: Evidence from the Movie Industry By Jaedo Choi; Yun Jeong Choi; Minki Kim
  19. Strategic microscheduling of movies By Dürr, Niklas S.; Engelstätter, Benjamin; Ward, Michael R.
  20. The optimal choice of internal decision-making structures in a network industry By Tsuyoshi Toshimitsu
  21. Moral hazard, optimal healthcare-seeking behavior, and competitive equilibrium. By Malakhov, Sergey
  22. The impact of mergers and acquisitions on shareholders' wealth in the logistics service industry By Kiesel, F.; Ries, J. M.; Tielmann, A.
  23. "Cost Effect of Mergers in Public Hospitals in Japan" (in Japanese) The purpose of the paper is to assess the extent to which the merger between public hospitals reduce the operation costs in Japan. To deal with the endogeneity of the hospitals' decisions to merger, we employ two approaches; (1) a generalized difference in difference by use of hospitals' fixed effects, and (2) an instrumental variable that identify whether municipal jurisdiction in which public hospitals locate consolidate. The estimates indicate that the operation costs reduce by approximately 20 percent because of the merger. Two major components of this cost reduction are salaries to doctors and nurses; and material costs. For the former, the paper observes that an increase in the average salaries to doctors working at the merged public hospitals; this is because more experienced doctors remain to work at the merged hospitals. By Sahoko Furuta; Daiya Isogawa; Hiroshi Ohashi
  24. Industrial Organization of China’s Steel Industry and the Restructuring of the Asia-Pacific Iron Ore Market By Xiaochun Huang; Akira Tanaka
  25. Construction d'une gouvernance pro-concurrentielle en Nouvelle-Calédonie : Modernisation du droit économique et création progressive d'un droit de la concurrence By Florent Venayre

  1. By: Ioannis N. Pinopoulos (Department of Economics, University of Macedonia)
    Abstract: We study upstream horizontal mergers when one of the merging parties is a vertically integrated firm. Under upstream cost symmetry and observable contracting, we demonstrate that such type of horizontal mergers always harm consumers through a vertical partial foreclosure effect. Under observable contracting but upstream asymmetric costs, we show that overall consumer surplus may increase due to the merger even though input prices increase and some consumers are worse of. Under upstream cost symmetry but unobservable contracting, we find that consumers may be better off as a result of the merger even in the absence of exogenous cost-synergies between the merging firms. In all cases under consideration, the merger is always profitable for the merging parties.
    Keywords: Vertical relations; vertical integration; horizontal mergers; consumer surplus.
    JEL: L11 L13 L41 L42
    Date: 2017–08
  2. By: Massimo Motta; Emanuele Tarantino
    Abstract: It has been suggested that mergers, by increasing concentration, raise incentives to invest and hence are pro-competitive. To study the effects of mergers, we rewrite a game with simultaneous price and cost-reducing investment choices as one where firms only choose prices, and make use of aggregative game theory. We find no support for that claim: absent efficiency gains, the merger lowers total investments and consumer surplus. Only if it entails sufficient efficiency gains, will it be pro-competitive. We also show there exist classes of models for which the results obtained with cost-reducing investments are equivalent to those with quality-enhancing investments.
    Keywords: Horizontal mergers, innovation, investments, network-sharing agreements, competition
    JEL: K22 D43 L13 L41
    Date: 2017–08
  3. By: Azamat Valei
    Abstract: This paper studies the incentives for a monopolistic firm producing a good with network externalities to advertise when consumers face imperfect infor- mation and therefore must search to realize their actual willingness to pay for the good. A firm may disclose market information through advertising if it finds it beneficial. The results suggest that advertising is more likely in the case of a negative network effect and less likely with a positive network effect. When a monopolist faces a strong network externality, it chooses to support the maximum possible network and charge a price equal to the value of the externality. Finally, depending on the value of the search cost and type of network externality, a monopolist may use different advertising content: no information, price information only, product characteristics, or both price and product characteristics. Specifically, if all consumers have the same search cost, as the search cost grows the firm must include more informa- tion in the advertising content, while as the network externality changes from negative to positive, the firm reduces the content. In contrast, if consumers di¤er in their search costs, the firm tends to provide more information as the externality changes from negative to positive.
    Keywords: advertising; search; network effects; consumption externality; band- wagon; snob effect; monopoly; industrial organization;
    JEL: D42 D83 D85 L12
    Date: 2017–06
  4. By: Gomez Martinez, Francisco
    Abstract: A usual assumption in the theory of collusion is that cartels are all-inclusive. In contrast, most real- world collusive agreements do not include all firms that are active in the relevant industry. This paper studies both theoretically and experimentally the formation and behavior of partial cartels. The theoretical model is a variation of Bos and Harrington's (2010) model where firms are heterogeneous in terms of production capacities and where individual cartel participation is endogenized. The experimental study has two main objectives. The first goal is examine whether partial cartels emerge in the lab at all, and if so, which firms are part of it. The second aim of the experiment is to study the coordinated effects of a merger when partial cartels are likely to operate. The experimental results can be summarized as follows. We find that cartels are typically not all-inclusive and that various types of partial cartels emerge. We observe that market prices decrease by 20% on average after a merger. Our findings suggest that merger analysis that is based on the assumption that only full cartels forms produces misleading results. Our analysis also illustrates how merger simulations in the lab can be seen as a useful tool for competition authorities to back up merger decisions.
    Keywords: Experiments; Mergers; Cartels; Bertrand oligopoly
    JEL: G34 L44 L41 L13 C92
    Date: 2017–08–01
  5. By: Anthony Savagar
    Abstract: I analyze two opposing effects of firm dynamics on productivity over the business cycle. Consider net exit, on the one hand it reallocates resources to incumbents whose productivity improves through scale economies, on the other hand it reduces the competitive pressure incumbents face which depresses productivity. Contrarily net entry strengthens competition, thus increasing productivity, but worsens incumbents' scale economies, thus decreasing productivity. I outline a theory that focuses on two industrial features (1) slow firm entry/exit and (2) firm pricing that depends on the number of competitors. In this environment a negative shock strikes incumbents due to slow exit responses. This weakens their scale thus worsening productivity but the effect recedes as exit occurs which reallocates resources to incumbents. However, the remaining firms face fewer competitors and thus charge higher markups which damages productivity. I analyze this trade-off between productivity improving resource reallocation and productivity degrading market power, by developing a continuous time, analytically tractable DGE model of endogenous firm entry/exit and endogenous markups.
    Keywords: Endogenous markups; Entry; Endogenous Productivity; Imperfect product markets; dynamical systems
    JEL: E32 D21 D43 L13 C62
    Date: 2017–08
  6. By: Gülen Karakoç (Università di Milano Bicocca); Marco Pagnozzi (Università di Napoli Federico II and CSEF); Salvatore Piccolo (Università di Bergamo and CSEF)
    Abstract: A manufacturer designs a dynamic contract with a retailer who is privately informed about demand and faces competition by an integrated entrant in a second period. Since the entrant only observes demand after entry and demand is correlated across periods, information about past demand affects the entrant’s production. We analyze the incentives of the incumbent players to share information with the entrant and show that the retailer benefits from transparency, but the manufacturer does not. Contrary to what intuition suggests, transparency with an integrated entrant harms consumers. When the entrant is not an integrated firm, whether transparency benefits consumers depends on the degree of demand persistency.
    Keywords: Dynamic Adverse Selection, Entry, Information Sharing, Transparency, Vertical Contracting
    JEL: D40 D82 D83 L11
    Date: 2017–09–02
  7. By: Erik Eyster; Kristof Madarasz; Pascal Michaillat
    Abstract: This paper proposes a theory of price rigidity consistent with survey evidence that firms stabilize prices out of fairness to their consumers. The theory relies on two psychological assumptions. First, customers care about the fairness of prices: fixing the price of a good, consumers enjoy it more at a low markup than at a high markup. Second, customers underinfer marginal costs from prices: when prices rise due to an increase in marginal costs, customers underappreciate the increase in marginal costs and partially misattribute higher prices to higher markups. Firms anticipate customers’ reaction and trim their price increases. Hence, the passthrough of marginal costs into prices falls short of one—prices are somewhat rigid. Embedded in a simple macroeconomic model, our pricing theory produces nonneutral monetary policy, a short-run Phillips curve that involves both past and future inflation rates, a hump-shaped impulse response of output to monetary policy, and a nonvertical long-run Phillips curve.
    JEL: D21 D42 E52 L11
    Date: 2017–09
  8. By: Huberts, Nick (Tilburg University, School of Economics and Management)
    Abstract: This dissertation comprises of two parts. The first part focusses on the optimal investment problem of incumbent firms when they are offered the option to start the production of a new product that yields an innovation compared to the established product. We start with the incumbent-entrant problem in Chapter 2. Chapter 3 looks at incumbent firms that have the option to expand their current production lines by offering a new generation of the existing product. In Chapter 4, we look at the situation where incumbent firms can choose their optimal moment to replace their current technology for a new, better, technology. The second part of this dissertation looks at the optimal investment timing in a setting with a birth-death process.
    Date: 2017
  9. By: Jean-Pierre Dubé; Sanjog Misra
    Abstract: We study the welfare implications of scalable price targeting, an extreme form of third-degree price discrimination implemented with machine learning for a large, digital firm. Targeted prices are computed by solving the firm's Bayesian Decision-Theoretic pricing problem based on a database with a high-dimensional vector of customer features that are observed prior to the price quote. To identify the causal effect of price on demand, we first run a large, randomized price experiment and use these data to train our demand model. We use l1 regularization (lasso) to select the set of customer features that moderate the heterogeneous treatment effect of price on demand. We use a weighted likelihood Bayesian bootstrap to quantify the firm's approximate statistical uncertainty in demand and profitability. We then conduct a second experiment that implements our proposed price targeting scheme out of sample. Theoretically, both firm and customer surplus could rise with scalable price targeting. Optimized uniform pricing improves revenues by 64.9% relative to the control pricing, whereas scalable price targeting improves revenues by 81.5%. Firm profits increase by over 10% under targeted pricing relative to optimal uniform pricing. Customer surplus declines by less than 1% with price targeting; although nearly 70% of customers are charged less than the uniform price. Our weighted likelihood bootstrap estimator also predicts demand and demand uncertainty out of sample better than several alternative approaches.
    JEL: C11 C93 D4 L11 M3
    Date: 2017–09
  10. By: Zha Giedt, Jenny
    Abstract: This paper explores why firms seek strategic alternatives, effectively putting themselves up for sale in the market for corporate control. Using a sample of firms that are observed to be exploring strategic alternatives, I model (1) the self-selection of firms to become potential takeover targets, which is distinct from (2) the selection of targets by bidders. The findings suggest that firms seek strategic alternatives because they are performing poorly and face financial constraints, yet corporate governance mechanisms prompt the disruptive attempt to maximize shareholder value. In contrast, the subset of firms that actually receive bids have relatively better growth prospects and performance, and lower market risk – which suggests that bidders do not prefer under-performing targets, contrary to conventional thought. The largely contrasting profiles of firms that are volitionally supplied by sellers versus demanded by bidders modify our conventional understanding of target firms’ motives and target selection in M&A.
    Keywords: strategic alternatives; mergers and acquisitions; target motives; takeover prediction; financial constraints; deal initiation; voluntary disclosure; media leaks
    JEL: D84 G3 G34 M2 M21
    Date: 2017–08–23
  11. By: Zha Giedt, Jenny
    Abstract: This paper documents the consequences of publicly announcing “strategic alternatives,” whereby the company reveals its decision to explore a potential sale or merger. The inherent uncertainty in ex-post transactional outcomes (i.e., whether the firm is sold, liquidated, or remains independent) allows me to identify positive and negative consequences differentially accruing to these subsamples. The public announcement of strategic alternatives is associated with excess takeover-related gains for firms that are subsequently acquired but abnormally negative returns for firms that are not subsequently sold. Tests of potential mechanisms are consistent with the public announcement generating greater investor attention and leading to a more informed M&A sale process that maximizes value for successful targets’ shareholders, while also being a costly admission of business problems that alienates company stakeholders and wears on operations. These consequences that are ultimately related to firm value underscore the varied costs and benefits managers should weigh when making this disruptive disclosure decision.
    Keywords: corporate disclosure; strategic alternatives; mergers and acquisitions; economic consequences; disclosure costs; disclosure benefits; information transmission; shareholder value
    JEL: D82 D84 G14 G34 M41
    Date: 2016
  12. By: Michael Florig; Jorge Rivera
    Abstract: This paper investigates the limit properties of a sequence of competitive outcomes existing for economies where all commodities are indivisible, as indivisibility vanishes. The nature of this limit depends on whether the “strong survival assumption” is assumed or not in the limit economy, a standard convex economy. If this condition holds, then the equilibrium sequence converges to a Walras equilibrium for the convex economy; otherwise it converges to a hierarchic equilibrium, a competitive outcome existing in this economy despite the fact that a Walras equilibrium might not exist.
    Date: 2017–08
  13. By: Koichi Futagami (Osaka University); Toshihiro Matsumura (The University of Tokyo; Osaka University); Kizuku Takao (Aomori Public University)
    Abstract: Previous studies in differential games reveal that intertemporal strategic behaviors have an important role for various economic problems. However, most of their analyses are limited to cases where objective functions are identical among agents. In this paper, we characterize the open-loop Nash equilibrium and the Markov perfect Nash equilibrium of a mixed duopoly game where a fully or partially state-owned firm and a fully private rm compete in the quantities of homogeneous goods with sticky prices. We show that in the Markov perfect Nash equilibrium, an increase in the governments' share-holdings of the state-owned firm has a non-monotonic effect on the price, and in a wide range of parameter spaces, it increases the price. These results are derived from the interaction of an asymmetric structure of agents' objectives and inter-temporal strategic behaviors, which are in sharp contrast with those in the open-loop Nash equilibrium. We provide new implications for privatization policies in the presence of dynamic interactions, against the static analyses.
    Keywords: Mixed Duopoly, Open-loop Nash equilibrium, Markov Perfect Nash equilibrium
    JEL: C73 D43 L32
    Date: 2017–04
  14. By: Daniel Rijken (VU Amsterdam, The Netherlands); Vincent (V.A.C.) van den Berg (VU Amsterdam, The Netherlands; Tinbergen Institute, The Netherlands)
    Abstract: We investigate the impacts of five airline mergers on one quality dimension, namely route frequency. We use monthly data on routes between the largest 64 US cities from 1999 to 2016. On average, the mergers decrease the frequency, but there are large differences between the five mergers. We hypothesize that these differences resulted from differences in the market and network structures. Our estimations indicate that, if a destination has more connecting flights of the merging airlines, the merger is less detrimental to the frequency, possibly because the merger removes serial marginalization in the quality and price setting. For the market structure effect, we use two distinct set-ups. In the first set-up, the effects of mergers depend on a lagged variable measuring the current market structure. On routes with stronger competition, mergers decrease the frequency more, possibly due to a larger effect on the market structure. When the merging airlines control all the flights, mergers have almost no impact on the frequency. The second set-up uses the market structure before the merger. When one of the merging partners controlled all the flights between two airports, the merger does not directly affect the market structure and seems to have little to no impact on the frequency. Surprisingly, if both partners were flying between two airports before the merger, this merger does not seem to be more harmful to the frequency than when only one partner was operating on the route.
    Keywords: Mergers; quality; airlines; schedule delay; frequency
    JEL: D22 L13 L93 R40
    Date: 2017–09–05
  15. By: Isabelle Laplace (ENAC - Ecole Nationale de l'Aviation Civile); Chantal Latgé-Roucolle (LEEA - ENAC - Laboratoire d'Economie et d'Econométrie de l'Aérien - ENAC - Ecole Nationale de l'Aviation Civile); Aliya Ussinova (TSE - Toulouse School of Economics - Toulouse School of Economics)
    Abstract: An innovations in airline industry has significant impact on the behavior of its participants: airline companies, airports and passengers. In this paper the innovation that is studied is an introduction of double-deck plane – A-380, which is currently the largest aircraft. Due to its size, it is able to carry at once approximately twice as many passenger as the other medium-sized aircraft, thus, allowing to reduce the frequency, and, as a consequence, induce lower environmental impact. However, in reality, flight frequency depends on many other factors such as airport fees, demand and strategic decision of companies to maximize their profits under competition. Using the monthly panel observations of airline companies over 10 years on 121 routes, we test if the utilization of A-380 leads to the decrease in airline company’s flight frequency. Moreover, we analyze the response of the use of A-380 on the competitors’frequency. We find that increase in usage of A-380 leads to the decrease of company’s own frequency, whereas the competitors have incentive to increase its frequency by differentiating their flights by departure time in order to attract passengers who value the availability of flight at a particular hour.
    Keywords: A-380,frequency of flight,airline innovation,airline competition
    Date: 2016–11–03
  16. By: Yves Crozet (LAET - Laboratoire Aménagement Économie Transports - UL2 - Université Lumière - Lyon 2 - École Nationale des Travaux Publics de l'État [ENTPE] - CNRS - Centre National de la Recherche Scientifique, IEP Lyon - Sciences Po Lyon - Institut d'études politiques de Lyon)
    Abstract: The development of rail freight is central to the European Union's transportation policy. As it has been the case for road and air transport and for other network industries (e.g. energy and telecommunications), deregulation and market opening have been the main policy options chosen by EU to promote rail freight. But rail freight is still facing a doubly-imperfect competition. On one hand, the intermodal competition is off balance between road and rail. On the other hand, intra-modal competition between railway operators is imperfect. Railway operators are not all alike, major companies exist and they play a structuring role that regulation must take into account. According to the HHI (Hirschman Herfindahl Index) the market structure is still characterised by a strong concentration. Therefore, the key roles played by the major companies as well as, in some countries, the remaining action of the state, have to be addressed, since both of them represent some of the key features of imperfect competition in the rail sector. Numerous entry barriers remain and market power manifest itself in many areas of rail freight. This should be given special attention by regulators or competition authorities. National regulators should also communicate with one another, as they will be confronted with major companies’ market power.
    Keywords: Barriers to enrry,Competition,Concentation index,EU,Liberalisation,Road freight,Rail freight,Regulation
    Date: 2016–07–10
  17. By: Calzolari, Giacomo; Felli, Leonardo; Koenen, Johannes; Spagnolo, Giancarlo; Stahl, Konrad
    Abstract: Using unique data from buyer-supplier relationships in the German automotive industry, we unveil a puzzle by which more trust in a relationship is associated with higher idiosyncratic investment, but also more competition. We develop a theoretical model of repeated procurement with non-contractible, buyer-specifi c investments rationalizing both observations. Against the idea that competition erodes rents needed to build trust and sustain relationships, we infer that trust and competition tend to go hand in hand. In our setting trust and rents from reduced supplier competition behave like substitutes, rather than complements as typically understood.
    Keywords: Competition; Hold-up Problem; Innovation; Management Practices; Procurement; Relational Contracts; Specific Investment; Supply Chains; Trust
    JEL: D22 D86 L22 L62
    Date: 2017–09
  18. By: Jaedo Choi (University of Michigan, Ann Arbor); Yun Jeong Choi (Yonsei University); Minki Kim (University of California, San Diego)
    Abstract: We investigate a vertically integrated theater's contract and screen allocation decisions in the movie industry characterized by quality unpredictability, price uni- formity, and revenue-sharing contracts. Based on a simple theoretical model that describes the decisions of theaters and movie distributors, we derive two mecha- nisms of foreclosure behaviors: selection and allocation foreclosure. Our empirical results suggest that integrated theaters not only impose a higher quality standard for movies from independent distributors at contracts but also screen their aliated movies more even after contract. Vertically integrated theaters' favoritism toward its aliated movies are more pronounced at company-owned theaters than franchised theaters. Further, we also nd integrated theaters' favorable treats for their rival movies compared to independent movies as well as non-linearity of the foreclosure e ects across movie quality and seasonality.
    Keywords: Endogenous Product Characteristics, Movie Industry, Quality Unpre- dictability, Revenue-Sharing Contract, Vertical Integration
    JEL: L13 L22 L40 L82
    Date: 2017–09
  19. By: Dürr, Niklas S.; Engelstätter, Benjamin; Ward, Michael R.
    Abstract: We investigate how competition in product niches affects the ultimate timing of product release for experience goods using data on motion pictures in the United States. We identify product niches that movies occupy along three different product dimensions: common actor, common director, and common genre. We estimate the drivers for a motion picture's weekly sales based on the variation in the level of competition in these particular niches over time. We show that release date of motion pictures are more likely rescheduled when there is more competition during the initially proposed release week. Next, we find that competition from movies by the same director or within the same movie genre decrease motion picture's box office revenue most. Finally, we compare a movie's actual sales to estimated sales at the originally planned release date. Rescheduled movies generate about $6 million more revenue than they would have at their originally proposed release date.
    Keywords: Non-price competition,Niche competition,Strategic timing of entry,Movie market
    JEL: D22 L21 L82 M31
    Date: 2017
  20. By: Tsuyoshi Toshimitsu (School of Economics, Kwansei Gakuin University)
    Abstract: Focusing on the role of compatibility between products, we consider the choice of internal decision-making structures—i.e., centralization and decentralization—and its effect on welfare in a network industry where there are horizontally differentiated products associated with network externalities. We demonstrate that if the degree of a network externality is sufficiently large, it is socially optimal to choose decentralization. Furthermore, in the case of consumer ex post expectations, it is optimal for the firm’s owners to choose centralization. However, it is socially preferable given a particular condition.
    Keywords: internal decision-making; centralization; decentralization; network externality; compatibility; multiproduct monopoly
    JEL: D43 D62 L14 L15 L41
    Date: 2017–09
  21. By: Malakhov, Sergey
    Abstract: The theory of the optimal-consumption leisure choice under price dispersion describes the phenomenon of moral hazard as the customer’s reaction on unfair insurance policy. The unfair insurance offer does not equalize marginal costs of propensity to seek healthcare with marginal benefits on purchase. Under unfair insurance policy consumers increase ex post healthcare seeking activities and they optimize their consumption of medical services. The analysis of moral hazard results in the assumption that for an unfair offer there is an increase in the time horizon of the insurance policy that makes it fair and moral hazard becomes inefficient. The time horizon competition between insurance companies can eliminate moral hazard effect that clears the way to the competitive equilibrium.
    Keywords: moral hazard, health insurance, healthcare seeking behavior, optimal consumption-leisure choice
    JEL: D11 D83 I13
    Date: 2017–09–07
  22. By: Kiesel, F.; Ries, J. M.; Tielmann, A.
    Abstract: Logistic service providers are facing significant challenges in recent years due to intensified competition and ever-increasing customer expectations for cohesive high-standard services at low cost. To cope with these developments many companies aim for external growth to realize operational efficiencies and exploit productive opportunities of new markets and diversified services. Accordingly, 2015 has even become the most active year for mergers and acquisitions in logistic service industry. However, studies examining the post-merger performance effect and its determinants are scarce. Consequently, this paper takes up this issue by analysing a sample of 826 transaction announcements taken place between 1996 and 2015 and their performance effect in terms of short- and long-term abnormal shareholder returns. The results reveal, that although overall transactions exhibit significant positive abnormal returns, post-merger performance for the acquiring companies differs considerably according to the logistic services offered. In the short-term trucking, railway, 3PL and air cargo companies experience significant positive abnormal returns of about 0.6%-2.6%, while sea freight carriers realize only marginal effects and CEP companies do even not show any significant reaction. In the long-term, railway and 3PL companies realize a significant abnormal return of about 20%-24%, while trucking, sea freight and air cargo carriers do not exhibit significant returns and CEP companies do even experience significant losses of about –17%. Overall, diversifying transactions of established full-service providers outperform focus-increasing transactions of specialised operators.
    Date: 2017–09–10
  23. By: Sahoko Furuta (The Bank of Japan); Daiya Isogawa (Graduate School of Public Policy, The University of Tokyo); Hiroshi Ohashi (Faculty of Economics, University of Tokyo)
    Date: 2017–08
  24. By: Xiaochun Huang; Akira Tanaka
    Abstract: The iron ore trading system underwent a transformation in 2010. Until then,long-term contracts dominated the trade and the FOB price was determinedthroughnegotiationsbetween supplierand buyer, with the agreed price applied the following year. This system was changed in 2010 to aquarterly index-linked pricingin which the CFR price was applied. Some studies have suggested that the intervention of the Chinese government was the reason for this change, but this study concludesthat it was thebargaining betweensuppliersand purchasers thatresulted in this transformation.
    Keywords: Long-term contract, spot trading, iron ore price index, the Big Three, China Iron and Steel Association(CISA), dispersed industrial organization, state intervention
    Date: 2017–08
  25. By: Florent Venayre (GDI - Gouvernance et développement insulaire - UPF - Université de la Polynésie Française, LAMETA - Laboratoire Montpelliérain d'Économie Théorique et Appliquée - UM1 - Université Montpellier 1 - UM3 - Université Paul-Valéry - Montpellier 3 - Montpellier SupAgro - Centre international d'études supérieures en sciences agronomiques - INRA Montpellier - Institut national de la recherche agronomique [Montpellier] - UM - Université de Montpellier - CNRS - Centre National de la Recherche Scientifique - Montpellier SupAgro - Institut national d’études supérieures agronomiques de Montpellier)
    Abstract: During the second half of the 20th century, Caledonian economic law was embodied in a regulatory interventionism resulting mainly in broad price control with no reference to any measure usually taken in view of promoting competitive market mechanisms. The early 2000s constitute the beginning of a renewal with the establishment of a general pricing principle and the clear introduction in Caledonian law of the prohibition of trade agreements as well as abuse of dominance. However, despite a considerable legal breakthrough, the terms of October 6th, 2004 deliberation are still strongly influenced by concepts of law pertaining more to commercial or consumption law than to a real competition law. Above all, on the one hand the decade following the legislation has been riddled with reintroductions of tariff controls, thus annihilating potential benefits of price deregulation while, on the other hand, no real action was taken to repress anti-competitive behaviours. Ironically, such inefficiencies have most probably fueled the wish for more radical modifications of Caledonian law and progressively led to the introduction in 2013 of a real local competition law.
    Abstract: Durant toute la seconde partie du XX e siècle, le droit économique calédonien s'est incarné dans un interventionnisme réglementaire se traduisant notamment par un large contrôle des prix, sans référence aux dispositions habituellement prises pour favoriser les mécanismes concurrentiels de marché. Le début des années 2000 va cependant constituer le début d'un renouveau, à la fois en consacrant un principe général de liberté tarifaire et en introduisant explicitement en droit calédonien la prohibition des ententes et des abus de position dominante. Mais en dépit de ces avancées juridiques certaines, la délibération adoptée le 6 octobre 2004 demeure pour le reste de sa rédaction encore très des conceptions relevant plus du droit commercial ou du droit de la consommation que d'un réel droit de la concurrence. Surtout, la décennie qui va suivre son adoption va être émaillée de réintroductions de contrôles tarifaires venant annihiler les effets potentiellement bénéfiques d'une libération des prix, tandis que, parallèlement, aucune action ne sera conduite dans les faits pour réprimer les pratiques anticoncurrentielles nouvellement interdites. Paradoxalement, ce sont sans doute ces inefficacités qui vont attiser le désir de modifications plus radicales du droit calédonien et conduire progressivement à l'adoption d'un véritable droit local de la concurrence en 2013.
    Keywords: New Caledonia,Governance, Competition law, Nouvelle-Calédonie,Droit de la concurrence, Gouvernance
    Date: 2017

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