nep-cul New Economics Papers
on Cultural Economics
Issue of 2019‒06‒24
four papers chosen by
Roberto Zanola
Università degli Studi del Piemonte Orientale

  1. Happily ever after? Vertical and horizontal mergers in the U.S. media industry By Stöhr, Annika; Noskova, Victoriia; Kunz-Kaltenhäuser, Philipp; Gänßle, Sophia; Budzinski, Oliver
  2. Examining generational preferences for sustainability attributes of wine: a discrete choice experiment in California By Tait, Peter; Saunders, Caroline; Dalziel, Paul; Rutherford, Paul; Driver, Timothy
  3. Does Social Media Promote Democracy? Some Empirical Evidence By Chandan K. Jha; Oasis Kodila-Tedika
  4. Cultural Diversity on Wall Street: Evidence from Sell-Side Analysts’ Forecasts By Kenneth J. Merkley; Roni Michaely; Joseph Pacelli

  1. By: Stöhr, Annika; Noskova, Victoriia; Kunz-Kaltenhäuser, Philipp; Gänßle, Sophia; Budzinski, Oliver
    Abstract: This paper provides an economic analysis of recent vertical and horizontal mergers in the U.S. industry for audiovisual media content, including the AT&T-Time Warner and the Disney-Fox mergers. Using a theory-driven approach, we examine economic effects of these types of mergers on market competition, focusing on digital media content distribution. In doing so, we address three research questions: (i) Is the current development of analyzing industry with its recent merger activity concerning? (ii) Would vertical or horizontal integration be more preferable for overall welfare and competition in this industry? (iii) What are implications for antitrust policy? We conclude from our analysis that in the already highly horizontally concentrated U.S. market for audiovisual content the process of further vertical integration creates concerns from a competition policy perspective. Moreover, even though horizontal concentration on some of the market stages may be anticompetitive as well, vertical integration is likely to be more harmful. As a consequence, we recommend a stricter approach to vertical merger control in this industry, as well as a more active abuse control against already vertically-integrated media companies.
    Keywords: competition policy,antitrust,industrial economics,digitization,media economics,institutional economics,industrial organization,mergers,vertical integration,horizontal integration
    JEL: L42 L41 K21 K23 L82 L86 L13 D43 L51 L96
    Date: 2019
  2. By: Tait, Peter; Saunders, Caroline; Dalziel, Paul; Rutherford, Paul; Driver, Timothy
    Abstract: Millennials are the largest demographic segment in the USA (Wine Market Council, 2016) and have gained market share of high frequency wine drinkers while Baby Boomers and Gen-X generations are falling in market share (Franson, 2016). This demographic evolution in wine market composition has focused industry attention on expanding understanding of Millennial wine drinkers preferences as an important marketing dynamic. At the same time the wine industry has seen significant establishment of sustainable certification systems as preferences for sustainability have developed and been recognised as an avenue for product diversification in a highly competitive global market. While there is a recognition that preferences for the types of attributes sustainability programmes can deliver may differ between generations, scant research has explored this segmentation. This paper reports on the application of a discrete choice experiment with the objective of comparing generational preferences for individual components of sustainability schemes active in the Californian Sauvignon blanc market. We find consumption behaviour and attribute preference differences over age cohorts. A central finding is that Millennial consumers are willing to pay more for sustainability attributes than both Gen-X and Baby Boomers, while conversely Baby Boomers are willing to pay more for country of origin attributes than both Gen-X or Millennials.
    Keywords: Crop Production/Industries, Production Economics
    Date: 2019–04–15
  3. By: Chandan K. Jha (Madden School of Business, New York, USA); Oasis Kodila-Tedika (University of Kinshasa, The DRC)
    Abstract: This study explores the relationship between social media and democracy in a cross- section of over 125 countries around the world. We find the evidence of a strong, positive correlation between Facebook penetration (a proxy for social media) and democracy. We further show that the correlation between social media and democracy is stronger for low-income countries than high-income countries. Our lowest point estimates indicate that a one-standard deviation (about 18 percentage point) increase in Facebook penetration is associated with about 8-point (on a scale of 0–100) increase for the world sample and over 11 points improvement for low-income countries.
    Keywords: Democracy; Information; Facebook; Internet; Social Media
    JEL: D72 D83 O1
    Date: 2019–01
  4. By: Kenneth J. Merkley (Indiana University - Kelley School of Business - Department of Accounting); Roni Michaely (University of Geneva - Geneva Finance Research Institute (GFRI); Swiss Finance Institute); Joseph Pacelli (Indiana University - Kelley School of Business - Department of Accounting)
    Abstract: We study the effect of cultural diversity on an industry’s labor force using information about sell-side research analysts’ cultural backgrounds and their output, the consensus earnings forecast. Using both exogenous shocks to analyst diversity and panel regression methods, we find that increases in cultural diversity positively affect the quality of the consensus earnings forecast. These positive effects of cultural diversity are also robust to controlling for other dimensions of diversity. We further explore earnings conference calls as one viable mechanism for our findings, and find that cultural diversity increases conference call participation and interaction, indicating that diversity improves information flows. Overall, our results indicate that cultural diversity on Wall Street can generate significant benefits for investors.
    Keywords: Analysts, Cultural Diversity, Conference Calls
    Date: 2019–01

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