nep-hme New Economics Papers
on Heterodox Microeconomics
Issue of 2013‒09‒13
eleven papers chosen by
Frederic S. Lee
University of Missouri-Kansas City

  1. Industrial Seigniorage, the Other Face of Competition By Jordan Melmiès
  2. As-Efficient Competitor Test in Exclusionary Prices Strategies: Does Post-Danmark Really Pave the Way towards a More Economic Approach? By Frédéric Marty
  4. Corporate social responsibility, multi-faceted job-products, and employee outcomes By Shuili Du; CB Bhattacharya; Sankar Sen
  5. Product Downsizing and Hidden Price Increases: Evidence from Japan's Deflationary Period By Satoshi Imai; Tsutomu Watanabe
  6. NYSE changing hands: Antitrust and attempted acquisitions of an erstwhile monopoly By Jeitschko, Thomas D.
  7. Reformas en la producción y distribución eléctrica y su relación con el sector manufacturero: el impacto de la sustitución de Luz y Fuerza del Centro por la Comisión Federal de Electricidad By Montufar Helu Jiménez, Alejandro
  8. Does State Antitrust Enforcement Drive Establishment Exit? By Robert M. Feinberg; Thomas A. Husted; Florian Szücs
  9. The Location of the UK Cotton Textiles Industry in 1838: a Quantitative Analysis By Crafts, Nicholas; Wolf, Nikolaus
  10. A Working Paper Presenting a Profile of Revisions in the Current Employment Statistics Program By Kenneth W. Robertson,
  11. MEASURING “FACTORYLESS” MANUFACTURING: EVIDENCE FROM U.S. SURVEYS By Fariha Kamal; Brent R. Moulton; Jennifer Ribarsky

  1. By: Jordan Melmiès
    Abstract: This paper tries to develop an original view on industrial practices in competitive capitalist economies. In particular, we question the link between prices, competition and the quality of goods and services. We try to show that it is rational for firms to try to reduce the quality and/or the identity of goods and services while still presenting theses goods and services as the same as before, in order to reduce their prices and so to improve their relative position in the competitive struggle and in order to increase their profits. By reducing quality, we mean the practice that consists of mixing inputs at the margin with cheaper ones or with alternative products that give weight. This practice reminds us of the old Seigneurs who used to mix gold with other metals to produce more coins. That’s why we propose to label this practice 'industrial seigniorage'. The article first tries to delineate the widespread existence of this practice among French firms, and then explains the fundamental elements of (Post Keynesian) consumers' behaviour which allow for this practice to exist. We especially insist on the inability of the consumer to evaluate the quality of goods and services, and his inability to distinguish a good which have been modified at the margin. In a third part, we analyze the phenomenon of industrial seigniorage in a kaleckian model. We show the impact on sectoral profit rates and on prices, as well as the global and macroeconomic consequences on growth, distribution and employment.
    Keywords: Industrial seigniorage, Input substitution, product downsizing, Post Keynesian economics, Stock-Flow consistent modelling
    JEL: B50 D11 D20
    Date: 2013–07
  2. By: Frédéric Marty
    Abstract: The Post Danmark judgment may cast the light on the interpretations by the EU Court of Justice of crucial dimensions of the competition policy as: selective price cuts, above-cost rebates, costs test for exclusionary abuses with common costs. As we see one of the main interests of the decision lies on the cost criteria used by the Court to determine if a given price practice may exclude a competitor as efficient as the incumbent. In other words, does Post Danmark constitutes a real step towards the appropriation by the Court of Justice of the more economic approach promoted by the Commission and, more broadly, is really the logic of the Court coherent with an effects-based approach? Does Post Danmark conciliates the traditional decisional practice of the Court with the new principles of competition policy enforcement advocated by the Commission since the issuance of its February 2009 guidelines, relative to the exclusionary practices of dominant undertakings?
    Keywords: exclusionary practices, abuse of dominant position, predatory pricing, as-efficient competitor test
    JEL: K21 L43 L44 L97
    Date: 2013–07
  3. By: Geoffrey Tate; Liu Yang
    Abstract: We estimate the labor market consequences of corporate diversification using worker-firm matched data from the U.S. Census Bureau. We find evidence that workers in diversified firms have greater cross-industry mobility. Displaced workers experience significantly smaller losses when they move to a firm in a new industry in which their former firm alsooperates. We also find more active internal labor markets in diversified firms. Diversified firms exploit the option to redeploy workers internally from declining to expanding industries. Though diversified firms pay higher wages to retain workers, their labor is also more productive than focused firms of the same size, age, and industry. Overall, internal labor markets provide a bright side to corporate diversification.
    Date: 2013–08
  4. By: Shuili Du (University of New Hampshire); CB Bhattacharya (ESMT European School of Management and Technology); Sankar Sen (Baruch College)
    Abstract: This paper examines how employees react to their organizations’ corporate socialresponsibility (CSR). Drawing upon research in internal marketing and psychologicalcontract theory, we conceptualize that employees have multi-faceted job needs(i.e., economic, developmental, and ideological needs) and that CSR programsconstitute an important means to fulfill these needs. Based on cluster analysis, weidentify three employee segments, Idealists, Enthusiasts, and Indifferents, whovary in their multi-faceted job needs and, consequently, their demand fororganizational CSR. We further find that an organization’s CSR programs generatesfavorable employee related outcomes, such as job satisfaction and reduction inturnover intention, partially by fulfilling employees’ ideological and developmentaljob needs. Finally, we find that CSR proximity strengthens the positive impact ofCSR on employee-related outcomes. This research reveals significant employeeheterogeneity in their demand for organizational CSR and sheds light on theunderlying mechanisms linking CSR to employee-related outcomes. We end with adiscussion about the theoretical and practical implications of our research.
    Keywords: Corporate social responsibility, job product, employee job performance, cluster analysis
    Date: 2013–08–27
  5. By: Satoshi Imai (Statistics Bureau of Japan); Tsutomu Watanabe (University of Tokyo)
    Abstract: Consumer price inflation in Japan has been below zero since the mid-1990s. Given this, it is difficult for firms to raise product prices in response to an increase in marginal costs. One pricing strategy firms have taken in this situation is to reduce the size or the weight of a product while leaving the price more or less unchanged, thereby raising the effective price. In this paper, we empirically examine the extent to which product downsizing occurred in Japan as well as the effects of product downsizing on prices and quantities sold. Using scanner data on prices and quantities for all products sold at about 200 supermarkets over the last ten years, we find that about one third of product replacements that occurred in our sample period were accompanied by a size/weight reduction. The number of product replacements with downsizing has been particularly high since 2007. We also find that prices, on average, did not change much at the time of product replacement, even if a product replacement was accompanied by product downsizing, resulting in an effective price increase. However, comparing the magnitudes of product downsizings, our results indicate that prices declined more for product replacements that involved a larger decline in size or weight. Finally, we show that the quantities sold decline with product downsizing, and that the responsiveness of quantity purchased to size/weight changes is almost the same as the price elasticity, indicating that consumers are as sensitive to size/weight changes as they are to price changes. This implies that quality adjustments based on per-unit prices, which are widely used by statistical agencies in countries around the world, may be an appropriate way to deal with product downsizing.
    Keywords: consumer price index; scanner data; product downsizing; quality adjustment; deflation
    Date: 2013–04
  6. By: Jeitschko, Thomas D.
    Abstract: The Intercontinental Exchange's current attempted acquisition of NYSE-Euronext is the third takeover proposal in as many years. In this article the two previous attempts are reviewed and lessons are drawn from an antitrust and competition policy perspective concerning the evolving competitive landscape of exchanges. --
    Keywords: NYSE-Euronext,Deutsche Börse,Nasdaq,Intercontinental Exchange,Direct Edge,BATS Global Markets,Stock Exchanges,Derivatives Markets,Mergers,Acquisitions,Antitrust,US Department of Justice,European Competition Commission,DGComp,SEC
    Date: 2013
  7. By: Montufar Helu Jiménez, Alejandro
    Abstract: The present paper is an analysis of electricity on the Mexican context as an input provided by the government. The approach consists in evaluating the effect on the manufacturing sector of an improvement in efficiency on electricity production and distribution. Noteworthy, the improvement is consequence of an anti-competitive event (i.e. decree by which one of both electricity state-owned firms was extinguished); although, it does not represent a pro-competitive source in terms of quality and reliability in electricity distribution and production, it indeed embodies a positive shock. The main result is a negative average effect on manufacturing sector, which consists in a minimum decline of 5 per cent or maximum decline of 10 per cent, both in terms of value production; in monetized figures, it represents a cost as minimum as $ 1 095 million pesos or as maximum as $ 1 574 million pesos. In general, the negative impact on value production is smaller as industry consumes more electricity; even, it can become positive if consumption of electricity is high enough. Furthermore, the positive effect on production implied by consumption of electricity is smaller as industry generates in a higher proportion its own electricity. In conclusion, the policy did not generate a positive net impact due to adjustment costs which consist in the costs of transferring resources from one sector to another.
    Keywords: electricity; mexico; adjustment costs; production; manufacturing sector; efficiency
    JEL: L52 L6 L60 L94 L98 Y4
    Date: 2013–02–13
  8. By: Robert M. Feinberg; Thomas A. Husted; Florian Szücs
    Abstract: Previous work has shown that state-level antitrust enforcement activity may have impacts on entry and relocation behavior by U.S. firms. Significant state-level antitrust activity may be an indicator of a perceived adverse business environment and it is found to deter establishment entry, particularly for larger firms in the retail and wholesale sectors. An obvious question is whether establishment exit is affected in a symmetric way, or whether sunk costs of market entry may lead to a smaller impact in terms of the exit decisions. We first combine US Census establishment exit panel data with data for 1998?2006 on US state-level antitrust activity and other measures of state-level business activities that may affect establishment exit. We also consider establishment exit across different broad industry types -- manufacturing, retail and wholesale -- and several firm size categories. Local business cycle factors seem to be the primary driver of exit, though there is some evidence of political and antitrust determinants as well. In another approach, we examine firmlevel exit decisions and the extent to which these respond to state antitrust enforcement, with some indication of antitrust enforcement effects here as well, especially in the wholesale and retail sectors.
    Keywords: antitrust enforcement, state level, firm exit
    JEL: K21 L41 L60 L81
    Date: 2013
  9. By: Crafts, Nicholas (University of Warwick); Wolf, Nikolaus (Humboldt University)
    Abstract: We examine the geography of cotton textiles in Britain in 1838 to test claims about why the industry came to be so heavily concentrated in Lancashire. Our analysis considers both first and second nature aspects of geography including the availability of water power, humidity, coal prices, market access and sunk costs. We show that some of these characteristics have substantial explanatory power. Moreover, we exploit the change from water to steam power to show that the persistent effect of first nature characteristics on industry location can be explained by a combination of sunk costs and agglomeration effects.
    Keywords: agglomeration; cotton textiles; geography; industry location
    Date: 2013
  10. By: Kenneth W. Robertson, (U.S. Bureau of Labor Statistics)
    Abstract: The Current Employment Statistics (CES) survey, conducted by the U.S. Bureau of Labor Statistics, is a large monthly survey of businesses that produces timely estimates of employment, hours, and earnings by industry and geographic area. The survey produces estimates about three weeks after the week that includes the 12th of the month, and then produces revised estimates for the same reference period as additional responses for that reference period are collected over the next two months. This paper examines the distribution of response by several characteristics, and provides profiles of monthly revisions at the national, state, and metropolitan area level.
    Keywords: Bureau of Labor Statistics, Current Employment Statistics, response, revisions
    JEL: E24
    Date: 2013–08
  11. By: Fariha Kamal; Brent R. Moulton; Jennifer Ribarsky
    Abstract: “Factoryless” manufacturers, as defined by the U.S. OMB, perform underlying entrepreneurial components of arranging the factors of production but outsource all of the actual transformation activities to other specialized units. This paper describes efforts to measure “factoryless” manufacturing through analyzing data on contract manufacturing services (CMS). We explore two U.S. firm surveys that report data on CMS activities and discuss challenges with identifying and collecting data on entities that are part of global value chains.
    Keywords: contract manufacturing services, multinationals, fragmentation
    JEL: F1 F2 F23 L23
    Date: 2013–08

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