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on Industrial Organization |
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Issue of 2007‒08‒27
eleven papers chosen by |
| By: | IVALDI, Marc; VIBES, Catherine |
| Date: | 2007–01 |
| URL: | http://d.repec.org/n?u=RePEc:ide:wpaper:7201&r=ind |
| By: | IVALDI, Marc; MOTIS, Jrissy |
| JEL: | C14 G14 G34 L10 L20 |
| Date: | 2007–04 |
| URL: | http://d.repec.org/n?u=RePEc:ide:wpaper:7217&r=ind |
| By: | Robin Mason; Helen Weeds |
| Abstract: | We assess the impact of merger policy on entry and entrepreneurship. Facing uncertainty about its prospects and foreseeing that it may wish to quit should profitability prove poor, a rational entrant considers possible exit routes. Horizontal merger reduces competition subsequently, lowering welfare in the short run, but also provides a valuable exit route. By facilitating exit and thus raising the value of entry, more lenient merger policy may stimulate entry sufficiently that welfare is increased overall. We calculate the optimal merger policy in the form of a low, but positive, profitability threshold below which a merger is permitted despite its adverse impact on post-merger competition. This may be viewed as an extension of the "failing firm defence" to include ailing, low profitability firms as well as imminently failing ones. The implications of strategic firm behaviour for the optimal policy are examined, and merger policy is compared with an entry subsidy. |
| Date: | 2007–08–17 |
| URL: | http://d.repec.org/n?u=RePEc:esx:essedp:634&r=ind |
| By: | BERGES, Fabian; CHAMBOLLE, Claire |
| JEL: | D21 L12 L14 Q12 |
| Date: | 2007–07 |
| URL: | http://d.repec.org/n?u=RePEc:ide:wpaper:7320&r=ind |
| By: | BERGANTINO, Angela Stefania; DE VILLEMEUR, Etienne; VINELLA, Annalisa |
| JEL: | L11 L13 L51 L9 |
| Date: | 2007–07 |
| URL: | http://d.repec.org/n?u=RePEc:ide:wpaper:6379&r=ind |
| By: | DE VILLEMEUR, Etienne; GUI, Benedetto |
| JEL: | D42 D62 H21 H23 L51 |
| Date: | 2007–07 |
| URL: | http://d.repec.org/n?u=RePEc:ide:wpaper:7307&r=ind |
| By: | JEON, Doh-Shin; ROCHET, Jean-Charles |
| JEL: | D42 L42 L82 |
| Date: | 2007–06–21 |
| URL: | http://d.repec.org/n?u=RePEc:ide:wpaper:7208&r=ind |
| By: | Tseveen Gantumur; Andreas Stephan |
| Abstract: | In response to global market forces such as deregulation and globalization, technological change and digital convergence, the telecommunications in the 1990s witnessed an enormous worldwide round of Mergers & Acquisitions (M&A). Given both M&A and Innovation a major means of today’s competitive strategy development, this paper examines the innovation determinants of M&A activity and the consequences of M&A transactions on the technological potential and the innovation performance. We examine the telecommunications equipment industry over the period 1988-2002 using a newly constructed data set with firm-level data on M&A and innovation activity as well as financial characteristics. By implementing a counterfactual technique based on a matching propensity score procedure, the analysis not only controls for merger endogeneity and ex-ante observable firms characteristics but also takes account of unobserved heterogeneity. The study provides evidence that M&A realize significantly positive changes to the firm’s post-merger innovation performance. The effects of M&A on innovation performance are in turn driven by both the success in Research and Development (R&D) activity and the deterioration in internal technological capabilities at acquiring firms prior to a merger. |
| Keywords: | Mergers & Acquisitions, Innovation Performance, Telecommunications Equipment Industry. |
| JEL: | L63 O30 L10 |
| Date: | 2007–08 |
| URL: | http://d.repec.org/n?u=RePEc:hum:wpaper:sfb649dp2007-051&r=ind |
| By: | CHEN, Zhijun; REY, Patrick |
| Date: | 2007–04 |
| URL: | http://d.repec.org/n?u=RePEc:ide:wpaper:7038&r=ind |
| By: | Catherine ROUX; Thomas VON UNGERN-STERNBERG |
| Abstract: | We examine the effect of Amnesty Plus and Penalty Plus on firms' initial selfreporting decision, in one market, by altering their whistle-blowing incentives in another market. Amnesty Plus and Penalty Plus are proactive US strategies which aim at triggering multiple confessions by increasing the incentives of already convicted firms to report in a second market where they collude. Predictably, conditional on the conviction of one cartel, Amnesty Plus and Penalty Plus strengthen firms' incentives to report the remaining cartel. However, Amnesty Plus and Penalty Plus have an ambiguous impact on firms' incentives to apply for amnesty in the first place: On the one hand, Amnesty Plus and Penalty Plus may help to sustain a cartel, otherwise reported under the EC Leniency Program. On the other hand, Amnesty Plus and Penalty Plus may induce immediate reporting of both cartels whereas only one of them would have been reported under the EC Leniency Program. |
| Keywords: | Amnesty Plus; Leniency Program; Multimarket Contact; Self-reporting |
| JEL: | K21 K42 L41 |
| Date: | 2007–03 |
| URL: | http://d.repec.org/n?u=RePEc:lau:crdeep:07.03&r=ind |
| By: | Christopher C. Klein |
| Abstract: | The U.S. Supreme Court held that litigation for anticompetitive ends (“sham litigation”) must be “baseless” in order to face antitrust liability. The filing of such suits continues apace, as does the legal commentators’ debate, but economic analysis has lagged. Here, a game theoretic model is constructed in which plaintiffs file suit to achieve collateral gains and defendants may countersue for damages under the Sherman Act. In equilibrium, settlement fails and all suits are litigated, but the threat of countersuit deters low-expected-value plaintiffs. As the legal standard for sham litigation approaches “baselessness,” this deterrence effect is weakened and litigation may increase. |
| Keywords: | antitrust, sham litigation, countersuit |
| JEL: | K21 L41 |
| Date: | 2007–08 |
| URL: | http://d.repec.org/n?u=RePEc:mts:wpaper:200713&r=ind |