nep-ind New Economics Papers
on Industrial Organization
Issue of 2007‒12‒15
four papers chosen by
Kwang Soo Cheong
Johns Hopkins University

  1. Review of the Literature on the Impact of Mergers on Innovation By Schulz, Norbert
  2. MERGERS & ACQUISITIONS AND INNOVATION PERFORMANCE IN THE TELECOMMUNICATIONS EQUIPMENT INDUSTRY By Gantumur, Tseveen; Stephan, Andreas
  3. Competition in TV-Distribution - A framework and applications to Sweden By Bergman, Mats; Stennek, Johan
  4. Arbitrage in Energy Markets: Competing in the Incumbent's Shadow By Kupper, G.; Willems, B.R.R.

  1. By: Schulz, Norbert
    Abstract: Both M&A and innovation are instruments for growth and competitive advantage. Therefore they are fundamental to each firm’s competitive strategy. Usually, both instruments have been studied separately, but much less in conjunction. This is unfortunate as both processes - the process of innovation and the process of mergers and acquisitions - are intimately connected. The impact of mergers on innovation can only be rigorously assessed, if the converse direction of influence - mergers caused by innovation - is accounted for. Therefore this review tries to take a balanced view on both processes and to point out links between them. Nevertheless, the focus is on the impact of mergers on innovation. This discussion paper is identical with an older version with the title ‘Review on the Literature of Mergers on Innovation’.
    Keywords: innovation incentives, market structure, merger incentives
    JEL: L10 L25 O31
    Date: 2007
    URL: http://d.repec.org/n?u=RePEc:zbw:zewdip:6661&r=ind
  2. By: Gantumur, Tseveen (European University Viadrina); Stephan, Andreas (JIBS and CESIS)
    Abstract: The telecommunications in the 1990s witnessed an enormous worldwide round of Mergers & Acquisitions (M&A). 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 describing M&A and innovation activity as well as financial characteristics. Based on a matching propensity score procedure, the study provides evidence that M&A realize significantly positive changes to the firm’s postmerger innovation performance.
    Keywords: Mergers & Acquisitions; Innovation Performance; Telecommunications Equipment Industry
    JEL: L10 L63 O30
    Date: 2007–12–11
    URL: http://d.repec.org/n?u=RePEc:hhs:cesisp:0111&r=ind
  3. By: Bergman, Mats (Uppsala University); Stennek, Johan (Department of Economics, School of Business, Economics and Law, Göteborg University)
    Abstract: The purpose of this report is to investigate how well competition in the TV-industry works, primarily focusing on distribution. For this purpose we suggest a framework of analysis and, at the same time, we apply this framework to the Swedish market. Even if our focus will be distribution services, we will need to paint a broader picture, including contents providers, channels, pay-TV operators, advertisers, viewers and other market participants. While our assessment is primarily based on economic analysis of the market, we also aim to integrate the economic analysis with the traditional methodology of competition law. We will therefore go into some details of how the relevant markets should be defined. The report concludes with an in-depth investigation of three current issues in the Swedish market.<p>
    Keywords: television; distribution; cable; satellite; IPTV; terrestrial; telecommunications; competition; oligopoly; competition policy; regulation
    JEL: L00 L40
    Date: 2007–12–11
    URL: http://d.repec.org/n?u=RePEc:hhs:gunwpe:0273&r=ind
  4. By: Kupper, G.; Willems, B.R.R. (Tilburg University, Center for Economic Research)
    Abstract: This paper studies the welfare implications of using market mechanisms to allocate transmission capacity in recently liberalized electricity markets. It questions whether access to this essential facility should be traded on a market, or whether the incumbent should retain exclusive usage rights. We show that granting exclusive use to the incumbent might be optimal, if the capacity of the essential facility is small and the incumbent can reduce production costs by taking advantage of interregional production-cost differences. This result counters the intuition that arbitrage will improve the social surplus when there is no output contraction. The reason is that when competition is imperfect, arbitrage might reduce production efficiency. We advise policymakers to introduce market mechanisms for the allocation of transmission capacity only if sufficient investment in the network is ensured or if the market power of the incumbent is broken in at least one of the markets in which it is active.
    Keywords: Arbitrage;electricity sector;price discrimination
    JEL: D40 L10 L50 Q48
    Date: 2007
    URL: http://d.repec.org/n?u=RePEc:dgr:kubcen:200794&r=ind

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