nep-ind New Economics Papers
on Industrial Organization
Issue of 2010‒01‒30
six papers chosen by
Kwang Soo Cheong
Johns Hopkins University

  1. Price regulation in oligopoly By Luis Corchón; Félix Marcos
  2. Decreasing Copyright Enforcement Costs: The Scope of a Gradual Response By Olivier Bomsel; Heritiana Ranaivoson
  3. Managing R&D activities in the Italian red biotech industry. A comparison between Italian independent firms and multinational companies By Alessia Pisoni; Alberto Onetti; Luciano Fratocchi; Marco Talaia
  4. Intellectual Property Protection and Patterns of Trade By Jade Vichyanond
  5. Effect of Liberalization on Banking Competition By Gloria Pasadilla; Melanie Milo
  6. Competition Policy and Regulation in Ports and Shipping By Gilberto M. Llanto; Enrico L. Basilio; Leilanie Basilio

  1. By: Luis Corchón; Félix Marcos
    Abstract: In this paper we consider price regulation in oligopolistic markets when firms are quantity setters. We consider a market for a homogeneous good with a special form of the demand function (?-linearity), constant returns to scale and identical firms. Marginal costs can take two values only: low or high. The regulator knows all parameters except marginal costs. Assuming that the regulator is risk neutral, we characterize the optimal policy and show how this policy depends on the basic parameter of demand and costs
    Date: 2010–01
    URL: http://d.repec.org/n?u=RePEc:cte:werepe:we100101&r=ind
  2. By: Olivier Bomsel (CERNA - Centre d'économie industrielle - Mines ParisTech); Heritiana Ranaivoson (CERNA - Centre d'économie industrielle - Mines ParisTech)
    Abstract: The digitization of copyrighted goods and the dematerialization of their distribution over the Internet have weakened copyright, a key institution of the creative industries. One factor affecting the value of copyright stems from the broadband roll-out, wherein copyright enforcement costs have become higher than the estimated benefits of copyright. This paper analyzes the causes of this situation and suggests how a graduated response to infringers may durably decrease copyright enforcement costs. Beginning with a review of the economic literature on copyright focusing on its industrial aspects, the study then analyzes how the consumers' impunity provides incentives to “free ride” on copyright all along the vertical distribution chain. This rapidly increases copyright enforcement costs. Next, the paper describes both the graduated response mechanism and the voluntary agreement which initiated this system in France. In conclusion, this study argues that increasing the cost of free-riding for the final consumer should lead to a decrease of copyright enforcement costs and, therefore, higher returns in the creative industries.
    Keywords: Copyright, Creative industries, Regulation enforcement costs, Digitization, Graduated response.
    Date: 2009–12
    URL: http://d.repec.org/n?u=RePEc:hal:journl:hal-00446189_v2&r=ind
  3. By: Alessia Pisoni (Department of Economics, University of Insubria, Italy); Alberto Onetti (Department of Economics, University of Insubria, Italy); Luciano Fratocchi (Department of Mechanical Thermal and Managerial Engineering – University of L’Aquila); Marco Talaia (Business Research Department – University of Pavia)
    Abstract: This paper aims at analysing the main features of R&D activities carried out by the Italian biotech companies. The proposed contribution can be ascribed to the massive stream of research related to the reconfiguration of the value chain activities at the international level. Such a topic has become more and more actual because of both the markets globalisation and diffusion of networked architectures within internationalised companies (see, among others, Bartlett 1986; Bartlett and Goshal 1987, 1990; Bartlett, Doz and Hedlund 1990; Forsgren 1993; Forsgren and Holm 1993; Forsgren, Holm and Johanson 1991, 1992; Forsgren and Johanson 1992; Forsgren and Pedersen 1998; Hedlund 1979, 1980, 1986, 1994; Hedlund and Ridderstrale 1994; Hedlund and Rolander 1990; Lipparini and Fratocchi 1999). Within such a stream of research, we decided to focus the attention on the biotech industry, due to its specific features, that deeply influence both the strategic behaviour of firms and the economic environment of the countries where they operate.Keeping in mind the different types of biotech firms operating at global level, we have decided to focus our attention to a less heterogeneous population. In so doing, we narrowed the analysis to the red biotech segment (that is health care biotech companies which develop drugs and diagnostics), because of its absolute predominance both in Italy (73% of enterprises, 94% of total revenue and 86% of investments1) and at worldwide level (51% of EU firms and 60% of USA ones2). First of all we collected data for a sample of companies operating in the Italian red biotech industry. Particularly, we focused on R&D activities: we tried to quantify its extent, to understand where they are located (domestically or abroad) and the role played by alliances/cooperation with -in and -out the industry. More specifically, in order to reach the goals above described, attention was paid to the aptitude of the Italian country-system to attract investments from abroad. In doing so, we studied separately the Italian independent firms and MNCs. Analysing the peculiarities of how Italian independent firms and MNCs manage R&D activities, we tried to find out the existence of a different approach to R&D investments. The paper is structured in four main sections. In the first one, the main relevant features of biotech firms are discussed and the literature background presented. The second paragraph deals with sample and methodology description. In the third section, the main results regarding the analysis of R&D activities carried out by the red Italian biotech companies are presented. The conclusions complete the paper.
    Keywords: Biotech, localisation, R&D, collaborative R&D, MNCs.
    Date: 2010–01
    URL: http://d.repec.org/n?u=RePEc:ins:quaeco:qf1003&r=ind
  4. By: Jade Vichyanond (Princeton University)
    Abstract: The paper provides a simple theoretical model for understanding how the difference in the level of intellectual property rights protection determines trade patterns. In particular, I examine how countries ?levels of patent rights protection affect exports in industries with different degrees of reliance on innovation. In contrast to most models of institutional comparative advantage, which predict that countries with superior institutions specialize in industries that are very dependent on institutions, I show that higher patent rights protection does not necessarily lead to specialization in industries that rely heavily on innovation. There may exist a threshold beyond which occurs a reversal of specialization patterns, a consequence of monopoly power inherent in intellectual property rights protection. I then use the model?s implications to assess empirically whether such predicted patterns hold in cross-country trade data and fi?nd evidence for general patterns of specialization as well as a reversal of such patterns among countries with high levels of patent rights protection.
    Keywords: intellectual property rights, trade patterns, patent rights
    JEL: L10 L12 K39 H32
    Date: 2009–11
    URL: http://d.repec.org/n?u=RePEc:pri:cepsud:1201&r=ind
  5. By: Gloria Pasadilla; Melanie Milo (Philippine Institute for Development Studies)
    Abstract: The paper analyzes the impact of major policy changes on banking structure, performance and competition, using bank-specific data from 1990-2002. We find that the entry of more market players is correlated with drops in interest spread and profits which, partly, bespeaks of possible dissipation of previous monopoly profits of large commercial banks. We also compute the H-stat based on the Panzar-Rosse methodology and find that, in general, despite the characteristic presence of few, large commercial banks, the sector is fairly competitive, specially in the loan-granting business. Moreover, competition has increased in the latter half of 1990s, primarily due to the presence of more small commercial banks, rather than big banks.
    Keywords: banking reform, bank liberalization, h-statistics, competition policy, Panzar- Rosse methodology
    JEL: G21 O16 O10
    Date: 2010–01
    URL: http://d.repec.org/n?u=RePEc:eab:develo:1789&r=ind
  6. By: Gilberto M. Llanto; Enrico L. Basilio; Leilanie Basilio (Philippine Institute for Development Studies)
    Abstract: The Philippines is an archipelago of approximately 7,107 islands. It has a long coastline extending to 235,973 square kilometers which is longer than that of the United States (UNESCAP 2002b). The country’s archipelagic configuration requires an efficient maritime transport infrastructure composed of ports and shipping for growth and socioeconomic integration. The integration of peripheral islands to the urban economic nodes such as Metro Manila, Cebu, Davao and General Santos and the diffusion of investments and economic activities fundamentally count on an efficient road and maritime transport network. This paper examines competition policy and the regulatory framework of the port and shipping sectors. It assesses the policies and programs of the government in promoting competition in these sectors and recommends areas for policy and regulatory reform. After a brief description of the analytical underpinnings of competition policy and regulation the paper reviews the present state of competition and regulation in Philippine ports and interisland shipping to identify emerging issues that call for policy action. It provides specific recommendations for policy and regulatory reform.
    Keywords: maritime transport, ports and inter-island shipping, competition policy, regulatory framework, market contestability, landlord port model
    JEL: L51 L90 O19
    Date: 2010–01
    URL: http://d.repec.org/n?u=RePEc:eab:develo:1760&r=ind

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