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on Industrial Organization |
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Issue of 2010‒04‒17
eight papers chosen by |
| By: | Ana Lozano-Vivas (Department of Economic Theory, Universidad de Málaga); Miguel A. Meléndez-Jímenez (Department of Economic Theory, Universidad de Málaga); Antonio J. Morales (Department of Economic Theory, Universidad de Málaga) |
| Abstract: | The U.S. banking industry has been characterized by intense merger activity in the absence of economies of scale and scope. We claim that the loosening of geographic constraints on U.S. banks is responsible for this consolidation process, irrespective of value-maximizing motives. We demonstrate this by putting forward a theoretical model of banking competition and studying banks’ strategic responses to geographic deregulation. We show that even in the absence of economies of scale and scope, bank mergers represent an optimal response. Also, we show that the consolidation process is characterized by merger waves and that some equilibrium mergers are not profitable per se -they yield losses- but become profitable as the waves of mergers unfold. |
| Keywords: | Banking Competition, Deregulation, Mergers |
| JEL: | C72 G21 G28 L13 L41 L51 |
| Date: | 2010–03 |
| URL: | http://d.repec.org/n?u=RePEc:mal:wpaper:2010-2&r=ind |
| By: | Tim James; Jolian McHardy (Department of Economics, The University of Sheffield Author-Person=pmc71) |
| Abstract: | We derive a measure of welfare loss as a proportion of the value of sales under quantity-setting symmetric oligopoly in terms of the equilibrium industry price elasticity of demand, the number of firms in the industry and a conjectural variation term in the context of the standard linear model. This generalises the monopoly measure in James and McHardy (1997). |
| Keywords: | Oligopoly, Welfare loss, Elasticity |
| JEL: | D60 |
| Date: | 2009–06 |
| URL: | http://d.repec.org/n?u=RePEc:shf:wpaper:2009013&r=ind |
| By: | Regmi, Anita; Seale, James L. Jr. |
| Abstract: | This report presents a simple methodology for calculating cross-price elasticities across countries, using the Frisch own-price elasticity. Cross-price elasticities are calculated for 9 major consumption categories from the 1996 International Comparison Program data across 114 countries. The consumption categories are: food, beverage, and tobacco; clothing and footwear; education; gross rent, fuel, and power; house furnishings and operations; medical care; recreation; transport and communications; and âotherâ items. Additionally, cross-price elasticities are calculated and reported for a two-good demand system of food and nonfood. The elasticity estimates from this report are the only available consistent cross-country cross-price elasticity estimates across such a large number of countries and consumption categories. |
| Keywords: | Cross-country demand analysis, cross-price elasticities, 1996 ICP data, Florida Model, Frisch elasticity, complete demand analysis, food demand, Demand and Price Analysis, International Development, International Relations/Trade, |
| Date: | 2010–03 |
| URL: | http://d.repec.org/n?u=RePEc:ags:uerstb:59870&r=ind |
| By: | Somsupa Nopprach |
| Abstract: | This paper seeks to analyze determinants of Asian countries' comparative advantage in the automotive industry. The effects of supporting industries, factor availability, factor intensity, transportation costs, and of the scale of foreign investment in the industry on the level of countries' comparative advantage are on focus. The results highlight the importance of strong supporting industries in raising a country's comparative advantage in the automotive industry. Furthermore, it is found that the role of factor endowments and intensities, and the role of the presence of Japanese firms, also became more important in determining a country's comparative advantage in the automotive industry following the decline in government intervention in the automotive industry. In addition, transportation costs play an important role in promoting costly-to-transport products to be likely to be produced in countries where there exists large local demand. |
| Date: | 2010–03 |
| URL: | http://d.repec.org/n?u=RePEc:hst:ghsdps:gd09-134&r=ind |
| By: | Uwe Cantner (School of Economics and Business Administration, Friedrich-Schiller-University Jena); Jens J. Krüger (Technical University Darmstadt, Fachbereich Rechts- und Wirtschaftswissenschaften); Rene Söllner (Friedrich Schiller University Jena, DFG-RTG "The Economics of Innovative Change") |
| Abstract: | The present paper examines one of the central elements of evolutionary thinking - competition formalized by the replicator dynamics mechanism. Using data on product characteristics of automobiles sold on the German domestic market over the period 2001-2006, we construct a competitiveness or fitness variable for each car model applying non-parametric efficiency measurement techniques. The basic question we intend to answer is whether cars providing a higher quality-price ratio for consumers tend to increase their market share compared to variants with lower quality-price ratios. The relationship between a car models' fitness and its market performance is empirically tested in a regression framework. The results show that the principle of `growth of the fitter' is working as suggested by evolutionary theory. In particular, we find that car models with considerably lower fitness than the market average lose, whereas models with above-average fitness gain additional market shares. |
| Keywords: | Replicator Dynamics, Product Characteristics, Data Envelopment Analysis |
| JEL: | O33 D12 L15 |
| Date: | 2010–04–07 |
| URL: | http://d.repec.org/n?u=RePEc:jrp:jrpwrp:2010-024&r=ind |
| By: | Bermingham, Colin (Central Bank and Financial Services Authority of Ireland); O’ Brien, Derry (Central Bank and Financial Services Authority of Ireland) |
| Abstract: | This paper empirically tests whether Irish and UK petrol and diesel markets are characterised by asymmetric pricing behaviour. The econometric assessment uses threshold autoregressive models and a dataset of monthly refined oil and retail prices covering the period 1997 to mid-2009. A methodological note is included on the importance of the specification of the number of possible regimes. In particular, the possibility of conflicting price pressures arising from short-run dynamics in retail prices and responses to disequilibrium errors needs to be explicitly modelled. For both the Irish and UK liquid fuel markets at national levels, the paper concludes that there is no evidence to support the “rockets and feathers” hypothesis that retail prices rise faster than they fall in response to changes in oil prices. It is still possible that a lack of competition at a more local level may accommodate asymmetric pricing behaviour. |
| Date: | 2010–02 |
| URL: | http://d.repec.org/n?u=RePEc:cbi:wpaper:3/rt/10&r=ind |
| By: | Nyström, Kristina (CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology) |
| Abstract: | This paper discusses the interrelationship between business regulations and entrepreneurial activities. Most empirical studies find that business regulations have a negative effect on the amount of entrepreneurial activities in an economy. In addition, we argue that the regulatory quality and amount of business regulation may also be influenced by the amount of entrepreneurial activities in the society since policymakers and bureaucrats tend to respond to changing conditions in the society. In the empirical part of the paper, data for 23 OECD countries for the period 1972-2002 in order to elaborate on the interrelationship between entrepreneurship and the quality of business regulations. The empirical findings indicate that there is a positive relationship between entrepreneurship, and the quality of business regulations. |
| Keywords: | entrepreneurship; red tape; business regulation |
| JEL: | L51 |
| Date: | 2010–04–10 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:cesisp:0225&r=ind |
| By: | Gianni De Fraja |
| Abstract: | Many industries and “sectors” of a modern economy display the interaction of private and public agents which forms the topic of this seminar. A first approximation classification identifies three broad types of situations, which beyond the prima facie similarity, are however radically different in origin and nature. |
| Date: | 2009–09 |
| URL: | http://d.repec.org/n?u=RePEc:lec:leecon:09/20&r=ind |