nep-ind New Economics Papers
on Industrial Organization
Issue of 2011‒08‒29
three papers chosen by
Kwang Soo Cheong
Johns Hopkins University

  1. The Consistency of Merger Decisions in a Developing Country: The South African Competition Commission By Richard J. Grimbeek; Sunel Grimbeek; Steven F. Koch
  2. Regulation and corporate corruption: new evidence from the telecom sector By Berg, Sanford V; Jiang, Liangliang; Lin, Chen
  3. Commercial and Regulatory Aspects of Reverse Hybrid Mail By Christian Jaag; Florian Stahl; Benoit Stroelin

  1. By: Richard J. Grimbeek (Department of Economics, University of Pretoria); Sunel Grimbeek (Department of Economics, University of Pretoria); Steven F. Koch (Department of Economics, University of Pretoria)
    Abstract: Merger decisions made by the South African Competition Commission from April 2002 to March 2010 are analyzed to empirically identify the factors, which have historically in uenced prohibition, conditional approval and unconditional approval. The key explanatory variables are linked to provisions of the 1998 Competition Act, as well as the timing of merger notications, such that the analysis provides insight into the consistency of merger decisions with respect to the legal requirements specied in the Act. Although the legislation includes standard economic concerns, it also includes a provision for advancing public interests and development concerns. Initial results point to diering behaviour over the time period, which suggests that the Commission is inconsistent; however, the majority of those inconsistencies are removed, once additional measures of market contestibility are included in the analysis. The nal results suggest that the Commission is less likely to approve mergers that they link to markets that are less contestable. Furthermore, in addition to protecting competition, the Commission is simultaneously protecting other public interests. Therefore, our research supports the hypothesis that the Commission consistantly applies its legislative remit.
    Keywords: South African Competition Commission, Merger Decisions
    JEL: K21 L40 D78
    Date: 2011–08
  2. By: Berg, Sanford V; Jiang, Liangliang; Lin, Chen
    Abstract: This paper examines how government regulation in developing countries affects the form of corruption between business customers and service providers in the telecom sector. We match the World Bank enterprise-level data on bribes with a unique cross-country telecom regulation dataset collected by Wallsten et al. (2004), finding that 1) strong regulatory substance (the content of regulation) and regulatory governance reduce corruption; 2) competition and privatization reduces corruption; 3) the effects of regulatory substance on corruption control are stronger in countries with state-owned or partially state-owned telecoms, greater competition, and higher telecommunication fees; and 4) bureaucratic quality exert substitution effects to regulatory substance in deterring corruption. Overall, our results suggest that regulatory strategies that reduce information asymmetry and increase accountability tend to reduce illegal side-payments for connections.
    Keywords: Telecommunications; Regulation; Corruption
    JEL: L5 L9 K4
    Date: 2011–08–18
  3. By: Christian Jaag; Florian Stahl; Benoit Stroelin
    Abstract: Driven by market opening and increased competition from electronic communication, postal operators have started extending their scope of business by offering hybrid mail services in addition to physical mail conveyance. This paper discusses commercial and regulatory aspects of reverse hybrid mail, i.e. the electronic delivery and archiving of physical mail messages. It argues that postal operators are well positioned to offer hybrid services due to their established brands and their reputation. The introduction of reverse hybrid mail is able to significantly reduce the cost of postal operations while at the same time fitting customers' needs better than traditional postal services. However, these effects rely on the assumption that a postal operator is actually allowed to introduce an electronic delivery system of letters to entire regions and to thereby partially substitute the physical delivery to the doorstep.
    Keywords: Reverse hybrid mail, Regulation, Postal market, Substitution, Intermodal competition
    JEL: L50 L87
    Date: 2011–08

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