nep-ind New Economics Papers
on Industrial Organization
Issue of 2013‒08‒23
two papers chosen by
Kwang Soo Cheong
Johns Hopkins University

  1. Does State Antitrust Enforcement Drive Establishment Exit? By Robert M. Feinberg; Thomas A. Husted; Florian Szucs
  2. Upstream product market regulations, ICT, R&D and productivity. By Cette, G.; Lopez, J.; Mairesse,J.

  1. By: Robert M. Feinberg; Thomas A. Husted; Florian Szucs
    Abstract: Previous work has shown that state-level antitrust enforcement activity may have impacts on entry and relocation behavior by U.S. firms. Significant state-level antitrust activity may be an indicator of a perceived adverse business environment and it is found to deter establishment entry, particularly for larger firms in the retail and wholesale sectors. An obvious question is whether establishment exit is affected in a symmetric way, or whether sunk costs of market entry may lead to a smaller impact in terms of the exit decisions. We first combine US Census establishment exit panel data with data for 1998-2006 on US state-level antitrust activity and other measures of state-level business activities that may affect establishment exit. We also consider establishment exit across different broad industry types -- manufacturing, retail and wholesale -- and several firm size categories. Local business cycle factors seem to be the primary driver of exit, though there is some evidence of political and antitrust determinants as well. In another approach, we examine firm-level exit decisions and the extent to which these respond to state antitrust enforcement, with some indication of antitrust enforcement effects here as well, especially in the wholesale and retail sectors. JEL classification:
    Date: 2013
    URL: http://d.repec.org/n?u=RePEc:amu:wpaper:2013-13&r=ind
  2. By: Cette, G.; Lopez, J.; Mairesse,J.
    Abstract: Our study aims at assessing the actual importance of the two main channels usually contemplated in the literature through which upstream sector anticompetitive regulations may impact productivity growth: business investments in R&D and in ICT. We thus precisely try to estimate what are the specific impacts of these two channels and their shares in total impact as against alternative channels of investments in other forms of intangible capital such as improvements in skills, management and organization. For this, we specify an extended production function relating productivity explicitly to R&D and ICT capital as well as to upstream regulations, and two factor demand functions relating R&D and ICT capital to upstream regulations. These relations are estimated on a panel of 14 OECD countries and 13 industries over the period 1987-2007. Our estimates confirm the results of previous similar studies finding that the impact of upstream regulations on total factor productivity can be sizeable, and they provide evidence that a good part of the total impact, though not a predominant one, goes through both investments in ICT and R&D, and particularly the latter.
    Keywords: Productivity, Growth, Regulations, Competition, Catch-up, R&D, ICT
    JEL: O43 L5 O33 O57 L16 C23
    Date: 2013
    URL: http://d.repec.org/n?u=RePEc:bfr:banfra:441&r=ind

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