nep-ind New Economics Papers
on Industrial Organization
Issue of 2015‒03‒27
five papers chosen by
Kwang Soo Cheong
Johns Hopkins University

  1. Technology, regulations, business strategy and business performance on indonesian telecommunication industry By Bambang Budiono
  2. Service Oligopolies and Australia’s Economy-Wide Performance By Rod Tyers
  3. R&D and Innovation Activities – Search for Better Definitions and an Economic-Historical Approach* By Marek Vokoun
  4. Contribution of R&D services to added economic value in Estonia By Aaro Hazak; Raul Ruubel
  5. Non-Competitive Potential in the Iranian Electricity Market By Ali Nazemi; Anahita Farsaee

  1. By: Bambang Budiono (Telkom university, pt. telkom indonesia)
    Abstract: Telecommunication industries in indonesia have currently entered a phase which people's awareness of knowledge on the information technology-based products and services increases. some of the phenomena that occur in the industries are : (i) the technology develops rapidly, (ii) the telecommunication regulations are frequently overdue in anticipating the user needs and business requirements, (iii) the income of the executants,signed by the average revenue per user (arpu), tends to decline hence the profit per customer decreases; (iv) the strategy implementation by the company or business unit in these industries are relatively the same. these conditions require the industry players to determine the proper steps in anticipating the current competition. therefore, this research will explore the correlation among the variables of technology , regulation , business strategy , and the business unit performancein order to formulate the correlation among the four variablesthe research is aimed to produce a study concerning the correlation among technology,regulation,business strategyy,and unit business performancein the telecommunication industries in indonesia. the research used descriptive and verification by conducting a survey to 34 samples with the units of analysis covering the business units in the four largest telecommunication operators in Indonesia. data were obtained from the results of observation, questionnaires and interviews, and partial least square (pls) was used for analysis and hypothesis testingthe results of this study show that there is an impactof technology on business unit performance through the regulation and business strategy. the impact of technology may happen through the regulatory and business strategies. at the same time, the impact of technology on both business strategy and business unit performance directly is extremely low, and so is the impact of the regulation on the performance of the business. the impactof regulation on the performance of the business unit will be significant if it is through the business strategy
    Keywords: Technology, Regulation, Business Strategy, Business Performance
    JEL: M20
    Date: 2014–05
  2. By: Rod Tyers (Business School, University of Western Australia)
    Abstract: The retreat from public ownership of service firms and industries has left behind numerous private monopolies and oligopolies supervised by regulatory agencies. Services industries in government and private ownership generate two-thirds of Australia’s value added, while the newly privatised ones, utilities, telecommunications, finance and transport, supply a fifth. This study offers an economy-wide approach that represents monopoly and oligopoly behaviour explicitly. It examines the implications of oligopoly rents for factor markets and the real exchange rate, the extent of sectoral interactions and the potential economy wide gains from tighter price cap regulation. The results confirm that the level of non-linear interaction between oligopoly sectors justifies an economy-wide approach. Moreover, pricing surveillance and price cap regulation are shown to play very significant roles in sustaining economic efficiency, helping avoid costs from oligopoly distortions that, in the absence of regulation, could amount to a third of Australia’s GDP.
    Date: 2014
  3. By: Marek Vokoun (University of Economics, Prague)
    Abstract: The paper examines the challenges social scientists face when analysing innovation, especially R&D and innovation activities of firms, i.e. their strategies in typical stages of an innovation process in a defined economy. The motivation behind is to describe properly the innovation activities of firms in the proper economic-historical context. There are many ways innovation can be understood (inter-culturally/inter-nationally) and different ways in which firms, institutions, and governments organize and undertake innovation activities. Entrepreneurs and multinationals are an essential part of market mechanism and innovation is, ex ante, beneficial for them. There are many theories and the current ones demand interdisciplinary approach. It is due to the dynamic nature of innovation and the global context – economic crises, the Internet. At the end of the paper current definition misunderstanding in social sciences is discussed and a better understanding is introduced, which builds upon the simultaneous nature and almost interchangeable relationship between innovation, imitation and invention.
    Keywords: Innovation, imitation, invention, firm’s strategies, market conditions, institutions, productivity, cliometrics, developing country, endogenous growth, technological change.
    JEL: L60 O38 D24
    Date: 2014–07
  4. By: Aaro Hazak (Tallinn University of Technology); Raul Ruubel (Tallinn University of Technology)
    Abstract: The role and intensity of knowledge within an economy remains a key success factor for long-term economic growth, increased productivity, competitiveness and socio-economic sustainability. These challenges are particularly important for emerging economies that are yet to catch up frontier knowledge economies. This paper seeks to understand the contribution that R&D services have through added economic value to the GDP in Estonia. Based on the most recent supply and use matrices on the data from year 2009, prepared under the input-output framework of Estonian national accounts, we identify to which extent do the R&D services used in the Estonian economy originate from domestic industries and imports, and how the supplies of R&D services are allocated between intermediate and final uses, including exports. As an output of that analysis we identify the direct contribution of R&D services to added economic value in the Estonian economy to be 0.5% and their primary indirect contribution to be 0.4%. Further indirect effects however exist which need to be quantified under our following studies. Vast majority (93%) of the R&D services used in the Estonian economy appear to be of local origin, generated primarily by companies specialising in R&D services. Export capacity of Estonian R&D services appears to be very limited, contributing 0.2% of Estonian total exports. Overall, we identify that a significant progress is yet to be made to catch up with knowledge frontier countries.
    Keywords: R&D services, GDP, supply and use tables, input-output modelling
    JEL: L80 C67
    Date: 2014–07
  5. By: Ali Nazemi (University of Economic Sciences); Anahita Farsaee (University of Economic Sciences)
    Abstract: The electricity markets worldwide have distinctive particularities due to some political and historical reasons. However, principal guidelines of market design remain very similar. The Iranian electricity market has been inaugurated as a pay-as-bid market in 2004. Although the Iranian electricity market has had positive consequences, the economic discussion about proper market design and architecture is in its infancy. The main goal of this paper is analyzing market power and efficiency in the Iranian electricity market.Generally, in spite of the fact that Iranian electricity market is not a high concentrated market, it has potential for non-competitive results. Analyzing results and other facts of the market shows that the most important reason for this is the urgent shortage of supply threshold in this market, rather than the extent of concentration in the industry.
    Keywords: market power, efficiency, Iranian Electricity Market
    JEL: D49
    Date: 2014–07

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