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on Industrial Organization |
| By: | Jaimovich, Esteban (University of Turin (ESOMAS Department) and Collegio Carlo Alberto); Madzharova, Boryana (Central Bank of Ireland, Friedrich-Alexander-Universität Erlangen-Nürnberg, and CESIfo); Merella, Vincenzo (University of Cagliari and Prague University of Economics and Busines) |
| Abstract: | The paper investigates firms’ rollout strategies for quality-differentiated products across geographically dispersed markets. Using a theoretical framework that integrates nonhomothetic preferences, we show that premium goods are more likely to enter wealthier markets first, allowing firms to capture higher markups. We find that the main factors influencing the selection of follow-up markets differ by product quality: for premium goods, income levels are the primary determinant of expansion paths, whereas geographic proximity is the main driver for lower-quality products. Using micro-level data from the refrigeration industry, we confirm a significant positive association between market-entry order and income for higherquality products. Furthermore, we observe that follow-up markets tend to be geographically more dispersed for premium goods, reflecting a shift away from proximity-based expansion strategies. |
| Keywords: | market entry, gravity; nonhomothetic preferences, quality differentiated products. |
| JEL: | F1 F14 F23 L68 |
| Date: | 2025–11 |
| URL: | https://d.repec.org/n?u=RePEc:cbi:wpaper:18/rt/25 |
| By: | Tatyana Deryugina; Alminas Žaldokas; Anastassia Fedyk; Yuriy Gorodnichenko; James Hodson; Ilona Sologoub |
| Abstract: | We develop a novel, scalable method for assessing the quality of public procurement systems using standard administrative data. Our approach compares the distribution of procurement opportunities to the distribution of contract awards across firms. We first derive a simple theoretical benchmark that relates the expected distribution of contract value winning firms, measured as a Herfindahl–Hirschman index (HHI), to the distribution of auction values, measured as a respective HHI, and the number of winning firms. Significant deviations of winning firms’ HHI from this benchmark indicate potential governance failures such as corruption or unchecked collusion. Our method requires no subjective input, is transparent and reproducible, and allows for meaningful comparisons across countries, industry sectors, and over time. We use procurement data from Ukraine and EU member states in 2018–2021 to assess the performance of five large sectors. Results indicate that Ukraine’s procurement performance in four of the five sectors is comparable to many other European countries. However, Ukraine’s construction sector consistently displays the largest excess concentration among all countries considered, consistent with anecdotal evidence of corruption in this sector. Overall, with minimal data requirements, our method offers a practical tool for cross-sector and cross-country assessment of procurement systems. |
| JEL: | D73 L1 L78 |
| Date: | 2025–11 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:34479 |