nep-net New Economics Papers
on Network Economics
Issue of 2005‒05‒14
seven papers chosen by
Yi-Nung Yang
Chung Yuan Christian University

  1. Vertical separation of the energy-distribution industry By Machiel Mulder; Victoria Shestalova; Marc Lijesen
  2. Firm Location, Corporate Structure, R&D Investment, Innovation and Productivity By Johansson, Börje; Lööf, Hans; Rader Olsson, Amy
  4. Agenda Networks and Farsightedly Stable Agenda Formation By Sami Dakhlia; Frank H. Page Jr.
  5. The International Drivers of Domestic Airline Mergers in Twenty Nations: Integrating Industrial Organization and International Business By Joseph A. Clougherty
  6. Classes empiétantes dans un graphe et application aux interactions entre protéines By Lucile Denoeud; Irène Charon; Alain Guénoche; Olivier Hudry
  7. The viability of deregulation in the russian gas industry By Catherine Locatelli

  1. By: Machiel Mulder; Victoria Shestalova; Marc Lijesen
    Abstract: The Dutch Minister of Economic Affairs has proposed to replace the currently implemented structure of legal unbundling of the energy distribution industry by ownership unbundling. In this study we analyse costs and benefits of this proposal, compared to the current situation, and to two alternative options that strengthen legal unbundling. We identify four mutually-related categories of benefits: better performance of networks, more efficient regulation, improved effectiveness of competition, and benefits of privatisation; and three categories of costs: one-off transaction costs, loss of economies of scope and the risk of less investment in generation. The analysis highlights that the benefits depend on the future development in small-scale generation and on allocation of the management of transmission networks. Mainly because of the uncertainty about the future role of small-scale generation and the uncertainty about the magnitude of the one-off transaction costs related to cross-border leases, the net welfare effect of ownership unbundling at the distribution level is ambiguous. We identify an alternative route for achieving some of the benefits considered.
    Keywords: network industries, electricity market, industrial organisation, unbundling, regulation
    JEL: L51 Q40 Q48
    Date: 2005–04
  2. By: Johansson, Börje (CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology); Lööf, Hans (CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology); Rader Olsson, Amy (CEFIN)
    Abstract: This study elucidates how firm location and corporate structure influence R&D-intensity, external collaboration on innovation, return on R&D and economic performance. The study, based on 1,907 firm level observations, essentially compare a functional region with four other regional areas in Sweden. In this context, the Stockholm region is assumed as an integrated functional urban region with innovation-proximity characteristics. The paper examines systematically the influence of location versus various firm characteristics. The econometric results suggest the following: First, a typical Stockholm firm has a significantly larger likelihood than other firms of being engaged in innovation activities. Second, among innovative firms, the R&D intensity and global collaboration on innovation is primarily determined by its corporate structure, not geographic location. Third, the embeddedness in regional and national scientific and vertical innovation systems is relatively more intense outside Stockholm. Finally, the advantage of being located within Sweden’s most strongest concentration of R&D spending, universities, human capital and multinational enterprises with their global networks is reflected by a superior return on R&D investments and higher productivity, when controlling for firm size, human capital, physical capital, R&D-intensity, market orientation and sector classification.
    Keywords: Regional economy; multinational companies; R&D; innovation; innovation system
    JEL: C21 G34 L22 O33
    Date: 2005–05–09
  3. By: Massimiliano Marinucci (Universidad Complutense Madrid); Teodosio Pérez-Amaral (Universidad Complutense Madrid)
    Abstract: We estimate the business telecommunications demands for local, intra- LATA and inter-LATA services, using US telecommunications data from a Bill Harvesting (R) survey carried out during 1997. We model heterogeneity, which is present among firms due to a variety of different business telecommunication needs, by estimating heteroskedastic normal mixture regression models for each demand. The results show that a three components mixture model fits well the demand for local services while a two components structure is used to model intra-LATA and inter-LATA demand. We describe the groups in terms of their difference among the coefficient regressors, and then use Retina to perform automatic model selection over a new expanded candidate regressor set which includes heterogeneity parameters as well as transformation of the original variables. Our results show that obtained models improve substantially the in-sample as well the out-of-sample predictive ability over alternative candidate models. Retina suggests that the final demand specification should include also interaction terms between telephone equipment variables which are found to be negative. On the other side the output of the firm, as well as its physical extension, have second order, yet significant effects on the demand for telecommunication services. Estimated elasticities are different for the three demands but always positive for access form (single-line or private network), while the effects of other variables is secondary.
    Keywords: Telecommunication Demand Models, Local calls, inter-LATA calls, intra-LATA calls, Retina, Flexible Functional Forms, Heterogeneity, Finite Mixtures.
    JEL: C21 C51 C87
    Date: 2005–05–10
  4. By: Sami Dakhlia (University of Alabama); Frank H. Page Jr. (University of Alabama)
    Abstract: We model the agenda formation process as a network. In an agenda network, nodes represent agendas while arcs represent coalition preferences over agendas and coalitional moves from one agenda to another. We show that all agenda networks have agenda nodes which are farsightedly consistent. These nodes represent agendas which are likely to emerge and persist if agents behave farsightedly in forming agendas. We demonstrate the usefulness of our approach by computing the farsightedly consistent agendas for three examples of agenda networks.
    Keywords: directed networks, farsighted stability
    JEL: D7
    Date: 2005–05–12
  5. By: Joseph A. Clougherty
    Abstract: The domestic airline merger phenomenon of the late 1980s and early 1990s sparked a great deal of Industrial Organization (IO) literature; yet, that literature neglected non-US domestic mergers and potential for international competitive gains. Using an International Business perspective to complement an IO analysis, I argue that factoring international competitive incentives helps explain domestic airline merger activity. A Cournot model of airline competition illustrates that domestic mergers, via enhanced domestic networks and reduced domestic competition, generate international competitive gains. Further, empirical tests - using a structural-equations approach on panel data covering international city-pair market segments - support domestic mergers improving international competitiveness. <br> <br> <i>ZUSAMMENFASSUNG - (Was die inländischen Fluglinien in 20 Ländern zur Fusion getrieben hat. Eine integrierte industrieökonomische und betriebswirtschaftliche Analyse des internationalen Wettbewerbs) <br> In der Industrieökonomik hat das Phänomen von Fusionen inländischer Fluggesellschaften in den späten 1980er und frühen 1990er Jahren viel wissenschaftliche Literatur angeregt. Die einschlägigen Forschungsarbeiten behandeln jedoch ausschließlich inländische Fusionen in den U.S.A. und lassen damit den Aspekt des internationalen Wettbewerbs außer Acht. In dieser Untersuchung, die die industrieökonomische Analyse um die Perspektive der internationalen Betriebswirtschaft ergänzt, wird gezeigt, dass die Anreize des internationalen Wettbewerb in das Erklärungsmodell für nationale Fusionen von Fluglinien integriert werden können. Anhand eines Cournot-Modells des Wettbewerbs zwischen Fluggesellschaften kann dargelegt werden, wie Fusionen zu einem erweiterten inländischen Netz an Flugverbindungen und verminderten Konkurrenzdruck im Inland führen und so die Position der fusionierten Fluglinie im internationalen Wettbewerb stärken. Dieses Ergebnis wird von empirischen Tests, die eine Struckturvergleichsmethode für Paneldaten über einen internationalen Städtevergleich der Marktsegmente verwenden, gestützt.</i>
    Keywords: airline-mergers, imperfect-competition, international-determinants
    JEL: L13 F14 L93
    Date: 2005–04
  6. By: Lucile Denoeud (ENST et CERMSEM); Irène Charon (ENST); Alain Guénoche (Institut de Mathématiques de Luminy); Olivier Hudry (ENST et CERMSEM)
    Abstract: In this paper, we study a method of classification by density in an unweighted graph. We search some areas with a high density of edges, that can be overlapping (we don't try to obtain a partition but some intrinsic classes). The method consists of two steps ; first we determine the cores of the classes by means of a local density function and then we extend these cores by their neighbourhoods following a criterion on the density of the classes. Finally, the method is applied on a protein-protein interaction network, with the aim of predicting unknown cellular functions of some proteins.
    Keywords: Bioinformatic, classification, density function, interaction network
    JEL: C69
    Date: 2005–04
  7. By: Catherine Locatelli (LEPII - Laboratoire d'économie de la production et de l'intégration internationale - - CNRS : FRE2664 - Université Pierre Mendès-France - Grenoble II)
    Abstract: Russia is the world's leading gas producer. But reforming the gas industry is currently one of the major challenges facing the Russian energy industry in order to pursue its development. Since 1991, the terms of the debate have scarcely changed: what level of deregulation is required, or can be introduced, in the gas industry? The reform project, actually discussed, is quite limited. This aim is to favour the development of competition on the Russian domestic market by creation of new producers. But it maintains the production-transport integration of Gazprom, the actual gas monopoly. Also, Gazprom will retain the monopoly on exports. So, the first stage of the reform, will only be the setting-up of a transparent and non-discriminatory transportation network for Gazprom, with regulated prices, and the creation of an unregulated market alongside a regulated market. But the issue of the reform begs a number of questions on the extent to which it will be accepted by the various actors involved at different levels.
    Keywords: russie;reforme;industrie gaziere;déréglementation;gas industry;deregulation;russia
    Date: 2004–03–16

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