nep-net New Economics Papers
on Network Economics
Issue of 2006‒09‒16
four papers chosen by
Yi-Nung Yang
Chung Yuan Christian University

  1. Ethnic Networks and U.S. Exports By Subhayu Bandyopadhyay; Cletus C. Coughlin; Howard J. Wall
  2. Systemic Innovation in a Distributed Network: Paradox or Pinnacle? By Poul Houman Andersen; Ina Drejer
  3. Econometric modeling of business Telecommunications demand using Retina and Finite Mixtues. By Massimiliano Marinucci; Teodosio Pérez Amaral
  4. Exclusive vs Overlapping Viewers in Media Markets By Ambrus, Attila; Reisinger, Markus

  1. By: Subhayu Bandyopadhyay (Department of Economics, West Virginia University); Cletus C. Coughlin (Federal Reserve Bank of St. Louis); Howard J. Wall (Federal Reserve Bank of St. Louis)
    Abstract: This paper provides new estimates of the effects of ethnic network on U.S. exports. In line with recent research, our dataset is a panel of exports from U.S. states to 29 foreign countries. Our analysis departs from the literature in two ways, both of which show that previous estimates of the ethnic-network elasticity of trade are sensitive to the restrictions imposed on the estimated models. Our first departure is to control for unobserved heterogeneity with properly specified fixed effects, which we can do because our dataset contains a time dimension absent from previous studies. Our second departure is to remove the restriction that the network effect is the same for all ethnicities. We find that ethnic-network effects are much larger than has been estimated previously, although they are important only for a subset of countries.
    Keywords: Ethnic networks, state exports
    JEL: F10 R10
    Date: 2005
  2. By: Poul Houman Andersen; Ina Drejer
    Abstract: Previous research has suggested that there is a dichotomy of organisational practices: companies involved in autonomous or modularised innovations, it is argued, benefit from decentralised approaches where coordination primarily takes place through the marketplace, whereas the benefits of systemic innovation are said to be appropriated best by centralised organisations. However, case studies of subcontractors to the Danish wind turbine industry suggest that the ability to meet heterogeneous demands plays an important role for the success of different forms of organisational practices in relation to innovation. The modularised versus systemic architecture approach therefore appears to be a too sweeping dichotomy for describing what can better be perceived as an array of different practices for balancing innovation contribution with the ability of individual firms to appropriate innovation benefits – and a heterogeneous market perception is a core element in building and sustaining this ability.
    Keywords: Organisational Forms; Innovation System; Knowledge Complementarities; Value Appropriation
    JEL: L14 O31 O34
    Date: 2006
  3. By: Massimiliano Marinucci (Universidad Complutense de Madrid. Facultad de CC. Económicas y Empresariales. Dpto. de Economía Cuantitativa.); Teodosio Pérez Amaral (Universidad Complutense de Madrid. Facultad de CC. Económicas y Empresariales. Dpto. de Economía Cuantitativa.)
    Abstract: In this paper we estimate the business telecommunications demands for local,intra-LATA and inter-LATA services, using US 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 normal heteroskedastic mixture regressions. The results show that a three-component mixture model fits the demand for local services well, while a two-component structure is used to model intra-LATA and inter-LATA demand. We characterize the groups in terms of their differences among the coefficients, and then use Retina to perform automatic model selection over an expanded candidate regressor set which includes heterogeneity parameters as well as transformations of the original variables. Our models improve substantially the in-sample fit as well the out-ofsample predictive ability over alternative candidate models. Retina suggests that the final demand specification should include telephone equipment variables as relevant regressors. On the other hand, 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).
    Date: 2005
  4. By: Ambrus, Attila; Reisinger, Markus
    Abstract: This paper investigates competition for advertisers in media markets when viewers can subscribe to multiple channels. A central feature of the model is that channels are monopolists in selling advertising opportunities toward their exclusive viewers, but they can only obtain a competitive price for advertising opportunities to multi-homing viewers. Strategic incentives of firms in this setting are different than those in former models of media markets. If viewers can only watch one channel, then firms compete for marginal consumers by reducing the amount of advertising on their channels. In our model, channels have an incentive to increase levels of advertising, in order to reduce the overlap in viewership. We take an account of the differences between the predictions of the two types of models and find that our model is more consistent with recent developments in broadcasting markets. We also show that if channels can charge subscription fees on viewers, then symmetric firms can end up in an asymmetric equilibrium in which one collects all or most of its revenues from advertisers, while the other channel collects most of its revenues via viewer fees.
    Keywords: Media; Multihoming; Platform Competition; Two-Sided Markets
    JEL: D43 L13
    Date: 2006–09

This nep-net issue is ©2006 by Yi-Nung Yang. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.