nep-net New Economics Papers
on Network Economics
Issue of 2011‒05‒30
two papers chosen by
Yi-Nung Yang
Chung Yuan Christian University

  1. Asymmetric Broadband Wholesale Regulation By Hoernig, Steffen
  2. The Value of Business Networks in Emerging Economies: An Analysis of Firms' External Financing Opportunities By Owolabi, Oluwarotimi; Pal, Sarmistha

  1. By: Hoernig, Steffen
    Abstract: Due to technological convergence, multiple infrastructures can now offer broadband or triple-play services, while the existing access regulation is based on a single essential network. We show that continued asymmetric access regulation of one network does not control sufficiently for market power and benefits the unregulated network, and that symmetric regulation would lead to higher consumer surplus. Furthermore, the whole setup of access regulation may not be viable in the long run if regulatory constraints provide strong first-mover advantages to the unregulated network.
    Keywords: Access regulation; Cable; Convergence; Copper
    JEL: L51 L96
    Date: 2011–05
  2. By: Owolabi, Oluwarotimi (Brunel University); Pal, Sarmistha (Brunel University)
    Abstract: The paper argues that networked firms are likely to have an advantage in securing external finance in countries with weak legal and judicial institutions since it helps financial institutions to minimize the underlying agency costs of lending. An analysis of recent BEEPS data from fifteen Central and Eastern European (CEE) countries lends some support to this hypothesis. Even after controlling for other factors, firms affiliated to business associations are more likely to secure bank finance. Importance of being associated with business networks is particularly evident among firms who borrow from private domestic and foreign banks, as these new banks attempt to minimize costs of adverse selection. Networking however discriminates against the small and medium sized firms' access to bank loans in the CEE regions. Results are robust in both single cross-section and panel data analyses.
    Keywords: business networks, agency costs, external firm financing, bank loans, transition economies, endogeneity
    JEL: G21 G30 L14 M20 P21
    Date: 2011–05

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