Template-Type: ReDIF-Article 1.0 Author-Name: William Baumol Author-X-Name-First: William Author-X-Name-Last: Baumol Title: Supply of Proprietary Technology: A Neglected Line of Research on Business Abstract: Journal: International Journal of the Economics of Business Pages: 9-10 Issue: 1 Volume: 1 Year: 1994 X-DOI: 10.1080/758540489 File-URL: http://www.tandfonline.com/10.1080/758540489 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:1:y:1994:i:1:p:9-10 Template-Type: ReDIF-Article 1.0 Author-Name: Richard Caves Author-X-Name-First: Richard Author-X-Name-Last: Caves Title: Game Theory, Industrial Organization, and Business Strategy Abstract: Journal: International Journal of the Economics of Business Pages: 11-14 Issue: 1 Volume: 1 Year: 1994 X-DOI: 10.1080/758540490 File-URL: http://www.tandfonline.com/10.1080/758540490 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:1:y:1994:i:1:p:11-14 Template-Type: ReDIF-Article 1.0 Author-Name: Keith Cowling Author-X-Name-First: Keith Author-X-Name-Last: Cowling Title: A More Creative Role for Industrial Policy Abstract: Journal: International Journal of the Economics of Business Pages: 15-17 Issue: 1 Volume: 1 Year: 1994 X-DOI: 10.1080/758540491 File-URL: http://www.tandfonline.com/10.1080/758540491 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:1:y:1994:i:1:p:15-17 Template-Type: ReDIF-Article 1.0 Author-Name: Stephen Davies Author-X-Name-First: Stephen Author-X-Name-Last: Davies Title: Empirical Research: The Future Abstract: Journal: International Journal of the Economics of Business Pages: 19-22 Issue: 1 Volume: 1 Year: 1994 X-DOI: 10.1080/758540492 File-URL: http://www.tandfonline.com/10.1080/758540492 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:1:y:1994:i:1:p:19-22 Template-Type: ReDIF-Article 1.0 Author-Name: Edwin Mansfield Author-X-Name-First: Edwin Author-X-Name-Last: Mansfield Title: The Role of Technology in Business Economics Abstract: Journal: International Journal of the Economics of Business Pages: 23-26 Issue: 1 Volume: 1 Year: 1994 X-DOI: 10.1080/758540493 File-URL: http://www.tandfonline.com/10.1080/758540493 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:1:y:1994:i:1:p:23-26 Template-Type: ReDIF-Article 1.0 Author-Name: Dennis Mueller Author-X-Name-First: Dennis Author-X-Name-Last: Mueller Title: Business and Industrial Organization Research: Synergy or Shotgun Marriage? Abstract: Journal: International Journal of the Economics of Business Pages: 27-30 Issue: 1 Volume: 1 Year: 1994 X-DOI: 10.1080/758540494 File-URL: http://www.tandfonline.com/10.1080/758540494 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:1:y:1994:i:1:p:27-30 Template-Type: ReDIF-Article 1.0 Author-Name: Louis Phlips Author-X-Name-First: Louis Author-X-Name-Last: Phlips Title: On Models for Product Markets Abstract: Journal: International Journal of the Economics of Business Pages: 31-33 Issue: 1 Volume: 1 Year: 1994 X-DOI: 10.1080/758540495 File-URL: http://www.tandfonline.com/10.1080/758540495 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:1:y:1994:i:1:p:31-33 Template-Type: ReDIF-Article 1.0 Author-Name: Michael Porter Author-X-Name-First: Michael Author-X-Name-Last: Porter Title: The Role of Location in Competition Abstract: Journal: International Journal of the Economics of Business Pages: 35-40 Issue: 1 Volume: 1 Year: 1994 X-DOI: 10.1080/758540496 File-URL: http://www.tandfonline.com/10.1080/758540496 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:1:y:1994:i:1:p:35-40 Template-Type: ReDIF-Article 1.0 Author-Name: John Sutton Author-X-Name-First: John Author-X-Name-Last: Sutton Title: History Matters. So What? Abstract: Journal: International Journal of the Economics of Business Pages: 41-44 Issue: 1 Volume: 1 Year: 1994 X-DOI: 10.1080/758540497 File-URL: http://www.tandfonline.com/10.1080/758540497 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:1:y:1994:i:1:p:41-44 Template-Type: ReDIF-Article 1.0 Author-Name: Oliver Williamson Author-X-Name-First: Oliver Author-X-Name-Last: Williamson Title: Research Needs and Opportunities in Transaction Cost Economics Abstract: Journal: International Journal of the Economics of Business Pages: 45-46 Issue: 1 Volume: 1 Year: 1994 X-DOI: 10.1080/758540498 File-URL: http://www.tandfonline.com/10.1080/758540498 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:1:y:1994:i:1:p:45-46 Template-Type: ReDIF-Article 1.0 Author-Name: Mark Casson Author-X-Name-First: Mark Author-X-Name-Last: Casson Title: Why are Firms Hierarchical? Abstract: Firms are hierarchical because hierarchy facilitates both monitoring and control. Monitoring is readily explained in terms of agency costs, but control is not. Control relations between superiors and subordinates emerge naturally only when the superior has decisive information and the subordinate does not. When decisiveness does not naturally occur, it may nevertheless be imposed in order to reduce communication costs. The degree of decisiveness reflects the pattern of volatility in the firm's environment. The theory connects the volatility of the environment to the degree of hierarchy in the organisation. Recent changes in volatility can be used to explain contemporary demands for flatter organizational structures. Journal: International Journal of the Economics of Business Pages: 47-76 Issue: 1 Volume: 1 Year: 1994 Keywords: Hierarchy; Decisiveness; Monitoring; Control, JEL classfication: L22, X-DOI: 10.1080/758540499 File-URL: http://www.tandfonline.com/10.1080/758540499 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:1:y:1994:i:1:p:47-76 Template-Type: ReDIF-Article 1.0 Author-Name: Lee Rivers Mobley Author-X-Name-First: Lee Rivers Author-X-Name-Last: Mobley Author-Name: H. E. Frech Author-X-Name-First: H. E. Author-X-Name-Last: Frech Title: Firm Growth and Failure in Increasingly Competitive Markets Theory and Application to Hospital Markets Abstract: Recent models of firm failure and growth have ignored demand factors. In this paper, we generalize these theoretical analyses to include demand factors in explaining failure and growth for heterogeneous firms in local markets facing imperfect but increasing competition. The model is then applied empirically to the hospital industry in California over the 1980s, during which time competition did intensify. We model the closure decision based on expectations of future growth, explicitly accounting for self selection and simultaneity. We find that both size and demand factors are important determinants of survival and growth Journal: International Journal of the Economics of Business Pages: 77-93 Issue: 1 Volume: 1 Year: 1994 Keywords: Closure; Growth; Survivor analysis; Hospitals; Scale economies; Competition, I11, L11, L31, L44, L84, O24, X-DOI: 10.1080/758540500 File-URL: http://www.tandfonline.com/10.1080/758540500 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:1:y:1994:i:1:p:77-93 Template-Type: ReDIF-Article 1.0 Author-Name: Peter Buckley Author-X-Name-First: Peter Author-X-Name-Last: Buckley Title: International Business Versus International Management? International Strategic Management from the View of point of Internalisation Theory Abstract: This article examines the theoretical bases of both international management and the internalisation approach to international business. Similarities include: attention to the 'make or buy' decision, interaction between locational and organisational variables and attention to internal control mechanisms. International management pays particular attention to the specific constraints on the firm's strategy arising from its history, dominant culture and leadership and to the process of management. The two approaches are used to analyse a single problem: the management of research and development, and it is found that important differences in emphasis remain. The approaches contrast but do not conflict. Journal: International Journal of the Economics of Business Pages: 95-104 Issue: 1 Volume: 1 Year: 1994 Keywords: Multinational corporations; International business strategy; Corporate strategy; Management of research and development, JEL classifications: F23, O32, X-DOI: 10.1080/758540501 File-URL: http://www.tandfonline.com/10.1080/758540501 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:1:y:1994:i:1:p:95-104 Template-Type: ReDIF-Article 1.0 Author-Name: Stephen Decanio Author-X-Name-First: Stephen Author-X-Name-Last: Decanio Title: Agency and Control Problems in US Corporations: The Case of Energy-efficient Investment Projects Abstract: Private sector corporations in the United States fall short of their potential to increase shareholders'1 wealth in a number of ways. One example is the failure to undertake profitable energy conservation investments. Explanations of this phenomenon include agency and moral hazard problems, imperfect information and incentives, myopia, and X-inefficiency. Data from a survey conducted by the US Environmental Protection Agency and from interviews with corporate executives are used to explore these hypotheses. Good overall corporate performance is found to be associated with longer internal payback requirements for energy investments. Suggestions for improving corporate decision-making in this area are proposed. Journal: International Journal of the Economics of Business Pages: 105-124 Issue: 1 Volume: 1 Year: 1994 Keywords: Energy; Efficiency; Agency problems; Myopia; Incentives; Information; Theory of the firm; Organizational behavior; Environment, JEL classifications: D2, D7, D8, L2, Q2, Q4, X-DOI: 10.1080/758540502 File-URL: http://www.tandfonline.com/10.1080/758540502 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:1:y:1994:i:1:p:105-124 Template-Type: ReDIF-Article 1.0 Author-Name: David Audretsch Author-X-Name-First: David Author-X-Name-Last: Audretsch Title: Business Survival and the Decision to Exit Abstract: The decision to exit is examined for a cohort of over 12,000 plants established in 1976. Using a longitudinal data base, the performance of the establishments is analysed over the subsequent 10 years. The empirical evidence suggests that start-up size, ownership status, and the industry environment affect the likelihood of a start -up subsequently exiting. Plants with more employees during the start -up year are found to have a lower likelihood of exit than do smaller plants. Similarly, establishnwnts which are independent are found to have a lower likelihood of exit within the following years than do newly created establishments belonging to a multi-plant firm. However, the determinants of exit apparently vary along with the age of the establishment. Innovative activity is found to raise the likelihood of establishment exit in the short run but lower it in the longer run. Journal: International Journal of the Economics of Business Pages: 125-137 Issue: 1 Volume: 1 Year: 1994 Keywords: Survival; Entry; Exit; Innovation, JEL classifications: L0, L1, X-DOI: 10.1080/758540503 File-URL: http://www.tandfonline.com/10.1080/758540503 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:1:y:1994:i:1:p:125-137 Template-Type: ReDIF-Article 1.0 Author-Name: Daniel Jones Author-X-Name-First: Daniel Author-X-Name-Last: Jones Title: The Auto Industry in Transition: From Scale to Process Abstract: Journal: International Journal of the Economics of Business Pages: 139-150 Issue: 1 Volume: 1 Year: 1994 X-DOI: 10.1080/758540504 File-URL: http://www.tandfonline.com/10.1080/758540504 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:1:y:1994:i:1:p:139-150 Template-Type: ReDIF-Article 1.0 Author-Name: Ronals Jones Author-X-Name-First: Ronals Author-X-Name-Last: Jones Title: America's High-Tech Industries: Tyson's Policy Proposals Abstract: Journal: International Journal of the Economics of Business Pages: 151-157 Issue: 1 Volume: 1 Year: 1994 X-DOI: 10.1080/758540505 File-URL: http://www.tandfonline.com/10.1080/758540505 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:1:y:1994:i:1:p:151-157 Template-Type: ReDIF-Article 1.0 Author-Name: Archana Hingorani Author-X-Name-First: Archana Author-X-Name-Last: Hingorani Author-Name: Karen Shastri Author-X-Name-First: Karen Author-X-Name-Last: Shastri Author-Name: Kuldeep Shastri Author-X-Name-First: Kuldeep Author-X-Name-Last: Shastri Title: Product Regulation and Stock Prices: The Case of the US Food and Drug Administration Abstract: This study focuses on the stock market effects associated with the announcements of product approvals, denials and recalls by the US Food and Drug Administration (FDA), and the impact of product approvals on research and development expenditures (R&D) and forecasts of earnings by Value Line. When the FDA announces approvals, the shareholder wealth of affected firms increases significantly. The announcements of denials and recalls by the FDA are associated with stock price declines. The stock price impact of recalls is dependent on whether the firm voluntarily withdraws a product or if the withdrawal is mandated by the FDA. Specifically, voluntary recalls are not associated with a change in stockholder wealth, while FDA mandated recalls are associated with decreases in stock price. In addition, we find that partial product recalls have a smaller impact than total recalls. An examination of the effects on competitors' stock price reveals losses when the FDA announces an approval or a recall, but no imt for a d. An analysis of changes in risk around FDA decisions suggests that, on average, betas do not change around approvals, recalls or denials. In addition, our results suggest that announcement period stock price behavior is unrelated to risk changes except for approvals where returns are positive and significant for firms with either increasing risk or no change in risk. We also find that approvals are associated with increases in R&D and forecasts of earnings for the sample firms, with returns to stockholders upon announcement of the approval being related to the increases in R&D and short-term earnings forecasts. Journal: International Journal of the Economics of Business Pages: 163-178 Issue: 2 Volume: 1 Year: 1994 Keywords: FDA product regulation; Stock price; Risk; R&D expenditures; Earnings forecasts JEL classifications:G14,K23,L5, X-DOI: 10.1080/758516793 File-URL: http://www.tandfonline.com/10.1080/758516793 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:1:y:1994:i:2:p:163-178 Template-Type: ReDIF-Article 1.0 Author-Name: Duncan Matthews Author-X-Name-First: Duncan Author-X-Name-Last: Matthews Author-Name: David Mayes Author-X-Name-First: David Author-X-Name-Last: Mayes Title: Towards a Single European Market? The Evolution of the Leasing Industry Abstract: It is argued that completion of the internal market for leasing requires sufficient openness of national markets for competition between rules to take place. This study of the leasing industry in the European Economic Area analyses those aspects of the European Commission's Single Market Programme which are intended to achieve this aim and pinpoints tax harmonisation, banking regulation and mutual recognition of accounting standards as the main areas of Commission regulatory activity which will impact on the evolution of rules for the industry. The paper looks at the structure of the national industries and highlights the constraints and driving forces within the various rule systems which will influence the process of change. It is concluded that relatively high levels of competition between rules are actually occurring. In the long term, national markets will continue to be segmented and it is questionable whether a European leasing industry will actually emerge Journal: International Journal of the Economics of Business Pages: 179-198 Issue: 2 Volume: 1 Year: 1994 Keywords: Europe; Leasing; Regulation; Harmonisation, X-DOI: 10.1080/758516794 File-URL: http://www.tandfonline.com/10.1080/758516794 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:1:y:1994:i:2:p:179-198 Template-Type: ReDIF-Article 1.0 Author-Name: Marina Papanastassiou Author-X-Name-First: Marina Author-X-Name-Last: Papanastassiou Author-Name: Robet Pearce Author-X-Name-First: Robet Author-X-Name-Last: Pearce Title: Host-Country Determinants of the Market Strategies of US Companies' Overseas Subsidiaries Abstract: As compeition in many industries becomes increasingly global, MNEs have found that import-substitution subsidiaries, focusing on the supply of national markets, are much less viable. In the pursuit of enhanced competitiveness through export-oriented subsidiaries, MNEs are also finding that relying on low-cost host-country inputs to produce established productss is also a limited strategy. The more dynamic strategy of allowing subsidiaries to use a wider range of creative local inputs to take full responsibility for the development, production and international marketing of distinctive new products is a more effective approach. Such an upgrading of the subsidiaries' role within the MNE often parallels the aims of host-country governments to achieve a more individual and dynamic basis for their country's evolving comparative advantage. It is thus argued that MNE subsidiaries and host countries can go through a mutually supportive period of creative transition, endowing both with a new level of technological dynamism and independence. The paper tests aspects of these arguments by analysing the host-country determinants of the degree of export-orientation of US MNEs' overseas subsidiaries. Journal: International Journal of the Economics of Business Pages: 199-216 Issue: 2 Volume: 1 Year: 1994 Keywords: Multinational enterprises; Market-orientation strategies; Creative transition, JEL classification F23,O33, X-DOI: 10.1080/758516795 File-URL: http://www.tandfonline.com/10.1080/758516795 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:1:y:1994:i:2:p:199-216 Template-Type: ReDIF-Article 1.0 Author-Name: Massimo Filippini Author-X-Name-First: Massimo Author-X-Name-Last: Filippini Author-Name: Paola Prioni Author-X-Name-First: Paola Author-X-Name-Last: Prioni Title: Is Scale and Cost Inefficiency in the Swiss Bus Industry a Regulatory Problem? Evidence from a Frontier Cost Approach Abstract: The aim of this study is to analyze the scale and cost inefficiencies in operation for the Swiss regional bus companies. For this purpose,we have considered estimation of a stochastic and a deterministic frontier cost model for a sample of 93 bus companies in 1989. The estimates of inefficiency from the frontier models are compared and discussed within the political and regulatory setting within which the Swiss regional bus companies operate. The empirical results indicate that regulation does not seem to influence the cost efficiency significantly. Only the tariff subsidies have a negative influence on efficiency. This is an interesting result because in the current transport policy debate, the abolition of this kind of subsidy has been raised. Journal: International Journal of the Economics of Business Pages: 219-232 Issue: 2 Volume: 1 Year: 1994 Keywords: Bus industry; Efficiency; Regulation; Cost frontier, JEL classifications: L320, R480, L920, X-DOI: 10.1080/758516796 File-URL: http://www.tandfonline.com/10.1080/758516796 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:1:y:1994:i:2:p:219-232 Template-Type: ReDIF-Article 1.0 Author-Name: Martin Robson Author-X-Name-First: Martin Author-X-Name-Last: Robson Title: The Determinants of New Firm Formation in UK Construction: Evidence from Quarterly VAT Registrations Abstract: This paper examines the ways in which industry-specific and macro-economic factors combine to lead to variations over time in the rate of new firm formation in the UK construction industry. The paper corroborates findings from elsewhere which suggest that housing wealth may be an important source of collateral for individuals seeking to raise the finance necessary to start up in business. The analysis of industry-specific influences supports the hypothesis that formation activity in construction is responsive to variations in the relative returns to entrepreneurship Journal: International Journal of the Economics of Business Pages: 233-246 Issue: 2 Volume: 1 Year: 1994 Keywords: New firms; Entrepreneurship; Collateral; Construction JEL classifications:L74,M13, X-DOI: 10.1080/758516797 File-URL: http://www.tandfonline.com/10.1080/758516797 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:1:y:1994:i:2:p:233-246 Template-Type: ReDIF-Article 1.0 Author-Name: Michael Bowe Author-X-Name-First: Michael Author-X-Name-Last: Bowe Title: The Costs of Arbitrage and Futures Market Trading Activity Abstract: Standardizing a futures contract's specifications to enhance its transfer-ability is problematic for any commodity whose cash market adopts relational contracting procedures. Standardization implies the contract's value cannot be completely determined by competitive arbitrage order flow, inhibiting the market's price discovery function, and leaving the futures price susceptible to manipulation. These effects may result in the market's failure. The model, based on the theory of storage, predicts that contracts with a higher spread-open position price volatility are more likely to contain a range of arbitrage indeterminacy, hence to experience difficulties in sustaining trading. The prediction is supported in an empirical examination of 104 US futures markets. The range of indeterminacy also increases the informational requirements of spread traders, reducing the effectiveness of spread arbitrage in maintaining the equilibrium intertemporal futures pricing relationship. Detailed evidence from 15 US contract markets demonstrates spread arbitrage is less effective in contract markets which subsequently fail. Journal: International Journal of the Economics of Business Pages: 247-270 Issue: 2 Volume: 1 Year: 1994 Keywords: Futures contracts; Futures price spreads; Storage; Arbitrage, JEL classfications: D23, G10, G13, X-DOI: 10.1080/758516798 File-URL: http://www.tandfonline.com/10.1080/758516798 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:1:y:1994:i:2:p:247-270 Template-Type: ReDIF-Article 1.0 Author-Name: Gregory Goering Author-X-Name-First: Gregory Author-X-Name-Last: Goering Title: Managerial Incentives and Durable Goods Monopoly Abstract: In many cases durable goods monopolists who sell out output do not appear to act in the competitive fashion suggested by Coase (1972). This indicates the firm's owners mitigate their commitment problem with buyers in some manner. This paper shows that managerial incentives provide a natural mechanism for the owner to mitigate its commitment problem without explicitly contracting with buyers. Owners will optimally shift their managers from the singular goal of profit maximization by penalizing them for sales. Additionally, the paper demonstrates that the degree to which managerial incentives and compensation diverge from pure profit maximization is in large part a function of the durability or quality of the product. Journal: International Journal of the Economics of Business Pages: 271-282 Issue: 2 Volume: 1 Year: 1994 Keywords: Managerial incentives; Durable goods, JEL Clasification L12,L15,L21, X-DOI: 10.1080/758516799 File-URL: http://www.tandfonline.com/10.1080/758516799 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:1:y:1994:i:2:p:271-282 Template-Type: ReDIF-Article 1.0 Author-Name: Roger Blair Author-X-Name-First: Roger Author-X-Name-Last: Blair Author-Name: Jill Herndon Author-X-Name-First: Jill Author-X-Name-Last: Herndon Title: A Survivor Test of the American Agency System of Distributing Property Liability Insurance Abstract: In earlier work byjoskow and by Cummins and VanDerhei, the American Agency system of distribution has been deemed inefficient, i.e. excessively costly. We test this in a natural way by examining whether the system survives in competition with more efficient systems. We find that it survives, but is in steady decline. Journal: International Journal of the Economics of Business Pages: 283-290 Issue: 2 Volume: 1 Year: 1994 Keywords: Insurance; Survivor principle, JEL classifications:G22,L22,M21, X-DOI: 10.1080/758516800 File-URL: http://www.tandfonline.com/10.1080/758516800 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:1:y:1994:i:2:p:283-290 Template-Type: ReDIF-Article 1.0 Author-Name: Clement Krouse Author-X-Name-First: Clement Author-X-Name-Last: Krouse Title: US Antidumping Law and Competition in International Trade Abstract: It is usual to argue that the US antidumping code and legal practice have become a substitute for tariffs now severely limited by GATT and, somewhat like these displaced tariffs, they are intended to limit the extent of price competition by foreign sellers. However, there is one set of conditions under which the regulations and duties, and the accompanying increase in market price they bring about, increases domestic producer surplus more than they decrease consumer surplus and therefore increase domestic welfare. As is shown, these conditions require antidumping duties to exclude foreign manufacturers from the domestic market in a specific inverse relationship to the prevailing market price. While the duties imposed with an antidumping violation implicitly set out an exclusion rate for foreign manufacturers, there is little in the US code or legal practice which suggests that the duties and exclusion rates are established with this specific rule in mind. Journal: International Journal of the Economics of Business Pages: 291-306 Issue: 2 Volume: 1 Year: 1994 Keywords: Dumping; International trade, Jel classifications: D20, D40, L10, X-DOI: 10.1080/758516801 File-URL: http://www.tandfonline.com/10.1080/758516801 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:1:y:1994:i:2:p:291-306 Template-Type: ReDIF-Article 1.0 Author-Name: Michael Waterson Author-X-Name-First: Michael Author-X-Name-Last: Waterson Title: What Can Microeconomics Teach Business? Abstract: Journal: International Journal of the Economics of Business Pages: 307-314 Issue: 2 Volume: 1 Year: 1994 X-DOI: 10.1080/758517802 File-URL: http://www.tandfonline.com/10.1080/758517802 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:1:y:1994:i:2:p:307-314 Template-Type: ReDIF-Article 1.0 Author-Name: Shelagh Heffernan Author-X-Name-First: Shelagh Author-X-Name-Last: Heffernan Title: Competition in the Canadian Personal Finance Sector Abstract: This paper employs cross-section continuous time series data to examine competition in the Canadian personal finance sector for the period 1987-90. Using a generalised linear pricing model, firm entry is found to be significant in the setting of deposit and mortgage rates, suggesting the presence an incontestable market structure consistent with Cournot oligopoly. There is also evidence of price-making behaviour and relative bargainlripoff products. For three of the four products studied, a 'fifth column' consisting of the 12 major banks and trust companies best explain pricing in these markets Journal: International Journal of the Economics of Business Pages: 323-338 Issue: 3 Volume: 1 Year: 1994 Keywords: Canadian personal finance sector; Generalised linear pricing model; Fifth column, JEL classifications: G21, E43, L13, X-DOI: 10.1080/758536225 File-URL: http://www.tandfonline.com/10.1080/758536225 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:1:y:1994:i:3:p:323-338 Template-Type: ReDIF-Article 1.0 Author-Name: Richard Harper Author-X-Name-First: Richard Author-X-Name-Last: Harper Title: Intellectual Property and Unfair Trade: Market Response to ITC Actions Abstract: Firm-specific wealth effects associated with US International Trade Commission Section 337 investigations of intellectual property right infringements are estimated. A major finding is that the 337 protection is valuable to complainant firms, but the timing of wealth effects suggests differing motivations for firms which pursue this remedy. Other findings are that firms involved in concurrent District Court litigation and firms with greater number of respondents are less likely to settle their case prior to an ITC determination. Recent statutory changes in Section 337 also appear to have increased complainant firms' incentives to settle. Journal: International Journal of the Economics of Business Pages: 343-353 Issue: 3 Volume: 1 Year: 1994 Keywords: Intellectual property; Patent; International trade; Administered protection; Event study; International Trade Commission; Section 337, JEL Clasification F14, G14, X-DOI: 10.1080/758536226 File-URL: http://www.tandfonline.com/10.1080/758536226 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:1:y:1994:i:3:p:343-353 Template-Type: ReDIF-Article 1.0 Author-Name: M. Dobbs Ian Author-X-Name-First: M. Dobbs Author-X-Name-Last: Ian Author-Name: Paul Richards Author-X-Name-First: Paul Author-X-Name-Last: Richards Title: Entry and Component Pricing in Regulated Markets Abstract: This paper discusses work on computable models of entry into regulated markets. Cournot, Stackelberg and Fringe entry are considered for the case where the incumbent operator's profitability is regulated and component pricing influences the desirability of entry. The simulation results illustrate that welfare optimal component pricing can be highly sensitive to model specification (behavioural assumptions about agents, the nature of competition, the extent of product differentiation etc.) and that no welfare ranking of simple component pricing rules (such as marginal cost, average cost, opportunity cost or efficient component price) exists. In addition, the welfare desirability of entry is seen to be sensitive to the choice of welfare benchmark for comparison Journal: International Journal of the Economics of Business Pages: 355-376 Issue: 3 Volume: 1 Year: 1994 Keywords: Component pricing; Network access pricing; Entry; Regulation; Oligopoly, JEL classifications:D43,L40,L51,L90,L98, X-DOI: 10.1080/758536227 File-URL: http://www.tandfonline.com/10.1080/758536227 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:1:y:1994:i:3:p:355-376 Template-Type: ReDIF-Article 1.0 Author-Name: Roger Clarke Author-X-Name-First: Roger Author-X-Name-Last: Clarke Author-Name: Christos Ioannidis Author-X-Name-First: Christos Author-X-Name-Last: Ioannidis Title: Mergers and Excess Deposits: Some Evidence for the UK Abstract: In this paper we consider an argument, often used in the City and the press, that mergers take place more because of the availability of finance than for strong economic reasons. In particular, we focus on the availability of finance part of this argument and suggest that the financial sector and firms themselves use excess funds to support merger activity. Using data for the UK, we show that there is evidence for such an effect for non-bank financial institutions but results for firms are not significant. Possible interpretations of this result are also discussed. Journal: International Journal of the Economics of Business Pages: 377-385 Issue: 3 Volume: 1 Year: 1994 Keywords: Mergers;Time series;Excess deposite, JEL classification:L16.M2, X-DOI: 10.1080/758536228 File-URL: http://www.tandfonline.com/10.1080/758536228 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:1:y:1994:i:3:p:377-385 Template-Type: ReDIF-Article 1.0 Author-Name: James Boyd Author-X-Name-First: James Author-X-Name-Last: Boyd Title: Risk, Liability, and Monopoly Abstract: The paper explores a monopolist's safety and output choices when there are potentially large-scale claims that can lead to firm insolvency. Analysis of a monopolized market yields different conclusions than models of rule choice where perfect competition or simple cost-minimization are assumed. The following are shown to be true when consumers do not internalize expected, uncompensated hazard costs: (1) potentially insolvent firms may make more efficient safety and output choices than fully capitalized firms and (2), for any level of capitalization, compliance with a negligence rule—where liabilities are removed—may in fact result in less output and safety than under strict liability, where hazard costs are at least partially internalized. When consumers fully discount risks, a negligence rule dominates strict liability because it allows for less costly, credible commitments to profit- and welfare-maximizing safety investments. The analysis demonstrates that the optimal legal system—including financial responsibility requirements—is particularly sensitive to market structure and the characteristics of firms' risk reduction technology Journal: International Journal of the Economics of Business Pages: 387-403 Issue: 3 Volume: 1 Year: 1994 Keywords: Strict liability; Negligence; Monopoly; Insolvency, JEL classification:K13,L51, X-DOI: 10.1080/758536229 File-URL: http://www.tandfonline.com/10.1080/758536229 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:1:y:1994:i:3:p:387-403 Template-Type: ReDIF-Article 1.0 Author-Name: Julian Lowe Author-X-Name-First: Julian Author-X-Name-Last: Lowe Author-Name: M. H. Atkins Author-X-Name-First: M. H. Author-X-Name-Last: Atkins Title: Small Firms and the Strategy of the First Mover Abstract: Timing of entry and the decision to be a leader or follower in products or markets is a complex decision and empirical evidence suggests that first movers do not always 'capture' all the potential benefits from being first. Small firms in particular are faced with problems when deciding on whether to be a first or later mover. Their strategies were examined using a sample of 264 firms in chosen industry sectors and specific external and internal factors were found to explain much of the variation in timing of entry strategies by these firms. In particular a composite measure of the technological turbulence that firms faced in their supply chain was seen as a crucial determinant of early entry whilst uncertainty as to general business conditions explained much of the late and non pioneering strategies. Even within this group of small firms, size also played an important role with the smallest companies tending to be the most pioneering Journal: International Journal of the Economics of Business Pages: 405-419 Issue: 3 Volume: 1 Year: 1994 Keywords: Small firms; First mover; Strategy; Technology, JEL classifications: D21, D43, M21, X-DOI: 10.1080/758536230 File-URL: http://www.tandfonline.com/10.1080/758536230 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:1:y:1994:i:3:p:405-419 Template-Type: ReDIF-Article 1.0 Author-Name: Paul Stoneman Author-X-Name-First: Paul Author-X-Name-Last: Stoneman Author-Name: Nathan Francis Author-X-Name-First: Nathan Author-X-Name-Last: Francis Title: Double Deflation and the Measurement of Output and Productivity in UK Manufacturing 1979-89 Abstract: The objective of this paper is to examine the impact of applying double deflation methods to the measurement of productivity growth in UK manufacturing between 1979 and 1989. A number of alternative indicators of output growth are considered and it is argued that double deflated value added is the superior concept to employ for the measurement of productivity. It is shown that output measured by double deflated value added fell by 0.05% over the period between 1979 and 1989 whereas the official series indicates that output rose by 12.2% over the period. Measuring productivity as output per person employed, the double deflated value added measure indicates that between 1979 and 1989productivity increased by 34%> whereas the official series indicates an increase of 51 %. Whereas the latter may indicate a productivity miracle the former does not Journal: International Journal of the Economics of Business Pages: 423-437 Issue: 3 Volume: 1 Year: 1994 Keywords: Double deflation; Value added; Productivity, JEL classifications: C8, E2, L6, X-DOI: 10.1080/758536231 File-URL: http://www.tandfonline.com/10.1080/758536231 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:1:y:1994:i:3:p:423-437 Template-Type: ReDIF-Article 1.0 Author-Name: Simon Domberger Author-X-Name-First: Simon Author-X-Name-Last: Domberger Author-Name: Stephen Rimmer Author-X-Name-First: Stephen Author-X-Name-Last: Rimmer Title: Competitive Tendering and Contracting in the Public Sector: A Survey Abstract: This paper is a survey of the role and impact of competitive tendering and contracting (CTC) policies in the public sector. The paper examines the theoretical rationale for introducing competition in the provision of public services and the methodology by which contracting decisions are reached. It investigates the extent of implementation and nature of outcomes in several countries. A broad sweep of the empirical findings suggests that CTC generates substantial cost savings. Lack of adequate data makes an assessment of the effect on quality more troublesome, and further research is needed Journal: International Journal of the Economics of Business Pages: 439-453 Issue: 3 Volume: 1 Year: 1994 Keywords: Competitive tendering; Contracting-out; Public sector management; Competition policy, JEL classifications: LI4, L33, X-DOI: 10.1080/758536232 File-URL: http://www.tandfonline.com/10.1080/758536232 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:1:y:1994:i:3:p:439-453 Template-Type: ReDIF-Article 1.0 Author-Name: Roger Clarke Author-X-Name-First: Roger Author-X-Name-Last: Clarke Title: Geroski's Market Dynamics and Entry: A Review Abstract: Journal: International Journal of the Economics of Business Pages: 455-459 Issue: 3 Volume: 1 Year: 1994 X-DOI: 10.1080/758536233 File-URL: http://www.tandfonline.com/10.1080/758536233 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:1:y:1994:i:3:p:455-459 Template-Type: ReDIF-Article 1.0 Author-Name: Massimo Colombo Author-X-Name-First: Massimo Author-X-Name-Last: Colombo Title: Firm Size and Cooperation: The Determinants of Cooperative Agreements in Information Technology Industries Abstract: This paper aims to shed light on factors that lead firms to resort to collaborative ventures. Specific attention is devoted to the role of firm size. The study relies on an extensive econometric analysis of a representative sample of firms in three Information Technology industries (semiconductor, data processing, and telecommunications). Data relating to the number and type of agreements concluded by firms, provided by the ARPA database developed at Politecnico di Milano, are correlated with firm-, industry- and country-specific variables. The findings of the econometric estimates point to the importance of firm size, scope of activity within the industries considered, diversification in related industries, and, to a less extent, degree of internationalization in explaining use of agreements. Moreover, the study provides preliminary evidence in support of a complementary relation between interfirm linkages and R&D expenditures. A positive correlation with growth rates also seems to emerge. In contrast, the s regarding the relation between internal capital expenditures and recourse to agreements are mixed. Journal: International Journal of the Economics of Business Pages: 3-30 Issue: 1 Volume: 2 Year: 1995 Keywords: cooperative agreements; information technologies; firm size, JEL classifications: L22, L63, X-DOI: 10.1080/758521094 File-URL: http://www.tandfonline.com/10.1080/758521094 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:2:y:1995:i:1:p:3-30 Template-Type: ReDIF-Article 1.0 Author-Name: Nicholas Wilson Author-X-Name-First: Nicholas Author-X-Name-Last: Wilson Author-Name: Kwee Chong Author-X-Name-First: Kwee Author-X-Name-Last: Chong Author-Name: Michael Peel Author-X-Name-First: Michael Author-X-Name-Last: Peel Author-Name: A. N. Kolmogorov Author-X-Name-First: A. N. Author-X-Name-Last: Kolmogorov Title: Neural Network Simulation and the Prediction of Corporate Outcomes: Some Empirical Findings Abstract: Neural Networks (NN's) involve an innovative method of simulating and analysing complex and constantly changing systems of relationships. Originally developed to mimic the neural architecture and functioning of the human brain, NN techniques have recently been applied to many different business fields and have demonstrated a capability to solve complex problems. This paper investigates the use of NN techniques as a tool for the modelling and prediction of corporate bankruptcy and other corporate outcomes. The within and out-of-sample accuracy of trained NNs are compared with those of standard logit and multilogit techniques. The results of the study suggest that, from a pure predictive point of view, NN simulation produces a higher predictive accuracy and is more robust than conventional logit and multilogit models. Journal: International Journal of the Economics of Business Pages: 31-50 Issue: 1 Volume: 2 Year: 1995 Keywords: Corporate failure; Neural networks; Multi-outcome models, JEL classifications: G33, G34, C53, X-DOI: 10.1080/758521095 File-URL: http://www.tandfonline.com/10.1080/758521095 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:2:y:1995:i:1:p:31-50 Template-Type: ReDIF-Article 1.0 Author-Name: Mary K. Olson Author-X-Name-First: Mary Author-X-Name-Last: Olson Title: The Effects of UK Pharmaceutical Policy on Government Drug Expenditure: Cost Control and Incentives for R&D Abstract: This paper investigates the impact of UK pharmaceutical policy on the level of NHS pharmaceutical expenditure. UK pharmaceutical policy is one which has managed to control costs, but at the same time, has not sacrificed the rewards for conducting long-term R&D in the UK. The analysis provides evidence that the government policies which encourage long-term R&D and the development of new drugs actually lead to lower overall pharmaceutical expenditure by the NHS. The reason for this is attributed to the savings associated with the replacement of new drugs for other less effective drugs. Additional results show that the UK receives positive spillovers from the R&D conducted by US firms and this R&D has a cost reducing impact on NHS pharmaceutical expenditure. Journal: International Journal of the Economics of Business Pages: 51-64 Issue: 1 Volume: 2 Year: 1995 Keywords: UK pharmaceutical policy; R&D NHS drug expenditure, JEL classifications: L51, X-DOI: 10.1080/758521096 File-URL: http://www.tandfonline.com/10.1080/758521096 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:2:y:1995:i:1:p:51-64 Template-Type: ReDIF-Article 1.0 Author-Name: David Butz Author-X-Name-First: David Author-X-Name-Last: Butz Title: Most-Favored Treatment Provisions as Nondiscrimination Guarantees Abstract: A firm employs suppliers who make specific investments. Because output demand is uncertain and the cost of enumerating contingencies high, the firm retains some unilateral control over the input quantities it purchases. To allay suppliers' concerns over potential opportunism the firm must commit not to pit them against one another ex post by threatening to buy less from those who refuse to discount their prices. By extending most-favored treatment guarantees the firm commits not to discriminate. In some circumstances this generates efficient and opportunism-free outcomes. In others it is less effective but may remain attractive relative to other options. Evidence from field market contracts for natural gas corroborates this nondiscrimination hypothesis. Journal: International Journal of the Economics of Business Pages: 65-86 Issue: 1 Volume: 2 Year: 1995 Keywords: Natural gas; Most-favored treatment provisions; Opportunism; Vertical contracts, JEL classifications: L14, X-DOI: 10.1080/758521097 File-URL: http://www.tandfonline.com/10.1080/758521097 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:2:y:1995:i:1:p:65-86 Template-Type: ReDIF-Article 1.0 Author-Name: Harald Gruber Author-X-Name-First: Harald Author-X-Name-Last: Gruber Title: Market Structure, Learning and Product Innovation: Evidence for the EPROM Market Abstract: The study analyses the market for semiconductor memory chips, in particular EPROMs. Semiconductors are very interesting industry for studying empirically the dynamics of innovation. Given the short product life cycles of generations of chips, the market dynamics unfold much more rapidly than in other industries and are therefore better amenable to empirical observation. One of the aims is to shed more light on the link between learning and the dynamics of product innovation, as well as their influence on market structure. Learning with an old generation turns out to be an important determinant for product innovation. The further down the firm has moved on the learning curve, the higher its market share, and the larger becomes the probability that the firm is an early innovator. The results are consistent with the persistence of leadership hypothesis. Journal: International Journal of the Economics of Business Pages: 87-101 Issue: 1 Volume: 2 Year: 1995 Keywords: Semiconductor industry; Product innovation; Learning curve, JEL classifications: L63, O31, X-DOI: 10.1080/758521098 File-URL: http://www.tandfonline.com/10.1080/758521098 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:2:y:1995:i:1:p:87-101 Template-Type: ReDIF-Article 1.0 Author-Name: Steven Hackett Author-X-Name-First: Steven Author-X-Name-Last: Hackett Title: Heterogeneity and Share Contracting in Medical Group Practices Abstract: This paper offers an empirical analysis of the relationship between income sharing rules and physician heterogeneity in medical group practices.The economies to group formation associated with risk-sharing, mutual monitoring,and internal referral are served by sharing at least a portion of group income equally. Sharing group income equally is problematic, however, when group members differ in their contribution to group income. Member contributions to group income may differ because of differences in ability, effort, or the price of services across specialty fields. The analysis below is addressed to the question of how income sharing rules in physician groups are affected by variation in member contributions. The analysis finds evidence that heterogeneity in member contributions to group income limits the use of equal income sharing rules in multispecialty groups relative to single specialty groups, and large groups relative to small groups. Nevertheless, 65% of all groups in the survey share at least a pn of group income equally, which broadly suggests that the joint surplus enhancement from risk sharing, mutual monitoring, and internal referral are sufficient to overcome the incentive problems of such rules Journal: International Journal of the Economics of Business Pages: 103-121 Issue: 1 Volume: 2 Year: 1995 Keywords: Heterogeneity; Medical groups; Sharing rules, JEL classifications: D21, 119, L22, X-DOI: 10.1080/758521099 File-URL: http://www.tandfonline.com/10.1080/758521099 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:2:y:1995:i:1:p:103-121 Template-Type: ReDIF-Article 1.0 Author-Name: Richard Dowen Author-X-Name-First: Richard Author-X-Name-Last: Dowen Title: Board of Director Quality and Firm Performance Abstract: This paper aims to shed light on the relationship between the quality of the individuals on a firm's board of directors and performance. It reports the results of an empirical study of a sample of Fortune 1000 firms. The findings suggest that quality boards, as measured by the average number of board seats held by each director, are associated with quality firms, as measured by both accounting and market performance. Journal: International Journal of the Economics of Business Pages: 123-132 Issue: 1 Volume: 2 Year: 1995 Keywords: Board of directors; Firm performance, JEL classification: 511, X-DOI: 10.1080/758521100 File-URL: http://www.tandfonline.com/10.1080/758521100 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:2:y:1995:i:1:p:123-132 Template-Type: ReDIF-Article 1.0 Author-Name: Robert McNabb Author-X-Name-First: Robert Author-X-Name-Last: McNabb Author-Name: Keith Whifield Author-X-Name-First: Keith Author-X-Name-Last: Whifield Title: The Business of Training: Microeconomic and Macroeconomic Considerations Abstract: Journal: International Journal of the Economics of Business Pages: 133-150 Issue: 1 Volume: 2 Year: 1995 X-DOI: 10.1080/758521101 File-URL: http://www.tandfonline.com/10.1080/758521101 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:2:y:1995:i:1:p:133-150 Template-Type: ReDIF-Article 1.0 Author-Name: David Heathfield Author-X-Name-First: David Author-X-Name-Last: Heathfield Title: International Competition: Winning the War or Sharing the Wealth? Abstract: Journal: International Journal of the Economics of Business Pages: 151-154 Issue: 1 Volume: 2 Year: 1995 X-DOI: 10.1080/758521102 File-URL: http://www.tandfonline.com/10.1080/758521102 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:2:y:1995:i:1:p:151-154 Template-Type: ReDIF-Article 1.0 Author-Name: Robert Wilson Author-X-Name-First: Robert Author-X-Name-Last: Wilson Title: Technology, Antitrust and Structural Change: Essays in Honor of Merton J. Peck Abstract: Journal: International Journal of the Economics of Business Pages: 167-170 Issue: 2 Volume: 2 Year: 1995 X-DOI: 10.1080/758519305 File-URL: http://www.tandfonline.com/10.1080/758519305 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:2:y:1995:i:2:p:167-170 Template-Type: ReDIF-Article 1.0 Author-Name: Richard Nelson Author-X-Name-First: Richard Author-X-Name-Last: Nelson Title: Co-evolution of Industry Structure, Technology and Supporting Institutions, and the Making of Comparative Advantage Abstract: In recent years,a considerable body of research has been established on the co-evolution of technology and industry structure, from the time that the technology is young to the time when it is mature· A somewhat smaller body of research has been established on how private and public institutions, and public programs and policies co-evolved with a technology and industry· It is proposed here that nations differ in their pace and pattern of institutional response to the birth and development of an industry, and that the locus of comparative advantage is largely determined by these different kinds of national response. Journal: International Journal of the Economics of Business Pages: 171-184 Issue: 2 Volume: 2 Year: 1995 Keywords: co-evolution;industry structure;technology;comparative advantage, JEL classifications: O3,L0,F2,H4, X-DOI: 10.1080/758519306 File-URL: http://www.tandfonline.com/10.1080/758519306 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:2:y:1995:i:2:p:171-184 Template-Type: ReDIF-Article 1.0 Author-Name: Sharon Oster Author-X-Name-First: Sharon Author-X-Name-Last: Oster Title: Exclusive Licensing in a Sequence of Innovations Abstract: In this paper, I examine the issues involved with sequential licensing of innovations. In particular, a model is developed in which the granting of an exclusive license has the potential to distort future industrial structure. Subsequent licensing negotiations are then affected by the initial exclusivity, giving the initial licensee more leverage in bidding. This dynamic effect gives firms strategic incentives to take exclusive licenses, even when, in a one-shot market, such licenses would not be optimal. Appropriate antitrust rules in the context of sequential innovations are then discussed. Journal: International Journal of the Economics of Business Pages: 185-198 Issue: 2 Volume: 2 Year: 1995 Keywords: sequential licensing; innovations; industry structure; exclusivity, JEL classifications: L123 L40, O31, X-DOI: 10.1080/758519307 File-URL: http://www.tandfonline.com/10.1080/758519307 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:2:y:1995:i:2:p:185-198 Template-Type: ReDIF-Article 1.0 Author-Name: Paul Macavoy Author-X-Name-First: Paul Author-X-Name-Last: Macavoy Title: Comments on: Exclusive Licensing in a Sequence of Innovations Abstract: Journal: International Journal of the Economics of Business Pages: 199-200 Issue: 2 Volume: 2 Year: 1995 X-DOI: 10.1080/758519308 File-URL: http://www.tandfonline.com/10.1080/758519308 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:2:y:1995:i:2:p:199-200 Template-Type: ReDIF-Article 1.0 Author-Name: Joseph Dimasi Author-X-Name-First: Joseph Author-X-Name-Last: Dimasi Author-Name: Henry Grabowski Author-X-Name-First: Henry Author-X-Name-Last: Grabowski Author-Name: John Vernon Author-X-Name-First: John Author-X-Name-Last: Vernon Title: R&D Costs, Innovative Output and Firm Size in the Pharmaceutical Industry Abstract: This study examines the relationships between firm size, R&D costs and output in the pharmaceutical industry. Project-level data from a survey of 12 US-owned pharmaceutical firms on drug development costs, development phase lengths and failure rates are used to determine estimates of the R&D cost of new drug development by firm size. Firms in the sample are grouped into three size categories, according to their pharmaceutical sales at the beginning of the study period. The R&D cost per new drug approved in the US is shown to decrease with firm size, while sales per new drug approved are shown to increase markedly with firm size. Sales distributions are highly skewed and suggest that firms need to search for blockbuster drugs with above--average returns. The results are consistent with substantial economies of scale in pharmaceutical R&D, particularly at the discovery and preclinical development phases. Journal: International Journal of the Economics of Business Pages: 201-219 Issue: 2 Volume: 2 Year: 1995 Keywords: economies of scale; pharmaceutical R&D cost; sales-weighted output, JEL classifications: L65, 032, X-DOI: 10.1080/758519309 File-URL: http://www.tandfonline.com/10.1080/758519309 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:2:y:1995:i:2:p:201-219 Template-Type: ReDIF-Article 1.0 Author-Name: PAUL Macavoy Author-X-Name-First: PAUL Author-X-Name-Last: Macavoy Title: Comments on: R&D Costs, Innovative Output, and Firm Size in the Pharmaceutical Industry Abstract: Journal: International Journal of the Economics of Business Pages: 221-222 Issue: 2 Volume: 2 Year: 1995 X-DOI: 10.1080/758519310 File-URL: http://www.tandfonline.com/10.1080/758519310 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:2:y:1995:i:2:p:221-222 Template-Type: ReDIF-Article 1.0 Author-Name: Linda Cohen Author-X-Name-First: Linda Author-X-Name-Last: Cohen Author-Name: Roger Noll Author-X-Name-First: Roger Author-X-Name-Last: Noll Title: Feasibility of Effective Public-Private R&D Collaboration: the Case of Cooperative R&D Agreements Abstract: Since the mid-1980s, the federal government has supported collaborative R&D in private consortia and between industry and national research laboratories. One justification for these activities is that they can solve 'public goods' problems associated with producing non-appropriable, technology-base research. However, these efforts also create formidable contracting problems similar to those experienced in defense weapons systems development. We examine the early history of collaborations with the national laboratories, to ascertain whether or not this policy is working effectively, and find that the problems seem to be outweighing the benefits mentioned, in many cases. Journal: International Journal of the Economics of Business Pages: 223-240 Issue: 2 Volume: 2 Year: 1995 Keywords: national laboratories; R&D; technology policy, JEL classifications: L5, 03, X-DOI: 10.1080/758519311 File-URL: http://www.tandfonline.com/10.1080/758519311 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:2:y:1995:i:2:p:223-240 Template-Type: ReDIF-Article 1.0 Author-Name: Robert Wilson Author-X-Name-First: Robert Author-X-Name-Last: Wilson Author-Name: Frederick Warrwn-Boulton Author-X-Name-First: Frederick Author-X-Name-Last: Warrwn-Boulton Title: Riding the Wave: Exclusionary Practices in Markets for Microprocessors Used in IBM-Compatible Personal Computers Abstract: This paper examines exclusionary practices allegedly used by Intel to maintain its dominant position in sales of microprocessors for IBM-compatible personal computers (PCs), focusing primarily on the preferential allocation of scarce product among customers. The paper considers the period 1991-93, which encompasses the transition from the 386 to the 486 microprocessor generation and the entry of several competitors. We test for two conditions that are necessary for exclusionary practices to be successful. First, using the market definition approach that is common to antitrust analyses in the US, we demonstrate that, at the upstream microprocessor level, Intel had monopoly power in a distinct market for high-end microprocessors. In particular, pricing data show that the effects of entry were localized at the low end of Intel's product line. Secondly, we identify four conditions that are sufficient for exclusionary practices to be successful, and show that the downstream PC manufacturing stage has these characteristics. Finally, we consider potential explanations for preferential allocation that are based on efficiencies, and outline a methodology for calculating the effect of exclusionary practices on the prices received by two of Intel's competitors Journal: International Journal of the Economics of Business Pages: 241-262 Issue: 2 Volume: 2 Year: 1995 Keywords: exclusionary practices; allocation; microprocessor industry; market definition; monopoly power; damages, JEL classifications: L12, L41, L42, L63, O31, X-DOI: 10.1080/758519312 File-URL: http://www.tandfonline.com/10.1080/758519312 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:2:y:1995:i:2:p:241-262 Template-Type: ReDIF-Article 1.0 Author-Name: William Comanor Author-X-Name-First: William Author-X-Name-Last: Comanor Author-Name: F. M. Scherer Author-X-Name-First: F. M. Author-X-Name-Last: Scherer Title: Rewriting History: the Early Sherman Act Monopolization Cases Abstract: This paper reviews two early precedent-setting US antitrust decisions and asks a series of counter-factual questions. What if the Standard Oil Company had not been broken into 34 pieces? What if the United States Steel Corporation had been fragmented? It traces the qualitative evolution of the Standard Oil fragments, following the 1911 divestiture decision, and the corresponding history of United States Steel. It then undertakes quantitative analyses of the survivors' market share trends and the comparative productivity growth, average plant sizes, price — cost margins, and net exports for petroleum refining, blast furnaces and steel from 1899 through 1939. At first, the post-divestiture performance did not differ much between the two subject industries. However, by the 1930s, competition intensified in petroleum refining and the decline of the Standard Oil fragments' market shares came to a halt. In the steel industry, however, competition continued to be mild. A lethargic United States Steel held a price um brella over its rivals and steadily lost market share. Steel companies were ill-prepared for rising import competition during the 1960s and 1970s. The paper concludes that the 1911 break-up of Standard Oil had few deleterious short-run consequences and, by shaping a more competitive environment, it had a decidedly positive long-run effect. Journal: International Journal of the Economics of Business Pages: 263-290 Issue: 2 Volume: 2 Year: 1995 Keywords: antitrust; Sherman act; monopoly; divestiture, JEL classifications: L12, L41, X-DOI: 10.1080/758519313 File-URL: http://www.tandfonline.com/10.1080/758519313 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:2:y:1995:i:2:p:263-290 Template-Type: ReDIF-Article 1.0 Author-Name: Robert Litan Author-X-Name-First: Robert Author-X-Name-Last: Litan Title: Comments on: Rewriting History: the Early Sherman Act Monopolization Cases and Riding the Wave: Exclusionary Practices in Markets for Microprocessors Used In IBM-Compatible Personal Computers Abstract: Journal: International Journal of the Economics of Business Pages: 291-295 Issue: 2 Volume: 2 Year: 1995 X-DOI: 10.1080/758519314 File-URL: http://www.tandfonline.com/10.1080/758519314 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:2:y:1995:i:2:p:291-295 Template-Type: ReDIF-Article 1.0 Author-Name: Paul Joskow Author-X-Name-First: Paul Author-X-Name-Last: Joskow Author-Name: Richard Schmalensee Author-X-Name-First: Richard Author-X-Name-Last: Schmalensee Title: Privatization in Russia: What Should be a Firm? Abstract: This paper examines a variety of issues associated with the restructuring of Russian industry prior to privatization, from a transactions cost perspective. It is argued that none of the components of the industrial hierarchies inherited from the Soviet system corresponded closely to firms in a modem market economy. Moreover, product-level concentration of production created potential monopoly problems. Ideally, it would have been desirable to restructure Russian industry to create efficient organizations and competitive market structures prior to privatization. However, political and information constraints precluded widespread fine tuning of the existing industrial hierarchies prior to privatization. Given these constraints, the decision of the Gaidar government to focus privatization on 'enterprises', i.e. the smallest organizational units within the industrial hierarchies, was sensible and led to significant deconcentration of Russian industry. Policies with regard to voluntary separation of subunits of enterprises and aggregation of enterprises prior to privatization also helped to promote deconcentration. Significant additional restructuring of Russian industry is expected now that the mass privatization has been completed. Journal: International Journal of the Economics of Business Pages: 297-327 Issue: 2 Volume: 2 Year: 1995 Keywords: privatization; Russia; enterprise; transaction cost; deconcentration; firm; organization.JEL classifications: 610, 050, X-DOI: 10.1080/758519315 File-URL: http://www.tandfonline.com/10.1080/758519315 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:2:y:1995:i:2:p:297-327 Template-Type: ReDIF-Article 1.0 Author-Name: John Meyer Author-X-Name-First: John Author-X-Name-Last: Meyer Title: Restructuring Soviet Transport: a Study in Similarities and Contrasts Abstract: The nation states created by the disintegration of the former Soviet Union inherited transportation systems ill suited to the needs of market economies. Technologies were often outmoded, too energy intensive and not well adapted to the on-time delivery of small shipments characteristic of a modem consumer society. Furthermore, similarly to much of the rest of the Soviet economy, the transport sector was burdened with unwieldy and diffxcult-to-manage vertically integrated monopolies that were largely unresponsive to customer needs. Policies to solve these problems will vary from mode to mode. For water and highway transport, simple pro-competitive policies that emphasize easy entry, little regulation and prompt privatization should be appropriate. Because of network coordination and specialized infrastructure requirements, rail and air transport will need less fragmented approaches. One positive aspect of the transport situation in the former Soviet Union, slightly reducing the pressures for immediate reforms, the substantial capacity put in place by the old regime-a consequence of the former command/control economy being one of the most transport intensive in the world Journal: International Journal of the Economics of Business Pages: 329-340 Issue: 2 Volume: 2 Year: 1995 Keywords: transportation; Soviet Union; airlines; railroads; trucking; water transport, JEL classifications: L33, L92, L93, X-DOI: 10.1080/758519316 File-URL: http://www.tandfonline.com/10.1080/758519316 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:2:y:1995:i:2:p:329-340 Template-Type: ReDIF-Article 1.0 Author-Name: John Tilton Author-X-Name-First: John Author-X-Name-Last: Tilton Title: Comments on: Privatization in Russia: What Should be a Firm? and Restructuring Soviet Transport: a Study in Similarities and Contrasts Abstract: Journal: International Journal of the Economics of Business Pages: 341-343 Issue: 2 Volume: 2 Year: 1995 X-DOI: 10.1080/758519317 File-URL: http://www.tandfonline.com/10.1080/758519317 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:2:y:1995:i:2:p:341-343 Template-Type: ReDIF-Article 1.0 Author-Name: Alvtn Klevorick Author-X-Name-First: Alvtn Author-X-Name-Last: Klevorick Title: The Economic Theory of Crime and the Problems of a Society in Transition Abstract: Journal: International Journal of the Economics of Business Pages: 345-357 Issue: 2 Volume: 2 Year: 1995 Keywords: crime; transaction structure; technological change. JEL classifications: K14, K42, X-DOI: 10.1080/758519318 File-URL: http://www.tandfonline.com/10.1080/758519318 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:2:y:1995:i:2:p:345-357 Template-Type: ReDIF-Article 1.0 Author-Name: Gerard Wedig Author-X-Name-First: Gerard Author-X-Name-Last: Wedig Author-Name: Soonman Kwon Author-X-Name-First: Soonman Author-X-Name-Last: Kwon Title: Sustainable Asset Growth and the Accounting Rate of Return in Not-For-Profit Organizations: Theory and Evidence Abstract: Parties needing to monitor the financial performance of not-for-profit (NFP) organizations have traditionally relied upon financial ratios of accounting data. This practice can lead to misleading inferences about profitability in relation to organizational needs, since accounting rates of return are potentially poor proxies for economic rates of return. In this paper we show how to compensate for the imprecision of the accounting rate of return through the use of a simple interpretive rule based on the finding that accounting and economic rates of return are on the same side of the growth rate. According to our rule, the accounting rate of return must exceed the asset growth rate in order to sustain growth with internally-generated cash flow. Logistic regressions are used to test the rule's ability to predict sustainable asset growth in a sample of NFP hospitals. The findings not only validate the rule, but also show that the rule exploits all usable information contained in the accounting rate of return Journal: International Journal of the Economics of Business Pages: 367-391 Issue: 3 Volume: 2 Year: 1995 Keywords: Accounting rate of return; Economic rate of return; Growth, Not-for-profit, JEL classifications: G30, L31, M40, X-DOI: 10.1080/758538012 File-URL: http://www.tandfonline.com/10.1080/758538012 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:2:y:1995:i:3:p:367-391 Template-Type: ReDIF-Article 1.0 Author-Name: Malcolm Coate Author-X-Name-First: Malcolm Author-X-Name-Last: Coate Title: The Shifting Sands of Merger Enforcement at the Federal Trade Commission Abstract: This paper presents a statistical model for Federal Trade Commission merger enforcement. After reviewing the literature, economic and political variables are posited to explain bureaucratic merger decisions. Various probit models are estimated with the results suggesting that the Commission enhanced the consideration given to merger-specific efficiencies in response to exogenous pressure to increase merger enforcement. Overall, the tightening of merger policy appears to have been focused on the transactions lacking documented cost savings Journal: International Journal of the Economics of Business Pages: 393-407 Issue: 3 Volume: 2 Year: 1995 Keywords: Antitrust policy; Antitrust law; Bureaucracy, JEL classifications: L4, K21, D73, X-DOI: 10.1080/758538013 File-URL: http://www.tandfonline.com/10.1080/758538013 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:2:y:1995:i:3:p:393-407 Template-Type: ReDIF-Article 1.0 Author-Name: Paroush Jacob Author-X-Name-First: Paroush Author-X-Name-Last: Jacob Author-Name: Spiegel Uriel Author-X-Name-First: Spiegel Author-X-Name-Last: Uriel Title: Price Discrimination with One-way Separated Markets Abstract: This paper extends the traditional model of third degree price discrimination which assumes complete separation between markets to the case where markets are only one-way separated. In two periods of time one can carry over quantities of the product from the present to the future but not vice versa. We show that this model provides a wide framework for analysis of several promotional marketing strategies. Journal: International Journal of the Economics of Business Pages: 441-452 Issue: 3 Volume: 2 Year: 1995 Keywords: Intertemporal price discrimination; Learning by consumption; Third degree monopoly, JEL Classifications: D21, X-DOI: 10.1080/758538015 File-URL: http://www.tandfonline.com/10.1080/758538015 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:2:y:1995:i:3:p:441-452 Template-Type: ReDIF-Article 1.0 Author-Name: Peter Hart Author-X-Name-First: Peter Author-X-Name-Last: Hart Title: The Convergence of Labour Productivity in British and German Industries Abstract: When a Galtonian cross-section regression model is used to analyse data on the relative labour productivity of 30 British and German manufacturing industries 1960-1989, it is found that there are strong tendencies for labour productivity in the two countries to converge. This is particularly true for 1960-73 and for 1979-89, when there was Galtonian regression towards the (geometric) mean level of relative productivity. There was no tendency for the relative advantage or disadvantage of an industry to persist over time. When an errors-in-variables model is used, it is found that reverse regression and lagged value instrumental variable estimators do not indicate that the OLS estimators in the Galtonian model are usually biased downwards and in fact confirm the direction of the Galtonian regression. Journal: International Journal of the Economics of Business Pages: 453-463 Issue: 3 Volume: 2 Year: 1995 Keywords: Labour productivity; Britain and Germany; Galtonian regression; Convergence; Errors-in-variables, X-DOI: 10.1080/758538016 File-URL: http://www.tandfonline.com/10.1080/758538016 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:2:y:1995:i:3:p:453-463 Template-Type: ReDIF-Article 1.0 Author-Name: Peter Zweifel Author-X-Name-First: Peter Author-X-Name-Last: Zweifel Title: Diffusion of Hospital Innovations in Different Institutional Settings Abstract: This paper purports to analyze a hospital's adoption of both product and process innovation as a quanta! choice. The impacts of this decision on physicians, while depending on institutions that differ between the US and continental Europe, are shown to feed back to the hospital, influencing the profitability of the innovation. Recent changes of hospital finance give rise to testable comparative predictions in both institutional settings Journal: International Journal of the Economics of Business Pages: 465-483 Issue: 3 Volume: 2 Year: 1995 Keywords: diffusion of innovation; hospitals; comparative institutions; regulation, JEL classifications: 111, 118, L31, L51, 031, X-DOI: 10.1080/758538017 File-URL: http://www.tandfonline.com/10.1080/758538017 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:2:y:1995:i:3:p:465-483 Template-Type: ReDIF-Article 1.0 Author-Name: Ron Smith Author-X-Name-First: Ron Author-X-Name-Last: Smith Author-Name: Stefan Szymanski Author-X-Name-First: Stefan Author-X-Name-Last: Szymanski Title: Executive Pay and Performance: The Empirical Importance of the Participation Constraint Abstract: The low elasticity of top executive pay to performance in recent empirical work presents a puzzle since it is clear from the data that in practice both pay and performance measures have moved closely in line in recent years. This paper demonstrates that cross-section and time-series estimates of the pay performance elasticity differ significantly unless the effect of average executive pay is included. It is argued that this can be seen as the effect of the participation constraint in a principal agent model, more commonly known as "the going rate". The going rate must be paid to executives to deter them from taking up their outside option, which is the opportunity to leave the current firm and sign an incentive contract with another firm. Thus the outside option will depend on performance by other firms. Since performance is correlated between firms, this generates a larger time-series pay performance elasticity as perceived by the executive. The paper also considers the possibility that the going rate may induce incentive effects. The predictions of this argument are tested on a panel of data for large UK companies Journal: International Journal of the Economics of Business Pages: 485-495 Issue: 3 Volume: 2 Year: 1995 Keywords: JEL classifications: L14, J33, X-DOI: 10.1080/758538018 File-URL: http://www.tandfonline.com/10.1080/758538018 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:2:y:1995:i:3:p:485-495 Template-Type: ReDIF-Article 1.0 Author-Name: David Collard Author-X-Name-First: David Author-X-Name-Last: Collard Title: The Mainspring of Institutional Change? Abstract: Journal: International Journal of the Economics of Business Pages: 497-500 Issue: 3 Volume: 2 Year: 1995 X-DOI: 10.1080/758538019 File-URL: http://www.tandfonline.com/10.1080/758538019 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:2:y:1995:i:3:p:497-500 Template-Type: ReDIF-Article 1.0 Author-Name: Peter Buckley Author-X-Name-First: Peter Author-X-Name-Last: Buckley Author-Name: Martin Carter Author-X-Name-First: Martin Author-X-Name-Last: Carter Title: The Economics of Business Process Design: Motivation, Information and Coordination Within the Firm Abstract: This paper presents a transaction cost analysis of the internal business processes of firms. Business processes are collections of activities which are technologically or managerially linked so that they jointly affect value added. Their organisation is characterised by their 'architecture'—the allocation of responsibilities amongst individuals and groups and communication between them for information and coordination—and their incentive structure. The overall costs of organisation are determined by losses due to imperfect motivation of process members, which flows from the incentive structure, and imperfect information and coordination, which flow from the architecture, together with the resource costs associated with incentives and architecture. Perfect motivation corresponds to 'team behaviour' and a quantitative model, based on team theory, indicates how the best architecture depends on the degree interaction between activities comprising the business process. Journal: International Journal of the Economics of Business Pages: 5-24 Issue: 1 Volume: 3 Year: 1996 Keywords: Transaction costs; Business processes; Organisation design; Team theory. JEL classifications: D23, L22, X-DOI: 10.1080/758533485 File-URL: http://www.tandfonline.com/10.1080/758533485 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:3:y:1996:i:1:p:5-24 Template-Type: ReDIF-Article 1.0 Author-Name: Timothy Brennan Author-X-Name-First: Timothy Author-X-Name-Last: Brennan Title: Is Cost-of-Service Regulation Worth the Cost? Abstract: Cost-of-service regulation that reduces prices will also reduce incentives to control cost. Increased output counteracts this trend when there are economies of scale. We derive closed-form approximations for the maximum cost increase that leaves a positive welfare gain when regulation reduces price by some percentage. To be useful to regulators, these approximations depend only on demand elasticity and the ratio of fixed to total cost. For low demand elasticities typical of regulated industries, price must fall by half to outweigh cost increases of as little as 2%. Cost-of-service regulation appears to reduce welfare unless economies of scale are strong. These conclusions may be reversed if regulators favor consumers, but only a slight bias in favor of the firm exacerbates them. Regulatory methods that preserve incentives to be efficient by divorcing price from cost become more appealing. Journal: International Journal of the Economics of Business Pages: 25-42 Issue: 1 Volume: 3 Year: 1996 Keywords: Regulation; Cost-of-service; Rate-of-return; Incentive regulation, JEL classifications: L51, L21, D21, D78.key, X-DOI: 10.1080/758533486 File-URL: http://www.tandfonline.com/10.1080/758533486 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:3:y:1996:i:1:p:25-42 Template-Type: ReDIF-Article 1.0 Author-Name: Michael Utton Author-X-Name-First: Michael Author-X-Name-Last: Utton Title: Selective Distribution, Refusal to Sell and the Monopolies and Mergers Commission Abstract: Refusal to sell to 'unauthorised' dealers is an integral part of a selective distribution system. Under such a system manufacturers authorise only those dealers meeting their specific requirements. Where the market involved is 'reasonably competitive' it is widely recognised that manufacturers, dealers and consumers can gain. The British Monopolies and Mergers Commission (MMC) has been criticised for its interpretation of what constitutes a 'reasonably competitive' market. In a recent report into the supply of fine fragrances the issue was again central to its findings that the selective distribution system was not against the public interest. The European Commission has also recently granted exemption from Article 85 for the distribution system operated by the leading firms. We argue that the MMCs analysis of competition was again flawed in this case and that the danger to the consumer and new entrants is compounded by the Europe-wide exemption. Journal: International Journal of the Economics of Business Pages: 43-55 Issue: 1 Volume: 3 Year: 1996 Keywords: Refusal to sell; Selective distribution; Vertical restraints index;'Grey' market supplies; Reasonable competition, JEL classifications: LI 2, L42, L66, X-DOI: 10.1080/758533487 File-URL: http://www.tandfonline.com/10.1080/758533487 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:3:y:1996:i:1:p:43-55 Template-Type: ReDIF-Article 1.0 Author-Name: Gianni De Fraja Author-X-Name-First: Gianni Author-X-Name-Last: De Fraja Author-Name: Alessandra Staderini Author-X-Name-First: Alessandra Author-X-Name-Last: Staderini Title: An Empirical Analysis of Competition in Brand Differentiated Oligopoly Abstract: The paper studies the behaviour of four oligopolistic firms in the Italian coffee market. We study whether their behaviour is better represented by Bertrand behaviour or by collusive pricing. We also investigate the role of advertising in product differentiation. Journal: International Journal of the Economics of Business Pages: 57-67 Issue: 1 Volume: 3 Year: 1996 X-DOI: 10.1080/758533488 File-URL: http://www.tandfonline.com/10.1080/758533488 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:3:y:1996:i:1:p:57-67 Template-Type: ReDIF-Article 1.0 Author-Name: Julian Simon Author-X-Name-First: Julian Author-X-Name-Last: Simon Author-Name: Manouchehr Mokhtari Author-X-Name-First: Manouchehr Author-X-Name-Last: Mokhtari Author-Name: Daniel Simon Author-X-Name-First: Daniel Author-X-Name-Last: Simon Title: Are Mergers Beneficial or Detrimental? Evidence from Advertising Agencies1 Abstract: We study 33 pairs of advertising agencies that merged between 1947 and 1985, comparing each merging pair against two controls: (a) a pair of agencies with combined merger-date billings close to the total billings of the merged unit, and (b) a single agency with similar total merger-date billings. Gross revenues are the dependent variable. Results: Merging firms do worse in the short run than controls. Assuming similar subsequent rates of growth for merging and non-merging firms, a loss of 16 percent of firm value due to merging is implied. Journal: International Journal of the Economics of Business Pages: 69-82 Issue: 1 Volume: 3 Year: 1996 Keywords: mergers, advertising agencies JEL classification: L10, X-DOI: 10.1080/758533489 File-URL: http://www.tandfonline.com/10.1080/758533489 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:3:y:1996:i:1:p:69-82 Template-Type: ReDIF-Article 1.0 Author-Name: Gregory Werden Author-X-Name-First: Gregory Author-X-Name-Last: Werden Author-Name: Luke Froeb Author-X-Name-First: Luke Author-X-Name-Last: Froeb Author-Name: Timothy Tardiff Author-X-Name-First: Timothy Author-X-Name-Last: Tardiff Title: The Use of the Logit Model in Applied Industrial Organization Abstract: Qualitative choice models, such as the logit model, can capture important firm and product asymmetries. This paper surveys use of the logit model in industrial organization, with special focus on its application to merger analysis. The basic model and its motivation are reviewed, as is its estimation. Discussed in some detail is the use of the logit model to predict the price and welfare effects of horizontal mergers in differentiated products industries. Simulation using a qualitative choice model is argued to be far superior to traditional structural analysis. Logit merger simulations have the particular virtues of low informational and computational burdens and the use of the logit model can be motivated as reflecting a diffuse prior on the structure of demand. Journal: International Journal of the Economics of Business Pages: 83-105 Issue: 1 Volume: 3 Year: 1996 Keywords: Quantitative Choice; Mergers; Antitrust, JEL classifications: D43, L25, L4, X-DOI: 10.1080/758533490 File-URL: http://www.tandfonline.com/10.1080/758533490 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:3:y:1996:i:1:p:83-105 Template-Type: ReDIF-Article 1.0 Author-Name: Harold Demsetz Author-X-Name-First: Harold Author-X-Name-Last: Demsetz Title: Ownership and Control: A Review Abstract: Journal: International Journal of the Economics of Business Pages: 107-112 Issue: 1 Volume: 3 Year: 1996 X-DOI: 10.1080/758533491 File-URL: http://www.tandfonline.com/10.1080/758533491 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:3:y:1996:i:1:p:107-112 Template-Type: ReDIF-Article 1.0 Author-Name: Sherill Shaffer Author-X-Name-First: Sherill Author-X-Name-Last: Shaffer Title: Viability of Traditional Banking Activities: Evidence from Shifts in Conduct and Excess Capacity Abstract: This paper applies modem statistical techniques to estimate levels and shifts of market conduct and aggregate excess capacity in the provision of traditional US banking products such as loans and demand deposits. A variety of models indicate that loans are competitively supplied, with no obvious excess capacity as defined. Some models indicate an anticompetitive shift in demand deposits after 1984, but other evidence suggests that this result may be an artifact attributable to the growth of NOW accounts, MMDAs, and the like. All results suggest that the current levels of these services can be profitably sustained under current market conditions. Journal: International Journal of the Economics of Business Pages: 125-143 Issue: 2 Volume: 3 Year: 1996 Keywords: banking; conduct; excess capacity. JEL classifications: G2, LI, X-DOI: 10.1080/758528449 File-URL: http://www.tandfonline.com/10.1080/758528449 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:3:y:1996:i:2:p:125-143 Template-Type: ReDIF-Article 1.0 Author-Name: Thomas Hazlett Author-X-Name-First: Thomas Author-X-Name-Last: Hazlett Title: Cable Television Rate Deregulation Abstract: In the 1984 Cable Communications Policy Act, cable television operators were effectively freed from rate regulation, and subsequently enjoyed monopoly franchise protection with free market pricing. In 1992, however, reregulation of basic cable service rates was established in the Cable Consumer Protection and Competition Act. The argument for reimposing regulation was that a substantial increase in basic cable rates had occurred post-deregulation. Yet the efficacy of rate controls upon an industry which has substantial freedom to adjust product quality is theoretically ambiguous. This study examines simple price, quality, and output evidence to determine how rate deregulation impacted consumers. It finds support for the view that rate controls did not lower quality-adjusted prices and are best explained as tools for influencing rent distribution across interest groups Journal: International Journal of the Economics of Business Pages: 145-164 Issue: 2 Volume: 3 Year: 1996 Keywords: rate regulation; cable television; telecommunications policy; product quality, JEL classifications: 619, 635, X-DOI: 10.1080/758528450 File-URL: http://www.tandfonline.com/10.1080/758528450 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:3:y:1996:i:2:p:145-164 Template-Type: ReDIF-Article 1.0 Author-Name: Peter Holl Author-X-Name-First: Peter Author-X-Name-Last: Holl Author-Name: Dimitis Kyriaziz Author-X-Name-First: Dimitis Author-X-Name-Last: Kyriaziz Title: The Determinants of Outcome in UK Take-over Bids Abstract: In this paper we have investigated the determinants of the outcome of 238 friendly and hostile take-over bids that occurred in the UK during the 1980s. We also use our model for prediction purposes and in order to map the effects of a variety of independent variables on the probability of the bid being successful. Our main results can be summarised as follows. First, target management resistance and the wealth effect of a bid are key determinants of the outcome of a bid. Second, we find limited evidence to suggest that share ownership by the bidding company and by target directors also contributes significantly to bid outcome. In the latter case we find a non-linear relationship consistent with the argument that when director holdings are low the bid is discouraged but when they are high the bid is encouraged. Third, our model is good at predicting outcome for all bids but weak at predicting the outcome of hostile bids on their own. Journal: International Journal of the Economics of Business Pages: 165-184 Issue: 2 Volume: 3 Year: 1996 Keywords: bid outcome; logit estimation; predictive ability; take-overs, JEL classifications: G34, G14, C25, X-DOI: 10.1080/758528451 File-URL: http://www.tandfonline.com/10.1080/758528451 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:3:y:1996:i:2:p:165-184 Template-Type: ReDIF-Article 1.0 Author-Name: Donald Smythe Author-X-Name-First: Donald Author-X-Name-Last: Smythe Title: The Dynamics of Oligopoly Behavior: A Study of the US Cigarette Industry, 1955-90 Abstract: This paper uses the comparative statics method of testing for a monopoly equilibrium to track the competitiveness of the US cigarette industry between 1955 and 1990. The degree of competition ranged from somewhat less than a Coumot-Nash equilibrium would imply to somewhat more. Although the industry's behavior was highly autocorrelated, there were periodic reversions to behavior that was much more competitive than the trend Journal: International Journal of the Economics of Business Pages: 185-200 Issue: 2 Volume: 3 Year: 1996 Keywords: Oligopoly; Cournot; Competitiveness, JEL classifications: LI 3, L66, X-DOI: 10.1080/758528452 File-URL: http://www.tandfonline.com/10.1080/758528452 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:3:y:1996:i:2:p:185-200 Template-Type: ReDIF-Article 1.0 Author-Name: Gregory Goering Author-X-Name-First: Gregory Author-X-Name-Last: Goering Author-Name: Michael Pippenger Author-X-Name-First: Michael Author-X-Name-Last: Pippenger Title: Durable Goods and Switching Costs Abstract: A simple two-period switching cost model is developed and analyzed assuming durable output. The analysis indicates that many of the conventional managerial implications of the switching cost literature need not hold if products are durable. In particular, the model indicates that managers of durable goods firms that lease or rent output may wish to decrease their customer base (provide service to only a subset of the experienced customers) in future periods, in contrast to the non-durable goods case where the number of customers served is the same. Moreover, the model shows that the optimal behavior of sellers of durable products depends critically upon their commitment ability with buyers, and outlines the conditions under which a manager selling output may rationally expand their customer base (i.e. sell to new customers in a future period). Journal: International Journal of the Economics of Business Pages: 201-212 Issue: 2 Volume: 3 Year: 1996 Keywords: Switching costs; Durable goods, JEL classifications: D4, LI, M2, X-DOI: 10.1080/758528453 File-URL: http://www.tandfonline.com/10.1080/758528453 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:3:y:1996:i:2:p:201-212 Template-Type: ReDIF-Article 1.0 Author-Name: Mike Adams Author-X-Name-First: Mike Author-X-Name-Last: Adams Title: Choice of Distribution System in the New Zealand Life Insurance Industry Abstract: Using 1988-93 panel data drawn from the New Zealand life insurance industry, this paper examines empirically the notion that the choice of distribution system is an efficient contracting solution to incentive conflicts between owners, managers and sales agents in life insurance firms. Consistent with what was hypothesised, the empirical results suggest that choice of distribution system is distinguished by organisational form, firm size, and sales commission. However, contrary to expectations, the variables representing product diversity and asset specificity were found not to be statistically significant. The empirical results thus lend mixed support for prior predictions. Journal: International Journal of the Economics of Business Pages: 213-226 Issue: 2 Volume: 3 Year: 1996 Keywords: New institutional economics; Life insurance; Distribution system; New Zealand, JEL classifications: G22, L22, M21, X-DOI: 10.1080/758528454 File-URL: http://www.tandfonline.com/10.1080/758528454 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:3:y:1996:i:2:p:213-226 Template-Type: ReDIF-Article 1.0 Author-Name: James Love Author-X-Name-First: James Author-X-Name-Last: Love Author-Name: Frank Stephen Author-X-Name-First: Frank Author-X-Name-Last: Stephen Title: Advertising, Price and Quality in Self-regulating Professions: A Survey Abstract: This paper surveys the theoretical and empirical literature on the relationship between advertising, fees and quality in the self-regulating professions. Much of the literature is derived from the perspective of advertising as an information-enhancing device, helping to reduce the information asymmetry between professional and client. This is consistent with the majority of the empirical studies which suggest that advertising tends to have a downward effect on professional fees, with little if any adverse effect on quality. There are, however, important issues of method and measurement which may lessen the force of this conclusion Journal: International Journal of the Economics of Business Pages: 227-248 Issue: 2 Volume: 3 Year: 1996 Keywords: Advertising; Self-regulating professions; Price-quality interaction, JEL classifications: L15, L43, L84, X-DOI: 10.1080/758528455 File-URL: http://www.tandfonline.com/10.1080/758528455 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:3:y:1996:i:2:p:227-248 Template-Type: ReDIF-Article 1.0 Author-Name: Neil Kay Author-X-Name-First: Neil Author-X-Name-Last: Kay Title: The Economics of Trust Abstract: Journal: International Journal of the Economics of Business Pages: 249-260 Issue: 2 Volume: 3 Year: 1996 X-DOI: 10.1080/758528456 File-URL: http://www.tandfonline.com/10.1080/758528456 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:3:y:1996:i:2:p:249-260 Template-Type: ReDIF-Article 1.0 Author-Name: Derek Bosworth Author-X-Name-First: Derek Author-X-Name-Last: Bosworth Title: Determinants of the Use of Advanced Technologies Abstract: There is an extensive literature about the influences on the adoption of new technologies. However, while we often assert the role of qualifications and skills in the innovation and diffusion processes, there has been little formal econometric work in this area. One of the key reasons for this is the lack of information about human capital in firm accounts, at all levels of the organisation, including the top executive and board of directors. This paper draws on a large, firm level data set to explore the linkages between the adoption and use of 13 advanced technologies and the qualification and skill structure of the enterprise. In addition, it provides a number of further insights about the effects of ownership, firm size and industry structure. Journal: International Journal of the Economics of Business Pages: 269-293 Issue: 3 Volume: 3 Year: 1996 Keywords: Innovation; Diffusion; Advanced technologies; Qualifications; Skills; Industrial structure; Goals of the firm, JEL classification: L11, L23, O33, X-DOI: 10.1080/758539567 File-URL: http://www.tandfonline.com/10.1080/758539567 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:3:y:1996:i:3:p:269-293 Template-Type: ReDIF-Article 1.0 Author-Name: Jose Mata Author-X-Name-First: Jose Author-X-Name-Last: Mata Author-Name: Banco de Portugal Author-X-Name-First: Banco Author-X-Name-Last: de Portugal Title: Business Conditions and Business Starts Abstract: This paper analyses the effect of business conditions on new firm starts. The birth of new firms displays a pro-cyclical behaviour, more firms being created when GDP is growing fast and the interest rate is low. The entry response to industry profitability is tempered by the level of sunk costs; for a given profit signal, more entry occurs where sunk costs are low. Journal: International Journal of the Economics of Business Pages: 295-306 Issue: 3 Volume: 3 Year: 1996 Keywords: Entry; Business starts; Sunk costs. JEL classifications: Lll, L60, X-DOI: 10.1080/758539568 File-URL: http://www.tandfonline.com/10.1080/758539568 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:3:y:1996:i:3:p:295-306 Template-Type: ReDIF-Article 1.0 Author-Name: Mark Casson Author-X-Name-First: Mark Author-X-Name-Last: Casson Author-Name: Nigel Wadeson Author-X-Name-First: Nigel Author-X-Name-Last: Wadeson Title: Information Strategies and the Theory of the Firm Abstract: Information costs play a key role in determining the relative efficiency of alternative organisational structures. The choice of locations at which information is stored in a firm is an important determinant of its information costs. A specific example of information use is modelled in order to explore what factors determine whether information should be stored centrally or locally and if it should be replicated at different sites. This provides insights into why firms are structured hierarchically, with some decisions and tasks being performed centrally and others at different levels of decentralisation. The effects of new information technologies are also discussed. These can radically alter the patterns and levels of information costs within a firm and so can cause substantial changes in organisational structure Journal: International Journal of the Economics of Business Pages: 307-330 Issue: 3 Volume: 3 Year: 1996 Keywords: Information; Firm; Organisation; Hierarchy; Decision, JEL classification: L20, X-DOI: 10.1080/758539569 File-URL: http://www.tandfonline.com/10.1080/758539569 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:3:y:1996:i:3:p:307-330 Template-Type: ReDIF-Article 1.0 Author-Name: Kimya Kamshad Author-X-Name-First: Kimya Author-X-Name-Last: Kamshad Title: The Dynamics of Firm Growth and Survival Under Alternative Forms of Control Abstract: The publication of the passive learning model of Jovanovic [Jovanic, B., "Selection and the Evolution of Industry," Econometrica, 1982, 60, 649-670.] initiated a resurgence of interest in firm growth and survival processes. Yet all the recent work has focused on the profit maximizing firm, without considering how robust the results are to alternative forms of control. This paper applies the model to the case of the labour managed firm, a type of firm studied extensively for its divergent behaviour from profit maximising firms. The findings indicate that Jovanovic's key predictions are rendered indeterminate under labour management, although there is evidence to show that the actual empirical relationships continue to hold. In considering possible explanations for the breakdown of the results, we conclude that the Jovanovic model overemphasizes institutional structure to the neglect of more fundamental determinants of growth and survival.midt, Paul Geroski and an anonymous referee for helpful comments and discussions. Any remaining errors are my own. Journal: International Journal of the Economics of Business Pages: 331-341 Issue: 3 Volume: 3 Year: 1996 Keywords: Firm growth; Survival; Labour management; Passive learning., JEL classifications: C61, D21, D73 D9, J54, L2, P13, X-DOI: 10.1080/758539570 File-URL: http://www.tandfonline.com/10.1080/758539570 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:3:y:1996:i:3:p:331-341 Template-Type: ReDIF-Article 1.0 Author-Name: Hans Gersbach Author-X-Name-First: Hans Author-X-Name-Last: Gersbach Title: Vertical Relationships in the Automotive Industry: Do They Matter? Abstract: In this note we examine how vertical relationships are related to the efficiency of the operations in the automotive production chain. We first provide an overview of the nature of supplier arrangements by comparing current practices in the countries Japan, US, and Germany. Current best practices show that vertical linkages in the automotive industry have shifted away from simple market transactions and now involve closer long-term interactions coupled however with subtle incentive elements. We outline the economic issues which are present in vertical relationships and include a brief account of differing theoretical perspectives. Then, we use a refined methodology to measure productivity at the industry level for the supplier industries automotive parts and metalworking and for the final assembly industry. It turns out that Japanese industries achieve the highest productivity level at the supplier and at the assembly level. We interpret the empirical results and relate the differences in vertical arrangemen s with the efficiency of both parts in the relation. Journal: International Journal of the Economics of Business Pages: 343-350 Issue: 3 Volume: 3 Year: 1996 Keywords: Automobiles; Vertical relationships; Productivity performance., JEL Classification: L10, L14, L22, L62, X-DOI: 10.1080/758539571 File-URL: http://www.tandfonline.com/10.1080/758539571 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:3:y:1996:i:3:p:343-350 Template-Type: ReDIF-Article 1.0 Author-Name: Mick Silver Author-X-Name-First: Mick Author-X-Name-Last: Silver Title: Quality, Prices and Hedonics Abstract: Journal: International Journal of the Economics of Business Pages: 351-366 Issue: 3 Volume: 3 Year: 1996 X-DOI: 10.1080/758539572 File-URL: http://www.tandfonline.com/10.1080/758539572 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:3:y:1996:i:3:p:351-366 Template-Type: ReDIF-Article 1.0 Author-Name: Nemat Shafik Author-X-Name-First: Nemat Author-X-Name-Last: Shafik Title: Selling Privatization Politically Abstract: Journal: International Journal of the Economics of Business Pages: 367-378 Issue: 3 Volume: 3 Year: 1996 X-DOI: 10.1080/758539573 File-URL: http://www.tandfonline.com/10.1080/758539573 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:3:y:1996:i:3:p:367-378 Template-Type: ReDIF-Article 1.0 Author-Name: Roger Clarke Author-X-Name-First: Roger Author-X-Name-Last: Clarke Title: Regulation and Competition in Electricity: A Review of M. A. Einhorn, ed., From Regulation to Competition: Nezv Frontiers in Electricity Markets Abstract: Journal: International Journal of the Economics of Business Pages: 379-384 Issue: 3 Volume: 3 Year: 1996 X-DOI: 10.1080/758539574 File-URL: http://www.tandfonline.com/10.1080/758539574 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:3:y:1996:i:3:p:379-384 Template-Type: ReDIF-Article 1.0 Author-Name: Timothy Sorenson Author-X-Name-First: Timothy Author-X-Name-Last: Sorenson Title: Minimal Differentiation at the Top Abstract: Rooted in the economics of industrial organization, the principle of differentiation ranks as one of the fundamental tenets of competitive strategy. However, while differentiation may be an intuitive means of averting vigorous price competition, casual observation reveals that firms often sell similar, if not perfectly identical, product features. This paper examines the effect of (possibly tacitly) collusive pricing on product location choices in a vertical differentiation framework: when firms are able to successfully collude on price, they minimally differentiate at the top of the vertical spectrum. While firms jointly earn first-best profits, overall welfare is unambiguously lower. Journal: International Journal of the Economics of Business Pages: 5-20 Issue: 1 Volume: 4 Year: 1997 Keywords: Production location; Vertical differentation; Collusice Pricing; Collusion., JEL classification: LI3, X-DOI: 10.1080/758532190 File-URL: http://www.tandfonline.com/10.1080/758532190 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:4:y:1997:i:1:p:5-20 Template-Type: ReDIF-Article 1.0 Author-Name: Donald George Author-X-Name-First: Donald Author-X-Name-Last: George Title: Production, Quality and Markets Abstract: The quality of output is of great concern to firms, consumers and regulators and yet firms' decisions concerning quality receive far less attention from economists than quantity or pricing decisions. There is a substantial management literature on product quality which, to some extent, discusses the costs and benefits of various approaches to product quality, but does not provide a theoretical explanation of the firm's quality decisions. The model presented here incorporates production, quality control, warranty and pricing decisions into the firm's overall (expected) profit maximising behaviour. Both competitive and monopolistic markets are considered. Journal: International Journal of the Economics of Business Pages: 21-31 Issue: 1 Volume: 4 Year: 1997 Keywords: Quality; Management; Warranties, JEL Classification: D21, D82, L14, L15, M21, X-DOI: 10.1080/758532191 File-URL: http://www.tandfonline.com/10.1080/758532191 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:4:y:1997:i:1:p:21-31 Template-Type: ReDIF-Article 1.0 Author-Name: H. E. Frech Author-X-Name-First: H. E. Author-X-Name-Last: Frech Title: The Nonequivalence of Vertical Merger and Exclusive Dealing Abstract: The economic and legal view of vertical integration has varied over time, but, a constant source of concern is the fear that the integrated firm will foreclose competitors from intermediate markets. At the same time, most commentators have considered the economics of vertical contracts, especially exclusive dealing, to be essentially identical to vertical merger. Using the simple model of Comanor and Freeh [Comanor, William S. and Freeh, H.E., III, "The Competitive Effects of Vertical Agreements?" American Economic Review, June 1985, 75, 3, 539-46], it is shown that vertical mergers and exclusive dealing contracts are not behaviorally equivalent. In particular, vertical mergers will not lead to foreclosure of rivals for anticompetitive reasons, while ordinary exclusive dealing contracts will lead to such anticompetitive foreclosure. Vertical mergers avoid certain externalities that exclusive dealing contracts create. In this model, vertical mergers can only cause anticompetitive problems through their horizol aspects, by creating a monopoly of distributors. Of course, merger can always be mimicked by a complex enough contract between nominally independent parties. In this model, the contracts that mimic the merger require two parties to agree on the price of a third party's products and are particularly subject to being undermined by price-cutting. Thus, it is likely to be uncommon. Journal: International Journal of the Economics of Business Pages: 33-50 Issue: 1 Volume: 4 Year: 1997 Keywords: Vertical, Foreclosure, Contracts, Mergers, Restrictions, X-DOI: 10.1080/758532192 File-URL: http://www.tandfonline.com/10.1080/758532192 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:4:y:1997:i:1:p:33-50 Template-Type: ReDIF-Article 1.0 Author-Name: Gil Epstein Author-X-Name-First: Gil Author-X-Name-Last: Epstein Author-Name: Uriel Spiegel Author-X-Name-First: Uriel Author-X-Name-Last: Spiegel Title: Monitoring within the Firm and Manager Relations Abstract: Many managers face the problem of employee assessment. Face to face meetings are the only source of basic information concerning employee activity and productivity. This unavoidable situation creates an opening for dishonest and misleading behavior whereby employees invest in 'manager relations' and misrepresent their actual contribution to total output. Furthermore, employees who have an advantage in creating favorable 'manager relations' force others who are less accomplished in creating 'manager relations' to invest time in this activity. Their purpose being to correct unjust income distribution. However, these activities lead to a reduction in productivity and consequently to a loss of total production and income. Journal: International Journal of the Economics of Business Pages: 51-61 Issue: 1 Volume: 4 Year: 1997 Keywords: Manager relations, Influence costs, JEL classifications: D23, L14, L22, X-DOI: 10.1080/758532193 File-URL: http://www.tandfonline.com/10.1080/758532193 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:4:y:1997:i:1:p:51-61 Template-Type: ReDIF-Article 1.0 Author-Name: Kenneth Danger Author-X-Name-First: Kenneth Author-X-Name-Last: Danger Title: Nonprofit Hospital Mergers: What can we Learn from Financial Markets? Abstract: Antitrust challenges to hospital mergers have become increasingly common. Empirical studies of hospital prices and costs have generally utilized static measures of concentration and accounting data. This study avoids the difficulties that surround such approaches. Instead, this study seeks an answer to the question; what can we learn about nonprofit hospital mergers from capital market data? The results indicate that the effects of nonprofit hospital mergers are anti-competitive but also small. They cannot be distinguished from either zero or from the effects of profit-seeking mergers. However the results are precise enough to reject previous findings claiming that nonprofit hospital mergers lead to large price decreases. Journal: International Journal of the Economics of Business Pages: 63-69 Issue: 1 Volume: 4 Year: 1997 Keywords: Nonprofit hospital mergers; Imperfect competition; Profits, JEL classification: 111, L31, L44, L13, X-DOI: 10.1080/758532194 File-URL: http://www.tandfonline.com/10.1080/758532194 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:4:y:1997:i:1:p:63-69 Template-Type: ReDIF-Article 1.0 Author-Name: Michael Kitson Author-X-Name-First: Michael Author-X-Name-Last: Kitson Author-Name: Jonathan Michie Author-X-Name-First: Jonathan Author-X-Name-Last: Michie Title: Does Manufacturing Matter? Abstract: Journal: International Journal of the Economics of Business Pages: 71-95 Issue: 1 Volume: 4 Year: 1997 X-DOI: 10.1080/758532195 File-URL: http://www.tandfonline.com/10.1080/758532195 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:4:y:1997:i:1:p:71-95 Template-Type: ReDIF-Article 1.0 Author-Name: Derek Bosworth Author-X-Name-First: Derek Author-X-Name-Last: Bosworth Title: Rivalry and Anticompetitive Practices Abstract: Journal: International Journal of the Economics of Business Pages: 97-104 Issue: 1 Volume: 4 Year: 1997 X-DOI: 10.1080/758532196 File-URL: http://www.tandfonline.com/10.1080/758532196 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:4:y:1997:i:1:p:97-104 Template-Type: ReDIF-Article 1.0 Author-Name: Leola Ross Author-X-Name-First: Leola Author-X-Name-Last: Ross Title: When Will an Airline Stand Its Ground? An Analysis of Fare Wars Abstract: The research presented in this paper focuses on the recent onset of price wars in the airline industry while accommodating multimarket contact, multiple products, and a dispersed price distribution. An important innovation in this study is in developing a price war definition using a rank dominance criterion. A second innovation is the extension of a probit model to a bivariate probit, which assesses the behavior of multimarket firms after a price war occurs. In particular, a carrier may choose to stay and fight when a price war erupts or may simply leave a route. Carriers will engage in fare wars when market shares change, higher elasticity customers patron the route, and load factors drop. Carriers will leave routes after a fare war when offering service to another carrier's hub but will remain steadfast in their own spheres of influence. Journal: International Journal of the Economics of Business Pages: 109-127 Issue: 2 Volume: 4 Year: 1997 Keywords: Price wars; Airline industry studies; Multimarket contact, JEL classifications: LI3, L93, X-DOI: 10.1080/758516223 File-URL: http://www.tandfonline.com/10.1080/758516223 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:4:y:1997:i:2:p:109-127 Template-Type: ReDIF-Article 1.0 Author-Name: Hans-Jurgen Engelbrecht Author-X-Name-First: Hans-Jurgen Author-X-Name-Last: Engelbrecht Title: Corporate Bureaucracies and United States Competitiveness Abstract: Two features of the US manufacturing sector during the 1980s are its increased openness to international trade and the rise in nonproduction employment relative to production employment. The latter seems to be due to technological change and/or organisational 'fat'. In this study, the hypothesis that the 'organisational factor' is an important determinant of US export competitiveness and trade in manufactures is tested using industry panel data for 1985-89. The empirical results indicate that, while conventional trade determinants like human and physical capital intensity are still important, technology in both the narrow and wider sense, i.e. R&D intensity and organisational technology, seems to be the major determinant. It is found that large nonproduction employment had a detrimental effect on US export competitiveness. This seems to provide an explanation for the large white-collar layoffs observed since the late 1980s. Journal: International Journal of the Economics of Business Pages: 129-154 Issue: 2 Volume: 4 Year: 1997 Keywords: Corporate bureaucracies; Organisational efficiency; Export competitiveness; United States, JEL classification numbers: F14, L60, X-DOI: 10.1080/758516224 File-URL: http://www.tandfonline.com/10.1080/758516224 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:4:y:1997:i:2:p:129-154 Template-Type: ReDIF-Article 1.0 Author-Name: Peter Holl Author-X-Name-First: Peter Author-X-Name-Last: Holl Author-Name: Xeni Dassiou Author-X-Name-First: Xeni Author-X-Name-Last: Dassiou Author-Name: Dimitris Kyriazis Author-X-Name-First: Dimitris Author-X-Name-Last: Kyriazis Title: Testing for Asymmetric Information Effects in Failed Mergers Abstract: In this paper we report the results of an empirical investigation based on a sample of 105 failed merger bids that occurred in the UK in the 1980's. We find that target firms report large, significant, positive gains after the bid while bidder firms report large, significant, negative gains. We also find that these returns are affected by the extent to which the bidder and target firms are related. In related bids target returns are significantly lower and bidder returns are significantly more negative than in unrelated bids. We conclude that these results are consistent with an information based explanation of merger activity. Journal: International Journal of the Economics of Business Pages: 155-172 Issue: 2 Volume: 4 Year: 1997 Keywords: Failed mergers; Asymmetric information; Event study, JEL classification: D82, G34, X-DOI: 10.1080/758516225 File-URL: http://www.tandfonline.com/10.1080/758516225 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:4:y:1997:i:2:p:155-172 Template-Type: ReDIF-Article 1.0 Author-Name: Hariolf Grupp Author-X-Name-First: Hariolf Author-X-Name-Last: Grupp Title: External Effects as a Microeconomic Determinant of Innovation Efficiency Abstract: Recent studies point to the significant effects unintended technological spillover has on profits, market value and patent output of enterprises. The public good character relates not only to technology, but also to (public) science. The paper introduces a new data source on German businesses making possible new variables for innovation, spillover, investment and competition. By employing Data Envelopment Analysis (DEA), innovation efficiency and the role of externalities is modelled and explained. For this sample, neither advantages nor disadvantages in innovation efficiency are found on the part of large firms. This emphasises the fragility of the size hypothesis in industrial economics. Instead, the firms with more activity in interconnected, spilling-over technologies are the efficient ones. The benefits from appropriation of spillovers seem to outweigh- any unintended losses of know-how to competitors Journal: International Journal of the Economics of Business Pages: 173-188 Issue: 2 Volume: 4 Year: 1997 Keywords: Innovation efficiency; Spillovers; Competition; Profitability; DEA, JEL classification: O31, L21, H4, O33, X-DOI: 10.1080/758516226 File-URL: http://www.tandfonline.com/10.1080/758516226 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:4:y:1997:i:2:p:173-188 Template-Type: ReDIF-Article 1.0 Author-Name: Rajeev Dhawan Author-X-Name-First: Rajeev Author-X-Name-Last: Dhawan Title: Asymmetric Information and Debt Financing: Hie Empirical Importance of Size and Balance Sheet Factors Abstract: In an environment with asymmetric information regarding the outcome of investment activities, the premium on external funds is dependent upon a borrower's financial characteristics. Consequently, a borrower's need for funds and accessibility to the desired amount is interlinked. Using panel data over the 1970-89 period, this study finds that a firm's existing level of indebtedness reduces its current net issuance of long term debt. Bigger firm size, higher net worth and a lower sales to asset ratio alleviate this negative effect. The results suggest that the notion of a stronger balance sheet, which governs a firm's access to the capital market, should be extended to include the non-financial sales to asset ratio variable. Journal: International Journal of the Economics of Business Pages: 189-202 Issue: 2 Volume: 4 Year: 1997 Keywords: Asymmetric information; Tobin's q; Fixed effects; net worth; Liquidity; Balance sheet, JEL classifications: D82, E22, X-DOI: 10.1080/758516227 File-URL: http://www.tandfonline.com/10.1080/758516227 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:4:y:1997:i:2:p:189-202 Template-Type: ReDIF-Article 1.0 Author-Name: Li Way Lee Author-X-Name-First: Li Way Author-X-Name-Last: Lee Title: Persuasive Advertizing and Socialization Abstract: In markets where consumption is socialized, persuasive advertizing can change consumption by affecting socialization, rather than taste or price. The paper develops an explanation of persuasive advertizing in such markets and notes its particularly simple welfare implications. The paper then presents evidence that the pattern of beer consumption during Prohibition is consistent with the hypothesis that consumption depends on socialization and persuasive advertizing Journal: International Journal of the Economics of Business Pages: 203-214 Issue: 2 Volume: 4 Year: 1997 Keywords: Persuasive advertizing; Socialization; Bandwagon; Beer drinking; Prohibition; Welfare, JEL classification: Dll, 118, L66, X-DOI: 10.1080/758516228 File-URL: http://www.tandfonline.com/10.1080/758516228 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:4:y:1997:i:2:p:203-214 Template-Type: ReDIF-Article 1.0 Author-Name: P. A. Geroski Author-X-Name-First: P. A. Author-X-Name-Last: Geroski Title: What Can Economics Offer Strategy? A Review of: D. Besanko, D. Dranove and M. Shanley Economics of Strategy Abstract: Journal: International Journal of the Economics of Business Pages: 215-227 Issue: 2 Volume: 4 Year: 1997 X-DOI: 10.1080/758516229 File-URL: http://www.tandfonline.com/10.1080/758516229 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:4:y:1997:i:2:p:215-227 Template-Type: ReDIF-Article 1.0 Author-Name: H. E. Frech Author-X-Name-First: H. E. Author-X-Name-Last: Frech Title: Introduction Abstract: This symposium is organized around a major, ongoing, antitrust case, In re: Brand Name Prescription Drugs Antitrust Litigation, MDL-997, Master File No.94C 897(Us Federal Court for the Northern District of Illinois). As one can see, this case involves fascinating scientific and policy issues, such as pharmaceutical and healthcare innovation, price discrimination and intellectual property. This symposium is an example of the Journal 's effort to encourage the publication of economic analyses on litigation and regulation Journal: International Journal of the Economics of Business Pages: 237-238 Issue: 3 Volume: 4 Year: 1997 Keywords: Pharmaceutical industry; Price discrimination; Health care; Antitrust, JEL classifications: K21, L42, L65, 111, X-DOI: 10.1080/758523204 File-URL: http://www.tandfonline.com/10.1080/758523204 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:4:y:1997:i:3:p:237-238 Template-Type: ReDIF-Article 1.0 Author-Name: F. M. Scherer Author-X-Name-First: F. M. Author-X-Name-Last: Scherer Title: How US Antitrust Can Go Astray: The Brand Name Prescription Drug Litigation Abstract: This paper analyzes the substantive issues in a US antitrust case under which retail pharmacists alleged that drug manufacturers conspired to avoid granting the retailers discounts that were offered to health maintenance organizations (HMOs). The HMOs are viewed as an innovative means of delivering health care to consumers at lower cost. They elicited discounts by credibly threatening to exclude manufacturers' drugs unless price concessions were offered — a strategy drug retailers were unable or unwilling to pursue. In challenging those discounts, the retail pharmacists pursued their traditional strategy of using governmental power to oppose innovations that squeezed their price/cost margins and reduced drug prices to consumers. The evidence of manufacturer conspiracy appears to have been ephemeral at best, and the litigation appears more likely to have reduced competition and consumer welfare than enhancing it Journal: International Journal of the Economics of Business Pages: 239-256 Issue: 3 Volume: 4 Year: 1997 Keywords: Pharmaceuticals industry; Retail pharmacies; Antitrust policy; Price discrimination; Health care, JEL classifications: K21, L41, L65, 111, X-DOI: 10.1080/758523205 File-URL: http://www.tandfonline.com/10.1080/758523205 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:4:y:1997:i:3:p:239-256 Template-Type: ReDIF-Article 1.0 Author-Name: Roy Weinstein Author-X-Name-First: Roy Author-X-Name-Last: Weinstein Author-Name: John Culbertson Author-X-Name-First: John Author-X-Name-Last: Culbertson Title: How US Antitrust Can Be On Target: The Brand-Name Prescription Drug Litigation Abstract: Retail pharmacies have alleged that sellers of brand-name Pharmaceuticals illegally agreed not to sell at discounted prices to retail pharmacies. In this paper, we analyze the theory offered by defendants that their price discrimination can be explained as independent, profit-maximizing conduct, not collusion. The court, in a preliminary decision found evidence of illegal agreements among sellers of brand-name pharmaceuti-cals. We conclude that the theory of independent action ultimately fails as an explanation for this price discrimination Journal: International Journal of the Economics of Business Pages: 257-264 Issue: 3 Volume: 4 Year: 1997 Keywords: Collusion; Price discrimination; Pharmaceuticals, JEL classifications: L41, L65, X-DOI: 10.1080/758523206 File-URL: http://www.tandfonline.com/10.1080/758523206 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:4:y:1997:i:3:p:257-264 Template-Type: ReDIF-Article 1.0 Author-Name: Jeffery Harrison Author-X-Name-First: Jeffery Author-X-Name-Last: Harrison Title: The Brand Name Prescription Drug Litigation:Comments on Scherer Abstract: Journal: International Journal of the Economics of Business Pages: 265-270 Issue: 3 Volume: 4 Year: 1997 X-DOI: 10.1080/758523207 File-URL: http://www.tandfonline.com/10.1080/758523207 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:4:y:1997:i:3:p:265-270 Template-Type: ReDIF-Article 1.0 Author-Name: Henry Zaretsky Author-X-Name-First: Henry Author-X-Name-Last: Zaretsky Title: Comment on: F.M. Scherer, "How US Antitrust Can Go Astray: The Brand Name Prescription Drug Litigation Abstract: Journal: International Journal of the Economics of Business Pages: 271-275 Issue: 3 Volume: 4 Year: 1997 Keywords: Drug manufacturers; Retail pharmacies; Price discrimination; Health-care competition; Managed care; Antitrust, JEL classifications: K21, L41,'L65, 111, X-DOI: 10.1080/758523208 File-URL: http://www.tandfonline.com/10.1080/758523208 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:4:y:1997:i:3:p:271-275 Template-Type: ReDIF-Article 1.0 Author-Name: Peter Zweifel Author-X-Name-First: Peter Author-X-Name-Last: Zweifel Title: Comment on: F.M. Scherer, "How US Antitrust Can Go Astray: The Brand Name Prescription Drug Litigation" Abstract: Journal: International Journal of the Economics of Business Pages: 277-278 Issue: 3 Volume: 4 Year: 1997 Keywords: Antitrust policy; Price discrimination; Patent protection; Pharmaceutical industry, JEL classifications: K21, L41, Kll, L65, X-DOI: 10.1080/758523209 File-URL: http://www.tandfonline.com/10.1080/758523209 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:4:y:1997:i:3:p:277-278 Template-Type: ReDIF-Article 1.0 Author-Name: W. Duncan Reekie Author-X-Name-First: W. Duncan Author-X-Name-Last: Reekie Title: Cartels, Spontaneous Price Discrimination and International Pharmacy Retailing Abstract: This paper examines the nature of pharmacy retail distribution in several different countries. Evidence in the market place supports the view that innovations in distribution technology are or could be plentiful; conversely, because of institutional rigidities bolstered by law, retail pharmacists in many countries are successfully participating in a cartel-like environment where those innovations are retarded. The outcome is often perverse. Retailers do not achieve economies of scale (a common argument in favour of cartels), while consumers do not experience the lower prices resulting from inter-firm rivalry (a common argument in favour of diffuse ownership) Journal: International Journal of the Economics of Business Pages: 279-285 Issue: 3 Volume: 4 Year: 1997 Keywords: Pharmaceutical industry; Retail pharmacies; Antitrust policy; Health care, JEL classifications: K21, L41, L65, I11, X-DOI: 10.1080/758523210 File-URL: http://www.tandfonline.com/10.1080/758523210 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:4:y:1997:i:3:p:279-285 Template-Type: ReDIF-Article 1.0 Author-Name: Kenneth Elzinga Author-X-Name-First: Kenneth Author-X-Name-Last: Elzinga Author-Name: David Mills Author-X-Name-First: David Author-X-Name-Last: Mills Title: The Distribution and Pricing of Prescription Drugs Abstract: Scherer (Scherer, F.M., "How US Antitrust Can Go Astray: The Brand Name Prescription Drug Litigation", International Journal of the Economics of Business, 1997, 4, 3, 000-000) uses the conventional economic model of third-degree price discrimination to analyze the pharmaceutical industry's practice of selling prescription drugs at discounted prices to hospitals and managed care entities. In this framework, prescription drug discounts appear to make some consumers (those in the managed care sector) better off and other consumers (those outside the managed care sector) worse off. While illuminating, this analysis neglects two important aspects of pharmaceutical pricing. First, it neglects the active role hospitals and managed care organizations play in making the demand for drugs more elastic. Second, the sellers of prescription drugs, as a rule, are oligopolists, not monopolists as the price discrimination model assumes. In this paper, we incorporate these two characteristics of pharmaceutical markets in an analysis of prescription drug pricing and conclude that discounts increase consumer welfare in the managed care sector but do not reduce consumer welfare in the traditional retail pharmacy sector Journal: International Journal of the Economics of Business Pages: 287-300 Issue: 3 Volume: 4 Year: 1997 Keywords: Pharmaceutical industry; Price discrimination; Prescription drug pricing; Managed care, JEL classifications: D40, L40, L65, X-DOI: 10.1080/758523211 File-URL: http://www.tandfonline.com/10.1080/758523211 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:4:y:1997:i:3:p:287-300 Template-Type: ReDIF-Article 1.0 Author-Name: Patricia Danzon Author-X-Name-First: Patricia Author-X-Name-Last: Danzon Title: Price Discrimination for Pharmaceuticals: Welfare Effects in the US and the EU Abstract: Standard analysis of the welfare effects of price discrimination for pharma-ceuticals (Scherer, F.M., "How US Antitrust Can Go Astray: The Brand Name Prescription Drug Litigation", International Journal of Business and Economics, 1997, 4, 3, 000-000) is incomplete because it presumes the optimality of marginal cost pricing, ignoring the sunk costs of R&D. Pharmaceutical R&D is a global joint cost of serving all consumers worldwide; it accounts for roughly 30% of total costs. Ramsey pricing principles imply that differential pricing related to inverse demand elasticities is the second best optimal strategy to cover the joint costs. Actual price differentials to managed care customers in the US should roughly approximate Ramsey optimal differentials, in the absence of legal constraints. In the European Union (EU), traditional price differentials between countries are being undermined by parallel trade and regulation based on foreign prices. This break down of market segmentation leads manufacturers to adopt uniform prices EU-wide. Efficiency and distributive effects of such policies are probably negative. Monopsony is a more serious problem in the EU, hence actual price differentials may exceed Ramsey optimal differences. Confidential contracts between manufacturers and governments, including rebates off a common list price, would preserve ex post price differentials and should be consistent with EU law Journal: International Journal of the Economics of Business Pages: 301-322 Issue: 3 Volume: 4 Year: 1997 Keywords: Pharmaceutical industry; Price discrimination; Ramsey pricing; Antitrust policy; Parallel trade; Regulation, JEL classifications: L41, L51, L65, 111, K21, X-DOI: 10.1080/758523212 File-URL: http://www.tandfonline.com/10.1080/758523212 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:4:y:1997:i:3:p:301-322 Template-Type: ReDIF-Article 1.0 Author-Name: W.Duncan Reekie Author-X-Name-First: W.Duncan Author-X-Name-Last: Reekie Title: Competition in Health Care: Is it Working? Abstract: Journal: International Journal of the Economics of Business Pages: 323-334 Issue: 3 Volume: 4 Year: 1997 X-DOI: 10.1080/758523213 File-URL: http://www.tandfonline.com/10.1080/758523213 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:4:y:1997:i:3:p:323-334 Template-Type: ReDIF-Article 1.0 Author-Name: Mark Casson Author-X-Name-First: Mark Author-X-Name-Last: Casson Author-Name: Nigel Wadeson Author-X-Name-First: Nigel Author-X-Name-Last: Wadeson Title: Communication Costs and the Boundaries of the Firm Abstract: Much has been written about where the boundaries of the firm are drawn, but little about what occurs at the boundaries themselves. When a firm subcontracts, does it inform its suppliers fully of what it requires, or is it willing to accept what they have available? In practice firms often engage in a dialogue, or conversation, with their suppliers, in which at first they set out their general requirements, and only when the supplier reports back on how these can be met are their more specific requirements set out. This paper models such conversations as a rational response to communication costs. The model is used to examine the impact of new information technology, such as CAD/CAM, on the conduct of subcontracting. It can also be used to examine its impact on the marketing activities of firms. The technique of analysis, which is based on the economic theory of teams, has more general applications too. It can be used to model all the forms of dialogue involved in the processes of coordination both within and between firms. Journal: International Journal of the Economics of Business Pages: 5-27 Issue: 1 Volume: 5 Year: 1998 Keywords: Communication, Firm, Information, Complexity, X-DOI: 10.1080/13571519884549 File-URL: http://www.tandfonline.com/10.1080/13571519884549 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:5:y:1998:i:1:p:5-27 Template-Type: ReDIF-Article 1.0 Author-Name: Peter Taylor Author-X-Name-First: Peter Author-X-Name-Last: Taylor Title: Mixed Strategy Pricing Behaviour in the UK Package Tour Industry Abstract: In a market, such as that for package tours, in which products are weakly differentiated and information is fuzzy, consumers may adopt search behaviour such that effectively, they play mixed strategies in the selection of the product that they choose to purchase. Tour operators' best response to this behaviour is mixed strategy pricing. Mixed strategy pricing is likely to mean that the variances of prices will be different at different points during the season for each operator. A simple model is formulated to illustrate the sequence of moves and the behaviour of variances. Brochure data for the summer seasons of 1982 and 1995 is analysed to investigate whether variances differ at different times during the season and thus differ systematically with the level of demand. The weight of evidence generally supports the view that operators adopt mixed strategies when setting brochure prices, even if achieved unconsciously through the application of rules of thumb. Strong evidence is found of the form that one operator, at least, produced a pattern of variances that is statistically significant and that could not result from the method of analysis adopted in the paper or from an ad hoc allocation of its fixed costs. Journal: International Journal of the Economics of Business Pages: 29-46 Issue: 1 Volume: 5 Year: 1998 Keywords: Mixed-strategy Pricing, Package Tours, Hedonic Regression, X-DOI: 10.1080/13571519884558 File-URL: http://www.tandfonline.com/10.1080/13571519884558 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:5:y:1998:i:1:p:29-46 Template-Type: ReDIF-Article 1.0 Author-Name: Tommy Staahl Gabriel Author-X-Name-First: Tommy Staahl Author-X-Name-Last: Gabriel Author-Name: Lars Sorgard Author-X-Name-First: Lars Author-X-Name-Last: Sorgard Title: The Pro-competitive Effect of Two-Part Tariffs Abstract: Two producers delegate sales of differentiated products to common retailers, each with a monopoly position. Each producer can offer either a linear or a two-part tariff. In the single-period game each producer's dominant strategy is to use a two-part tariff. If the two producers' products are sufficiently close substitutes and the discount factor is sufficiently high, both producers offering linear tariffs can be sustained as an equilibrium outcome in an infinitely repeated game. Journal: International Journal of the Economics of Business Pages: 47-55 Issue: 1 Volume: 5 Year: 1998 Keywords: Delegation, Common Retailers, Vertical Restraints, Pricing Schemes, X-DOI: 10.1080/13571519884567 File-URL: http://www.tandfonline.com/10.1080/13571519884567 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:5:y:1998:i:1:p:47-55 Template-Type: ReDIF-Article 1.0 Author-Name: David Paton Author-X-Name-First: David Author-X-Name-Last: Paton Title: Who A dvertises Prices? A Firm Level Study Based on Survey Data Abstract: Recent years have seen a growing body of literature devoted to the analysis of price advertising. Much of this work argues that price advertising leads to lower prices and is likely to be welfare improving. The questions of how much price advertising takes place and which firms are more likely to include price information in advertising have been somewhat neglected. This paper uses a unique new data set of UK company advertising to answer these questions. The evidence presented suggests that only a small proportion of firms include price information in any of their advertisements. Price information tends to be included in a higher percentage of the advertisements of distribution companies and of those which face more than ten competitors. In addition, the importance of price as a form of competition is a factor in determining the inclusion of price information, but only where the firm aims most of its advertisements towards final consumers. Journal: International Journal of the Economics of Business Pages: 57-75 Issue: 1 Volume: 5 Year: 1998 Keywords: Advertising, Price, Search, Information, X-DOI: 10.1080/13571519884576 File-URL: http://www.tandfonline.com/10.1080/13571519884576 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:5:y:1998:i:1:p:57-75 Template-Type: ReDIF-Article 1.0 Author-Name: Ravi Ratnayake Author-X-Name-First: Ravi Author-X-Name-Last: Ratnayake Title: Do Stringent Environmental Regulations Reduce International Competitiveness? Evidence from an Inter-industry A nalysis Abstract: An increasing interest has emerged among policy makers and academics on the question "Do stringent environmental regulations lead to loss of international competitiveness in terms of declining exports and increasing imports compared with those from the countries which have lower environmental standards and regulations?". This paper examines this issue by conducting an inter-industry analysis of New Zealand manufacturing industries. By analysing the patterns and determinants of comparative advantage of 109 industries over the last 13 years, we found no strong evidence to suggest that environmental standards lead to loss of competitiveness. Journal: International Journal of the Economics of Business Pages: 77-96 Issue: 1 Volume: 5 Year: 1998 Keywords: Environmental Regulations, International Competitiveness, Exports And Imports, Inter-industry Analysis, X-DOI: 10.1080/13571519884585 File-URL: http://www.tandfonline.com/10.1080/13571519884585 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:5:y:1998:i:1:p:77-96 Template-Type: ReDIF-Article 1.0 Author-Name: Doris Neu Berger Author-X-Name-First: Doris Neu Author-X-Name-Last: Berger Title: Industrial Organization of Banking: A Review Abstract: Empirical research about structure, conduct and performance in banking markets has developed mostly independently from the microeconomic theory of banking. The present paper reviews the literature by focusing on the links between theoretical and empirical research. It considers basic conditions, variables of market structure, conduct and performance and public policy special to the banking industry. It is shown that the competitive conditions are different in different market segments, and that the trend towards universal banks which are active in different geographic markets gives new challenges to research. Journal: International Journal of the Economics of Business Pages: 97-118 Issue: 1 Volume: 5 Year: 1998 Keywords: Banking, Industrial Organization, Structure-conduct-performance Paradigm, Market Imperfections, Public Policy, X-DOI: 10.1080/13571519884594 File-URL: http://www.tandfonline.com/10.1080/13571519884594 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:5:y:1998:i:1:p:97-118 Template-Type: ReDIF-Article 1.0 Author-Name: Clement Krouse Author-X-Name-First: Clement Author-X-Name-Last: Krouse Title: Market Dominance: Competing Theories and A ntitrust Policy. A Review of Michael Utton, Market Dominance and Antitrust Policy Abstract: Journal: International Journal of the Economics of Business Pages: 119-127 Issue: 1 Volume: 5 Year: 1998 X-DOI: 10.1080/13571519884602 File-URL: http://www.tandfonline.com/10.1080/13571519884602 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:5:y:1998:i:1:p:119-127 Template-Type: ReDIF-Article 1.0 Author-Name: Monica Noether Author-X-Name-First: Monica Author-X-Name-Last: Noether Title: Economic Issues in the Antitrust Assessment of Hospital Competition: Overview Abstract: Rapid consolidation in the hospital industry, as health care markets respond to consumer pressures for more cost-effective delivery of health care services, has focused increased attention on antitrust enforcement theories and actions. This paper reviews the Federal agency challenges of four recent hospital mergers that have all been denied by the courts, but for varying reasons. Questions raised include the appropriate definition of the product and geographic markets, the extent of realizable merger-specific efficiencies and the influence of non-profit status on hospital behavior. The lack of conclusive empirical economic evidence on these topics undoubtedly contributes to the current divergence of opinion among regulators, courts and hospitals. This paper also identifies how each of the subsequent papers in this special issue contributes valuable findings to inform the lively debate. Journal: International Journal of the Economics of Business Pages: 133-140 Issue: 2 Volume: 5 Year: 1998 Keywords: Hospital Competition, Market Definition, Antitrust, X-DOI: 10.1080/13571519884477 File-URL: http://www.tandfonline.com/10.1080/13571519884477 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:5:y:1998:i:2:p:133-140 Template-Type: ReDIF-Article 1.0 Author-Name: John Simpson Author-X-Name-First: John Author-X-Name-Last: Simpson Author-Name: Richard Shin Author-X-Name-First: Richard Author-X-Name-Last: Shin Title: Do Nonprofit Hospitals Exercise Market Power? Abstract: Several theories of nonprofit hospitals behavior predict that nonprofit hospitals behave in the consumer interest and thus do not exercise market power. If these theories are correct, then antitrust enforcement of hospital mergers should be restricted only to those markets in which a nonprofit hospital cannot offset anticompetitive behavior by for-profit hospitals. In this paper, we examine the relationship between price and market concentration among nonprofit hospitals in California in 1993. We find that nonprofit hospitals set higher prices in more concentrated markets. This result suggests that antitrust enforcement should challenge those mergers of nonprofit hospitals that create market power without creating offsetting efficiencies. Journal: International Journal of the Economics of Business Pages: 141-157 Issue: 2 Volume: 5 Year: 1998 Keywords: Nonprofit Hospitals, Merger, Antitrust, X-DOI: 10.1080/13571519884486 File-URL: http://www.tandfonline.com/10.1080/13571519884486 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:5:y:1998:i:2:p:141-157 Template-Type: ReDIF-Article 1.0 Author-Name: Robert Connor Author-X-Name-First: Robert Author-X-Name-Last: Connor Author-Name: Roger Feldman Author-X-Name-First: Roger Author-X-Name-Last: Feldman Author-Name: Bryan Dowd Author-X-Name-First: Bryan Author-X-Name-Last: Dowd Title: The Effects of Market Concentration and Horizontal Mergers on Hospital Costs and Prices Abstract: Antitrust advocates believe that horizontal consolidation in hospital markets can reduce competition and increase prices while merger advocates believe it can benefit consumers by reducing service duplication. This study analyzed the market conditions, operating characteristics, and costs and prices of approximately 3500 short-term general hospitals (including 112 within-market-area mergers) from 1986 to 1994 to investigate the effects of market concentration, hospital mergers, and managed care penetration. The results show: a shift away from non-price competition toward price competition in health care markets; that this shift was fueled by increased market penetration by price-sensitive buyers; that horizontal hospital mergers produced average cost savings of approximately 5%, which were generally passed on to consumers as lower prices; that cost savings were generally greater for mergers of similar-size hospitals, with a higher degree of duplicative services, and with lower pre-merger occupancy rates; and some evidence that post-merger price reductions were smaller in less-competitive markets. Journal: International Journal of the Economics of Business Pages: 159-180 Issue: 2 Volume: 5 Year: 1998 Keywords: Hospital Mergers, Antitrust, Competition, Market Concentration, Economies Of Scale, X-DOI: 10.1080/13571519884495 File-URL: http://www.tandfonline.com/10.1080/13571519884495 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:5:y:1998:i:2:p:159-180 Template-Type: ReDIF-Article 1.0 Author-Name: Seth Sacher Author-X-Name-First: Seth Author-X-Name-Last: Sacher Author-Name: Louis Silvia Author-X-Name-First: Louis Author-X-Name-Last: Silvia Title: Antitrust Issues in Defining the Product Market for Hospital Services Abstract: In this paper we examine the standard product market relied on by the courts and antitrust agencies in hospital mergers-acute care, inpatient services-and consider whether narrower or broader alternatives may be more appropriate to assess the competitive effects of a hospital merger. To examine how much disaggregation of the standard product market definition may matter for the definition of relevant geographic markets and concentration, we considered patient flows and concentration for the overall inpatient 'cluster' and more disaggregated categories of service for two regions of California: San Luis Obispo and Sacramento. We find that a disaggregated approach may involve a relatively small number of inpatient service categories, that the overall cluster masked some variability in the underlying patient flows by service category, and that in San Luis Obispo, the overall cluster masked considerable detail in concentration at the service category level, which appeared to have been much less true in Sacramento. Journal: International Journal of the Economics of Business Pages: 181-202 Issue: 2 Volume: 5 Year: 1998 Keywords: Antitrust, Hospitals, Healthcare, Market Definition, X-DOI: 10.1080/13571519884503 File-URL: http://www.tandfonline.com/10.1080/13571519884503 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:5:y:1998:i:2:p:181-202 Template-Type: ReDIF-Article 1.0 Author-Name: William White Author-X-Name-First: William Author-X-Name-Last: White Author-Name: Michael Morrisey Author-X-Name-First: Michael Author-X-Name-Last: Morrisey Title: Are Patients Traveling Further? Abstract: Managed care has been hypothesized to increase patient travel for health care services by steering patients to more distant providers. This raises access concerns. However, if the result is to expand the geographic extent of provider markets, this may ease antitrust concerns about mergers. This research compares travel distances for patients discharged from California hospitals in 1985 and 1991 controlling for payor, diagnosis, and local market conditions. Privately insured patients were more likely to be in managed care than Medicare patients during this period. We expect travel distances to increase for private patients relative to Medicare patients if managed is leading to greater travel. However, for a random sample of patients excluding births and neonatal discharges, we find no evidence relative travel increased. Nor do we find a systematic pattern of increase when we examine travel for specific diagnoses selected on the basis of the urgency and complexity of care. Journal: International Journal of the Economics of Business Pages: 203-221 Issue: 2 Volume: 5 Year: 1998 Keywords: Patient Travel, Market Definition, Antitrust, X-DOI: 10.1080/13571519884512 File-URL: http://www.tandfonline.com/10.1080/13571519884512 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:5:y:1998:i:2:p:203-221 Template-Type: ReDIF-Article 1.0 Author-Name: Joy Grossman Author-X-Name-First: Joy Author-X-Name-Last: Grossman Author-Name: Dwayne Banks Author-X-Name-First: Dwayne Author-X-Name-Last: Banks Title: Unrestricted Entry and Nonprice Competition: The Case of Technological Adoption in Hospitals Abstract: Medical technology adoption is a major contributor to rising health care expenditures in the US. Multiple market failures provide incentives for hospitals to adopt technologies. Unrestricted entry may result in excess capacity and reductions in output that are inefficient with respect to cost and quality. We analyze the effects of hospital entry in the market for coronary artery bypass graft surgery on the number of procedures performed at both the market and firm levels, using California data from 1983 to 1990. We test the hypothesis that entry has differential effects on hospital output in a market with nonprice competition, depending on market structure. Results show that as the proximity of the nearest competitor increases with entry, hospital output declines. Holding distance to the nearest competitor constant, increasing the number of competitors results in a smaller, but still significant, decrease in output. When there are few incumbents nearby, however, output does not change significantly with entry, suggesting "business-augmenting" effects that result in increased physician referrals offset much of the conventional "businessstealing" effects. Journal: International Journal of the Economics of Business Pages: 223-245 Issue: 2 Volume: 5 Year: 1998 Keywords: Hospital Competition, Medical Technology, Market Structure, Cabg, X-DOI: 10.1080/13571519884521 File-URL: http://www.tandfonline.com/10.1080/13571519884521 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:5:y:1998:i:2:p:223-245 Template-Type: ReDIF-Article 1.0 Author-Name: Peter Zweifel Author-X-Name-First: Peter Author-X-Name-Last: Zweifel Title: Health Benefits at Work-A Review of Mark V. Pauly's, Health Benefits at Work. An Economic and Political Analysis of Employment-Based Health Insurance Abstract: Journal: International Journal of the Economics of Business Pages: 247-251 Issue: 2 Volume: 5 Year: 1998 Keywords: Health Insurance, Employment-related Benefits, Agency Relationship, X-DOI: 10.1080/13571519884530 File-URL: http://www.tandfonline.com/10.1080/13571519884530 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:5:y:1998:i:2:p:247-251 Template-Type: ReDIF-Article 1.0 Author-Name: Jonathan Michie Author-X-Name-First: Jonathan Author-X-Name-Last: Michie Title: Introduction. The Internationalisation of the Innovation Process Abstract: The international economics of business and management has focused - both in the academic literature and in corporate and public policy discussions - increasingly on issues of globalisation, innovation and 'competitiveness'. These issues, and in particular their interrelation, are analysed in detail in this Special Issue of the International Journal of the Economics of Business. This opening article aims to set the scene by considering how the rather distinct literatures around the above three topics can best be drawn upon in order to focus on what implications the new global economic environment has for the economics of business and public policy. Journal: International Journal of the Economics of Business Pages: 261-277 Issue: 3 Volume: 5 Year: 1998 Keywords: Globalisation, Innovation, R&D, Technology Policy, Systems, Competitiveness, X-DOI: 10.1080/13571519884387 File-URL: http://www.tandfonline.com/10.1080/13571519884387 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:5:y:1998:i:3:p:261-277 Template-Type: ReDIF-Article 1.0 Author-Name: Jeremy Howells Author-X-Name-First: Jeremy Author-X-Name-Last: Howells Author-Name: Jonathan Michie Author-X-Name-First: Jonathan Author-X-Name-Last: Michie Title: Technological Competitiveness in an International Arena Abstract: This article takes a sceptical view of the 'globalisation of technology' literature. We suggest three elements to such technological globalisation. First, there is the geographical extent in terms of the spatial spread and intensity (or 'depth'). Secondly, there are 'sectoral' variations in the degree of technological globalisation. Lastly, there is the issue of the 'temporal' extent of the globalisation of technology-when effectively did it first appear and what is the nature and extent of its subsequent development? With this framework, we find a far from uniform 'globalisation'. Government policy at the national level remains important, we argue, in part because much of what is depicted as globalisation is very clearly inter-national. Journal: International Journal of the Economics of Business Pages: 279-293 Issue: 3 Volume: 5 Year: 1998 Keywords: Technology, Competitiveness, Globalisation, Public Policy, X-DOI: 10.1080/13571519884396 File-URL: http://www.tandfonline.com/10.1080/13571519884396 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:5:y:1998:i:3:p:279-293 Template-Type: ReDIF-Article 1.0 Author-Name: Daniele Archibugi Author-X-Name-First: Daniele Author-X-Name-Last: Archibugi Author-Name: Roberto Simonetti Author-X-Name-First: Roberto Author-X-Name-Last: Simonetti Title: Objects and Subjects in Technological Interdependence. Towards a Framework to Monitor Innovation Abstract: Technology, even more than other aspects of economic life, is characterized by a strong interdependence across both sectors and organizations. However, we still know little about the determinants and impact of technological interdependence. The standard input-output analysis is unable to explain interdependence in technological life since a large proportion of innovations are either untraded or are disembodied from products. Innovations which are not appropriated by the innovators are not signalled by prices. Moreover, input-output tables do not systematically consider exchanges within economic organizations, such as firms. This paper proposes a more complex accounting framework for innovation which would monitor the technological field of the innovation and the product where it is used, as well as the producer-user interrelationship. Journal: International Journal of the Economics of Business Pages: 295-309 Issue: 3 Volume: 5 Year: 1998 Keywords: Innovation, Technical Change, R&D, X-DOI: 10.1080/13571519884404 File-URL: http://www.tandfonline.com/10.1080/13571519884404 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:5:y:1998:i:3:p:295-309 Template-Type: ReDIF-Article 1.0 Author-Name: Rinaldo Evangelista Author-X-Name-First: Rinaldo Author-X-Name-Last: Evangelista Author-Name: Tore Sandven Author-X-Name-First: Tore Author-X-Name-Last: Sandven Author-Name: Giorgio Sirilli Author-X-Name-First: Giorgio Author-X-Name-Last: Sirilli Author-Name: Keith Smith Author-X-Name-First: Keith Author-X-Name-Last: Smith Title: Measuring Innovation in European Industry Abstract: This paper analyses the results of the 1993 Community Innovation Survey (CIS). Fifty per cent of European firms introduced a product or process innovation during 1990-92. The share of innovating firms varies between industrial sectors and firm size. The percentage of innovating firms is higher for large firms than for smaller ones. In high-tech sectors this share is two thirds and for traditional ones is one third. The largest part of firms' expenditure for innovation is linked to the adoption and diffusion of technologies through machinery and equipment, which absorbs 50% of firms' innovation expenditure. R&D activities represent, on average, 20% of total innovation expenditure while other innovative activities, such as design and trial production, account respectively for 10% and 11%. The mix of innovation inputs, especially R&D and investment, is strongly correlated with firm size, displays little change across countries and varies greatly across industries. Journal: International Journal of the Economics of Business Pages: 311-333 Issue: 3 Volume: 5 Year: 1998 Keywords: Technological Change, Innovation, R&D, X-DOI: 10.1080/13571519884413 File-URL: http://www.tandfonline.com/10.1080/13571519884413 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:5:y:1998:i:3:p:311-333 Template-Type: ReDIF-Article 1.0 Author-Name: Simona Iammarino Author-X-Name-First: Simona Author-X-Name-Last: Iammarino Author-Name: Jonathan Michie Author-X-Name-First: Jonathan Author-X-Name-Last: Michie Title: The Scope of Technological Globalisation Abstract: The term 'globalisation' has been used widely and loosely. On the one hand there are the descriptives, of increased flows of goods, services, capital and people. On the other hand there is the prescriptive agenda, that there is a new global era, ruling out certain economic and political choices. The blurring of the lines between the two categories-of the descriptive and the prescriptive-presents the obvious starting point for academic investigation. And in both cases, the role played by technology takes centre stage. In the first case the argument is that the new developments in information technology, computing, telecommunications, broadcasting and so on have opened up the world economy. As for the second category, such developments are seen as leaving national governments helpless in the face of global corporate players. In this paper we therefore reconsider some of the evidence, focussing particular on the role of technology. Journal: International Journal of the Economics of Business Pages: 335-353 Issue: 3 Volume: 5 Year: 1998 Keywords: Technology, Globalisation, Trade, Fdi, R&D, X-DOI: 10.1080/13571519884422 File-URL: http://www.tandfonline.com/10.1080/13571519884422 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:5:y:1998:i:3:p:335-353 Template-Type: ReDIF-Article 1.0 Author-Name: Geert Duysters Author-X-Name-First: Geert Author-X-Name-Last: Duysters Author-Name: John Hagedoorn Author-X-Name-First: John Author-X-Name-Last: Hagedoorn Title: Technological Convergence in the IT Industry: The Role of Strategic Technology Alliances and Technological Competencies Abstract: For some time now, the convergence of the telecommunications and computer industries into a single 'information and entertainment' industry has been predicted. The acquisitions that appeared to be bringing such a convergence about have not, however, proved particularly successful. The paper suggests that one factor behind the relatively low degree of convergence may be inertia. Following evolutionary and ecological theory, the paper argues that both external and internal inertial forces reduce the ability of firms to deal with changes in their technological cores. The paper concludes that technological convergence, although apparent on the technological and product/market level, does not seem to have affected the 'core' competencies of major IT companies. Journal: International Journal of the Economics of Business Pages: 355-368 Issue: 3 Volume: 5 Year: 1998 Keywords: Technology, Convergence, Alliances, Competencies, X-DOI: 10.1080/13571519884431 File-URL: http://www.tandfonline.com/10.1080/13571519884431 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:5:y:1998:i:3:p:355-368 Template-Type: ReDIF-Article 1.0 Author-Name: Peter Buckley Author-X-Name-First: Peter Author-X-Name-Last: Buckley Author-Name: Malcolm Chapman Author-X-Name-First: Malcolm Author-X-Name-Last: Chapman Title: The Management of Cooperative Strategies in R&D and Innovation Programmes Abstract: This paper reports on an ESRC-funded project investigating 'the management of cooperative strategies', testing hypotheses drawn largely from (transaction cost) economics using data derived from the investigative methods of social anthropology. Cooperative strategies in a sample of British and French companies were investigated, with a wide range of their contact firms and related institutions being interviewed. The project was part of the ESRC's 'Contracts & Competition' Programme, and the results of the empirical material gathered during the study indicated clearly that the opposition cooperation/competition can not, in any simple way, be regarded as descriptive of the public/private opposition. The study demonstrated, and the paper argues, that the private business sector involves a broad spectrum of collaborative agreements between one company and another, and that a complex range of intermediate possibilities exist between the two notional extremes of markets and hierarchies. Journal: International Journal of the Economics of Business Pages: 369-381 Issue: 3 Volume: 5 Year: 1998 Keywords: Cooperative Strategies, R&D, Innovation, X-DOI: 10.1080/13571519884440 File-URL: http://www.tandfonline.com/10.1080/13571519884440 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:5:y:1998:i:3:p:369-381 Template-Type: ReDIF-Article 1.0 Author-Name: John Cantwell Author-X-Name-First: John Author-X-Name-Last: Cantwell Author-Name: Simona Iammarino Author-X-Name-First: Simona Author-X-Name-Last: Iammarino Title: MNCs, Technological Innovation and Regional Systems in the EU: Some Evidence in the Italian Case Abstract: The increasing appreciation of the role of multinational corporations (MNCs) in the generation of technology across national boundaries has been facilitated by the recent trend for MNCs to establish internal and external networks for innovation. The development of cross-border corporate integration and intra-border inter-company sectoral integration makes it increasingly important to examine where and how innovative activity by MNCs is internationally dispersed and regionally concentrated. By using patents granted to the largest industrial firms for innovation located abroad-arranged by the host region-we test the nature of the relationship between the foreign-owned and the indigenous company profiles of technological specialisation in the Italian regions. We argue the MNC networks for innovation in Europe conform to a geographical hierarchy of regional centres. Accordingly, the technological specialisation of foreign-owned affiliates in different regional locations depends upon the position of the region in the hierarchy, i.e. whether the regional system is at the top of the hierarchy (higher order location) or is a lower order regional centre. Journal: International Journal of the Economics of Business Pages: 383-408 Issue: 3 Volume: 5 Year: 1998 Keywords: Multinational Corporations, Technological Innovation, Regional Systems, X-DOI: 10.1080/13571519884459 File-URL: http://www.tandfonline.com/10.1080/13571519884459 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:5:y:1998:i:3:p:383-408 Template-Type: ReDIF-Article 1.0 Author-Name: Nicholas Oulton Author-X-Name-First: Nicholas Author-X-Name-Last: Oulton Title: Technology, Globalisation and Economic Performance - A Review of Daniele Archibugi and Jonathan Michie, eds, Technology, Globalisation and Economic Performance Abstract: Journal: International Journal of the Economics of Business Pages: 409-414 Issue: 3 Volume: 5 Year: 1998 Keywords: Technology, Globalisation, Growth, X-DOI: 10.1080/13571519884468 File-URL: http://www.tandfonline.com/10.1080/13571519884468 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:5:y:1998:i:3:p:409-414 Template-Type: ReDIF-Article 1.0 Author-Name: Jonathan Murray Author-X-Name-First: Jonathan Author-X-Name-Last: Murray Author-Name: Nicholas Sarantis Author-X-Name-First: Nicholas Author-X-Name-Last: Sarantis Title: Price-Quality Relations and Hedonic Price Indexes for Cars in the United Kingdom Abstract: The main objective of this paper is to employ a complete set of panel data on UK car characteristics to estimate a hedonic car price model. This enables us to examine price differences between various car models in terms of variations in individual car characteristics.We also pay greater attention to the specification of the hedonic price model than previous studies, as shown by the wide range of diagnostics reported. A second objective of the paper is to utilise the estimates of the hedonic price model to construct a hedonic price index for cars, which allows us to investigate the increase of car prices due to quality and non-quality factors. Journal: International Journal of the Economics of Business Pages: 5-27 Issue: 1 Volume: 6 Year: 1999 Keywords: Hedonic Prices, Quality, Cars, X-DOI: 10.1080/13571519984287 File-URL: http://www.tandfonline.com/10.1080/13571519984287 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:6:y:1999:i:1:p:5-27 Template-Type: ReDIF-Article 1.0 Author-Name: Dimitrios Giannias Author-X-Name-First: Dimitrios Author-X-Name-Last: Giannias Title: Market Positioning of Differentiated Products Abstract: A brand is a mean of product differentiation and a kind of a sign by which we can distinguish one commodity from another. Consumers' utility, as well as commodity prices are affected by brands. Therefore, the market positioning of branded products is important for firms, too, since it affects profits. This paper presents a theoretical framework that incorporates aspects of brand in microeconomic analysis and the tools for an effective market positioning of differentiated products. A case study illustrates the workings of the methodology; the application evaluates the quality of major tyres producers and undertakes their market positioning. Journal: International Journal of the Economics of Business Pages: 29-39 Issue: 1 Volume: 6 Year: 1999 Keywords: Market Positioning, Comparative Product, Brand Evaluation, X-DOI: 10.1080/13571519984296 File-URL: http://www.tandfonline.com/10.1080/13571519984296 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:6:y:1999:i:1:p:29-39 Template-Type: ReDIF-Article 1.0 Author-Name: Harvey James Author-X-Name-First: Harvey Author-X-Name-Last: James Title: Owner as Manager, Extended Horizons and the Family Firm Abstract: Previous work on firm ownership structure suggests that organizations in which ownership and control are combined may be undervalued relative to the market investment rule because decision makers have an incentive to forgo investment projects that managers in firms with specialized ownership find profitable. However, the specialization of ownership and decision-making functions may result in substantial agency costs. This paper shows that these tradeoffs may not exist in family firms. The extended horizons characteristic of family businesses may provide the necessary incentives for decision makers to invest according to the market rule while limiting agency costs that arise when ownership and control are separated. Family ties, loyalty, insurance, and stability are expected to be effective in lengthening the horizons of managers and in providing the incentives for family managers to make efficient investments in the family business. Journal: International Journal of the Economics of Business Pages: 41-55 Issue: 1 Volume: 6 Year: 1999 Keywords: Family Firms, Governance, Extended Horizons, Managerial Decisionmaking, X-DOI: 10.1080/13571519984304 File-URL: http://www.tandfonline.com/10.1080/13571519984304 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:6:y:1999:i:1:p:41-55 Template-Type: ReDIF-Article 1.0 Author-Name: Robert Feinberg Author-X-Name-First: Robert Author-X-Name-Last: Feinberg Title: Estimating Reaction Functions in Experimental Duopoly Markets Abstract: It is well known that, in general, there are a multitude of supergame equilibria in noncooperative duopoly markets, suggesting the inability (without severe restrictions) of theory alone to determine the 'best' strategy in a repeated game context. Axelrod's prisoner's dilemma simulation tournaments have led to the view of the somewhat cooperative 'tit-fortat' approach as an attractive strategy, in particular compared to an alternative strategy of 'always defecting' (choosing at all times the single period Nash solution). In this paper, we use data obtained from two independent posted-offer duopoly experiments to investigate the actual dynamic reaction functions of participants. Neither of the above seems to be commonly employed as a pure strategy.We also provide some support for the Axelrod view of 'tit-for-tat' as the most profitable strategy. Journal: International Journal of the Economics of Business Pages: 57-63 Issue: 1 Volume: 6 Year: 1999 Keywords: Experimental Economics, Reaction Functions, Duopoly Markets, X-DOI: 10.1080/13571519984313 File-URL: http://www.tandfonline.com/10.1080/13571519984313 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:6:y:1999:i:1:p:57-63 Template-Type: ReDIF-Article 1.0 Author-Name: Ram Mudambi Author-X-Name-First: Ram Author-X-Name-Last: Mudambi Title: Multinational Investment Attraction: Principal-Agent Considerations Abstract: Government agencies are becoming increasingly involved in the process of providing investment supports to attract foreign direct investment (FDI).This paper focuses on the problem of how best to structure the investment supports. Five different types of investment supports are theoretically and empirically analysed. In each case the effect of the principal-agent relationships between the MNE investor and the agency charged with attracting FDI are assessed in the strategic context. Theoretical analysis suggests that in some cases, governments may prefer support schemes that appear to be more expensive, but have better incentive or risk-sharing implications. Empirical analysis suggests that MNE firm characteristics are related to the type of investment support package obtained. Journal: International Journal of the Economics of Business Pages: 65-79 Issue: 1 Volume: 6 Year: 1999 Keywords: Government Investment Supports Mne, Investment Location, Principal Agent Theory, X-DOI: 10.1080/13571519984322 File-URL: http://www.tandfonline.com/10.1080/13571519984322 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:6:y:1999:i:1:p:65-79 Template-Type: ReDIF-Article 1.0 Author-Name: Paul Clyde Author-X-Name-First: Paul Author-X-Name-Last: Clyde Title: Is it Efficient to Impose Costs on Small-Volume Equity Traders? Abstract: A securities market that imposes higher trading costs on small-volume traders may reduce free-riding on information generated by large-volume traders. The reduction in free-riding increases the probability that large-volume traders will invest in socially beneficial information and engage in costly monitoring of managers of firms in their portfolio.V arious mechanisms can be used to impose costs on small-volume traders.We argue that Nasdaq's former treatment of limit orders was one such mechanism. Depending on the market's structure and the nature of the securities traded in the market, a reduction in freeriding activity may improve overall market efficiency despite a potentially negative impact on information dissemination. Journal: International Journal of the Economics of Business Pages: 81-92 Issue: 1 Volume: 6 Year: 1999 Keywords: Limit Orders, Market Microstructure, Information, X-DOI: 10.1080/13571519984331 File-URL: http://www.tandfonline.com/10.1080/13571519984331 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:6:y:1999:i:1:p:81-92 Template-Type: ReDIF-Article 1.0 Author-Name: Guttorm Schjelderup Author-X-Name-First: Guttorm Author-X-Name-Last: Schjelderup Title: Multinationals, Intra-Firm Trade and the Taxation of Foreign-Source Income Abstract: Most countries use the tax credit scheme instead of the tax deduction scheme to alleviate double taxation of foreign earnings. Under the tax deduction scheme, double taxation is alleviated by treating foreign taxes paid as business cost deductible against domestic income rather than allowing them to be credited against the taxes levied by the home country (as is the case under the tax credit system).This paper examines how the two tax systems affect trade between affiliates of a multinational firm. Journal: International Journal of the Economics of Business Pages: 93-105 Issue: 1 Volume: 6 Year: 1999 Keywords: Multinational Firm Behavior, Systems For Taxing Foreign Source Income, X-DOI: 10.1080/13571519984340 File-URL: http://www.tandfonline.com/10.1080/13571519984340 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:6:y:1999:i:1:p:93-105 Template-Type: ReDIF-Article 1.0 Author-Name: Rui Baptista Author-X-Name-First: Rui Author-X-Name-Last: Baptista Title: The Diffusion of Process Innovations: A Selective Review Abstract: This paper surveys some of the most noteworthy literature on the diffusion of process technologies from the point of view of economics. It examines the main theoretical approaches to the diffusion phenomenon: epidemic and learning effects, equilibrium models associated with firm characteristics and strategic interaction. It also discusses the role of the supply side. Empirical work modelling inter-firm diffusion is reviewed, and special attention is given to the role of geography and inter-firm networking in the process of knowledge transfer and diffusion. Some suggestions for further research are presented as a conclusion. Journal: International Journal of the Economics of Business Pages: 107-129 Issue: 1 Volume: 6 Year: 1999 Keywords: Diffusion Of Innovations, Geography, Inter-firm Networking, Spillovers, X-DOI: 10.1080/13571519984359 File-URL: http://www.tandfonline.com/10.1080/13571519984359 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:6:y:1999:i:1:p:107-129 Template-Type: ReDIF-Article 1.0 Author-Name: David Butz Author-X-Name-First: David Author-X-Name-Last: Butz Title: The Disconnection Between Principal-Agent Theory and Empirical Work: A Review of Bernard Salanie, The Economics of Contracts Abstract: Journal: International Journal of the Economics of Business Pages: 131-140 Issue: 1 Volume: 6 Year: 1999 X-DOI: 10.1080/13571519984368 File-URL: http://www.tandfonline.com/10.1080/13571519984368 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:6:y:1999:i:1:p:131-140 Template-Type: ReDIF-Article 1.0 Author-Name: Peter Hart Author-X-Name-First: Peter Author-X-Name-Last: Hart Author-Name: Nicholas Oulton Author-X-Name-First: Nicholas Author-X-Name-Last: Oulton Title: Gibrat, Galton and Job Generation Abstract: The proportionate growth of a company decreases with increases in its initial size, in accordance with the Galton model of regression towards the mean. Gibrat's Law of proportionate effect does not hold within size classes or within industries. In job generation accounting, actual increases in employment are even more important than proportionate ones. In the UK small and medium sized companies had larger absolute and proportionate increases in employment than did large companies and were responsible for most of the increase in jobs 1989-93. In fact large companies tended to reduce the numbers they employed. Journal: International Journal of the Economics of Business Pages: 149-164 Issue: 2 Volume: 6 Year: 1999 Keywords: Gibrat, Job Creation, Small Firms, Growth, X-DOI: 10.1080/13571519984197 File-URL: http://www.tandfonline.com/10.1080/13571519984197 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:6:y:1999:i:2:p:149-164 Template-Type: ReDIF-Article 1.0 Author-Name: Karl Aiginger Author-X-Name-First: Karl Author-X-Name-Last: Aiginger Author-Name: Michael Pfaffermayr Author-X-Name-First: Michael Author-X-Name-Last: Pfaffermayr Title: Product Quality, Cost Asymmetry and the Welfare Loss of Oligopoly Abstract: When competition is tough, firms which do not implement the least expensive technology are forced to exit, or the low cost firms are able to increase their market share. Persistent cost or profit differences require some form of restricted entry, specific intangible assets or oligopolistic co-ordination. If technology or skills is easy to transfer but it is not transferred because of collusion, we have to add a cost side effect ('the staircase')stemming from the non-proliferation of the best technology- to the well-known demand side loss ('the triangle'). This paper presents a model with vertical product differentiation and develops a method which disentangles cost differences coming from vertical product differences and those coming from other sources. Data for the paper industry in the EU, in the US and in Japan indicate that cost differences are large. If at least some part of them comes from oligopolistic co-ordination, then the welfare loss of oligopoly is much larger than the usually measured demand side welfare loss. Journal: International Journal of the Economics of Business Pages: 165-180 Issue: 2 Volume: 6 Year: 1999 Keywords: Dead-weight Loss Triangle, Cost Efficiency, Vertical Product Differentiation, Oligopoly, Paper Industry, X-DOI: 10.1080/13571519984205 File-URL: http://www.tandfonline.com/10.1080/13571519984205 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:6:y:1999:i:2:p:165-180 Template-Type: ReDIF-Article 1.0 Author-Name: Davide Vannoni Author-X-Name-First: Davide Author-X-Name-Last: Vannoni Title: Entries and Exits in Foreign Markets: Italian Firms' Multinational Expansion in the European Union Abstract: This paper focuses on the expansion strategies in foreign markets of a sample of Italian firms during the period 1987-93. The data reveal strong dynamics in entry and exit strategies and an overall increase in Italian firms' foreign manufacturing activities. Firms seem to be restructuring and reorganising their range of activities in view of the new competitive scenario promoted by the completion of the Single European Market. A logit model investigating the determinants of entry in foreign markets is tested at the firm level. The results suggest that firms' specific resources, target industry and foreign country characteristics are important explanatory variables. Some new insights concerning the export substitution effect, the presence of technological sourcing and the multinational/ diversification dichotomy are also discussed. Journal: International Journal of the Economics of Business Pages: 181-196 Issue: 2 Volume: 6 Year: 1999 Keywords: Multinationals, Foreign Direct Investments, Entries And Exits, X-DOI: 10.1080/13571519984214 File-URL: http://www.tandfonline.com/10.1080/13571519984214 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:6:y:1999:i:2:p:181-196 Template-Type: ReDIF-Article 1.0 Author-Name: Yoram Landskroner Author-X-Name-First: Yoram Author-X-Name-Last: Landskroner Author-Name: Jacob Paroush Author-X-Name-First: Jacob Author-X-Name-Last: Paroush Title: Sovereign Debt Restructuring and Bank Capital Abstract: The focus of this paper is on the interaction between a bail-out loan decision of a bank to a sovereign borrower and the adequacy of the bank's capital. The new loan is granted on two conditions: First, it must improve the likelihood of repayment of the outstanding loan; second the bank should have adequate capital.We find that in general a positive relationship exists between capital and the bail out loan and between existing debt and the new loan. However, under certain circumstances a negative relationship exists between the bank's capital and the new loan. Empirical results support the main implications of the theoretical model. Journal: International Journal of the Economics of Business Pages: 197-207 Issue: 2 Volume: 6 Year: 1999 Keywords: Sovereign Debt, Bail-out Loans, Capital Adequacy, X-DOI: 10.1080/13571519984223 File-URL: http://www.tandfonline.com/10.1080/13571519984223 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:6:y:1999:i:2:p:197-207 Template-Type: ReDIF-Article 1.0 Author-Name: Margarida De Mello Author-X-Name-First: Margarida Author-X-Name-Last: De Mello Author-Name: Antonio Brandao Author-X-Name-First: Antonio Author-X-Name-Last: Brandao Title: Measuring the Market Power of the Portuguese Milk Industry Abstract: This paper is based on the previous work of Appelbaum (Journal of Econometrics, 1979, 9, pp. 283-94; 1982, 19, pp. 287-99). Iwata (Econometrics 1974, 42, pp. 947-66) and Rogers (PhD Dissertation, GeorgeWashington University, 1983).We estimate the degree of market power of an oligopolistic industry, using a linear system and the 2SLS estimation method. Our departure point is the work of Appelbaum (1982) where a 'market power index' is estimated for each of the sample's 25 years. As the market power index depends functionally on the conjectural elasticity, the goal is to obtain annual estimates for that elasticity. For this purpose, Appelbaum defines a non-linear simultaneous-equation system and obtains, with non-linear methods, the conjectural elasticity estimates for each year of the sample. Considering the conjectural elasticity's functional form that Appelbaum adopts, we use a different approach and obtain a linear system that is easier to estimate. Due to the particular features of the industry analysed, we also derive a much simpler form for the equations involved. The model's simplicity is appealing and its generalisation to other industries with homogeneous products may be implemented with ease. Journal: International Journal of the Economics of Business Pages: 209-222 Issue: 2 Volume: 6 Year: 1999 Keywords: Oligopoly, Market Power, Conjectural Elasticity, X-DOI: 10.1080/13571519984232 File-URL: http://www.tandfonline.com/10.1080/13571519984232 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:6:y:1999:i:2:p:209-222 Template-Type: ReDIF-Article 1.0 Author-Name: Phillip McKnight Author-X-Name-First: Phillip Author-X-Name-Last: McKnight Author-Name: Cyril Tomkins Author-X-Name-First: Cyril Author-X-Name-Last: Tomkins Title: Top Executive Pay in the United Kingdom: A Corporate Governance Dilemma Abstract: This study represents a first attempt in the UK literature to split total pay into salary, annual bonus and share options for the purpose of empirically verifying how each is related to executive performance. As predicted from earlier studies on total pay, salaries were found primarily determined by firm size. Contarary to prior research, however, our findings suggest a pronounced link does exist between performance and pay over both the short- and long-term. This is manifested particularly by the magnitude of the coefficient estimates found between changes in shareholders return and changes in executive share options. This finding strongly suggests that the leverage executives achieve, on average, in their rewards as share prices increase may well be substantial; a finding that has not been captured in previous research on executive remuneration and which is of considerable relevance to the current corporate governance debates. Journal: International Journal of the Economics of Business Pages: 223-243 Issue: 2 Volume: 6 Year: 1999 Keywords: Executive Pay, Share Options, Bonus, Salary, Black-scholes, Performance, X-DOI: 10.1080/13571519984241 File-URL: http://www.tandfonline.com/10.1080/13571519984241 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:6:y:1999:i:2:p:223-243 Template-Type: ReDIF-Article 1.0 Author-Name: Luigi Filippini Author-X-Name-First: Luigi Author-X-Name-Last: Filippini Title: Leapfrogging in a Vertical Product Differentiation Model Abstract: The model considers a two-period duopoly game where in the first period the leader produces a good with a given quality and the other firm can only imitate it. It is the Stackelberg case where, in addition, the leader has the choice of the quality of the good and the imitation is costly, but not prohibitively so. Under this assumption quantities and profits in terms of the quality are derived as subgame perfect equilibrium. In the second period there exists the possibility for the leader and/or the follower to make an investment. The outcome of this is uncertain: it could either be the case that a good of better quality can be introduced, or that a cost-reduction in producing the existing good is attained. The former case is a product innovation, whereas the latter case is a process innovation. By solving the game backwards as a function of the quality of the first period, there exists the possibility of an equilibrium where the follower chooses to invest and the leader does not invest . Journal: International Journal of the Economics of Business Pages: 245-256 Issue: 2 Volume: 6 Year: 1999 Keywords: Leapfrogging, Product Differentiation, X-DOI: 10.1080/13571519984250 File-URL: http://www.tandfonline.com/10.1080/13571519984250 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:6:y:1999:i:2:p:245-256 Template-Type: ReDIF-Article 1.0 Author-Name: Steven Ongena Author-X-Name-First: Steven Author-X-Name-Last: Ongena Title: Lending Relationships, Bank Default and Economic Activity Abstract: The paper reviews contributions in the literature, which lend theoretical and empirical credibility to the idea that the banking relationship is valuable and important for the firm. Banks offer a lending relationship as the solution to the firm's ongoing credit needs. Bank default disrupts this relationship. Hence risk in the banking sector influences the value of the relationship, the cost of corporate finance, and the level and growth of real activity. As bank default is often the result of fraud and internal irregularities, it is hard to predict. Bank default affects the economy through a number of different channels. The loss of the relationship, benefit for the firm is an important route through which the health of the banking sector influences real activity. Journal: International Journal of the Economics of Business Pages: 257-280 Issue: 2 Volume: 6 Year: 1999 Keywords: Lending Relationship, Bank Default, X-DOI: 10.1080/13571519984269 File-URL: http://www.tandfonline.com/10.1080/13571519984269 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:6:y:1999:i:2:p:257-280 Template-Type: ReDIF-Article 1.0 Author-Name: G.M. Peter Swann Author-X-Name-First: G.M. Peter Author-X-Name-Last: Swann Title: An Economic Analysis of Taste-A Review of Gary S. Becker: Accounting for Tastes Abstract: Journal: International Journal of the Economics of Business Pages: 281-296 Issue: 2 Volume: 6 Year: 1999 X-DOI: 10.1080/13571519984278 File-URL: http://www.tandfonline.com/10.1080/13571519984278 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:6:y:1999:i:2:p:281-296 Template-Type: ReDIF-Article 1.0 Author-Name: Nigel Wadeson Author-X-Name-First: Nigel Author-X-Name-Last: Wadeson Title: Two-way Communication Costs and the Boundaries of the Firm Abstract: Casson and Wadeson (International Journal of the Economics of Business, 1998, 5, pp. 5-27) have modelled the dialogue, or conversation, which customers have with their suppliers in order to convey their requirements, while taking production implications into account. They showed that this has important implications for the positioning of the boundaries of the firm. Unfortunately, their model has the restriction that communication is only costly in the direction of customer to supplier. This paper extends their model by introducing two-way communication costs. It shows that the level of communication cost in the direction of supplier to customer is a key additional factor in determining the nature of the dialogue that takes place. It also shows that this has important additional implications for the positioning of the boundaries of the firm. Custom computer software development is used as an example of an application of the theory. Journal: International Journal of the Economics of Business Pages: 301-329 Issue: 3 Volume: 6 Year: 1999 Keywords: Communication, Firm, Information, Complexity, Product Development, X-DOI: 10.1080/13571519984106 File-URL: http://www.tandfonline.com/10.1080/13571519984106 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:6:y:1999:i:3:p:301-329 Template-Type: ReDIF-Article 1.0 Author-Name: Allen Goodman Author-X-Name-First: Allen Author-X-Name-Last: Goodman Author-Name: Janet Hankin Author-X-Name-First: Janet Author-X-Name-Last: Hankin Author-Name: Eleanor Nishiura Author-X-Name-First: Eleanor Author-X-Name-Last: Nishiura Author-Name: James Sloan Author-X-Name-First: James Author-X-Name-Last: Sloan Title: Impacts of Insurance on the Demand and Utilization of Drug Abuse Treatment: Implications for Insurance Mandates Abstract: This article addresses costs and utilization for mental health/substance abuse treatment, with particular emphasis on the emerging importance of self-insured coverage in the 1990s. We estimate drug abuse treatment demand and utilization with an insurance claims database from self-insured employers. The study population was selected from a large database consisting of health insurance claims for all treatment events starting 1 January 1989 and ending 31 December 1991. Approximately three-quarters of the increase in in-patient usage attributable to fractional co-insurance is due to increased usage per person (the other one-quarter refers to increased numbers of users). About half of the increase in outpatient usage is due to increased usage per person. In summary, our estimates provide useful measurements of the potential impacts of improved drug abuse treatment coverage. Although the potential induced in-patient expenditures and dead-weight losses are substantial compared to co-insurance rates of 0.5, losses can be trimmed by adjusting co-insurance, even at rates of approximately 0.1. Journal: International Journal of the Economics of Business Pages: 331-348 Issue: 3 Volume: 6 Year: 1999 Keywords: Drug Abuse Treatment, Health Demand, Health Mandates, In-patient Setting, Out-patient Setting, Insurance Claims, X-DOI: 10.1080/13571519984115 File-URL: http://www.tandfonline.com/10.1080/13571519984115 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:6:y:1999:i:3:p:331-348 Template-Type: ReDIF-Article 1.0 Author-Name: Nigel Driffield Author-X-Name-First: Nigel Author-X-Name-Last: Driffield Title: Regulation of the Petrol Industry in the UK: Issues and Evidence Abstract: The petrol industry has been investigated twice by the Monopolies and Mergers Commission in the last 20 years. On both occasions the MMC found that the conduct of the companies was not against the public interest. These findings were based on the perceived stable relationship between oil and petrol prices. This paper develops a model of petrol price using a co-integration approach, concluding that one must question the findings of the MMC. Journal: International Journal of the Economics of Business Pages: 349-365 Issue: 3 Volume: 6 Year: 1999 Keywords: Petrol Pricing, Regulation, X-DOI: 10.1080/13571519984124 File-URL: http://www.tandfonline.com/10.1080/13571519984124 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:6:y:1999:i:3:p:349-365 Template-Type: ReDIF-Article 1.0 Author-Name: Torben Pedersen Author-X-Name-First: Torben Author-X-Name-Last: Pedersen Author-Name: Steen Thomsen Author-X-Name-First: Steen Author-X-Name-Last: Thomsen Title: Economic and Systemic Explanations of Ownership Concentration among Europe's Largest Companies Abstract: The paper examines causes and effects of ownership concentration among the largest companies in 12 European countries. As a reference point the paper takes a seminal empirical study on US data and examines to what extent the model is applicable in European countries. The findings indicate that both general economic effects and system effects are significant. Ownership concentration is found to decrease with firm size and to increase with earnings volatility. But in support of the system theories advocated nationality is also found to have a significant effect which is partly attributable to institutional differences between nations such as stock market size and the frequency of large banks. Finally ownership concentration is found to have an insignificant effect on accounting profitability (return on equity) Journal: International Journal of the Economics of Business Pages: 367-381 Issue: 3 Volume: 6 Year: 1999 Keywords: European Ownership Concentration, Corporate Governance, X-DOI: 10.1080/13571519984133 File-URL: http://www.tandfonline.com/10.1080/13571519984133 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:6:y:1999:i:3:p:367-381 Template-Type: ReDIF-Article 1.0 Author-Name: Jon Magnussen Author-X-Name-First: Jon Author-X-Name-Last: Magnussen Author-Name: Lee Rivers Mobley Author-X-Name-First: Lee Rivers Author-X-Name-Last: Mobley Title: The Impact of Market Environment on Excess Capacity and the Cost of an Empty Hospital Bed Abstract: The health economics literature contains contradictory empirical findings regarding the cost of an empty hospital bed. Recent empirical studies which account for the endogeneity of reserve capacity produce high estimates of these costs, while earlier studies and industry experts maintain that empty beds are cheap. This paper provides evidence which helps to reconcile the controversy. The cost of excess bed capacity will depend upon staffing levels of different types of labor in the hospital. We provide a relationship between capacity utilization, productive efficiency, and the cost of empty beds, and then compare the utilization of bed capacity in four very different market environments. These are the highly regulated, public Norwegian hospitals, who face very little competitive pressure, and the unregulated, private California hospitals, divided into three groups with variation in ownership and competitive environment. We find considerable variation in input utilization and excess capacity, with different implications for the cost of empty beds across the hospital groups and their respective market environments. Our findings suggest that the cost of an empty bed varies with market conditions, hence the seemingly contradictory findings in the literature are to be expected. Our findings also suggest an interesting area of future research: the impact of managed care on reserve capacity in hospitals. Journal: International Journal of the Economics of Business Pages: 383-398 Issue: 3 Volume: 6 Year: 1999 Keywords: Hospital, Efficiency, Capacity, Reserve Capacity, Competition, Option Demand, Cost Of An Empty Bed, Staffed Bed, X-DOI: 10.1080/13571519984142 File-URL: http://www.tandfonline.com/10.1080/13571519984142 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:6:y:1999:i:3:p:383-398 Template-Type: ReDIF-Article 1.0 Author-Name: John Pickering Author-X-Name-First: John Author-X-Name-Last: Pickering Author-Name: Duncan Matthews Author-X-Name-First: Duncan Author-X-Name-Last: Matthews Title: Rule Making in Pursuit of a Single European Market Abstract: The paper explores the nature of rule systems in the Single European Market. It investigates the influence of firms in the legislative process and examines corporate responses in rule-governed conditions within the Single Market. It demonstrates that there have been very diverse outcomes for different sectors as a result of the manner in which rules have been formulated and implemented, and derives interpretations which may have a future bearing on the revision and refinement of Single Market legislation Journal: International Journal of the Economics of Business Pages: 399-416 Issue: 3 Volume: 6 Year: 1999 Keywords: Economic Integration, Regulation, Europe, Single Market, Soft Law, X-DOI: 10.1080/13571519984151 File-URL: http://www.tandfonline.com/10.1080/13571519984151 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:6:y:1999:i:3:p:399-416 Template-Type: ReDIF-Article 1.0 Author-Name: W. H. Furtan Author-X-Name-First: W. H. Author-X-Name-Last: Furtan Author-Name: D. F. Kraft Author-X-Name-First: D. F. Author-X-Name-Last: Kraft Author-Name: E. W. Tyrchniewicz Author-X-Name-First: E. W. Author-X-Name-Last: Tyrchniewicz Title: Can the Canadian Wheat Board Extract Monopoly Rents? The Case of the Spring Wheat Market Abstract: The Canadian Wheat Board (CWB) is a monopoly seller of wheat, durum and malting barley from western Canada. This paper examines the question whether the CWB monopoly can extract a premium in the international market place. Using actual transaction data (i.e. actual transaction prices) we estimate that the CWB charged importers an average price premium of $13.35/tonne for wheat over the period 1980-94. In periods when high quality wheat was in short supply the CWB was able to charge higher premiums.We also show that during the period of export subsidies the CWB earned farmers a premium by avoiding subsidized markets. Journal: International Journal of the Economics of Business Pages: 417-437 Issue: 3 Volume: 6 Year: 1999 Keywords: State Trading, Wheat Marketing, Price Premium, X-DOI: 10.1080/13571519984160 File-URL: http://www.tandfonline.com/10.1080/13571519984160 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:6:y:1999:i:3:p:417-437 Template-Type: ReDIF-Article 1.0 Author-Name: Brian Loasby Author-X-Name-First: Brian Author-X-Name-Last: Loasby Title: Making Connections - A Review of Neil M. Kay, Pattern in Corporate Evolution Abstract: Journal: International Journal of the Economics of Business Pages: 439-452 Issue: 3 Volume: 6 Year: 1999 X-DOI: 10.1080/13571519984179 File-URL: http://www.tandfonline.com/10.1080/13571519984179 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:6:y:1999:i:3:p:439-452 Template-Type: ReDIF-Article 1.0 Author-Name: Robert Kennedy Author-X-Name-First: Robert Author-X-Name-Last: Kennedy Title: The Effect of Bankruptcy Filings on Rivals' Operating Performance: Evidence from 51 Large Bankruptcies Abstract: I examine the operating performance of financially distressed firms and their rivals in the periods surrounding 51 bankruptcy filings. The analysis indicates that filings are associated with declines in rivals' revenues and profit margins. The declines occur prior to and coincident with bankruptcy filings, but dissipate quickly after a filing occurs. The adverse effect on rivals' profit margins appears to be caused by changes in firms' product market conduct, as it is robust to several methods used to screen out filings where a common shock has occurred. I then examine whether market structure affects the link between filings and rivals' profit margins. The market structure effects appear to be small. Journal: International Journal of the Economics of Business Pages: 5-25 Issue: 1 Volume: 7 Year: 2000 Keywords: Financial Distress, Distress And Competition, Bankruptcy, X-DOI: 10.1080/13571510084032 File-URL: http://www.tandfonline.com/10.1080/13571510084032 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:7:y:2000:i:1:p:5-25 Template-Type: ReDIF-Article 1.0 Author-Name: Atanu Saha Author-X-Name-First: Atanu Author-X-Name-Last: Saha Author-Name: Lynette Hilton Author-X-Name-First: Lynette Author-X-Name-Last: Hilton Title: A New Approach to Estimating Damages in Mass Torts Abstract: Damage estimation in mass torts involving hazardous or defective products is often complicated by the unknown time-profile of disease incidence or failure rate. Because these cases involve diseases with long latencies or involve products that fail after years of productive use, estimation of the defendants' future liability stream requires a model that can predict how the failure rate or the onset of the disease will change over time.This paper proposes such a model. The estimation technique allows one to compute the 'excess risk' attributable to the hazard or product defect distinct from the natural causes of failure or disease incidence and to calculate the defendants' future liability stream based on the estimates of failure or incidence rates. An application to product failure illustrates the working of the model. Journal: International Journal of the Economics of Business Pages: 27-46 Issue: 1 Volume: 7 Year: 2000 Keywords: Product Liability, Hazard, Expo-POWER, X-DOI: 10.1080/13571510084041 File-URL: http://www.tandfonline.com/10.1080/13571510084041 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:7:y:2000:i:1:p:27-46 Template-Type: ReDIF-Article 1.0 Author-Name: Mahmud Hassan Author-X-Name-First: Mahmud Author-X-Name-Last: Hassan Author-Name: Gerard Wedig Author-X-Name-First: Gerard Author-X-Name-Last: Wedig Author-Name: Michael Morrisey Author-X-Name-First: Michael Author-X-Name-Last: Morrisey Title: Charity Care by Non-profit Hospitals: The Price of Tax-exempt Debt Abstract: In this paper, we study the effects of tax-exempt debt on the supply of charity care of non-profit hospitals. We hypothesize that hospitals using tax-exempt rather than taxable debt are forced to provide higher levels of charity care as a condition for gaining access to the tax-exempt market. The study uses a panel of 189 California non-profit hospitals. Hospital uncompensated care is regressed on the level of uncompensated care by other hospitals in the market, lagged values of tax-exempt and taxable debt and other control variables.The magnitude of the tax-exempt bond subsidy has a positive effect on the flow of charity care and varies positively with the charity care provided by other hospitals. We conclude that subsidies provided by tax-exempt debt are an effective media to increase the supply of charity care by hospitals. Regulators can use competition between non-profit hospitals in order to enforce the desired behavior. Journal: International Journal of the Economics of Business Pages: 47-62 Issue: 1 Volume: 7 Year: 2000 Keywords: Tax-EXEMPT, Charity Care, X-DOI: 10.1080/13571510084050 File-URL: http://www.tandfonline.com/10.1080/13571510084050 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:7:y:2000:i:1:p:47-62 Template-Type: ReDIF-Article 1.0 Author-Name: Earl Thompson Author-X-Name-First: Earl Author-X-Name-Last: Thompson Title: Why World Oil Monopolization Lowers Oil Prices: A Theory of Involuntary Cartelization Abstract: This paper first shows that, in the absence of long-term production commitments, time-consistent monopolistic sellers of a wasting natural resource will underconserve their resource. Since the present values of the profits of these uncommitted monopolists are generally much lower than under competition, the only rational explanation for the persistent recurrence of such monopolies in the oil industry is the high profits to current generations of oil buyers, who unite to establish such a producer monopoly. The victims of such a monopolistic cartel, besides future generations of consumers, are the producers who must involuntarily expand their current productive capacities in order to benefit the cartel leaders, who stand to benefit from the higher future prices. OPEC, rather than being a monopolistic cartel, is an excess-capacity cartel, one that has been induced by current generations of buyers to supply sufficient excess capacity to efficiently accommodate their prospective future emergencies. Journal: International Journal of the Economics of Business Pages: 63-78 Issue: 1 Volume: 7 Year: 2000 Keywords: Time-CONSISTENCY, Monopoly, International Cartels, Natural Resources, Conservation, Intergenerational Exploitation, X-DOI: 10.1080/13571510084069 File-URL: http://www.tandfonline.com/10.1080/13571510084069 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:7:y:2000:i:1:p:63-78 Template-Type: ReDIF-Article 1.0 Author-Name: Robert Ekelund Author-X-Name-First: Robert Author-X-Name-Last: Ekelund Author-Name: George Ford Author-X-Name-First: George Author-X-Name-Last: Ford Author-Name: John Jackson Author-X-Name-First: John Author-X-Name-Last: Jackson Title: Are Local TV Markets Separate Markets? Abstract: In sweeping revisions the US Telecommunications Act of 1996 relaxed rules respecting broadcast TV ownership regulations. In particular Congress directed the Federal Communication Commission (FCC) to conduct a rulemaking on whether the 'duopoly rules' preventing businesses from owning multiple broadcast stations in the same market should be relaxed, modified or eliminated. Naturally, this directive raises questions concerning competition. Specifically, would concentration and consolidation of local media firms have deleterious effects on advertising rates, output and consumer choice? In the present paper we examine, using own-price and cross-price elasticity demand estimates, the question of whether local TV markets constitute a separate market for advertising. Our structural tests, with appropriate caveats, reveal that local TV advertising is not, by itself, a distinct market - one relevant for antitrust action. Journal: International Journal of the Economics of Business Pages: 79-97 Issue: 1 Volume: 7 Year: 2000 Keywords: Telecommunications, Tv Advertising, Antitrust, X-DOI: 10.1080/13571510084078 File-URL: http://www.tandfonline.com/10.1080/13571510084078 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:7:y:2000:i:1:p:79-97 Template-Type: ReDIF-Article 1.0 Author-Name: A. Marvasti Author-X-Name-First: A. Author-X-Name-Last: Marvasti Title: Motion Pictures Industry: Economies of Scale and Trade Abstract: Recent economic theories find industrial structure to be an important determinant of the pattern of trade. In the motion picture industry, economies of scale and imperfect competition, in addition to cultural sovereignty, are conditions sometimes used to justify protectionist policies. This paper examines the significance of the capital-labor ratio, VCRs, market share, tariffs, domestic market size, taste similarities, stars and domestically popular films on international trade in the industry. The results indicate that stars and blockbusters in the domestic market do not seem to influence consumption of films overseas, however, external economies of scale are present in the industry, tariffs are effective trade barriers in the industry, and VCRs increase the chances of piracy. Journal: International Journal of the Economics of Business Pages: 99-114 Issue: 1 Volume: 7 Year: 2000 Keywords: Us Motion Picture Trade, Imperfect Competition, Industry Structure, Economies Of Scale, X-DOI: 10.1080/13571510084087 File-URL: http://www.tandfonline.com/10.1080/13571510084087 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:7:y:2000:i:1:p:99-114 Template-Type: ReDIF-Article 1.0 Author-Name: Michael Utton Author-X-Name-First: Michael Author-X-Name-Last: Utton Title: Books Are Not Different After All: Observations on the Formal Ending of the Net Book Agreement in the UK Abstract: By the begining of 1997 resale price maintenance was legally enforceable on only two groups of products in the UK, books and non-prescription medicines. The Net Book Agreement had been in existence substantially unchanged, for close on 100 years. It amounted to a horizontal agreement amongst publishers to maintain a vertical restraint on resale prices. The Restrictive Practices Court in 1962 had accepted that the abandonment of the Agreement would deprive the public of a substantial benefit and that, therefore, it could be retained. By the late 1990s, however, the Court was persuaded that there had been a material change of circumstances in the industry (in production costs, in the length of economic production runs, and in the structure of retailing) and that as a result, the arguments accepted in 1962 were no longer valid. In particular, the main supporter of the Agreement, the Publishers Association, had decided it could no longer defend it. The Court decided that the Agreement should be struck down. Journal: International Journal of the Economics of Business Pages: 115-126 Issue: 1 Volume: 7 Year: 2000 Keywords: Resale Price Maintenance, Vertical Restraints, Material Change Of Circumstances, Restrictive Practices Court, X-DOI: 10.1080/13571510084096 File-URL: http://www.tandfonline.com/10.1080/13571510084096 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:7:y:2000:i:1:p:115-126 Template-Type: ReDIF-Article 1.0 Author-Name: Luke Froeb Author-X-Name-First: Luke Author-X-Name-Last: Froeb Author-Name: Gregory Werden Author-X-Name-First: Gregory Author-X-Name-Last: Werden Title: An Introduction to the Symposium on the Use of Simulation in Applied Industrial Organization Abstract: Simulation offers a rigorous methodology for addressing policy or litigation issues that require a comparison of an observed state of the world with an unobserved one. Simulation employs a calibrated, structural oligopoly model to describe the unobserved state of the world. Calibration involves reliance on real-world observations to set the key parameter values in the model. Simulation is an increasingly important tool of the industrial organization economist, particularly in analyzing the competitive effects of mergers. Papers in this symposium illustrate merger simulations in a variety of contexts and one other application of simulation. Journal: International Journal of the Economics of Business Pages: 133-137 Issue: 2 Volume: 7 Year: 2000 Keywords: Simulation, Mergers, Antitrust, Patents, Electricity, X-DOI: 10.1080/13571510050084479 File-URL: http://www.tandfonline.com/10.1080/13571510050084479 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:7:y:2000:i:2:p:133-137 Template-Type: ReDIF-Article 1.0 Author-Name: Gregory Werden Author-X-Name-First: Gregory Author-X-Name-Last: Werden Title: Expert Report in United States v. Interstate Bakeries Corp. and Continental Baking Co. Abstract: This is a condensed antitrust analysis of the proposed merger of two leading bakers of white pan bread. The traditional structural analysis is supplemented by merger simulation, which estimates the likely price effects of the merger. Journal: International Journal of the Economics of Business Pages: 139-148 Issue: 2 Volume: 7 Year: 2000 Keywords: Simulation, Mergers, Antitrust, Baking, X-DOI: 10.1080/13571510050084488 File-URL: http://www.tandfonline.com/10.1080/13571510050084488 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:7:y:2000:i:2:p:139-148 Template-Type: ReDIF-Article 1.0 Author-Name: Atanu Saha Author-X-Name-First: Atanu Author-X-Name-Last: Saha Author-Name: Peter Simon Author-X-Name-First: Peter Author-X-Name-Last: Simon Title: Predicting the Price Effect of Mergers with Polynomial Logit Demand Abstract: We propose a polynomial logit model to quantify the price effects of mergers in a static Nash setting. The proposed model is parsimonious in parameters and is shown to have excellent predictive power, rivaling the in-sample and out-of-sample predictive accuracy of the widely-used AIDS model.The analysis, using actual scanner data on bread sales, demonstrates that a linear logit model is likely to over-estimate the merger price effect. Journal: International Journal of the Economics of Business Pages: 149-157 Issue: 2 Volume: 7 Year: 2000 Keywords: Mergers, Antitrust, Discrete Choice, Logit, X-DOI: 10.1080/13571510050084497 File-URL: http://www.tandfonline.com/10.1080/13571510050084497 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:7:y:2000:i:2:p:149-157 Template-Type: ReDIF-Article 1.0 Author-Name: David Weiskopf Author-X-Name-First: David Author-X-Name-Last: Weiskopf Title: The Impact of Omitting Promotion Variables on Simulation Experiments Abstract: Using store-level scanner data, elasticity matrices are estimated using a twotiered demand system. Two basic models are estimated, one with promotion variables and one without. Differences between the estimates across the two models are statistically significant. However, when the elasticities are used as 'inputs' into several simulation exercises, there are only small differences in merger effects and patent damage estimates.The results suggest that the differences are not 'economically' significant. Journal: International Journal of the Economics of Business Pages: 159-166 Issue: 2 Volume: 7 Year: 2000 Keywords: Antitrust, Aids Demand, Merger Simulation, Patent Damage Simulation, Scanner Data, Omitted Variables Bias, X-DOI: 10.1080/13571510050084505 File-URL: http://www.tandfonline.com/10.1080/13571510050084505 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:7:y:2000:i:2:p:159-166 Template-Type: ReDIF-Article 1.0 Author-Name: John Morris Author-X-Name-First: John Author-X-Name-Last: Morris Title: Finding Market Power in Electric Power Markets Abstract: As part of the regulatory review of electric utility mergers in the United States, the Federal Energy Regulatory Commission requires utilities to submit market power studies. The Commission has specified a detailed method for calculating market concentration in these studies.This paper shows that one can simulate the actual price effects from the merger by using similar data and models. Using the merger between Union Electric and Central Illinois Public Service Company as an example, this paper demonstrates that the Commission's method is unsound and often identifies competitive problems that are not likely to exist. Journal: International Journal of the Economics of Business Pages: 167-178 Issue: 2 Volume: 7 Year: 2000 Keywords: Electric Utilities, Computer Simulation, Mergers, X-DOI: 10.1080/13571510050084514 File-URL: http://www.tandfonline.com/10.1080/13571510050084514 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:7:y:2000:i:2:p:167-178 Template-Type: ReDIF-Article 1.0 Author-Name: Jith Jayaratne Author-X-Name-First: Jith Author-X-Name-Last: Jayaratne Author-Name: Carl Shapiro Author-X-Name-First: Carl Author-X-Name-Last: Shapiro Title: Simulating Partial Asset Divestitures to 'Fix' Mergers Abstract: In this paper, we apply and extend merger simulation methodology to analyze the effectiveness of partial divestitures as a 'fix' to remedy the possible anticompetitive effects of horizontal mergers. Typically, antitrust agencies require merging firms to divest assets so that the status quo before the merger is restored, that is, they favor a 'full divestiture'. We focus on the effectiveness of a partial divestiture as an antitrust remedy (where a subset of products owned by the merging firms is spun off). Although this is not the type of full divestiture favored by antitrust agencies, we argue here that a partial divestiture could leave consumers better off after the merger than they were before - under certain conditions. Using a real-world example, we show how divesting a relatively close substitute creates competition that offsets the anticompetitive effects of combining products that are relatively distant substitutes. This result stands even when the divestee is moderately inefficient. Journal: International Journal of the Economics of Business Pages: 179-200 Issue: 2 Volume: 7 Year: 2000 Keywords: Mergers, Antitrust, Simulation, Logit, Divestiture, X-DOI: 10.1080/13571510050084523 File-URL: http://www.tandfonline.com/10.1080/13571510050084523 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:7:y:2000:i:2:p:179-200 Template-Type: ReDIF-Article 1.0 Author-Name: Steven Tschantz Author-X-Name-First: Steven Author-X-Name-Last: Tschantz Author-Name: Philip Crooke Author-X-Name-First: Philip Author-X-Name-Last: Crooke Author-Name: Luke Froeb Author-X-Name-First: Luke Author-X-Name-Last: Froeb Title: Mergers in Sealed versus Oral Auctions Abstract: In this paper, we study mergers in oral or second-price auctions and compare them to mergers in sealed-bid or first-price auctions. We use an adaptation of the logit qualitative choice model to characterize the underlying bidder value distributions. In second-price auctions, this model has a closed-form relationship between winning bids (prices) and the probabilities of winning (shares), and this relationship gives rise to a Herfindahl-like formula that predicts merger effects. We compare mergers in second-price auctions to mergers in first-price auctions. Despite their differences, sealed-bid merger effects are predicted by the oral Herfindahl-like formula.The source of this curious similarity is not apparent. Journal: International Journal of the Economics of Business Pages: 201-212 Issue: 2 Volume: 7 Year: 2000 Keywords: Auction, Merger, X-DOI: 10.1080/13571510050084532 File-URL: http://www.tandfonline.com/10.1080/13571510050084532 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:7:y:2000:i:2:p:201-212 Template-Type: ReDIF-Article 1.0 Author-Name: Gregory Werden Author-X-Name-First: Gregory Author-X-Name-Last: Werden Author-Name: Luke Froeb Author-X-Name-First: Luke Author-X-Name-Last: Froeb Author-Name: James Langenfeld Author-X-Name-First: James Author-X-Name-Last: Langenfeld Title: Lost Profits from Patent Infringement: The Simulation Approach Abstract: A patent owner is entitled to recover any additional profits that would have been earned but for infringement. This paper suggests the use of an adaptation of merger simulation to assess lost profits in patent infringement cases. A model of the industry with infringement is calibrated to observed prices and quantities and estimated demand elasticities. Lost profits are then estimated by calculating a new equilibrium without the infringing product(s). Journal: International Journal of the Economics of Business Pages: 213-227 Issue: 2 Volume: 7 Year: 2000 Keywords: Simulation, Patents, Damages, X-DOI: 10.1080/13571510050084541 File-URL: http://www.tandfonline.com/10.1080/13571510050084541 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:7:y:2000:i:2:p:213-227 Template-Type: ReDIF-Article 1.0 Author-Name: Graham Hall Author-X-Name-First: Graham Author-X-Name-Last: Hall Title: An Appreciation: Simon Domberger, 29.9.49 - 4.5.00 Abstract: Journal: International Journal of the Economics of Business Pages: 237-244 Issue: 3 Volume: 7 Year: 2000 X-DOI: 10.1080/13571510050197168 File-URL: http://www.tandfonline.com/10.1080/13571510050197168 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:7:y:2000:i:3:p:237-244 Template-Type: ReDIF-Article 1.0 Author-Name: Matthias Greuner Author-X-Name-First: Matthias Author-X-Name-Last: Greuner Author-Name: David Kamerschen Author-X-Name-First: David Author-X-Name-Last: Kamerschen Author-Name: Peter Klein Author-X-Name-First: Peter Author-X-Name-Last: Klein Title: The Competitive Effects of Advertising in the US Automobile Industry, 1970-94 Abstract: Is advertising anticompetitive? One school of thought in industrial economics holds that advertising increases profits and reduces consumer welfare by creating spurious product differentiation and barriers to entry. Another school focuses on the informative character of advertising, claiming that advertising makes markets more competitive and reduces profits by supplying consumers with information about price and quality. We distinguish these views by examining the effect of advertising on competition in the US automobile industry. Our data include advertising, sales, profit, and market-share figures for General Motors, Ford, and Chrysler over a 25-year period from 1970 to 1994.We ask if advertising increases or decreases profitability, controlling for market structure and other factors affecting demand.Wefind that these firms cannot increase their profits above normal levels by increasing their advertising expenditures. This evidence supports the view that advertising serves primarily to transmit information, not to create entry barriers. Journal: International Journal of the Economics of Business Pages: 245-261 Issue: 3 Volume: 7 Year: 2000 Keywords: Automobile Industry, Advertising, Competition, Entry Barriers, Information, X-DOI: 10.1080/13571510050197177 File-URL: http://www.tandfonline.com/10.1080/13571510050197177 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:7:y:2000:i:3:p:245-261 Template-Type: ReDIF-Article 1.0 Author-Name: Frederick Guy Author-X-Name-First: Frederick Author-X-Name-Last: Guy Title: CEO Pay, Shareholder Returns, and Accounting Profits Abstract: We assess the impact on CEO pay (including salary, cash bonus, and benefits in kind) of changes in both accounting and shareholder returns in 99 British companies in the years 1972-89. After correcting for heterogeneity biases inherent in the standard specifications of the problem, we find a strong positive relationship between CEO pay and within-company changes in shareholder returns, and no statistically significant relationship between CEO pay and within-company changes in accounting returns. Differences between firms in long-term average profitability do appear to have a substantial effect on CEO pay, while differences between firms in shareholder returns add nothing to the within-firm pay dynamics.These findings call into question the rationale for explicitly share-based incentive schemes. Journal: International Journal of the Economics of Business Pages: 263-274 Issue: 3 Volume: 7 Year: 2000 Keywords: Ceo Pay, Random Coefficients, X-DOI: 10.1080/13571510050197186 File-URL: http://www.tandfonline.com/10.1080/13571510050197186 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:7:y:2000:i:3:p:263-274 Template-Type: ReDIF-Article 1.0 Author-Name: Grazia Santangelo Author-X-Name-First: Grazia Author-X-Name-Last: Santangelo Title: Inter-European Regional Dispersion of Corporate Research Activity in Information and Communications Technology: The Case of German, Italian and UK Regions Abstract: The increased geographical dispersion of corporate research seems to emphasize the significance of the local dimension over the pace of technological development. However, although a large number of studies have focused on intra-border analysis in the US, the European regional dimension has been explored only recently due to the lack of data availability.This paper investigates the regional dispersion of European-owned ICT research activity across German, Italian and UK regions.The empirical results suggest that locally embedded value added and the subsequent localised knowledge spillovers stemming from it are promoting spatial agglomeration economies, which generate competitive corporate advantage based on untraded externalities. Journal: International Journal of the Economics of Business Pages: 275-295 Issue: 3 Volume: 7 Year: 2000 Keywords: Corporate Research And Development, European Regions, X-DOI: 10.1080/13571510050197195 File-URL: http://www.tandfonline.com/10.1080/13571510050197195 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:7:y:2000:i:3:p:275-295 Template-Type: ReDIF-Article 1.0 Author-Name: Graham Hall Author-X-Name-First: Graham Author-X-Name-Last: Hall Author-Name: Patrick Hutchinson Author-X-Name-First: Patrick Author-X-Name-Last: Hutchinson Author-Name: Nicos Michaelas Author-X-Name-First: Nicos Author-X-Name-Last: Michaelas Title: Industry Effects on the Determinants of Unquoted SMEs' Capital Structure Abstract: This paper reports a study of 3500 unquoted, UK small and medium sized enterprises (SMEs). The objectives of the research were to test various hypotheses concerning the determinants of SME capital structure and to establish whether and how the relationship of these determinants to long- and short-term debt varied between industries. Long-term debt was found to be related positively to asset structure and company size and negatively to age; short-term debt was related negatively to profitability, asset structure, size and age and positively to growth. Significant variation across industries was found in most of the explanatory variables. The effect of growth on short-term debt, however, was consistent across industries whilst profitability had no effect on long-term borrowing in any industry. Journal: International Journal of the Economics of Business Pages: 297-312 Issue: 3 Volume: 7 Year: 2000 Keywords: Capital Structure, Industry Effects, Smes, X-DOI: 10.1080/13571510050197203 File-URL: http://www.tandfonline.com/10.1080/13571510050197203 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:7:y:2000:i:3:p:297-312 Template-Type: ReDIF-Article 1.0 Author-Name: Daphne Hameeteman Author-X-Name-First: Daphne Author-X-Name-Last: Hameeteman Author-Name: Bert Scholtens Author-X-Name-First: Bert Author-X-Name-Last: Scholtens Title: Size, Growth, and Variance among the World's Largest Non-merged Banks Abstract: This paper analyses growth, size, and variance of the capital, assets, and pre-tax profits of large international banks during 1987-97.We test hypotheses on whether size matters. It turns out that there is an inverse relationship between the amount of bank capital, assets, and profits and the growth rate of these items.This is in line with the findings for US banks in the pre-BrettonWoods era. Furthermore, we did not find, in contrast with Tschoegl's observations for international banks in the 1970s, a negative relationship between the size of large banks and the variability of growth in capital, assets, or profits. We conclude that size is not a self-sustaining attribute of international banks. Journal: International Journal of the Economics of Business Pages: 313-323 Issue: 3 Volume: 7 Year: 2000 Keywords: Bank Performance, Bank Size, International Banking, X-DOI: 10.1080/13571510050197212 File-URL: http://www.tandfonline.com/10.1080/13571510050197212 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:7:y:2000:i:3:p:313-323 Template-Type: ReDIF-Article 1.0 Author-Name: Uri Ben-Zion Author-X-Name-First: Uri Author-X-Name-Last: Ben-Zion Author-Name: Aharon Hibshoosh Author-X-Name-First: Aharon Author-X-Name-Last: Hibshoosh Author-Name: Uriel Spiegel Author-X-Name-First: Uriel Author-X-Name-Last: Spiegel Title: Price Discrimination by Coupons Restriction Abstract: In this paper we show how the use of a restricted number of coupons in the presence of different types of customers is an effective means of implementing a price discriminating policy. Hence, firm profits can be increased even when traditional price discrimination is forbidden. Journal: International Journal of the Economics of Business Pages: 325-331 Issue: 3 Volume: 7 Year: 2000 Keywords: Price Discrimination, Coupons, Loyal Customers, Deal Prones, X-DOI: 10.1080/13571510050197221 File-URL: http://www.tandfonline.com/10.1080/13571510050197221 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:7:y:2000:i:3:p:325-331 Template-Type: ReDIF-Article 1.0 Author-Name: Nicholas Wilson Author-X-Name-First: Nicholas Author-X-Name-Last: Wilson Author-Name: Barbara Summers Author-X-Name-First: Barbara Author-X-Name-Last: Summers Author-Name: Robert Hope Author-X-Name-First: Robert Author-X-Name-Last: Hope Title: Using Payment Behaviour Data for Credit Risk Modelling Abstract: In this paper we evaluate payment scores in two contexts; that of predicting future payment behaviour and that of corporate failure prediction. The assessment of the ability and willingness of a firm to pay its creditors, and the likely timeliness of payments, are a major focus of both credit risk analysis (from the trade credit perspective) and government policy, although the latter issues have not been much studied in the academic literature. While failure prediction models are traditionally used as indicators of payment behaviour in the UK, payment behaviour prediction models are estimated and made available in the USA by the leading credit reporting agencies and the predictive abilities of such scores in the UK context are, therefore, worthy of consideration.We also consider the contribution that payment behaviour scores can make to predicting corporate failure. An important question is whether the availability of payment behaviour scores increases the overall information content of the credit report or merely re-packages information represented elsewhere. We find that payment behaviour data can be used to predict successfully future payment behaviour in a trade credit context, and can add incrementally to the predictivity of corporate failure models. Journal: International Journal of the Economics of Business Pages: 333-346 Issue: 3 Volume: 7 Year: 2000 Keywords: Corporate Failure, Payment Behaviour, Trade Credit, Credit Risk, X-DOI: 10.1080/13571510050197230 File-URL: http://www.tandfonline.com/10.1080/13571510050197230 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:7:y:2000:i:3:p:333-346 Template-Type: ReDIF-Article 1.0 Author-Name: Holger Gorg Author-X-Name-First: Holger Author-X-Name-Last: Gorg Author-Name: Frances Ruane Author-X-Name-First: Frances Author-X-Name-Last: Ruane Title: Multinational Companies and Linkages: Panel-Data Evidence for the Irish Electronics Sector Abstract: This paper analyses the extent and determinants of backward local linkages between multinational companies and domestic suppliers in the Irish electronics industry, and their effect on indirect employment generated in domestic supplier firms. Several models in recent literature show that linkages between firms can lead to positive effects on the development of indigenous industry, agglomerations, technology spill-overs and indirect employment generation. Our empirical analysis, using a uniquely generated firm-level panel data set, indicates that the extent of linkages is related in a non-linear fashion to the length of time that the firm is located in Ireland. In the context of the literature on the effects of linkages, we find empirical evidence consistent with the view that growth in employment in upstream supplier firms in electronics is linked to the development of downstream firms. Journal: International Journal of the Economics of Business Pages: 1-18 Issue: 1 Volume: 8 Year: 2001 Keywords: Multinational Companies, Local Linkages, Indirect Employment, X-DOI: 10.1080/13571510151075215 File-URL: http://www.tandfonline.com/10.1080/13571510151075215 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:8:y:2001:i:1:p:1-18 Template-Type: ReDIF-Article 1.0 Author-Name: Kirsten Foss Author-X-Name-First: Kirsten Author-X-Name-Last: Foss Author-Name: Nicolai Foss Author-X-Name-First: Nicolai Author-X-Name-Last: Foss Title: Assets, Attributes and Ownership Abstract: The notion of full asset ownership is important in economics, for example, in recent work on the boundaries of the firm. Much of this work has been taken up with the issue why it matters who owns an asset. However, recognizing that assets have multiple attributes, and that these may be subject to capture in a world of positive measurement and enforcement costs, implies that the notion of full asset ownership is problematic. New property rights theorists sidestep these issues by implicitly assuming that residual rights of control are perfectly enforced (i.e. full asset ownership obtains). We discuss the notion of property rights and ownership in a setting characterized by positive costs of enforcement, and suggest that in such a setting, the new property rights model is a part of a more overarching perspective, which also includes older contributions to property rights economics. Journal: International Journal of the Economics of Business Pages: 19-37 Issue: 1 Volume: 8 Year: 2001 Keywords: Ownership, Property Rights, Economic Organization, X-DOI: 10.1080/13571510151075233 File-URL: http://www.tandfonline.com/10.1080/13571510151075233 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:8:y:2001:i:1:p:19-37 Template-Type: ReDIF-Article 1.0 Author-Name: Kent Matthews Author-X-Name-First: Kent Author-X-Name-Last: Matthews Author-Name: Jean Lloyd-Williams Author-X-Name-First: Jean Author-X-Name-Last: Lloyd-Williams Title: The VAT-Evading Firm and VAT Evasion: An Empirical Analysis Abstract: It has been claimed that an increase in the ratio of VAT reclaimed to VAT paid is an indicator of increasing non-compliance. By examining this ratio, this paper evaluates the potential for VAT non-compliance in the Restaurant and Take-out, Clothing and Footwear, Furniture and Floor-coverings, and Hairdressing markets. Estimates of aggregate expenditure are used to estimate potential gross VAT payments. These are compared with actual gross payments as an indicator of the extent of non-compliance. Journal: International Journal of the Economics of Business Pages: 39-49 Issue: 1 Volume: 8 Year: 2001 Keywords: Value Added Tax, Tax Evasion, The Firm, X-DOI: 10.1080/13571510151075251 File-URL: http://www.tandfonline.com/10.1080/13571510151075251 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:8:y:2001:i:1:p:39-49 Template-Type: ReDIF-Article 1.0 Author-Name: Robert Pearce Author-X-Name-First: Robert Author-X-Name-Last: Pearce Title: Multinationals and Industrialisation: The Bases of 'Inward Investment' Policy Abstract: The paper argues that policies towards inward investment should extend, much more decisively and comprehensively, beyond initial attraction in order to seek to secure sustained benefits from these operations. The view of the modern multinational enterprise as a dynamic differentiated network, operating through subsidiaries that have scope for evolution and development, provides a basis for the analysis of the potentials in this regard. The paper discusses in detail the content of particular phases in subsidiary transformation that can then provide a potential for embedding their operations in a host country in a creative and dynamic way that generates mutually supportive interdependencies in processes of resource (notably knowledge) generation and use. Journal: International Journal of the Economics of Business Pages: 51-73 Issue: 1 Volume: 8 Year: 2001 Keywords: Multinationals, Industrialisation, Technology, Government Policy, X-DOI: 10.1080/13571510151075279 File-URL: http://www.tandfonline.com/10.1080/13571510151075279 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:8:y:2001:i:1:p:51-73 Template-Type: ReDIF-Article 1.0 Author-Name: Wilfried Pauwels Author-X-Name-First: Wilfried Author-X-Name-Last: Pauwels Author-Name: Hylke Vandenbussche Author-X-Name-First: Hylke Author-X-Name-Last: Vandenbussche Author-Name: Marcel Weverbergh Author-X-Name-First: Marcel Author-X-Name-Last: Weverbergh Title: Strategic Behaviour under European Antidumping Duties Abstract: In this paper we develop a dynamic two-period model of imperfect competition to analyse the effects of European antidumping duties on firm behaviour and domestic welfare. Our model is one of the first to complement the European empirical literature on antidumping policy and can usefully be compared with papers dealing with the effects of US antidumping policy. We arrive at three important conclusions: (a) the strategic behaviour of European firms under European antidumping rules may run in the opposite direction compared to the incentives for US firms provided under the US antidumping rules; (b) US antidumping rules perform better than European rules in terms of domestic welfare and in terms of protecting domestic value added and employment; (c) the Strategic Trade Policy argument for protection need not apply for antidumping duties because the level of protection is endogenously determined by the firms involved. Journal: International Journal of the Economics of Business Pages: 75-99 Issue: 1 Volume: 8 Year: 2001 Keywords: Antidumping Duties, Two-PERIOD Cournot Oligopoly, Domestic Welfare, X-DOI: 10.1080/13571510151075297 File-URL: http://www.tandfonline.com/10.1080/13571510151075297 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:8:y:2001:i:1:p:75-99 Template-Type: ReDIF-Article 1.0 Author-Name: Roger Svensson Author-X-Name-First: Roger Author-X-Name-Last: Svensson Title: Success Determinants when Tendering for International Consulting Projects Abstract: A unique database on individual proposals is used to analyse competition among consulting firms (CFs) for international projects. CFs, which sell services based on human capital, focus on developing countries when operating abroad and, thereby, are highly dependent on development agencies (DAs). The DAs have strict tender rules and claim that skill and experience are the most important factors when proposals are evaluated. Both economic theory and the results of the estimations suggest, however, that long-term relationships (LTRs) between the CFs and the clients are at least as important as traditional skill and experience factors. The LTRs are here measured by means of information about whether the CF has previously worked for the client (repeat purchases) or has visited the client. The results indicate that the client in some cases has pre-decided which CF to select. The client invites several CFs to compete for the tender anyway, either because he is forced to do so by the financier, or because he wants to subject an old supplier to competitive pressure. As the tender rules do not seem to be followed, a policy implication would be that the DAs can skip, or at least relax, their strict tender rules, or strengthen the sanctions associated with violations of the rules. Journal: International Journal of the Economics of Business Pages: 101-122 Issue: 1 Volume: 8 Year: 2001 Keywords: Consulting Firms, Export Proposals, Procurement, Development Agencies, Long-TERM Relationships, Asymmetric Information, X-DOI: 10.1080/13571510151075314 File-URL: http://www.tandfonline.com/10.1080/13571510151075314 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:8:y:2001:i:1:p:101-122 Template-Type: ReDIF-Article 1.0 Author-Name: Paul Stoneman Author-X-Name-First: Paul Author-X-Name-Last: Stoneman Author-Name: Otto Toivanen Author-X-Name-First: Otto Author-X-Name-Last: Toivanen Title: The Impact of Revised Recommended Accounting Practices on R&D Reporting by UK Firms Abstract: The R&D reporting practices of UK quoted companies are analysed and the impact of the introduction of a revised Statement of Standard Accounting Practices in 1989, SSAP13 (Revised), recommending separate R&D disclosure for companies meeting certain size thresholds, explored. Using hazard rate models the preferred results indicate that the hazard of a firm reporting its R&D in its annual accounts shows positive time dependence and that large firms, by sales, are more likely to announce than small firms. It is also found that the introduction of SSAP13 impacted considerably upon the extent of reporting by all firms (whatever their size) with an anticipation effect in 1988, and large positive impacts in 1989 and 1990. Post-1989 those firms that exceeded the size thresholds embodied in the new standard also had a higher hazard of reporting their R&D. Journal: International Journal of the Economics of Business Pages: 123-136 Issue: 1 Volume: 8 Year: 2001 Keywords: R And D, Accounting Standards, Information Disclosure, X-DOI: 10.1080/13571510151075332 File-URL: http://www.tandfonline.com/10.1080/13571510151075332 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:8:y:2001:i:1:p:123-136 Template-Type: ReDIF-Article 1.0 Author-Name: Ahmad Seyf Author-X-Name-First: Ahmad Author-X-Name-Last: Seyf Title: Can Globalisation and Global Localisation Explain Foreign Direct Investment? Japanese Firms in Europe Abstract: This paper uses logit regression on the responses of 383 Japanese manufacturing firms located in the member countries of the European Union to investigate the motives for foreign direct investment. Japan External Trade Organisation (JETRO) data, as published in their 8th Annual Survey (October 1992) classified by industry, were used. The results confirm that decisions leading to FDI cannot be explained by a single factor and, furthermore, different types of FDI are influenced by different combinations of motives. Journal: International Journal of the Economics of Business Pages: 137-153 Issue: 1 Volume: 8 Year: 2001 Keywords: Globalisation, Foreign Direct Investment, Internationalisation, European Union, X-DOI: 10.1080/13571510151075350 File-URL: http://www.tandfonline.com/10.1080/13571510151075350 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:8:y:2001:i:1:p:137-153 Template-Type: ReDIF-Article 1.0 Author-Name: John Cantwell Author-X-Name-First: John Author-X-Name-Last: Cantwell Author-Name: Rajneesh Narula Author-X-Name-First: Rajneesh Author-X-Name-Last: Narula Title: The Eclectic Paradigm in the Global Economy Abstract: Economic globalisation and the subsequent growth of global and alliance capitalism have fundamentally affected the way in which MNC activities are undertaken and organised. The various contributions to this special issue have evaluated the eclectic paradigm in the global economy, and its validity as a theoretical basis to understand these developments. This paper places these contributions into context. We highlight that globalisation has increased the interactive dynamics between and among 'O', 'L' and 'I' characteristics at firm, industry and country level, in at least two ways. First, a knowledge-based society has meant that the efficient exploitation of MNCs' ownership advantages and the continual need to augment and sustain their competitive advantages is ever more crucial, leading to a complex interdependence between ownership and location advantages. Second, globalisation has affected how MNCs seek to organise their cross-border activities coherently in response to changing boundaries of the firm. We find that the paradigm continues to provide a framework which facilitates how best to synthesise relevant complementary theories, or how to choose between potentially competing theories, and helps to operationalise them. Journal: International Journal of the Economics of Business Pages: 155-172 Issue: 2 Volume: 8 Year: 2001 Keywords: Eclectic Paradigm, Mncs, Internationalisation, Technological Change, Economic Development, Asset Augmentation, Innovation Alliances, Transaction Cost Theory, X-DOI: 10.1080/13571510110051504 File-URL: http://www.tandfonline.com/10.1080/13571510110051504 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:8:y:2001:i:2:p:155-172 Template-Type: ReDIF-Article 1.0 Author-Name: John Dunning Author-X-Name-First: John Author-X-Name-Last: Dunning Title: The Eclectic (OLI) Paradigm of International Production: Past, Present and Future Abstract: This article describes the origins, and traces the subsequent evolution of the eclectic paradigm from the mid-1950s to the present day. It does so in the light of the changing characteristics of MNE activity and of the global economic scenario. The article concludes by asserting that the eclectic paradigm still remains a powerful and robust framework for examining contextual specific theories of foreign direct investment and international production. Journal: International Journal of the Economics of Business Pages: 173-190 Issue: 2 Volume: 8 Year: 2001 Keywords: Eclectic Paradigm, Mnes, Strategy, International Production, Alliances, X-DOI: 10.1080/13571510110051441 File-URL: http://www.tandfonline.com/10.1080/13571510110051441 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:8:y:2001:i:2:p:173-190 Template-Type: ReDIF-Article 1.0 Author-Name: Paz Estrella Tolentino Author-X-Name-First: Paz Estrella Author-X-Name-Last: Tolentino Title: From a Theory to a Paradigm: Examining the Eclectic Paradigm as a Framework in International Economics Abstract: Over the course of a quarter of a century, the eclectic paradigm has derived its strength from being a general framework of analysis that explains the level and pattern of foreign value-added activities of firms, and/or of countries, and allows for the co-existence of complementary and alternative theories in the discipline of international economics in a logically consistent manner without being inextricably wedded to any one particular approach. The current study aims to support such broad theoretical appeal of the paradigm by refining its theoretical interpretations of the concepts of ownership advantages and internalisation. To support its view that asset ownership advantages are both competitive advantages and monopolistic advantages, the theoretical interpretation of asset ownership advantages in the paradigm needs to be broadened from a narrow emphasis on Bain-type monopolistic advantages which enable firms to erect barriers to entry to new competition and exercise monopoly power in final product markets. It must also accommodate the theoretical perception of asset ownership advantages as part of the rivalrous behaviour or competitive process between firms consistent with the approach of Cantillon and the classical economists starting with Adam Smith, the Austrian economists such as Schumpeter and Hayek, as well as Penrose. The eclectic paradigm must also effectively address the important distinction between 'internalisation of ownership advantages or intermediate products' and the 'internalisation of the markets for ownership advantages or intermediate products' within the context of endogenous structural market imperfections in final products and exogenous transactional market imperfections in intermediate products. In clearly distinguishing between the alternative interpretations of the concepts of ownership advantages and internalisation, the paradigm could more effectively synthesise alternative theories of the firm and the multinational corporation in one cogent framework of economic analysis. Journal: International Journal of the Economics of Business Pages: 191-209 Issue: 2 Volume: 8 Year: 2001 Keywords: Eclectic Paradigm, Theory Of International Production, Theory Of The Multinational Enterprise, X-DOI: 10.1080/13571510110051496 File-URL: http://www.tandfonline.com/10.1080/13571510110051496 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:8:y:2001:i:2:p:191-209 Template-Type: ReDIF-Article 1.0 Author-Name: Terutomo Ozawa Author-X-Name-First: Terutomo Author-X-Name-Last: Ozawa Author-Name: Sergio Castello Author-X-Name-First: Sergio Author-X-Name-Last: Castello Title: Toward an 'International Business' Paradigm of Endogenous Growth: Multinationals and Governments as Co-Endogenisers Abstract: Endogenous growth theory has recently originated in economics. Building on this theory, this paper conceptualises the phenomenon of endogenous growth in terms of some new ideas developed in the field of international business (IB), especially Dunning's eclectic paradigm and his notion of macro-organisation policy. These ideas have so far not been linked to the notion of endogenous growth. At the same time, mainstream economics has not made much progress in exploring the MNC-government relationships through which growth-inducing 'mechanics' are created, a topic of great importance in IB. Both MNCs and governments complement each other in facilitating an efficient matching of ownership-specific assets (notably knowledge) with location-specific advantages through Dunning's OLI mechanism, thereby enabling the developing host countries to realise potential growth in an intensified manner, a new mode of endogenous growth that counteracts the law of diminishing returns. The phenomenon of MNC-cum-governmentdriven endogenous growth will be conceptualised. Journal: International Journal of the Economics of Business Pages: 211-228 Issue: 2 Volume: 8 Year: 2001 Keywords: International Business, Eclectic Paradigm, Endogenous Growth, Internalisation, Mnc-CUM-GOVERNMENT-DRIVEN Growth, X-DOI: 10.1080/13571510110051450 File-URL: http://www.tandfonline.com/10.1080/13571510110051450 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:8:y:2001:i:2:p:211-228 Template-Type: ReDIF-Article 1.0 Author-Name: Sarianna Lundan Author-X-Name-First: Sarianna Author-X-Name-Last: Lundan Author-Name: John Hagedoorn Author-X-Name-First: John Author-X-Name-Last: Hagedoorn Title: Alliances, Acquisitions and Multinational Advantage Abstract: This paper reviews recent empirical evidence to assess the implications of alliance formation and increasing merger and acquisition activity of multinationals in the context of the eclectic paradigm. Specifically, the paper will concentrate on the performance implications of international expansion via alliances and mergers, and their relationship to the so-called asset-augmenting foreign direct investment. It has been argued in the literature that the way in which multinationals are able to build on their existing advantages and to add to them by virtue of their international activities confers specific benefits to multinationality. We argue that the growth of cross-border acquisitions and alliances as modalities for international expansion has resulted from the continuing convergence of value-adding capabilities within the Triad, and while such activity can help to augment the asset base of the investing firms, it also has potentially anti-competitive implications. Journal: International Journal of the Economics of Business Pages: 229-242 Issue: 2 Volume: 8 Year: 2001 Keywords: Alliances, Mergers, Acquisitions, Multinationals, Performance, X-DOI: 10.1080/13571510110051469 File-URL: http://www.tandfonline.com/10.1080/13571510110051469 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:8:y:2001:i:2:p:229-242 Template-Type: ReDIF-Article 1.0 Author-Name: Anoop Madhok Author-X-Name-First: Anoop Author-X-Name-Last: Madhok Author-Name: Anupama Phene Author-X-Name-First: Anupama Author-X-Name-Last: Phene Title: The Co-evolutional Advantage: Strategic Management Theory and the Eclectic Paradigm Abstract: The eclectic paradigm has been one of the leading frameworks for explaining multinational activity over the past two decades. Yet recent trends in international business pose a challenge to the explanatory power of the paradigm. Strategic management theory, with its focus on performance differences between firms, provides a useful complement to the OLI framework in understanding the activities of the modern multinational. In particular, global competition and the management of a firm's global stocks and flows of knowledge merit closer attention.The advent of global competition requires us to shift from the existing institutional perspective of comparisons of firms and markets or of foreign firms and local firms to a firm-level perspective of comparisons of the multinational firm to its global competitors. It also necessitates a focus on firm-level capabilities in knowledge management relative to competitors, the development of these capabilities involving both macro and micro co-evolutionary processes. Our arguments incorporate these changes to extend the OLI paradigm to accommodate both an economic and a strategic management perspective. Journal: International Journal of the Economics of Business Pages: 243-256 Issue: 2 Volume: 8 Year: 2001 Keywords: Eclectic Paradigm, Global Strategy, Multinational Firms, Co-EVOLUTION, Resource-BASED View, X-DOI: 10.1080/13571510110051478 File-URL: http://www.tandfonline.com/10.1080/13571510110051478 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:8:y:2001:i:2:p:243-256 Template-Type: ReDIF-Article 1.0 Author-Name: Stephen Guisinger Author-X-Name-First: Stephen Author-X-Name-Last: Guisinger Title: From OLI to OLMA: Incorporating Higher Levels of Environmental and Structural Complexity into the Eclectic Paradigm Abstract: Theorists using the eclectic paradigm have drastically restricted their analytic scope to the firm and its subsidiaries, rarely exploring more finely grained firm structures, such as business processes. By contrast, organisational theorists examining multinational firm behaviour have employed a richly differentiated array of firm structural forms though without developing a precise delineation of the international business environment. Eclectic researchers are adept at handling environmental, but not structural, complexity, while the reverse seems true for organisational theorists. This study extends the eclectic paradigm by incorporating higher levels of environmental and structural complexity through two methods: (1) a deconstruction of the multinational firm into business processes; and (2) a more complete definition of the international business environment, called geovalent elements. The paper argues that an enhanced eclectic paradigm called OLMA (for Ownership, Location, Mode of entry, and Adjustment) provides the complete set of concepts needed for studying the modern multinational firm. Journal: International Journal of the Economics of Business Pages: 257-272 Issue: 2 Volume: 8 Year: 2001 Keywords: Multinational Firms, International Business, Theory, Eclectic Paradigm, Adaptation, Environment, X-DOI: 10.1080/13571510110051487 File-URL: http://www.tandfonline.com/10.1080/13571510110051487 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:8:y:2001:i:2:p:257-272 Template-Type: ReDIF-Article 1.0 Author-Name: John Dunning Author-X-Name-First: John Author-X-Name-Last: Dunning Author-Name: Cliff Wymbs Author-X-Name-First: Cliff Author-X-Name-Last: Wymbs Title: The Challenge of Electronic Markets for International Business Theory Abstract: We examine the extent to which the eclectic paradigm of international production, and its composite theories, can help explain the coming E-commerce revolution. Our findings are that the basic tenets of the paradigm appear to hold well, but the operational application of several of the constituent parts and the context in which they are being considered, need to be redefined in the light of some of the unique characteristics of Internet transport. Journal: International Journal of the Economics of Business Pages: 273-301 Issue: 2 Volume: 8 Year: 2001 Keywords: E-COMMERCE, Ib Theory, Eclectic Paradigm, X-DOI: 10.1080/13571510110051432 File-URL: http://www.tandfonline.com/10.1080/13571510110051432 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:8:y:2001:i:2:p:273-301 Template-Type: ReDIF-Article 1.0 Author-Name: Peter Buckley Author-X-Name-First: Peter Author-X-Name-Last: Buckley Author-Name: Mark Casson Author-X-Name-First: Mark Author-X-Name-Last: Casson Title: The Moral Basis of Global Capitalism: Beyond the Eclectic Theory Abstract: Dunning's recent discussions of the morality of global capitalism, as developed from his eclectic theory, are critically reviewed. It is argued that, in highlighting the benefits of globalisation, Dunning has underestimated the extent to which globalisation amplifies the costs of capitalism. The nature of capitalism varies according to the social and religious framework within which economic activity is embedded. An effective framework creates a high-trust form of capitalism based on self-regulation and self-control. This framework aligns private and social interests in cases where the forces of law and competition are weak. Late twentieth-century Western culture is secular and atomistic: it has fostered a low-trust form of capitalism, based on a selfish, individualistic and competitive concept of the entrepreneur. Low-trust capitalism provides entrepreneurs with unrivalled opportunities to manipulate consumer tastes, and frees them from any inhibitions about exercising this power. The globalisation of consumer product markets has reinforced this tendency, by strengthening the incentive to refine manipulative marketing techniques. The increasing reliance on mass media - especially television - for advertising distinguishes modern global capitalism from the international capitalism of the late nineteenth century. Because of these changes, people's wants are satisfied with unprecedented abundance, but their social needs are met much less adequately than before. Journal: International Journal of the Economics of Business Pages: 303-327 Issue: 2 Volume: 8 Year: 2001 Keywords: Capitalism, Globalisation, Morals, Markets, X-DOI: 10.1080/13571510110051423 File-URL: http://www.tandfonline.com/10.1080/13571510110051423 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:8:y:2001:i:2:p:303-327 Template-Type: ReDIF-Article 1.0 Author-Name: Daniel Hosken Author-X-Name-First: Daniel Author-X-Name-Last: Hosken Author-Name: John David Simpson Author-X-Name-First: John David Author-X-Name-Last: Simpson Title: Have Supermarket Mergers Raised Prices? An Event Study Analysis Abstract: Antitrust enforcement of supermarket merger activity during the late 1980s and early 1990s was less stringent than it had been before or has been since. For six announcements of supermarket acquisitions during this period, this study examines the abnormal stock returns of rival firms to determine if investors believed these acquisitions would lead to higher retail prices.These abnormal returns imply that investors expected that the average retail price change associated with these types of acquisitions ranges from a 0.12% decrease to a 0.05% increase. Thus, our results suggest that investors generally did not view these acquisitions as anticompetitive. Journal: International Journal of the Economics of Business Pages: 329-342 Issue: 3 Volume: 8 Year: 2001 Keywords: Event Study, Supermarket, Mergers, X-DOI: 10.1080/13571510110079603 File-URL: http://www.tandfonline.com/10.1080/13571510110079603 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:8:y:2001:i:3:p:329-342 Template-Type: ReDIF-Article 1.0 Author-Name: Luuk Klomp Author-X-Name-First: Luuk Author-X-Name-Last: Klomp Author-Name: George Van Leeuwen Author-X-Name-First: George Author-X-Name-Last: Van Leeuwen Title: Linking Innovation and Firm Performance: A New Approach Abstract: Using the second Community Innovation Survey (CIS-2) for the Netherlands, we analyse the input and output stages of the innovation process and the links between the innovation process and overall economic performance. We investigate the existence of feedback links running from past economic performance to the input and the output stage of the innovation process and compare the results of a single-equation approach with the results obtained from a simultaneous-equation model. Journal: International Journal of the Economics of Business Pages: 343-364 Issue: 3 Volume: 8 Year: 2001 Keywords: Innovation, Research, Technological Opportunities, Simultaneous-EQUATION Models, Economic Performance, X-DOI: 10.1080/13571510110079612 File-URL: http://www.tandfonline.com/10.1080/13571510110079612 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:8:y:2001:i:3:p:343-364 Template-Type: ReDIF-Article 1.0 Author-Name: Terence Tse Author-X-Name-First: Terence Author-X-Name-Last: Tse Author-Name: Khaled Soufani Author-X-Name-First: Khaled Author-X-Name-Last: Soufani Title: Wealth Effects of Takeovers in Merger Activity Eras: Empirical Evidence from the UK Abstract: Existing studies on the assessment of shareholders' gains in takeovers have not taken the characteristics of the prevailing economic activity period into consideration. This study investigates the wealth effects to shareholders in the event of a merger and acquisition transaction by analysing 124 cases in the UK. The paper differs from previous studies in that it examines the abnormal returns found in two different economic periods. These include a boom period, characterised by high merger activity era (HMAE) and a trough period, characterised by low merger activity era (LMAE). The sample firms were categorised into friendly mergers and hostile takeovers— both successful and unsuccessful. The empirical findings derived from this work revealed that upon the differentiation of the two periods, the wealth effects to shareholders in the different transactions is related to the prevailing performance of the economy. Journal: International Journal of the Economics of Business Pages: 365-377 Issue: 3 Volume: 8 Year: 2001 Keywords: Merger And Acquisitions, Wealth Effects, Economic Cycle, X-DOI: 10.1080/13571510110079829 File-URL: http://www.tandfonline.com/10.1080/13571510110079829 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:8:y:2001:i:3:p:365-377 Template-Type: ReDIF-Article 1.0 Author-Name: John Finch Author-X-Name-First: John Author-X-Name-Last: Finch Author-Name: Nicola Dinnei Author-X-Name-First: Nicola Author-X-Name-Last: Dinnei Title: Capturing Knightian Advantages of Large Business Organisations Through Group Decision-making Processes Abstract: This paper develops an explanation of how large business organisations may achieve advantages of size by virtue of decision-making procedures. The argument is inspired by Knight's (Risk, Uncertainty and Profit, NewYork: Houghton Mifflin, 1921) model of internal business organisation, together with his explanation of profits pertaining to large business organisations by being connected with situations that he characterises as uncertain rather than risky. Capturing the decision-making advantages is fairly straightforward in Knight's explanation. Decision making is internalised to individuals who cope with uncertain situations— beyond the range of normal experience— in a manner consistent with managerial/entrepreneurial vision. Recent organisation theory has drawn attention to the use of groups as an integral part of decision making within large business organisations and this has important implications for economics. This paper highlights the role of groups in achieving Knightian advantages. The argument loosens the identification of organisation with a managerial/entrepreneurial vision, adding different levels and types of deliberate and automatic selection, the alignment of which is likely to be problematic. Journal: International Journal of the Economics of Business Pages: 379-403 Issue: 3 Volume: 8 Year: 2001 Keywords: Decision Making, Uncertainty, Large Business Organisations, Frank Knight, Capabilities, Shared Mental Models, X-DOI: 10.1080/13571510110081187 File-URL: http://www.tandfonline.com/10.1080/13571510110081187 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:8:y:2001:i:3:p:379-403 Template-Type: ReDIF-Article 1.0 Author-Name: Catherine Beaudry Author-X-Name-First: Catherine Author-X-Name-Last: Beaudry Title: Entry, Growth and Patenting in Industrial Clusters: A Study of the Aerospace Industry in the UK Abstract: This paper studies how firm performance is influenced by the strength of the industrial cluster (or industrial district) in which it is located. The paper presents estimates of firm-level employment and patent growth models for a range of '5-digit' aerospace industries in the UK. In these models, employment in the firm's own sector and employment in other sectors is taken as a measure of the strength of the cluster. Strong positive clustering effects are found in many sectors, but nevertheless some clustering effects are negative. Entry into clusters of this industry is also examined and some sectors are found to attract new entry while others are only attracted. Journal: International Journal of the Economics of Business Pages: 405-436 Issue: 3 Volume: 8 Year: 2001 Keywords: Industrial Clusters, Firm Performance, Innovation, Entry, Aerospace, X-DOI: 10.1080/13571510110079000 File-URL: http://www.tandfonline.com/10.1080/13571510110079000 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:8:y:2001:i:3:p:405-436 Template-Type: ReDIF-Article 1.0 Author-Name: Daniel Friesner Author-X-Name-First: Daniel Author-X-Name-Last: Friesner Author-Name: Robert Rosenman Author-X-Name-First: Robert Author-X-Name-Last: Rosenman Title: The Property Rights Theory of the Firm and Mixed Competition: A Counter-Example in the US Health Care Industry Abstract: We present a counter-example to the conventional property rights theory of the firm, which indicates that not-for-profit firms are incapable of directly competing against strictly profit-maximizing firms without the presence of barriers to entry, outside assistance, changing profit status or economies of scale and scope. We employ a modified Bertrand duopoly model of mixed competition in the health care industry to show that, even when these four conditions do not hold, not-for-profit firms may still be able to compete and possibly dominate the market. Consequently, market fundamentals, rather than market intervention, regulation or uncertainty, determine a not-for-profit provider's success or failure in the market. A necessary requirement is that the not-for-profit manager must care about non-pecuniary benefits but be willing to accept lower than normal returns. Moreover, under specific cost and demand conditions, a not-for-profit's ability to compete may actually be enhanced by increasing its production of non-pecuniary benefits. Journal: International Journal of the Economics of Business Pages: 437-450 Issue: 3 Volume: 8 Year: 2001 Keywords: Duopoly, Quality, Competition, Non-PECUNIARY Benefits, Not-FOR-PROFIT, X-DOI: 10.1080/13571510110081204 File-URL: http://www.tandfonline.com/10.1080/13571510110081204 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:8:y:2001:i:3:p:437-450 Template-Type: ReDIF-Article 1.0 Author-Name: Eleanor Morgan Author-X-Name-First: Eleanor Author-X-Name-Last: Morgan Title: A Decade of EC Merger Control Abstract: The introduction of the EC Merger Control Regulation in September 1990 plugged a serious gap in European competition policy. This paper examines aspects of its record over the first ten years. These include the changing scope of the policy and the much higher level of activity than originally anticipated. Developments in the appraisal of mergers are assessed with particular reference to oligopoly, the treatment of non-competition effects and dynamic competition, especially in high tech industries. The risks of an increasing tendency towards remedial settlements are also discussed and some future challenges highlighted . Journal: International Journal of the Economics of Business Pages: 451-473 Issue: 3 Volume: 8 Year: 2001 Keywords: Mergers, Competition Policy, Eu Merger Policy, Ec Merger Control Regulation, X-DOI: 10.1080/13571510110081213 File-URL: http://www.tandfonline.com/10.1080/13571510110081213 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:8:y:2001:i:3:p:451-473 Template-Type: ReDIF-Article 1.0 Author-Name: Chris Freeman Author-X-Name-First: Chris Author-X-Name-Last: Freeman Title: A Review of David C. Mowery and Richard R. Nelson, eds: Sources of Industrial Leadership: Studies of Seven Industries Abstract: Journal: International Journal of the Economics of Business Pages: 475-482 Issue: 3 Volume: 8 Year: 2001 X-DOI: 10.1080/13571510110081222 File-URL: http://www.tandfonline.com/10.1080/13571510110081222 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:8:y:2001:i:3:p:475-482 Template-Type: ReDIF-Article 1.0 Author-Name: Nicolai Foss Author-X-Name-First: Nicolai Author-X-Name-Last: Foss Title: New Organizational Forms - Critical Perspectives Abstract: Journal: International Journal of the Economics of Business Pages: 1-8 Issue: 1 Volume: 9 Year: 2002 X-DOI: 10.1080/13571510110102949 File-URL: http://www.tandfonline.com/10.1080/13571510110102949 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:9:y:2002:i:1:p:1-8 Template-Type: ReDIF-Article 1.0 Author-Name: Nicolai Foss Author-X-Name-First: Nicolai Author-X-Name-Last: Foss Title: 'Coase vs Hayek': Economic Organization and the Knowledge Economy Abstract: Many writers argue that economic organization is undergoing major transformation in the emerging knowledge economy; authority relations are withering; legal and ownership-based definitions of the boundaries of firms are becoming irrelevant and there are increasingly few constraints on the set of feasible combinations of coordination mechanisms. The present paper critically deals with these claims, beginning from the basic idea that they may be analysed as turning on the implications for the Coasian firm of the Hayekian notion that the distributed knowledge is a strong constraint on the use of planned coordination. It argues that there are efficiency reasons for the existence of authority under Hayekian distributed knowledge; that the increasing importance of knowledge in production does not render legal and ownership-based notions of the boundaries of the firm irrelevant; and that coordination mechanisms will also cluster in certain, predictable combinations in the emerging knowledge economy. Thus, Coasian firm organization is consistent with Hayekian knowledge conditions. Journal: International Journal of the Economics of Business Pages: 9-35 Issue: 1 Volume: 9 Year: 2002 Keywords: The Knowledge Economy, Authority, Firms' Boundaries, Internal Organization, X-DOI: 10.1080/13571510110102958 File-URL: http://www.tandfonline.com/10.1080/13571510110102958 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:9:y:2002:i:1:p:9-35 Template-Type: ReDIF-Article 1.0 Author-Name: Geoffrey Hodgson Author-X-Name-First: Geoffrey Author-X-Name-Last: Hodgson Title: The Legal Nature of the Firm and the Myth of the Firm-Market Hybrid Abstract: A sharp conceptual distinction used to be drawn between the firm and the market. However, since the 1970s, many economists and sociologists have argued that the boundaries of the firm are indistinct. Ideas emerged of 'internal markets' within firms, of the 'quasifirm', of 'hybrid firms' and of firms as 'quasi-markets'. This article re-examines the formal, legal conception of the firm. It is argued that there is no good reason to abandon this conception, even in the light of relational contracting, networking, subcontracting and other developments. To avoid confusion, additional terms such as 'supplier network' or 'conglomerate' should be used to describe these phenomena, rather than abandoning a legally-based definition of the firm. With this clarified definition, 'internal markets' and 'hybrid firms' disappear from view. Journal: International Journal of the Economics of Business Pages: 37-60 Issue: 1 Volume: 9 Year: 2002 Keywords: Firm, Market, Relational Exchange, Internal Markets, Hybrids, X-DOI: 10.1080/13571510110102967 File-URL: http://www.tandfonline.com/10.1080/13571510110102967 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:9:y:2002:i:1:p:37-60 Template-Type: ReDIF-Article 1.0 Author-Name: Margit Osterloh Author-X-Name-First: Margit Author-X-Name-Last: Osterloh Author-Name: Jetta Frost Author-X-Name-First: Jetta Author-X-Name-Last: Frost Author-Name: Bruno Frey Author-X-Name-First: Bruno Author-X-Name-Last: Frey Title: The Dynamics of Motivation in New Organizational Forms Abstract: This paper discusses the impact of the dynamics of motivation on new organizational forms that are suited to forge value-creating knowledge transfers in teams and between organizational units and functions. Our aim is to develop the management of motivation as a source of distinctive firm competences. We argue that motivation is an endogenous variable and introduce it as a crucial link into the theory of the firm. Balancing intrinsic and extrinsic motivation helps to overcome social dilemmas in firms that are not solvable by hierarchical authority. Integrating the dynamics of motivation is a step to a more comprehensive theory of organization. It links organizational economics to the knowledge-based perspective. Journal: International Journal of the Economics of Business Pages: 61-77 Issue: 1 Volume: 9 Year: 2002 Keywords: Motivation, Organizational Forms, Knowledge Transfer, Firm-SPECIFIC Pool Resources, X-DOI: 10.1080/13571510110102976 File-URL: http://www.tandfonline.com/10.1080/13571510110102976 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:9:y:2002:i:1:p:61-77 Template-Type: ReDIF-Article 1.0 Author-Name: Todd Zenger Author-X-Name-First: Todd Author-X-Name-Last: Zenger Title: Crafting Internal Hybrids: Complementarities, Common Change Initiatives, and the Team-Based Organization Abstract: Hybrid governance forms that seek to meld the virtues of both market control and traditional hierarchical control are alluring. Comparatively little research, outside of the M-form literature, has examined internal hybrids - hierarchical forms infused with elements of market control. This paper contends that common change initiatives, such as TQM, re-engineering, autonomous work teams, and group-based rewards, are appropriately viewed as attempts to craft internal hybrids by selectively infusing elements of market control within hierarchy. However, these change initiatives are often implemented in isolation and, as a consequence, violate patterns of complementarity that sustain traditional hierarchy or support the stable infusion of market control.The paper argues that these violations of complementarity often spiral hierarchies toward fundamental transformation. The clear trajectory of these transformations is to quite radically disaggregated organizations structured around teams. The paper presents both theory and evidence supporting the existence of complementarities among these common change initiatives. Journal: International Journal of the Economics of Business Pages: 79-95 Issue: 1 Volume: 9 Year: 2002 Keywords: Organizational Forms, Complementarities, Hybrid Structures, Organizational Change, X-DOI: 10.1080/13571510110102985 File-URL: http://www.tandfonline.com/10.1080/13571510110102985 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:9:y:2002:i:1:p:79-95 Template-Type: ReDIF-Article 1.0 Author-Name: Bruce Heiman Author-X-Name-First: Bruce Author-X-Name-Last: Heiman Author-Name: Jack Nickerson Author-X-Name-First: Jack Author-X-Name-Last: Nickerson Title: Towards Reconciling Transaction Cost Economics and the Knowledge-based View of the Firm: The Context of Interfirm Collaborations Abstract: This paper presents a set of relationships that have the potential to reconcile the dispute between the knowledge-based view of the firm (KBV) and transaction cost economics (TCE). Several KBV scholars have argued that governance choice need rely only on bounded rationality and not on opportunism where TCE scholars maintain that both behavioural assumptions are needed to explain governance choice.We help to resolve part of the debate by developing an extension ofTCE to encompass certain knowledge-based attributes of transactions.We argue that high-levels of two knowledge transfer attributes - knowledge tacitness or problem solving complexity - lead to the adoption of the knowledge management practices - high-bandwidth channels or idiosyncratic communication codes - to economize on the cognitive limitations of man. It is these knowledge management practices that generate contracting hazards for whichTCE, and its attendant concern about opportunism, predicts equity-based collaborations are superior to non-equity-based collaborations.The linkages between knowledge transfer attributes, knowledge management practices, and governance choice add value via implications for managers which are not readily apparent from either theory alone. Journal: International Journal of the Economics of Business Pages: 97-116 Issue: 1 Volume: 9 Year: 2002 Keywords: Interfirm Collaborations, Knowledge Management, Knowledge Transfer, Governance Choice, X-DOI: 10.1080/13571510110103001 File-URL: http://www.tandfonline.com/10.1080/13571510110103001 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:9:y:2002:i:1:p:97-116 Template-Type: ReDIF-Article 1.0 Author-Name: Paul Gooderham Author-X-Name-First: Paul Author-X-Name-Last: Gooderham Author-Name: Svein Ulset Author-X-Name-First: Svein Author-X-Name-Last: Ulset Title: 'Beyond the M-form': Towards a Critical Test of the New Form Abstract: This paper critically examines Bartlett and Ghoshal's claim that a radical new organizational form, distinctly different from the M-form both in terms of its structure and psychological underpinnings, may be observed among transnationals. The main theoretical dimensions of the M-form and the 'New Form' are delineated and compared within the context of the discourse between Transaction Costs Economics (TCE) and the Knowledge Based Approach on organizational advantage. Thereafter empirical evidence centred on ABB is extended and re-examined. On the basis of this analysis the thesis of an emergent new form is found to be unsupported. It is thus reasonable to assume that any organizational advantage transnational companies may possess still resides in hierarchical governance as identified by TCE and outlined in its multinational M-form application. To the extent to which it exists, normative social control has a secondary status. Journal: International Journal of the Economics of Business Pages: 117-138 Issue: 1 Volume: 9 Year: 2002 Keywords: Governance, Capabilities, Multinational Corporations, X-DOI: 10.1080/13571510110103010 File-URL: http://www.tandfonline.com/10.1080/13571510110103010 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:9:y:2002:i:1:p:117-138 Template-Type: ReDIF-Article 1.0 Author-Name: Keld Laursen Author-X-Name-First: Keld Author-X-Name-Last: Laursen Title: The Importance of Sectoral Differences in the Application of Complementary HRM Practices for Innovation Performance Abstract: Recent theoretical and empirical analysis in the field of economic organization has focused almost exclusively on identifying organizational practices and complementarities between such practices, without regard for the type of activity in question. However, organizational theory suggests that more knowledge-intensive production activities often involve higher degrees of strategic uncertainty for firms and performance ambiguity in relation to individual employees. Therefore, the 'organic' or 'clan' form of organization - involving the application of 'new' HRM practices - is expected to perform better within knowledge-intensive sectors of the economy, as compared to other sectors. A sample of 726 Danish firms with more than 50 employees in manufacturing and private services is studied. The results show that HRM practices are more effective in influencing innovation performance when applied together, as compared with situations in which individual practices are applied alone. In other words, organizational complementarities obtain. Moreover, the application of complementary HRM practices is more effective for firms in knowledge-intensive industries ('high' and 'medium' knowledge-intensive industries). Journal: International Journal of the Economics of Business Pages: 139-156 Issue: 1 Volume: 9 Year: 2002 Keywords: Human Resource Management Practices, Organisational Complementarities, Innovation Performance, X-DOI: 10.1080/13571510110103029 File-URL: http://www.tandfonline.com/10.1080/13571510110103029 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:9:y:2002:i:1:p:139-156 Template-Type: ReDIF-Article 1.0 Author-Name: Aidan Hollis Author-X-Name-First: Aidan Author-X-Name-Last: Hollis Title: Strategic Implications of Learning by Doing Abstract: This paper examines firm strategy when competitors are at different points along the learning curve. It shows that firms high on the learning curve will have strong incentives to exclude new competitors, while firms that are learning more slowly will have weaker incentives to hinder new competitors and may even wish to encourage entry. The same strategies are shown to apply when firm reputation is acquired through participation in an industry. Several examples of strategic behaviour that take advantage of differential learning speeds or heterogeneous reputations are suggested and a variety of applications of the principle involved are explored. Journal: International Journal of the Economics of Business Pages: 157-174 Issue: 2 Volume: 9 Year: 2002 Keywords: Learning By Doing, Strategic Behaviour, Entry Deterrence, X-DOI: 10.1080/13571510210134637 File-URL: http://www.tandfonline.com/10.1080/13571510210134637 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:9:y:2002:i:2:p:157-174 Template-Type: ReDIF-Article 1.0 Author-Name: Oliver Fabel Author-X-Name-First: Oliver Author-X-Name-Last: Fabel Author-Name: Erik Lehmann Author-X-Name-First: Erik Author-X-Name-Last: Lehmann Title: Adverse Selection and Market Substitution by Electronic Trade Abstract: Adverse selection induces economic limits to market substitution. If quality uncertainty persists in both Internet and traditional marketplaces, a second-best equilibrium with parallel market segments may arise. The information cost advantage of one marketplace is exactly offset by a more severe adverse selection problem associated with non-observable quality variables. The electronic marketplace providing dominant search means contains all segments, while the traditional market may lack some segments. These missing segments are characterized by low quality expectations given the set of advertised quality signals. The analytic results are confirmed by an empirical investigation of used-car trade. Thus the study also provides an estimate of the price differential between the electronic and the traditional marketplace. Journal: International Journal of the Economics of Business Pages: 175-193 Issue: 2 Volume: 9 Year: 2002 Keywords: E-COMMERCE, Market Substitution, Adverse Selection, Efficient Search And Learning, X-DOI: 10.1080/13571510210134646 File-URL: http://www.tandfonline.com/10.1080/13571510210134646 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:9:y:2002:i:2:p:175-193 Template-Type: ReDIF-Article 1.0 Author-Name: Naresh Pandit Author-X-Name-First: Naresh Author-X-Name-Last: Pandit Author-Name: Gary Cook Author-X-Name-First: Gary Author-X-Name-Last: Cook Author-Name: G. M. P. Swann Author-X-Name-First: G. M. P. Author-X-Name-Last: Swann Title: A Comparison of Clustering Dynamics in the British Broadcasting and Financial Services Industries Abstract: This paper compares patterns of industrial clustering in the British broadcasting and financial services industries. Recent trends of deregulation, rapid technological change, and globalization in both industries suggest the significant and increasing importance of clustering effects. This study examines the evidence. It investigates the effects of cluster strength on the growth of the firm and on rates of surviving entry. We find positive, large, and statistically significant clustering effects. In both industries: (a) incumbent firms located in a cluster that is strong in their own sub-sector of their industry tend to grow faster than average; and, (b) new firms are attracted by industry strength in certain sub-sectors in a particular region. The results for these largely mature service industries are very similar to those observed in earlier studies that have examined clustering patterns in newer high technology manufacturing industries. Journal: International Journal of the Economics of Business Pages: 195-224 Issue: 2 Volume: 9 Year: 2002 Keywords: Industrial Clusters, Growth, Entry, Broadcasting Industry, Financial Services Industry, X-DOI: 10.1080/13571510210134655 File-URL: http://www.tandfonline.com/10.1080/13571510210134655 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:9:y:2002:i:2:p:195-224 Template-Type: ReDIF-Article 1.0 Author-Name: Julia Lane Author-X-Name-First: Julia Author-X-Name-Last: Lane Author-Name: Robert Feinberg Author-X-Name-First: Robert Author-X-Name-Last: Feinberg Author-Name: Harry Broadman Author-X-Name-First: Harry Author-X-Name-Last: Broadman Title: Do Labour Strategies Matter? An Analysis of Two Enterprise-Level Data Sets in China Abstract: This paper examines the effect of labour strategies and management types on firm performance in Chinese enterprises. We use two large panel surveys on Chinese enterprises, spanning almost two decades of transition. Our findings suggest that, as commonly thought, there are significant differences across ownership types in China in the degree to which flexible labour market strategies are utilized; and more flexible strategies (such as bonus-reward systems) do seem to significantly enhance performance. However, after controlling for different degrees of labour market flexibility, ownership differences have little influence on enterprise performance (with the exception that foreign joint ventures clearly outperform other types in growth and labour productivity). This important result suggests that the impact of Chinese ownership types on performance is felt through cost-impacts rather than via direct differences in competitive behaviour or the goals of enterprise decision-makers. Journal: International Journal of the Economics of Business Pages: 225-237 Issue: 2 Volume: 9 Year: 2002 Keywords: Chinese Enterprises, Ownership, Labour Market Flexibility, Goals Of The Firm, X-DOI: 10.1080/13571510210134661 File-URL: http://www.tandfonline.com/10.1080/13571510210134661 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:9:y:2002:i:2:p:225-237 Template-Type: ReDIF-Article 1.0 Author-Name: James Love Author-X-Name-First: James Author-X-Name-Last: Love Author-Name: Stephen Roper Author-X-Name-First: Stephen Author-X-Name-Last: Roper Title: Internal Versus External R&D: A Study of R&D Choice with Sample Selection Abstract: This paper extends previous analyses of the choice between internal and external R&D to consider the costs of internal R&D. The Heckman two-stage estimator is used to estimate the determinants of internal R&D unit cost (i.e. cost per product innovation) allowing for sample selection effects. Theory indicates that R&D unit cost will be influenced by scale issues and by the technological opportunities faced by the firm. Transaction costs encountered in research activities are allowed for and, in addition, consideration is given to issues of market structure which influence the choice of R&D mode without affecting the unit cost of internal or external R&D. The model is tested on data from a sample of over 500 UK manufacturing plants which have engaged in product innovation. The key determinants of R&D mode are the scale of plant and R&D input, and market structure conditions. In terms of the R&D cost equation, scale factors are again important and have a non-linear relationship with R&D unit cost. Specificities in physical and human capital also affect unit cost, but have no clear impact on the choice of R&D mode. There is no evidence of technological opportunity affecting either R&D cost or the internal/external decision. Journal: International Journal of the Economics of Business Pages: 239-255 Issue: 2 Volume: 9 Year: 2002 Keywords: Scale, Market Structure, Cost Of R And D, R And D Mode, X-DOI: 10.1080/13571510210134998 File-URL: http://www.tandfonline.com/10.1080/13571510210134998 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:9:y:2002:i:2:p:239-255 Template-Type: ReDIF-Article 1.0 Author-Name: Barbara Summers Author-X-Name-First: Barbara Author-X-Name-Last: Summers Author-Name: Nicholas Wilson Author-X-Name-First: Nicholas Author-X-Name-Last: Wilson Title: An Empirical Investigation of Trade Credit Demand Abstract: This paper investigates the motivations for a firm's demand for trade credit. Demand for credit is modelled as a function of transaction costs motivations, financing motivations, operational considerations, seller compliance issues and supplier marketing, whilst controlling for the firm's business environment and for firm characteristics such as size and industry. This paper builds on previous studies by considering a wider range of factors that can affect trade credit demand holistically on a single sample. It appears that the use of trade credit is widespread, and that it is generally perceived as an important short term financing option, although the availability of trade credit is not a major influence on supplier choice. The level of a firm's trade credit demand is found to be significantly influenced by transaction costs, financing, operational issues, marketing activities by suppliers, the firm's investment in trade debtors and firm size. Journal: International Journal of the Economics of Business Pages: 257-270 Issue: 2 Volume: 9 Year: 2002 Keywords: Trade Credit, Demand For Credit, Short Term Finance, X-DOI: 10.1080/13571510210135005 File-URL: http://www.tandfonline.com/10.1080/13571510210135005 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:9:y:2002:i:2:p:257-270 Template-Type: ReDIF-Article 1.0 Author-Name: Gregory Goering Author-X-Name-First: Gregory Author-X-Name-Last: Goering Author-Name: Michael Pippenger Author-X-Name-First: Michael Author-X-Name-Last: Pippenger Title: Durable Goods Monopoly and Forward Markets Abstract: The existence of forward markets has long been explained by risk hedging behaviour. More recently, attention has focused on the Cournot competition rationale for the emergence of forward markets since the quantity of forward transactions can be used as strategic variable. However, an important facet of many forward markets that has typically been ignored in the literature is the durable nature of output (e.g. nickel and lead). We show that forward markets may optimally emerge as long as a monopolist sells any fraction of its durable output. In particular, the comparative static analysis shows that as the durability of the product increases or the fraction of output sold increases, the monopolist will optimally increase the number of forward contracts purchased due to an exacerbated commitment problem with buyers. Our analysis also provides another explanation for differences between the forward price and the expected future spot price of a commodity that does not rely on uncertainty or risk considerations. Journal: International Journal of the Economics of Business Pages: 271-282 Issue: 2 Volume: 9 Year: 2002 Keywords: Forward Markets, Durable Goods, Monopoly, X-DOI: 10.1080/13571510210135005A File-URL: http://www.tandfonline.com/10.1080/13571510210135005A File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:9:y:2002:i:2:p:271-282 Template-Type: ReDIF-Article 1.0 Author-Name: Jacques Rojot Author-X-Name-First: Jacques Author-X-Name-Last: Rojot Title: Economics and Management Theory: New Developments in France Abstract: Management theory, initially mostly concerned with establishing a set of normative principles aiming to train practicing managers, has developed a substantial body of theory and several original strands of research. It has traditionally drawn its inspiration largely from economic theory, but has integrated elements of sociology, law and social psychology, among other disciplines. In France, a set of relevant recent and innovative approaches come from recent developments in economic theory gathered generally under the label of 'economics of conventions. 'The paper attempts to characterize the main features of the'economics of conventions' and the ways in which it is relevant and provides fruitful new approaches to management theory. Journal: International Journal of the Economics of Business Pages: 283-294 Issue: 2 Volume: 9 Year: 2002 Keywords: Management Theory, Impact Of New Developments In French Economic Theory, Perspectives For Analysis Of Power And Culture, X-DOI: 10.1080/13571510210135014 File-URL: http://www.tandfonline.com/10.1080/13571510210135014 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:9:y:2002:i:2:p:283-294 Template-Type: ReDIF-Article 1.0 Author-Name: Catherine Matraves Author-X-Name-First: Catherine Author-X-Name-Last: Matraves Title: European Integration and Market Structure in the Soft Drinks Industry Abstract: The focus of this paper is the impact of European integration in the soft drinks industry. It is shown that the geographic level at which competition takes place has moved from the national to the European stage. We apply the new theory of industrial structure where the essential notion is that in endogenous sunk cost industries such as soft drinks, the traditional inverse structure-size relation may break down, due to the escalation of overhead fixed expenditures. The evidence is consistent with the theory. Moreover, it is shown how the persistence of a first mover advantage may affect market concentration. Finally, and in response to exogenous structural change, significant restructuring and increased multinationality has been observed among the leading manufacturers. Journal: International Journal of the Economics of Business Pages: 295-310 Issue: 3 Volume: 9 Year: 2002 Keywords: Concentration, European Integration, Advertising, Soft Drinks, X-DOI: 10.1080/1357151021000010427 File-URL: http://www.tandfonline.com/10.1080/1357151021000010427 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:9:y:2002:i:3:p:295-310 Template-Type: ReDIF-Article 1.0 Author-Name: Daniel Friesner Author-X-Name-First: Daniel Author-X-Name-Last: Friesner Author-Name: Robert Rosenman Author-X-Name-First: Robert Author-X-Name-Last: Rosenman Title: A Dynamic Property Rights Theory of the Firm Abstract: We present a dynamic property rights model of the firm with two types of non-pecuniary spending: one that is financed through capital markets which impacts future firm wealth, and one that does not. Consumption of the latter good is consistent with what has been found in previous models. Our theoretical model indicates that excess non-pecuniary spending may diverge or converge over time, depending on specific management goals and constraints, and regulatory factors. Using a panel of Washington State hospitals, we find evidence that non-pecuniary spending does fluctuate over time and that government policy variables, such as the level of Medicare and Medicaid reimbursement have a statistically significant impact on a firm's excess non-pecuniary spending. Journal: International Journal of the Economics of Business Pages: 311-333 Issue: 3 Volume: 9 Year: 2002 Keywords: Property Rights, Nonprofit, Inefficiency, Non-PECUNIARY Benefits, X-DOI: 10.1080/1357151021000010373 File-URL: http://www.tandfonline.com/10.1080/1357151021000010373 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:9:y:2002:i:3:p:311-333 Template-Type: ReDIF-Article 1.0 Author-Name: Nigel Driffield Author-X-Name-First: Nigel Author-X-Name-Last: Driffield Author-Name: Max Munday Author-X-Name-First: Max Author-X-Name-Last: Munday Author-Name: Annette Roberts Author-X-Name-First: Annette Author-X-Name-Last: Roberts Title: Foreign Direct Investment, Transactions Linkages, and the Performance of the Domestic Sector Abstract: Using data from the UK Census of Production, including foreign ownership data, and information from UK industry input-output tables, this paper examines whether the intensity of transactions linkages between foreign and domestic firms affects productivity growth in domestic manufacturing industries. The implications of the findings for policies promoting linkages between multinational and domestic firms in the UK economy are outlined. Journal: International Journal of the Economics of Business Pages: 335-351 Issue: 3 Volume: 9 Year: 2002 Keywords: Foreign Direct Investment, Productivity Spillovers, Input-OUTPUT, Tables, X-DOI: 10.1080/1357151021000010000 File-URL: http://www.tandfonline.com/10.1080/1357151021000010000 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:9:y:2002:i:3:p:335-351 Template-Type: ReDIF-Article 1.0 Author-Name: Hans Degryse Author-X-Name-First: Hans Author-X-Name-Last: Degryse Author-Name: Steven Ongena Author-X-Name-First: Steven Author-X-Name-Last: Ongena Title: Bank-Firm Relationships and International Banking Markets Abstract: This paper reviews how long-term relationships between firms and banks shape the structure and integration of banking markets worldwide. Bank relationships arise to span informational asymmetries that are endemic in financial markets. Firm-bank relationships not only entail specific benefits and costs for both the engaged firms and banks, but also directly affect the structure of banking markets. In particular, the sunk cost of screening and monitoring activities and the 'informational capital' collected by the incumbent banks may act as a barrier to entry. The intensity of the existing firm-bank relationships will determine the height of this barrier and shape the structure of international banking markets. For example, in Scandinavia where firms maintain few and strong relationships, foreign banks may only be able to enter successfully through mergers and acquisitions. On the other hand, Southern European firms maintain many bank relationships. Therefore, banks may consider entering Southern European banking markets through direct investment. Journal: International Journal of the Economics of Business Pages: 401-417 Issue: 3 Volume: 9 Year: 2002 Keywords: Bank-FIRM Relationships, International Banking Markets, X-DOI: 10.1080/1357151021000010000A File-URL: http://www.tandfonline.com/10.1080/1357151021000010000A File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:9:y:2002:i:3:p:401-417 Template-Type: ReDIF-Article 1.0 Author-Name: Eric Brousseau Author-X-Name-First: Eric Author-X-Name-Last: Brousseau Title: The Governance of Transactions by Commercial Intermediaries: An Analysis of the Re-engineering of Intermediation by Electronic Commerce Abstract: Efficiency arguments explain why commercial intermediaries exist and will continue to be involved in the exchanges despite the spread of digital networks. Commercial intermediaries provide producers and consumers with a set of information, logistic, securization and insurance (and liquidity) services. By bundling these services and by dedicating assets and learning capabilities to their production, commercial intermediaries allow transaction costs to be reduced. Digital networks per se cannot allow transacting parties to benefit from such efficient providers of intermediation services. Rather than establishing direct relationships among producers and consumers, the Internet will support a re-organization of existing intermediation chains, because traditional intermediaries will reinforce their ability to provide these service by using ITs. The analysis of the role of commercial intermediaries thus leads to a better understanding of the future of e-commerce. In turn, e-commerce provides New-Institutional Economics with a stimulating case study. Journal: International Journal of the Economics of Business Pages: 353-374 Issue: 3 Volume: 9 Year: 2002 Keywords: Transaction Costs, Commercial Intermediation, Distribution Channels, E-COMMERCE, Bundled Services, Digital Economy, X-DOI: 10.1080/1357151021000010355 File-URL: http://www.tandfonline.com/10.1080/1357151021000010355 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:9:y:2002:i:3:p:353-374 Template-Type: ReDIF-Article 1.0 Author-Name: Helen Short Author-X-Name-First: Helen Author-X-Name-Last: Short Author-Name: Kevin Keasey Author-X-Name-First: Kevin Author-X-Name-Last: Keasey Author-Name: Darren Duxbury Author-X-Name-First: Darren Author-X-Name-Last: Duxbury Title: Capital Structure, Management Ownership and Large External Shareholders: A UK Analysis Abstract: This paper examines empirically the effects of management ownership and ownership by large external shareholders on the capital structure of the firm from an agency theory perspective. The paper extends the US literature on the topic by examining the effect of interactions between management ownership and ownership by large external shareholders on the capital structure of UK firms. For a sample of UK firms, the paper provides empirical evidence that suggests the debt ratio is positively related to management ownership and negatively related to ownership by large external shareholders. Furthermore, the presence of a large external shareholder acts to negate the positive relationship between debt ratios and management ownership; in the presence of a large external shareholder, no significant relationship between debt ratios and management ownership exists. These findings are consistent with the hypothesis that the presence of large external shareholders affects the agency costs of debt and equity. Journal: International Journal of the Economics of Business Pages: 375-399 Issue: 3 Volume: 9 Year: 2002 Keywords: Capital Structure, Management Ownership, External Shareholders, X-DOI: 10.1080/1357151021000010382 File-URL: http://www.tandfonline.com/10.1080/1357151021000010382 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:9:y:2002:i:3:p:375-399 Template-Type: ReDIF-Article 1.0 Author-Name: Steve Parsons Author-X-Name-First: Steve Author-X-Name-Last: Parsons Title: Laffont and Tirole's Competition in Telecommunications : A View From the US Abstract: This article briefly reviews Competition in Telecommunications by Laffont andTirole (2000); it presents the major conclusions of the book and corrects certain errors. In addition, this article treats related topics, some specific to the US telecommunications industry. In US telecommunications access to incumbents facilities are priced based on cost model estimates. Several of the important sources of misunderstandings of telecommunications costs and cost estimates are described including: multiple meanings of 'access,'meanings of cross-subsidy; nature of loop costs; the many dimensions of marginal costs in telecommunications, misuses of long-run cost concepts; and misuses of 'most efficient' provider assumptions. The methods of cost calculations and legal and regulatory requirements in the US are described, as are the implications for incentive regulation, changing technology, efficient pricing, and measures of efficient competitive entry. Journal: International Journal of the Economics of Business Pages: 419-436 Issue: 3 Volume: 9 Year: 2002 Keywords: Telecommunications, Cost Estimates, Long-RUN Incremental Costs, Access, Regulation, Cross-SUBSIDIES, Cost Proxy Models, Incentive Regulation, Telecommunications, Act, Of, 1996, X-DOI: 10.1080/1357151021000010409 File-URL: http://www.tandfonline.com/10.1080/1357151021000010409 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:9:y:2002:i:3:p:419-436 Template-Type: ReDIF-Article 1.0 Author-Name: H. E. Frech Author-X-Name-First: H. E. Author-X-Name-Last: Frech Title: Corporate Demography and Empirical Industrial Organization: A Critical Appraisal Abstract: The emerging field of corporate demography views corporations and industries in a similar way to human or animal individuals and groups. In spite of a surprisingly large overlap of subject matter with economics, corporate demography is not well-known by, nor easily accessible to economists. An extremely useful recent book, The Demography of Corporations and Industries, by Glenn R. Carroll and Michael T. Hannan (2000) should change that. This review essay critically examines corporate demography from an economic viewpoint. The very different view of competition in corporate demography gets particular attention. Journal: International Journal of the Economics of Business Pages: 437-448 Issue: 3 Volume: 9 Year: 2002 Keywords: Entry, Exit, Demography, Survivor Analysis, Firm Growth, X-DOI: 10.1080/1357151021000010418 File-URL: http://www.tandfonline.com/10.1080/1357151021000010418 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:9:y:2002:i:3:p:437-448 Template-Type: ReDIF-Article 1.0 Author-Name: Tommy Staahl Gabrielsen Author-X-Name-First: Tommy Staahl Author-X-Name-Last: Gabrielsen Title: Conglomerate Mergers: Vertical Mergers in Disguise? Abstract: The article offers a complementary theory for conglomerate mergers. The central argument is that a conglomerate merger may be a vertical merger in disguise. The acquisition of a non-competing firm takes place to achieve control over the target's distribution channel that otherwise could be used by rival entrants. The analysis shows that an entrant with a very differentiated product is accommodated, and an entrant with a close substitute is foreclosed through a conglomerate merger. There also exist equilibria with partial foreclosure where the entrant is forced onto less efficient distribution channels. Incumbent firms' mergers to achieve foreclosure is socially wasteful. Journal: International Journal of the Economics of Business Pages: 1-16 Issue: 1 Volume: 10 Year: 2003 Keywords: Conglomerate Mergers, Distribution Channels, Foreclosure, X-DOI: 10.1080/1357151032000043294 File-URL: http://www.tandfonline.com/10.1080/1357151032000043294 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:10:y:2003:i:1:p:1-16 Template-Type: ReDIF-Article 1.0 Author-Name: Alessandra Tonazzi Author-X-Name-First: Alessandra Author-X-Name-Last: Tonazzi Title: Competition policy and the commercialization of sport broadcasting rights: The decision of the Italian Competition Authority Abstract: In 1999 the Italian Competition Authority (ICA) stated that the regulation of the Italian League allowing it to sell football broadcasting rights collectively was a restrictive agreement. The League changed its regulation and a new form of revenue redistribution compatible with individual commercialization was established. The paper compares the ICA decision with other cases concerning the commercialization of sport broadcasting rights (especially the decision of the British Restrictive Practices Court). It shows that individual commercialization does not necessarily imply problems concerning competitive balance when an appropriate redistribution system of the revenues is pursued. Some implications for competition in the downstream television market are also analysed. Journal: International Journal of the Economics of Business Pages: 17-34 Issue: 1 Volume: 10 Year: 2003 Keywords: Competition Policy, Football Broadcasting Rights, Television Industry, X-DOI: 10.1080/1357151032000043302 File-URL: http://www.tandfonline.com/10.1080/1357151032000043302 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:10:y:2003:i:1:p:17-34 Template-Type: ReDIF-Article 1.0 Author-Name: Joan-Ramon Borrell Author-X-Name-First: Joan-Ramon Author-X-Name-Last: Borrell Title: Drug Price Differentials Caused by Formularies and Price Caps Abstract: This paper analyses the behaviour of drug firms facing the threat of having their drugs excluded from the formulary of health care providers. The paper obtains two main results. One is that drug firms offer discounts to health care providers to avoid going off-list when competing in a free-entry monopolistically competitive setting, and that discounts obtained by health care providers do not cause prices to rise outside managed care. The second result is that price caps affect how prices evolve over time. Drug firms set higher introductory prices, but raise these less dramatically over time, when health care providers find it increasingly difficult to off-list older drugs. Journal: International Journal of the Economics of Business Pages: 35-48 Issue: 1 Volume: 10 Year: 2003 Keywords: Drugs, Discounts, Formularies, Price Caps, X-DOI: 10.1080/1357151032000043311 File-URL: http://www.tandfonline.com/10.1080/1357151032000043311 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:10:y:2003:i:1:p:35-48 Template-Type: ReDIF-Article 1.0 Author-Name: Harvey James Author-X-Name-First: Harvey Author-X-Name-Last: James Title: Employment Contracts, US Common Law and the Theory of the Firm Abstract: The purpose of this paper is to show that the common law governing the employment of labour in the United States makes the distinction not only between employees and independent contractors but also between employees characterized as 'servants' and employees as 'agents.' This paper also uses an online database of employment contracts to show how written contracts of employment support the granting of decision-making authority or agency to workers qua agents. In doing so, this paper articulates a paradox. The common law embodies 'defaults' that allow firm owners to employ workers as 'servants,' but the common law does not contain defaults for workers employed as 'agents,' hence the use of formal, written contracts. This is paradoxical because many contracts of employment contain similar characteristics and clauses, which could in theory be incorporated into the common law and thus used as 'defaults' in contracting, thereby creating a substantial transaction cost savings in the establishment of employment relationships with workers expected to possess agency authority. Journal: International Journal of the Economics of Business Pages: 49-65 Issue: 1 Volume: 10 Year: 2003 Keywords: Employment Contracts, Managerial Control, Agency Relations, Common Law, Transaction Cost Economics, X-DOI: 10.1080/1357151032000043320 File-URL: http://www.tandfonline.com/10.1080/1357151032000043320 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:10:y:2003:i:1:p:49-65 Template-Type: ReDIF-Article 1.0 Author-Name: Peter Szilagyi Author-X-Name-First: Peter Author-X-Name-Last: Szilagyi Author-Name: Jonathan Batten Author-X-Name-First: Jonathan Author-X-Name-Last: Batten Author-Name: Thomas Fetherston Author-X-Name-First: Thomas Author-X-Name-Last: Fetherston Title: Disintermediation and the Development of Bond Markets in Emerging Europe Abstract: The recent financial crises in Asia and Russia have shown that emerging European economies, due to their strong dependence on foreign capital, are highly vulnerable to the excessive volatility of international capital flows. Those economies that pursued sound macroeconomic policies, including setting up functioning financial market systems, have held up well and avoided major spillover effects. We argue that the appropriate approach to meet future refinancing needs is through the development of viable domestic and international bond markets. A key benefit of this strategy will be a reduction in systemic risk and the probability of future crisis. Journal: International Journal of the Economics of Business Pages: 67-82 Issue: 1 Volume: 10 Year: 2003 Keywords: Disintermediation, Bond Markets, Emerging Markets, X-DOI: 10.1080/1357151032000043339 File-URL: http://www.tandfonline.com/10.1080/1357151032000043339 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:10:y:2003:i:1:p:67-82 Template-Type: ReDIF-Article 1.0 Author-Name: Jonathan Batten Author-X-Name-First: Jonathan Author-X-Name-Last: Batten Author-Name: Peter Szilagyi Author-X-Name-First: Peter Author-X-Name-Last: Szilagyi Title: Why Japan Needs to Develop its Corporate Bond Market Abstract: Analysis of flow of funds data provides evidence of gradual disintermediation in Japan's financial system, but the major channel for the allocation of domestic savings to productive assets remains bank intermediated lending. Overall, the Japanese financial system is still bank dominated, with the lending patterns of the past decade bearing witness to the adverse selection and moral hazard problems that may arise from a market overly reliant on intermediated financing. This study recommends further development of Japan's corporate bond market with improved access by foreign participants including borrowers, investors and investment banks. Journal: International Journal of the Economics of Business Pages: 83-108 Issue: 1 Volume: 10 Year: 2003 Keywords: Bond Markets, Financial System Reform, Japan, X-DOI: 10.1080/1357151032000043348 File-URL: http://www.tandfonline.com/10.1080/1357151032000043348 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:10:y:2003:i:1:p:83-108 Template-Type: ReDIF-Article 1.0 Author-Name: Keith Cowling Author-X-Name-First: Keith Author-X-Name-Last: Cowling Title: America and Japan as Industrial Role Models. Reflections on Michael H. Best, The New Competitive Advantage: The Renewal of American Industry Abstract: Many in the economics profession have a deep suspicion of industrial policy, and rightly so: but it is typically a suspicion of the efficacy of massive industrial subsidisation of the major corporations by the state. Best points the way to a more creative industrial policy aimed at providing the enabling conditions for rapid entrepreneurial growth, and he is able, as an engineer-economist, to specify what this means in a rapidly changing world. Where we must remain somewhat suspicious is in his willingness to accept that the position of a major corporation as an entrepreneurial firm is unproblematic so long as it adopts the appropriate business model. This shows in his treatment of Intel. Whilst recognizing that the Intel example contains many desirable characteristics associated with dynamic innovation and production, the ultimate congruence between the technological trajectory driven by corporations like Intel and the public interest cannot be taken for granted. Journal: International Journal of the Economics of Business Pages: 109-115 Issue: 1 Volume: 10 Year: 2003 Keywords: Technology Management, American Renaissance, X-DOI: 10.1080/1357151032000043366 File-URL: http://www.tandfonline.com/10.1080/1357151032000043366 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:10:y:2003:i:1:p:109-115 Template-Type: ReDIF-Article 1.0 Author-Name: Stephen Leroy Author-X-Name-First: Stephen Author-X-Name-Last: Leroy Title: Review of Peter Bossaerts, The Paradox of Asset Pricing Abstract: By 'the paradox of asset pricing' Peter Bossaerts refers to his contention that, despite its apparent generality and sophistication, the theory of finance has largely been a failure empirically. Bossaerts reviews the major areas of finance: theory, empirical methods, empirical results and experiments. The explanatory variables for average asset returns suggested by theory - market beta and consumption beta - predict returns less successfully than variables for which the theoretical basis is weak. This reviewer agrees with Bossaerts' assessment. Bossaerts proposes weakening the hypothesis of market efficiency from full rational expectations to efficient learning: agents update priors optimally - that is, according to Bayes' rule - but start with possibly biased priors. He develops ingenious empirical implications of this specification. For example, he shows that under efficient learning, inverse asset returns are fair games going backward in time (under some additional assumptions). Empirical implementation of these tests appear promising. Journal: International Journal of the Economics of Business Pages: 117-126 Issue: 1 Volume: 10 Year: 2003 Keywords: Market Efficiency, Martingales, Experiments, CAPM, Consumption-based Asset Pricing, X-DOI: 10.1080/1357151032000043375 File-URL: http://www.tandfonline.com/10.1080/1357151032000043375 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:10:y:2003:i:1:p:117-126 Template-Type: ReDIF-Article 1.0 Author-Name: H. E. Frech Author-X-Name-First: H. E. Author-X-Name-Last: Frech Title: Introduction Abstract: Journal: International Journal of the Economics of Business Pages: 133-133 Issue: 2 Volume: 10 Year: 2003 Keywords: Gasoline Distribution, Price Discrimination, Uniform Pricing, X-DOI: 10.1080/13571510305066 File-URL: http://www.tandfonline.com/10.1080/13571510305066 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:10:y:2003:i:2:p:133-133 Template-Type: ReDIF-Article 1.0 Author-Name: William Comanor Author-X-Name-First: William Author-X-Name-Last: Comanor Author-Name: Jon Riddle Author-X-Name-First: Jon Author-X-Name-Last: Riddle Title: The Costs of Regulation: Branded Open Supply and Uniform Pricing of Gasoline Abstract: This paper examines recent proposals to alter distribution arrangements for gasoline within California. Specifically, these proposals would permit a company's branded dealer to obtain supplies from any point in its affiliated refiner's distribution network. Furthermore, the prices charged by refiners at each distribution point would be the same for dealers and distributors alike. In this analysis, we consider how the major oil companies would likely react to such changes, and how their expected reactions would affect the prices that California drivers pay for gasoline. For this purpose, we construct an economic model of a hypothetical distribution system that might arise if these proposals were enacted. The primary finding of this study is that imposing uniform prices on the leading refiners in California would lead to higher delivered prices of gasoline, on average, than those found currently. This result follows from the presence of competitive markets in some local markets that would not otherwise exist. By eliminating geographic price discrimination, these proposals would suppress competitive pressures and promote higher prices. Journal: International Journal of the Economics of Business Pages: 135-155 Issue: 2 Volume: 10 Year: 2003 Keywords: Gasoline Distribution, Costs Of Regulation, Price Discrimination And Uniform Pricing Of Gasoline, Branded Open Supply Of Gasoline, X-DOI: 10.1080/13571510305060 File-URL: http://www.tandfonline.com/10.1080/13571510305060 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:10:y:2003:i:2:p:135-155 Template-Type: ReDIF-Article 1.0 Author-Name: Michael Keeley Author-X-Name-First: Michael Author-X-Name-Last: Keeley Author-Name: Kenneth Elzinga Author-X-Name-First: Kenneth Author-X-Name-Last: Elzinga Title: Uniform Gasoline Price Regulation: Consequences for Consumer Welfare Abstract: In this paper, we assess the long-run implications for consumer welfare of proposed uniform gasoline price regulation. Such regulation would allow lessee dealers to ignore the terms of their lease agreements and purchase gasoline at the 'rack' (i.e., a wholesale distribution terminal) or from whomever and wherever they choose (most typically a 'jobber', i.e., an independent distributor). We show that such regulation would harm consumer welfare by raising wholesale and retail prices without benefiting lessee dealers. Prices would increase because the proposed regulation would prohibit efficient pricing that reflects differences in costs and demand that vary by geographic area and by type of distribution. We also show that even under the assumption that price differences result solely from price discrimination, uniform price regulation will not necessarily benefit consumers or all lessee dealers. Journal: International Journal of the Economics of Business Pages: 157-168 Issue: 2 Volume: 10 Year: 2003 Keywords: Gasoline Price Regulation, Uniform Price Regulation, Gasoline Distribution, Open Supply, Rack Price, Dtw Price, X-DOI: 10.1080/13571510305062 File-URL: http://www.tandfonline.com/10.1080/13571510305062 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:10:y:2003:i:2:p:157-168 Template-Type: ReDIF-Article 1.0 Author-Name: German Coloma Author-X-Name-First: German Author-X-Name-Last: Coloma Title: Price Discrimination and Price Dispersion in the Argentine Gasoline Market Abstract: This paper analyses the extent of gasoline price differences among provinces in Argentina during the period 1998-2000, and tries to impute those differences to price discrimination and non-price discrimination causes. It also tries to measure the effects of those differences on quantities and welfare. We conclude that price discrimination exists but it is relatively irrelevant to explain most geographic price differences. We also find that, in this case, eliminating price discrimination would lead to ambiguous changes in welfare, but moving to a uniform price scheme (i.e., preventing all geographic price differences) will almost certainly reduce total surplus. Journal: International Journal of the Economics of Business Pages: 169-178 Issue: 2 Volume: 10 Year: 2003 Keywords: Gasoline Market, Price Discrimination, Argentina, X-DOI: 10.1080/13571510305068 File-URL: http://www.tandfonline.com/10.1080/13571510305068 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:10:y:2003:i:2:p:169-178 Template-Type: ReDIF-Article 1.0 Author-Name: James Langenfeld Author-X-Name-First: James Author-X-Name-Last: Langenfeld Author-Name: Wenqing Li Author-X-Name-First: Wenqing Author-X-Name-Last: Li Author-Name: George Schink Author-X-Name-First: George Author-X-Name-Last: Schink Title: Economic Literature on Price Discrimination and its Application to the Uniform Pricing of Gasoline Abstract: This article summarizes much of the literature on price discrimination, discussing the alterative approaches and the general conclusions on price discrimination's impact on output, prices, and welfare. It applies lessons from the literature to a specific proposal that would eliminate arbitrage in California wholesales gasoline markets, and in effect prevent some forms of price discrimination. It concludes that applying extensions of the existing models to industry data is very important for gaining a better understanding of the implications price discrimination, and the current debate on price dispersion would benefit from such research. Journal: International Journal of the Economics of Business Pages: 179-193 Issue: 2 Volume: 10 Year: 2003 Keywords: Price Discrimination, Uniform Pricing, Gasoline, Oligopolistic Competition, Ricardian Equilibrium, X-DOI: 10.1080/13571510305065 File-URL: http://www.tandfonline.com/10.1080/13571510305065 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:10:y:2003:i:2:p:179-193 Template-Type: ReDIF-Article 1.0 Author-Name: Nigel Driffield Author-X-Name-First: Nigel Author-X-Name-Last: Driffield Author-Name: Christos Ioannidis Author-X-Name-First: Christos Author-X-Name-Last: Ioannidis Author-Name: David Peel Author-X-Name-First: David Author-X-Name-Last: Peel Title: Some Further Empirical Evidence on the Impact of Oil Price Changes on Petrol Prices Abstract: This paper analyses the asymmetries in the response of petrol prices to oil price shocks. We show that previous work, based on the determination of asymmetric responses, can be improved upon by allowing for asymmetries in short term dynamics. The paper shows that a significant determinant of the response of petrol prices to oil price changes, is the extent to which petrol price can be seen to have departed from its long run equilibrium level. Journal: International Journal of the Economics of Business Pages: 195-203 Issue: 2 Volume: 10 Year: 2003 Keywords: Petrol Price, Oil Prices, Asymmetric Adjustment, Non-Linearity, Cointegration, X-DOI: 10.1080/13571510305063 File-URL: http://www.tandfonline.com/10.1080/13571510305063 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:10:y:2003:i:2:p:195-203 Template-Type: ReDIF-Article 1.0 Author-Name: Roger Blair Author-X-Name-First: Roger Author-X-Name-Last: Blair Author-Name: Laura Daugherty Author-X-Name-First: Laura Author-X-Name-Last: Daugherty Title: Florida's Motor Fuel Marketing Practices Act Abstract: This paper examines some of the problems associated with Florida's statutory prohibition of below-cost gasoline pricing. We show some of the difficulties and potential pitfalls that accompany interventionist efforts in the gasoline market. Journal: International Journal of the Economics of Business Pages: 205-212 Issue: 2 Volume: 10 Year: 2003 Keywords: Gasoline Marketing, Below-cost Pricing, Market Intervention, X-DOI: 10.1080/13571510305067 File-URL: http://www.tandfonline.com/10.1080/13571510305067 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:10:y:2003:i:2:p:205-212 Template-Type: ReDIF-Article 1.0 Author-Name: Howard Marvel Author-X-Name-First: Howard Author-X-Name-Last: Marvel Title: On the Economics of Branded Open Supply Abstract: Branded open supply regulations permit gasoline dealers to incur transportation costs to arbitrage price differences among terminal locations. This arbitrage increases the overall cost of transporting gasoline from refinery to consumer by substituting high-cost truck transport for cheap bulk transportation. This paper provides a simple model of how arbitrage can lead either to a less dense terminal network or, in some instances, to a less dense network of dealers than refiners would prefer. Enforceable exclusive supply agreements can increase inventory holding, provide protection against excessive price volatility, and reduce transportation costs. An end to such agreements will likely impair the ability of branded dealers to differentiate themselves from unbranded rivals. Journal: International Journal of the Economics of Business Pages: 213-223 Issue: 2 Volume: 10 Year: 2003 Keywords: Gasoline, Distribution, Inventories, Open Supply, X-DOI: 10.1080/13571510305064 File-URL: http://www.tandfonline.com/10.1080/13571510305064 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:10:y:2003:i:2:p:213-223 Template-Type: ReDIF-Article 1.0 Author-Name: Christopher Taylor Author-X-Name-First: Christopher Author-X-Name-Last: Taylor Author-Name: Jeffrey Fischer Author-X-Name-First: Jeffrey Author-X-Name-Last: Fischer Title: A Review of West Coast Gasoline Pricing and the Impact of Regulations Abstract: There have been numerous proposals for legislating restrictions on vertical supply relationships on the West Coast and elsewhere. However, there has not been a systematic examination of gasoline prices on the West Cost, relative to the rest of the country, to understand the size of possible pricing anomalies. We examine the differences in the price of gasoline on the West Coast and the Gulf Coast both at the rack (wholesale) and retail. We also examine structural factors that have kept average West Coast prices higher than elsewhere, such as the higher costs to produce CARB gasoline and higher opportunity costs to produce conventional gasoline, higher shipping costs, Unocal's patents on CARB gasoline blending, higher taxes, Oregon's ban on self-service gasoline, and higher land costs. While a number of these factors are difficult to quantify, they would appear to explain most or possibly all of the measured difference in average prices. Journal: International Journal of the Economics of Business Pages: 225-243 Issue: 2 Volume: 10 Year: 2003 Keywords: Gasoline Pricing, Industry Study-Gasoline, Regulation, Competition Policy, X-DOI: 10.1080/13571510305061 File-URL: http://www.tandfonline.com/10.1080/13571510305061 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:10:y:2003:i:2:p:225-243 Template-Type: ReDIF-Article 1.0 Author-Name: Peter Nisbet Author-X-Name-First: Peter Author-X-Name-Last: Nisbet Author-Name: Wayne Thomas Author-X-Name-First: Wayne Author-X-Name-Last: Thomas Author-Name: Stuart Barrett Author-X-Name-First: Stuart Author-X-Name-Last: Barrett Title: UK direct investment in the United States: a mode of entry analysis Abstract: This article investigates the reasons underlying the high propensity of UK firms to directly invest in the United States via acquisition and merger. Using a binomial logit model, this study analyses data from 142 firms in five industrial sectors over the period 1984-1994. Together, these sectors account for more than 80% of UK foreign direct investment (FDI) in the sample period. The results highlight the role of diversification in explaining this behaviour. In contrast, the relative lack of evidence to support the role of exchange rates and leverage in influencing the decision to merge/acquire continues to fuel division as to the role of capital market imperfections in determining mode of entry. Journal: International Journal of the Economics of Business Pages: 245-259 Issue: 3 Volume: 10 Year: 2003 Keywords: Foreign Direct Investment, Mode of Entry, X-DOI: 10.1080/1357151032000126229 File-URL: http://www.tandfonline.com/10.1080/1357151032000126229 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:10:y:2003:i:3:p:245-259 Template-Type: ReDIF-Article 1.0 Author-Name: Klaus Gugler Author-X-Name-First: Klaus Author-X-Name-Last: Gugler Title: Corporate governance and investment Abstract: This article contributes in at least three ways to the investment-cash flow literature. First, it finds that the corporate governance environment of a firm affects the relationship between investment and cash flow. Second, it allows for both asymmetric information and managerial discretion explanations for positive investment-cash flow coefficients, thereby overcoming most of the ambiguities in this interpretation. Finally, by using a GMM estimator most of the problems with traditional OLS models are avoided. It is found that family-controlled firms appear to suffer from cash constraints as evidenced by a positive and robust relationship of investment to cash flow. State-controlled firms also exhibit a positive and significant cash flow sensitivity, which we explain by managerial discretion. Journal: International Journal of the Economics of Business Pages: 261-289 Issue: 3 Volume: 10 Year: 2003 Keywords: Corporate Governance, Cash Constraints, Managerial Discretion, Rates of Return, X-DOI: 10.1080/1357151032000126238 File-URL: http://www.tandfonline.com/10.1080/1357151032000126238 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:10:y:2003:i:3:p:261-289 Template-Type: ReDIF-Article 1.0 Author-Name: John Simpson Author-X-Name-First: John Author-X-Name-Last: Simpson Title: Geographic markets in hospital mergers: a case study Abstract: In three recent hospital merger cases, the courts concluded that the merged hospital would be unable to increase price profitably because of competition from distant hospitals. In reaching this conclusion, the courts found the following: hospitals earn high margins on the last patients that they serve; given these high margins, a small price increase would be unprofitable if even a relatively small percentage of patients switched to other hospitals; many of the merging hospitals' patients live in 'contestable' zip codes, where a large percentage of patients already use other hospitals; a price increase at the merging hospitals would prompt a large number of these patients to switch to other hospitals; and this amount of switching would make the price increase unprofitable. This article argues that the courts in these cases erred in accepting the defendants' argument that switching by patients living in 'contestable' zip codes would make a price increase at the merging hospitals unprofitable. Specifically, this article examines the behavior of patients following a merger similar to those analyzed by these courts and finds that a large price increase prompted little switching by patients living in 'contestable' zip codes. Journal: International Journal of the Economics of Business Pages: 291-303 Issue: 3 Volume: 10 Year: 2003 Keywords: Hospital Mergers, Geographic Markets, X-DOI: 10.1080/1357151032000126247 File-URL: http://www.tandfonline.com/10.1080/1357151032000126247 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:10:y:2003:i:3:p:291-303 Template-Type: ReDIF-Article 1.0 Author-Name: Robert Webb Author-X-Name-First: Robert Author-X-Name-Last: Webb Title: Levels of efficiency in UK retail banks: a DEA window analysis Abstract: This article utilizes DEA window analysis in order to investigate the relative efficiency levels of large UK retail banks during the period of transition 1982-1995. It finds that for the entire sample, the mean inefficiency levels are low in comparison to past studies, that the overall long run average efficiency trend is falling and that all banks in the study show reducing levels of efficiency over the entire time period. It then goes on to disaggregate efficiency into scale and pure technical efficiency and finds that: (1) scale inefficiencies dominate pure technical inefficiencies; (2) less big banks are more likely to report technical inefficiency and (3) during the 1990s banks with asset levels over £105bn suffer decreasing returns to scale Journal: International Journal of the Economics of Business Pages: 305-322 Issue: 3 Volume: 10 Year: 2003 Keywords: UK Banking, Efficiency, DEA, Window Analysis, X-DOI: 10.1080/1357151032000126256 File-URL: http://www.tandfonline.com/10.1080/1357151032000126256 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:10:y:2003:i:3:p:305-322 Template-Type: ReDIF-Article 1.0 Author-Name: Charles Zech Author-X-Name-First: Charles Author-X-Name-Last: Zech Title: Understanding denominational structures: churches as franchise organizations Abstract: One of the most complex, yet least-analyzed, organizational relationships is that between a religious denomination and its member congregations. This study maintains that denominational-congregational relationships in US Christian churches can be informed by the franchise model of organizations. It is argued that it is possible to envision a continuum of church organizational structures, ranging from a branch office, through various forms of franchise arrangements (including company owned, business format, and trademark franchises) to freestanding entrepreneurial units. By studying those situations where the franchise model explains denominational behavior, and contrasting them with those situations where the franchise model is not a good fit, we can learn more about denominational structures. Journal: International Journal of the Economics of Business Pages: 323-335 Issue: 3 Volume: 10 Year: 2003 Keywords: Franchise, Church, Agency, X-DOI: 10.1080/1357151032000126265 File-URL: http://www.tandfonline.com/10.1080/1357151032000126265 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:10:y:2003:i:3:p:323-335 Template-Type: ReDIF-Article 1.0 Author-Name: Cesaltina Pacheco Pires Author-X-Name-First: Cesaltina Pacheco Author-X-Name-Last: Pires Author-Name: Duarte Brito Author-X-Name-First: Duarte Author-X-Name-Last: Brito Title: Is there a 'change in efficiency theory'? Abstract: A standard result in oligopoly models is that the more efficient firms have larger market shares. The main question being answered in this paper is: 'if a firm increases (decreases) its relative efficiency does it increase (decrease) its market share?'. We show that, in two widely used models where more efficient firms have larger equilibrium market shares, it is possible to have a firm getting relatively less (more) efficient than its rivals and, at the same time, increasing (decreasing) its market share. Journal: International Journal of the Economics of Business Pages: 337-345 Issue: 3 Volume: 10 Year: 2003 Keywords: Efficiency Hypothesis, Market Share, Dominant Firm, X-DOI: 10.1080/1357151032000126274 File-URL: http://www.tandfonline.com/10.1080/1357151032000126274 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:10:y:2003:i:3:p:337-345 Template-Type: ReDIF-Article 1.0 Author-Name: Dennis Halcoussis Author-X-Name-First: Dennis Author-X-Name-Last: Halcoussis Author-Name: Anton Lowenberg Author-X-Name-First: Anton Author-X-Name-Last: Lowenberg Title: The quantity and quality of radio broadcasting: are small markets underprovided? Abstract: Small radio markets are characterized by less format variety and lower listening shares than larger markets. It is frequently argued that lack of format variety causes low listenership and that small markets consequently are underserved by commercial radio. However, if format variety is treated as endogenous, then the relatively low numbers of formats available in small markets might reflect underlying taste or lifestyle attributes rather than market failure. We argue that residents of smaller towns actually enjoy higher quality commercial broadcasts than their counterparts in large cities because radio stations in small markets play fewer commercials than big-city stations, ceteris paribus. To test this hypothesis we develop a measure of the average quantity of commercials played per station in each market area. Our findings confirm that listeners in small markets benefit from higher quality radio services than listeners in large markets, if high quality is defined as fewer commercial interruptions. Journal: International Journal of the Economics of Business Pages: 347-357 Issue: 3 Volume: 10 Year: 2003 Keywords: Radio Broadcasting, Public Goods, Market Size, X-DOI: 10.1080/1357151032000126283 File-URL: http://www.tandfonline.com/10.1080/1357151032000126283 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:10:y:2003:i:3:p:347-357 Template-Type: ReDIF-Article 1.0 Author-Name: George Ford Author-X-Name-First: George Author-X-Name-Last: Ford Author-Name: Barry Haworth Author-X-Name-First: Barry Author-X-Name-Last: Haworth Author-Name: Audrey Kline Author-X-Name-First: Audrey Author-X-Name-Last: Kline Title: Discrimination and minority ownership in radio broadcasting Abstract: Minority preferences in the broadcasting industry date to the early 1970s when the Federal Communications Commission (FCC) developed programs to encourage minority ownership of radio stations. In this article, one particular justification for minority preferences in radio broadcasting is examined. Specifically, it is evaluated whether or not minority-owned radio stations experience a revenue penalty simply because they are minority owned. Evidence of such discrimination may support minority preferences in radio broadcasting under the more stringent legal standard for minority preferences established by the Supreme Court decision of Adarand v. Pena. No evidence of discrimination in the radio industry is found, at least discrimination that would be detected by a revenue handicap for minority-owned stations. Journal: International Journal of the Economics of Business Pages: 359-371 Issue: 3 Volume: 10 Year: 2003 Keywords: Broadcasting, Discrimination, Communications, X-DOI: 10.1080/1357151032000126292 File-URL: http://www.tandfonline.com/10.1080/1357151032000126292 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:10:y:2003:i:3:p:359-371 Template-Type: ReDIF-Article 1.0 Author-Name: Stephen Law Author-X-Name-First: Stephen Author-X-Name-Last: Law Title: Inter-temporal Tie-ins: A Case for Tying Intellectual Property Through Licensing Abstract: Hybrid licences tie trade secret rights (which have no fixed expiration) to related patent rights (which expire). Although level royalty hybrid licences, which charge a single royalty for both rights, have been prohibited, it can be shown that infinite-term licensing (ITL) for patent rights may be better than a limited-term patent, when returns to the licensor are fixed. This article explains hybrid licensing as a means of privately implementing the efficient ITL outcome when returns to the licensor are constrained but not necessarily fixed, without requiring a change in the length of the patent term. Journal: International Journal of the Economics of Business Pages: 3-26 Issue: 1 Volume: 11 Year: 2004 Keywords: Licensing, Hybrid Licensing, Intellectual Property Rights, Patents, Trade Secrets, Tying, K11, K21, L42, X-DOI: 10.1080/1357151032000172200 File-URL: http://www.tandfonline.com/10.1080/1357151032000172200 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:11:y:2004:i:1:p:3-26 Template-Type: ReDIF-Article 1.0 Author-Name: Harry Bloch Author-X-Name-First: Harry Author-X-Name-Last: Bloch Author-Name: Jo Voola Author-X-Name-First: Jo Author-X-Name-Last: Voola Title: Strategic Responses to Advances in Seismic Technology in the Petroleum Industry Abstract: The world petroleum industry has been revolutionized by a change in exploration technology from two-dimensional (2D) to three-dimensional (3D) seismic mapping. One of the main effects of the newer technology has been to decrease the cost of finding oil, particularly in offshore fields. We examine the impact of the new technology on the exploration activities of the major international petroleum companies and find that they have aggressively increased petroleum exploration expenditures. As a result, we suggest that the companies have achieved a prisoner's dilemma outcome, where they are collectively worse off in terms of profits, providing a possible explanation for the recent wave of large-scale mergers in the industry. Journal: International Journal of the Economics of Business Pages: 27-36 Issue: 1 Volume: 11 Year: 2004 Keywords: Petroleum Industry, Exploration Expenditures, Oligopoly, Strategic Behaviour, JEL Classifications: l71, O32, X-DOI: 10.1080/1357151032000172219 File-URL: http://www.tandfonline.com/10.1080/1357151032000172219 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:11:y:2004:i:1:p:27-36 Template-Type: ReDIF-Article 1.0 Author-Name: Caroline Elliott Author-X-Name-First: Caroline Author-X-Name-Last: Elliott Title: Vertical Product Differentiation and Advertising Abstract: A duopoly model is developed in which firms' strategic variables include brand quality, the number of distinct market segments to enter and price. Informative advertising is used to overcome consumer ignorance about brands. In contrast to many existing models in which firms engage in price competition, the subgame perfect equilibria of the game are not characterised by the production of vertically differentiated products. Further, whilst the firms typically produce identical high quality products, in some circumstances the production of homogeneous low quality brands can be an equilibrium strategy. Journal: International Journal of the Economics of Business Pages: 37-53 Issue: 1 Volume: 11 Year: 2004 Keywords: Product Differentiation, Advertising, Duopoly, JEL Classifications: C7, D8, L1, X-DOI: 10.1080/1357151032000172228 File-URL: http://www.tandfonline.com/10.1080/1357151032000172228 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:11:y:2004:i:1:p:37-53 Template-Type: ReDIF-Article 1.0 Author-Name: Stephen Shmanske Author-X-Name-First: Stephen Author-X-Name-Last: Shmanske Title: Market Preemption and Entry Deterrence: Evidence from the Golf Course Industry Abstract: The population in a given geographical area has to be large enough before the area can support the entry of a golf course. The required amount of population will be higher if costs are higher, or if the underlying demand to golf by residents is lower, or if there is more preexisting competition from incumbent golf courses. If incumbent golf courses undertake entry-deterring strategies, either explicitly or implicitly, the required population will be higher still. If population is expected to grow quickly, then the amount of population required by the entry date could be lower. These effects are measured and analyzed in this empirical study of the entry of 104 golf courses in the greater San Francisco Bay Area between 1893 and 2001. Journal: International Journal of the Economics of Business Pages: 55-68 Issue: 1 Volume: 11 Year: 2004 Keywords: Preemptive Entry, Entry Deterrence, Golf Course Economics, Subsidized Pricing, Municipal Golf, Privatization, L11, L33, L83, D43, X-DOI: 10.1080/1357151032000172237 File-URL: http://www.tandfonline.com/10.1080/1357151032000172237 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:11:y:2004:i:1:p:55-68 Template-Type: ReDIF-Article 1.0 Author-Name: Paul Clyde Author-X-Name-First: Paul Author-X-Name-Last: Clyde Author-Name: James Reitzes Author-X-Name-First: James Author-X-Name-Last: Reitzes Title: Can Mergers to Monopoly, Price Fixing, and Market-Division Agreements Raise Welfare? Abstract: Naked market division, price fixing agreements and mergers which result in dominant positions have long been opposed by the courts and the government because of the high likelihood that they will result in a reduction in output and an increase in price. We show that the opposite may be true if the market is characterized by marketing spillovers. When marketing investment is required to educate consumers about the general capabilities or qualities of a product, marketing efforts by one producer will benefit rival producers. A theoretical model of these types of markets shows that marketing spillovers can forestall entry altogether or force incumbent firms to engage in 'limit marketing' that leaves the market underserved from a welfare-maximizing perspective. Under these circumstances, market output and social welfare are potentially raised not only through horizontal agreements among competitors, but also through cost-raising strategies and commitments to predatory behavior by incumbent firms. Journal: International Journal of the Economics of Business Pages: 69-90 Issue: 1 Volume: 11 Year: 2004 Keywords: Monopoly, Spillovers, Price Fixing, Market Division, Antitrust, L12, L13, L41, K21, X-DOI: 10.1080/1357151032000172246 File-URL: http://www.tandfonline.com/10.1080/1357151032000172246 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:11:y:2004:i:1:p:69-90 Template-Type: ReDIF-Article 1.0 Author-Name: Simon Ashby Author-X-Name-First: Simon Author-X-Name-Last: Ashby Author-Name: Swee-Hoon Chuah Author-X-Name-First: Swee-Hoon Author-X-Name-Last: Chuah Author-Name: Robert Hoffmann Author-X-Name-First: Robert Author-X-Name-Last: Hoffmann Title: Industry Self-Regulation: A Game-Theoretic Typology of Strategic Voluntary Compliance Abstract: We analyse the possibility of successful industry self-regulation in terms of the strategic interactions between industry members and government. In particular, this article presents a game-theoretic typology of generic self-regulatory scenarios and evaluates these in terms of the resulting likelihood of collective compliance. We discuss the advertising, press and life insurance industries in the UK as examples of the scenarios. Conclusions for corporate and public policy are offered. Journal: International Journal of the Economics of Business Pages: 91-106 Issue: 1 Volume: 11 Year: 2004 Keywords: Industry Self-regulation, Voluntary Compliance, Game Theory, Public Goods, Collective Action, JEL Classifications: C72, D7, H11, K20, L51, X-DOI: 10.1080/1357151032000172255 File-URL: http://www.tandfonline.com/10.1080/1357151032000172255 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:11:y:2004:i:1:p:91-106 Template-Type: ReDIF-Article 1.0 Author-Name: Switgard Feuerstein Author-X-Name-First: Switgard Author-X-Name-Last: Feuerstein Title: Collusion with Fluctuating Exchange Rates: A Note Abstract: A fluctuating exchange rate has an impact on how firms value a given stream of profits, thereby affecting the ability of an international oligopoly to collude implicitly. The conversion effect arises because the foreign firm maximizes its profits earned on the home market measured in foreign currency. The discount factor effect captures the fact that exchange rate fluctuations are connected with fluctuations in the interest rates, thereby changing the present value of future profits. Although each effect refers to only one of the firms, considered together they have an identical impact on the home and the foreign firm. If the foreign country is small, the conversion effect and the discount factor effect exactly offset each other. Otherwise, the effects analysed make collusion more difficult to sustain. Journal: International Journal of the Economics of Business Pages: 107-116 Issue: 1 Volume: 11 Year: 2004 Keywords: Implicit Collusion, International Oligopoly, Fluctuating Exchange Rate, D43, F12, L13, X-DOI: 10.1080/1357151032000172264 File-URL: http://www.tandfonline.com/10.1080/1357151032000172264 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:11:y:2004:i:1:p:107-116 Template-Type: ReDIF-Article 1.0 Author-Name: Stephen Meier Author-X-Name-First: Stephen Author-X-Name-Last: Meier Author-Name: Bruno Frey Author-X-Name-First: Bruno Author-X-Name-Last: Frey Title: Do Business Students Make Good Citizens? Abstract: Business students are often portrayed as behaving too egoistically. The critics call for more social responsibility and good citizenship behavior by business students. We present evidence of pro-social behavior of business students. With a large panel data set for real-life behavior at the University of Zurich, two specific hypotheses are tested: do selfish students select into business studies or does the training in business studies negatively indoctrinate students? The evidence points to a selection effect. Business education does not seem to change the citizenship behavior of business students. Journal: International Journal of the Economics of Business Pages: 141-163 Issue: 2 Volume: 11 Year: 2004 Keywords: Business Students, Public Good, Giving Behavior, Education, Selection, X-DOI: 10.1080/1357151042000222492 File-URL: http://www.tandfonline.com/10.1080/1357151042000222492 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:11:y:2004:i:2:p:141-163 Template-Type: ReDIF-Article 1.0 Author-Name: Frankling Mixon Author-X-Name-First: Frankling Author-X-Name-Last: Mixon Author-Name: Len Trevino Author-X-Name-First: Len Author-X-Name-Last: Trevino Author-Name: Angel Bales Author-X-Name-First: Angel Author-X-Name-Last: Bales Title: Just-below Princing Strategies in the Music Industry: Empirical Evidence Abstract: Journal: International Journal of the Economics of Business Pages: 165-174 Issue: 2 Volume: 11 Year: 2004 Keywords: Just-below Pricing, Pricing Strategies, Price Theory, X-DOI: 10.1080/751245213 File-URL: http://www.tandfonline.com/10.1080/751245213 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:11:y:2004:i:2:p:165-174 Template-Type: ReDIF-Article 1.0 Author-Name: Franz Wirl Author-X-Name-First: Franz Author-X-Name-Last: Wirl Title: Inter-Divisional Contracts Abstract: This article considers distributed and hierarchical decisions where the actions of two units of a firm (divisions, brands, departments) lead to externalities. For example, brand 1 plans to offer a new product that could have adverse effects on products from brand 2. Each unit has private information concerning the benefit ('1') and the harm ('2'). The second unit may ask the executives to intervene by either quantitative or financial interventions. The executives lack the private information and thus impose either a penalty or a standard, probably based on some average values. The surprising feature is that the resulting contracts (offered by '2') deviate substantially from the conventional contracts. First, considering standards, countervailing incentives - 'no distortion' at both ends - are optimal. A penalty leads to even more complex arrangements covering four different kinds of contracts including 'no distortion at the top', 'no distortion at the bottom', 'no distortion at an interior point', and a boundary solution (duplicating the executive's intervention). A comparison reveals that the standard outperforms the penalty. Journal: International Journal of the Economics of Business Pages: 197-216 Issue: 2 Volume: 11 Year: 2004 Keywords: Intra-Firm Contracts, Externalities, Organizational Instruments, X-DOI: 10.1080/1357151042000222828 File-URL: http://www.tandfonline.com/10.1080/1357151042000222828 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:11:y:2004:i:2:p:197-216 Template-Type: ReDIF-Article 1.0 Author-Name: Bruno Viani Author-X-Name-First: Bruno Author-X-Name-Last: Viani Title: Private Control, Competion, and the Performance of Telephone Firms in Less Developed Countries Abstract: Journal: International Journal of the Economics of Business Pages: 217-240 Issue: 2 Volume: 11 Year: 2004 Keywords: Telecommunications, Privatization, Competition, Less Developed Countries, X-DOI: 10.1080/751245214 File-URL: http://www.tandfonline.com/10.1080/751245214 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:11:y:2004:i:2:p:217-240 Template-Type: ReDIF-Article 1.0 Author-Name: Seth Norton Author-X-Name-First: Seth Author-X-Name-Last: Norton Title: Information Processing in the Theory of the Firm: The Rise of General Motors Abstract: This article reviews alternative theories of the firm and their relationship to the spectacular rise of General Motors during the 1920s. The article examines the degree of synchronization of GM's sales to dealers with dealers' sales to final consumers, both before and after Alfred Sloan's forecasting and information processing reforms. It also examines the link between the synchronization and GM's performance during the period. The data document a dramatic improvement in GM's information processing capabilities and a direct link between those capabilities and GM's profitability. Journal: International Journal of the Economics of Business Pages: 123-140 Issue: 2 Volume: 11 Year: 2004 Keywords: General Motors, Firms, Information, Forecasting, Performance, Vertical Integration, X-DOI: 10.1080/1357151042000222483 File-URL: http://www.tandfonline.com/10.1080/1357151042000222483 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:11:y:2004:i:2:p:123-140 Template-Type: ReDIF-Article 1.0 Author-Name: Peter Kotzian Author-X-Name-First: Peter Author-X-Name-Last: Kotzian Title: Pharmaceutical R&D in the Setting of Incomplete European Integration Abstract: The article analyzes the consequences of national price regulation for newly developed medicines in the setting of a partially integrated EU-wide market for pharmaceuticals and strategic entry-decisions by pharmaceutical enterprises. EU member states can be seen as jointly contributing to financing R&D conducted by the pharmaceutical industry. The article derives and compares the welfare implications of three regimes to organize this kind of collective action. First, a situation in which each government of a EU member state grants the price for a medicine it thinks appropriate, oriented solely at domestic considerations, but there is no spill over of prices among national markets. Second, the current situation in the EU of introduced tradability for medicines while price setting remained a national competence. Third, the possible situation of a centralized price setting procedure leading to a single price with compensations for those member states unable to pay this European price. The article argues that the process of EU integration in pharmaceuticals has left an optimal state without reaching another optimal one, but is instead stuck in a state of diminished welfare for all parties concerned. Journal: International Journal of the Economics of Business Pages: 175-195 Issue: 2 Volume: 11 Year: 2004 Keywords: European Integration, Pharmaceutical R&D, Welfare Effects, Parallel Trade, X-DOI: 10.1080/1357151042000222519 File-URL: http://www.tandfonline.com/10.1080/1357151042000222519 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:11:y:2004:i:2:p:175-195 Template-Type: ReDIF-Article 1.0 Author-Name: Jorg Borrmann Author-X-Name-First: Jorg Author-X-Name-Last: Borrmann Author-Name: Klaus Zauner Author-X-Name-First: Klaus Author-X-Name-Last: Zauner Title: Cross-subsidization when Firms Are Allowed to make Non-zero Profits Abstract: Faulhaber's (1975) concept of cross-subsidization is of crucial importance for regulatory activities. Its basic idea that customers demanding a good should not pay more than they would if they "stood alone" is a fundamental fairness rule which can be applied by independent regulators in infrastructure industries. In reality, however, regulators frequently do not restrict the pricing policy of a regulated firm to zero profits due to the influence of politicians and pressure groups or, in the case of state-owned firms, because of a mandate to generate profits to reduce the state's budget deficit. They approve of prices generating positive economic profits. In this case, Faulhaber's (1975) concept is not applicable. We develop a less restrictive concept of cross-subsidization which can be applied when regulators are not independent and allow firms to make non-zero profits. We generalize the usual stand-alone and incremental cost tests to the case when regulated firms make positive profits, and provide an equivalence result for the (generalized) stand-alone cost (GSAC) test and the (generalized) incremental cost (GIC) test. Journal: International Journal of the Economics of Business Pages: 241-247 Issue: 2 Volume: 11 Year: 2004 Keywords: Co-operative Game Theory, Cost Allocation, Cross-subsidization, Incremental Cost Test, Stand-alone Cost test, X-DOI: 10.1080/1357151042000222546 File-URL: http://www.tandfonline.com/10.1080/1357151042000222546 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:11:y:2004:i:2:p:241-247 Template-Type: ReDIF-Article 1.0 Author-Name: Werner Bonte Author-X-Name-First: Werner Author-X-Name-Last: Bonte Title: Innovation and employment growth in industrial clusters: evidence from aeronautical firms in Germany Abstract: This article investigates the impact of various agglomeration forces on employment and innovation for a sample of aeronautical cluster firms in Northern Germany and a control group of geographically dispersed aeronautical firms in other German regions. The findings suggest that employment growth is positively affected by labor market pooling but this effect is not cluster-specific. The firms' probability of innovating is positively influenced by knowledge flows from proximate scientific institutions and public information sources as well as demanding local customers. However, only the effect of demanding customers is cluster-specific. Journal: International Journal of the Economics of Business Pages: 259-278 Issue: 3 Volume: 11 Year: 2004 Keywords: Industrial Clusters, Innovation, Firm Performance, Aerospace, JEL Classifications: L62, O30, R12, X-DOI: 10.1080/1357151042000286393 File-URL: http://www.tandfonline.com/10.1080/1357151042000286393 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:11:y:2004:i:3:p:259-278 Template-Type: ReDIF-Article 1.0 Author-Name: Donald Lacombe Author-X-Name-First: Donald Author-X-Name-Last: Lacombe Author-Name: Harold Winter Author-X-Name-First: Harold Author-X-Name-Last: Winter Title: In or out? explaining state shares of the tobacco Master Settlement Agreement Abstract: In 1998, 46 states were involved in a Master Settlement Agreement (MSA) with the tobacco industry. The other four states settled on their own. Our goal is to answer a counter factual question: how would these four states have fared had they been included in the MSA? We use data from Viscusi (2002) to explain settlement shares for states participating in the 1998 tobacco MSA, and to predict settlement shares for the four nonparticipating states. We find that two nonparticipating states (Minnesota and Mississippi) may have fared substantially worse had they been included in the MSA. Journal: International Journal of the Economics of Business Pages: 279-285 Issue: 3 Volume: 11 Year: 2004 Keywords: Tobacco Industry, Tobacco Master Settlement Agreement, JEL Classifications: L6, K3, X-DOI: 10.1080/1357151042000286401 File-URL: http://www.tandfonline.com/10.1080/1357151042000286401 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:11:y:2004:i:3:p:279-285 Template-Type: ReDIF-Article 1.0 Author-Name: Nigel Wadeson Author-X-Name-First: Nigel Author-X-Name-Last: Wadeson Title: Multi-dimensional search: choosing the right path Abstract: This article seeks to analyse processes of decision-making where multiple costly observations can be made about individual decision outcomes. It presents a simple model of a decision in which information is collected sequentially. Most economic models of sequential collection of costly information have focused on price-search. It is argued that this is a very specialized type of search. This has led such models to focus on the issue of when search should stop. The article attempts to show how the principles of sequential search can be applied to other types of problems, such as innovation, where the choice of path is also of central concern. Journal: International Journal of the Economics of Business Pages: 287-301 Issue: 3 Volume: 11 Year: 2004 Keywords: Information Logistics, Search, Decision, JEL Classification: D83, D21, D23, L20, X-DOI: 10.1080/1357151042000286410 File-URL: http://www.tandfonline.com/10.1080/1357151042000286410 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:11:y:2004:i:3:p:287-301 Template-Type: ReDIF-Article 1.0 Author-Name: Pedro Pereira Author-X-Name-First: Pedro Author-X-Name-Last: Pereira Title: Some implications of search and switching costs for the price dynamics of electronic markets Abstract: This article develops a model, based on switching costs and technological uncertainty, which explains some aspects of the price dynamics of e-commerce. Switching costs and intertemporal cost correlation lock-in consumers. Firms initially charge low prices to build a customer base. If firms fail to reduce costs, and reservation prices are low, firms exit the industry. Over time, prices increase if no exit occurs, and decrease if exit occurs. Prices may also decrease over time, if the proportion of low search cost consumers increases. Journal: International Journal of the Economics of Business Pages: 303-327 Issue: 3 Volume: 11 Year: 2004 Keywords: E-Commerce, Search, Switching Costs, Learning, Industry Evolution, JEL Classification: D43, D83, L11, L13, L81, O31, O33, X-DOI: 10.1080/1357151042000286429 File-URL: http://www.tandfonline.com/10.1080/1357151042000286429 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:11:y:2004:i:3:p:303-327 Template-Type: ReDIF-Article 1.0 Author-Name: Antonis Demos Author-X-Name-First: Antonis Author-X-Name-Last: Demos Author-Name: Fragkiskos Filippaios Author-X-Name-First: Fragkiskos Author-X-Name-Last: Filippaios Author-Name: Marina Papanastassiou Author-X-Name-First: Marina Author-X-Name-Last: Papanastassiou Title: An event study analysis of outward foreign direct investment: the case of Greece Abstract: The purpose of this article is twofold. Firstly, by applying the event study methodology, it provides detailed and updated evidence on the value generating effect of different modes of foreign direct investment (FDI) entry. Secondly, this is the first paper to empirically evaluate the impact of FDI on the stock returns of Greek firms participating in the Athens Stock Exchange (ASE). In the case of Greece, the cross-section analysis revealed that successful outward FDI projects tend to be located in developed countries, performed in a high-technology sector and linked to horizontal integration. Journal: International Journal of the Economics of Business Pages: 329-348 Issue: 3 Volume: 11 Year: 2004 Keywords: Multinational Corporations (MNCs), Foreign Direct Investment, Mergers & Acquisitions, Event Study, JEL Classifications: F23, F30, G14, G34, X-DOI: 10.1080/1357151042000286438 File-URL: http://www.tandfonline.com/10.1080/1357151042000286438 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:11:y:2004:i:3:p:329-348 Template-Type: ReDIF-Article 1.0 Author-Name: Mark Rogers Author-X-Name-First: Mark Author-X-Name-Last: Rogers Title: Competition, agency and productivity Abstract: This article tests a set of hypotheses relating to agency and Schumpeterian views on how competition affects performance. A survey data set of Australian workplaces is used, with the change in labour productivity as the dependent variable. The results show strong support for the idea that intense competition raises productivity growth in managerial workplaces, but not in non-managerial workplaces (i.e. where the principal owner also works). Testing the agency theories in more detail, we find no evidence that the number of competitors, the price elasticity of demand or a proxy for bankruptcy (pre-tax losses) are the mechanisms behind the process. For non-managerial workplaces the results indicate support for the idea that greater demand uncertainty reduces productivity growth. In contrast, for managerial workplaces, greater demand uncertainty tends to raise productivity growth. Journal: International Journal of the Economics of Business Pages: 349-367 Issue: 3 Volume: 11 Year: 2004 Keywords: Competition, Agency, Schumpeterian, Productivity, JEL Classification: L1, X-DOI: 10.1080/1357151042000286447 File-URL: http://www.tandfonline.com/10.1080/1357151042000286447 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:11:y:2004:i:3:p:349-367 Template-Type: ReDIF-Article 1.0 Author-Name: Peter Kuhn Author-X-Name-First: Peter Author-X-Name-Last: Kuhn Title: Is monopsony the right way to model labor markets? a review of Alan Manning's monopsony in motion Abstract: Manning proposes that the 'traditional' monopsony model, once regarded as an analytical curiosity, be adopted as a widely-applicable description of firms' behavior in labor markets. In Manning's view, search frictions in the labor market generate upward-sloping labor supply curves to individual firms even when firms are small relative to the labor market. Thus a model of 'monopsonistic competition' best characterizes labor markets as a whole. Manning's book applies this new perspective to a wide range of 'traditional' topics in labor economics, ranging from labor supply, to gender discrimination, to the effects of trade unions on wages and employment, generating refreshing new insights in each case. Ultimately, however, this reader was left unconvinced that monopsony is the 'right' model of most firms' labor market behavior in the long run. Journal: International Journal of the Economics of Business Pages: 369-378 Issue: 3 Volume: 11 Year: 2004 Keywords: Monopsony, Search, Labor Markets, Wages, Employment, JEL Classification: J00, J42, J63, X-DOI: 10.1080/1357151042000286456 File-URL: http://www.tandfonline.com/10.1080/1357151042000286456 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:11:y:2004:i:3:p:369-378 Template-Type: ReDIF-Article 1.0 Author-Name: Guest Editors Author-X-Name-First: Guest Author-X-Name-Last: Editors Author-Name: Ana Teresa Tavares Author-X-Name-First: Ana Teresa Author-X-Name-Last: Tavares Author-Name: Stephen Young Author-X-Name-First: Stephen Author-X-Name-Last: Young Title: FDI and multinationals: patterns, impacts and policies Abstract: Journal: International Journal of the Economics of Business Pages: 3-16 Issue: 1 Volume: 12 Year: 2005 X-DOI: 10.1080/1357151042000323148 File-URL: http://www.tandfonline.com/10.1080/1357151042000323148 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:12:y:2005:i:1:p:3-16 Template-Type: ReDIF-Article 1.0 Author-Name: Koen De Backer Author-X-Name-First: Koen Author-X-Name-Last: De Backer Author-Name: Leo Sleuwaegen Author-X-Name-First: Leo Author-X-Name-Last: Sleuwaegen Title: A closer look at the productivity advantage of foreign affiliates Abstract: In analyzing firm productivity in Belgium, this article shows empirically that both scale and efficiency contribute positively to the typical productivity advantage of foreign affiliates. Stochastic production frontier estimation using the translog functional form indicates that foreign subsidiaries exploit economies of scale more fully and benefit from better (transferred) technological capabilities than Belgian national firms (i.e., Belgian owned firms without subsidiaries abroad). Belgian multinational enterprises (MNEs), i.e., Belgian owned firms with at least one subsidiary abroad, resemble foreign-based MNEs in possessing specific technological advantages. While the increasing globalization has facilitated the realization of scale effects across borders, this article shows that the development of technological capabilities/advantages is still a prerequisite for MNEs to compete successfully abroad. Journal: International Journal of the Economics of Business Pages: 17-34 Issue: 1 Volume: 12 Year: 2005 Keywords: Multinational Firms, Productivity, Efficiency, JEL Classification: F23, L10, M20, X-DOI: 10.1080/1357151042000323111 File-URL: http://www.tandfonline.com/10.1080/1357151042000323111 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:12:y:2005:i:1:p:17-34 Template-Type: ReDIF-Article 1.0 Author-Name: Lucia Piscitello Author-X-Name-First: Lucia Author-X-Name-Last: Piscitello Author-Name: Larissa Rabbiosi Author-X-Name-First: Larissa Author-X-Name-Last: Rabbiosi Title: The impact of inward FDI on local companies' labour productivity: evidence from the Italian case Abstract: The article aims to investigate the impact of inward foreign direct investment (FDI) occurring through acquisition upon the local target company' performance, as measured by labour productivity. It relies upon the idea that multinational enterprises (MNEs) act as a device to transfer firm-specific proprietary assets, thus causing their subsidiaries to exhibit better performance than their host country rivals. Specifically, our results show that foreign acquisitions generally increase the local target companies' labour productivity in the medium term after the acquisition. The empirical evidence refers to foreign acquisitions that occurred in Italy in the period 1994-1997. Journal: International Journal of the Economics of Business Pages: 35-51 Issue: 1 Volume: 12 Year: 2005 Keywords: Inward FDI, Acquisitions, Multinational Enterprises, Target Company's Performance, Labour Productivity, JEL Classifications: F20, F23, L25, X-DOI: 10.1080/1357151042000323120 File-URL: http://www.tandfonline.com/10.1080/1357151042000323120 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:12:y:2005:i:1:p:35-51 Template-Type: ReDIF-Article 1.0 Author-Name: Frances Ruane Author-X-Name-First: Frances Author-X-Name-Last: Ruane Author-Name: Ali Uğur Author-X-Name-First: Ali Author-X-Name-Last: Uğur Title: Foreign direct investment and productivity spillovers in Irish manufacturing industry: evidence from plant level panel data Abstract: It is often argued that foreign firms may enhance the productivity of indigenous firms in an economy, through forward or backward linkages. Such externality effects typically are called "productivity spillovers". In terms of foreign direct investment (FDI), Ireland is one of the most globalized economies in the world, having pursued a strategy of promoting investment by foreign companies for over 40 years. This article examines possible productivity spillovers from foreign-owned firms to indigenous firms in the Irish manufacturing sector, using plant-level data on all manufacturing firms for the period 1991-1998. Despite Irish policy commitment to building linkages between foreign and domestic firms, we find only weak evidence of spillovers and this evidence is sensitive to the definition and measurement of foreign presence. Journal: International Journal of the Economics of Business Pages: 53-66 Issue: 1 Volume: 12 Year: 2005 Keywords: Foreign Direct Investment, Irish Manufacturing, Productivity. JEL Classifications: F21, F23, X-DOI: 10.1080/1357151042000323139 File-URL: http://www.tandfonline.com/10.1080/1357151042000323139 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:12:y:2005:i:1:p:53-66 Template-Type: ReDIF-Article 1.0 Author-Name: Frank Barry Author-X-Name-First: Frank Author-X-Name-Last: Barry Author-Name: Holger Gorg Author-X-Name-First: Holger Author-X-Name-Last: Gorg Author-Name: Eric Strobl Author-X-Name-First: Eric Author-X-Name-Last: Strobl Title: Foreign direct investment and wages in domestic firms in Ireland: Productivity spillovers versus labour-market crowding out Abstract: There is a large literature on the positive spillovers frequently thought to be associated with inward foreign direct investment. Aitken et al. (1996) identify several cases, however, where inward FDI appears to have reduced wages in domestic firms. They suggest that this might arise either because foreign firms increase the degree of product-market competition that domestic firms face, or because they poach the best workers from domestic firms. We concentrate on the second effect, arguing that the first is unlikely to arise in the Irish case to which our data pertain. In a theoretical section we show that the labour-market poaching effect cannot generate the results postulated if labour markets are competitive and production functions are of the Cobb-Douglas variety, but that it can arise if production functions display higher elasticities of substitution. In an empirical section based on a sample of larger Irish firms we show that, consistent with our theoretical model, foreign presence has different effects on wages and productivity in domestic exporting and non-exporting establishments. Journal: International Journal of the Economics of Business Pages: 67-84 Issue: 1 Volume: 12 Year: 2005 Keywords: FDI, Spillovers, Labour Market, Crowding Out, JEL Classifications: F23, J23, J31, X-DOI: 10.1080/1357151042000323102 File-URL: http://www.tandfonline.com/10.1080/1357151042000323102 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:12:y:2005:i:1:p:67-84 Template-Type: ReDIF-Article 1.0 Author-Name: Sophia Dimelis Author-X-Name-First: Sophia Author-X-Name-Last: Dimelis Title: Spillovers from foreign direct investment and firm growth: technological, financial and market structure effects Abstract: This article examines spillover effects from inward investment on domestic firm growth in the case of a developed host country. The emphasis is placed on the role of the technological gap between domestic and foreign firms in identifying the importance of technology diffusion from the presence of multinationals. An augmented production function is employed to account for technological, financial and market structure effects. Based on a sample of 2589 manufacturing firms operating in Greece between 1992 and 1997, the analysis provides evidence that the significance of spillovers varies with the relative technological position of domestic firms and is higher in the middle and upper quantiles of the growth distribution. It was estimated that a unit increase in the foreign presence in Greek industry raises output growth by 7% on average, in a five-year period, after controlling for technological differences among firms. This result is consistent with the 'absorptive capacity' hypothesis that the technological capability of the host country relates positively to FDI spillover benefits. Journal: International Journal of the Economics of Business Pages: 85-104 Issue: 1 Volume: 12 Year: 2005 Keywords: Foreign Direct Investment, Growth, Productivity, Spillovers, Technological Gap, Absorptive capacity, JEL Classification: F23, O30, X-DOI: 10.1080/1357151042000323094 File-URL: http://www.tandfonline.com/10.1080/1357151042000323094 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:12:y:2005:i:1:p:85-104 Template-Type: ReDIF-Article 1.0 Author-Name: Lisa De Propris Author-X-Name-First: Lisa Author-X-Name-Last: De Propris Author-Name: Nigel Driffield Author-X-Name-First: Nigel Author-X-Name-Last: Driffield Author-Name: Stefano Menghinello Author-X-Name-First: Stefano Author-X-Name-Last: Menghinello Title: local industrial systems and the location of FDI in Italy Abstract: This article investigates the determinants of foreign direct investment (FDI) location across Italian provinces. Specifically it examines the relationship between industry-specific local industrial systems and the location of inward FDI. This extends previous analysis beyond the mere density of activity, to illustrate the importance of the specific nature of agglomerations in attracting inward investment. The article develops a model of FDI location choice using a unique FDI database stratified by industry and province. The results also suggest that the importance of agglomeration differs between industries, and offers some explanation for this. Journal: International Journal of the Economics of Business Pages: 105-121 Issue: 1 Volume: 12 Year: 2005 Keywords: Local Industrial Systems, Knowledge Sourcing, Agglomeration, Count Data Econometrics, JEL classification: F23, R12, X-DOI: 10.1080/1357151042000323085 File-URL: http://www.tandfonline.com/10.1080/1357151042000323085 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:12:y:2005:i:1:p:105-121 Template-Type: ReDIF-Article 1.0 Author-Name: Juan Duran Author-X-Name-First: Juan Author-X-Name-Last: Duran Author-Name: Fernando Ubeda Author-X-Name-First: Fernando Author-X-Name-Last: Ubeda Title: The investment development path of newly developed countries Abstract: According to foreign direct investment (FDI) path theory, developed countries are grouped into two phases, known as the fourth and fifth phases. Fourth-phase countries (newly developed economies) show a technological and institutional "gap" in comparison with fifth-phase economies, which explains their lesser capacity to generate direct investment. We found that these countries, which were less developed economies in the 1980s, had undergone a deep structural transformation. This transformation encouraged the multinationalization of firms, which is a differentiating element and one outcome of their development process. These results have clear policy implications: the governments of newly developed countries should take steps to increase the endowment of knowledge-intensive assets. The main contribution of this paper is the theoretical reformulation of the fourth phase of the investment development path theory. Journal: International Journal of the Economics of Business Pages: 123-137 Issue: 1 Volume: 12 Year: 2005 Keywords: Investment Development Path, Outward Direct Investment Stock, Inward Direct Investment Stock, Economic Development, Technological Gap, JEL Classifications: F21, F23, F43, X-DOI: 10.1080/1357151042000323076 File-URL: http://www.tandfonline.com/10.1080/1357151042000323076 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:12:y:2005:i:1:p:123-137 Template-Type: ReDIF-Article 1.0 Author-Name: Christian Bellak Author-X-Name-First: Christian Author-X-Name-Last: Bellak Title: Adjustment strategies of multinational enterprises to changing national competitiveness Abstract: This article establishes a link between four combinations of relative firm-specific advantages and comparative advantage and the adjustment strategies of multinational firms. Based on the distribution of firms across advantage combinations, hypotheses on four adjustment strategies are developed: expansion, rationalization, exit and relocation. Upon a detailed analysis of a representative sample of manufacturing firms for 1990-2000, a consistent competitiveness ranking of domestic and foreign firms across industries and over time is derived. The strategies followed by the firms are reflected by the development of employment, value-added and exports. Results show that firms are not distributed entirely in line with comparative advantage, but the dynamic interaction ("match") of location-advantage and firm-specific advantage seems to be decisive. Results also confirm that domestic and foreign firms partly react differently under a given advantage combination. The following principles for location policies are suggested: the empirically measured mismatch of firm capabilities and location advantages determine when direct and indirect measures should be used. The intensity of policy measures should be oriented towards the competitiveness ranking derived. Journal: International Journal of the Economics of Business Pages: 139-162 Issue: 1 Volume: 12 Year: 2005 Keywords: Foreign Direct Investment, Multinational Enterprises, Competitiveness, Manufacturing, Country Study, JEL Classification: F10, F23, H540, X-DOI: 10.1080/1357151042000323067 File-URL: http://www.tandfonline.com/10.1080/1357151042000323067 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:12:y:2005:i:1:p:139-162 Template-Type: ReDIF-Article 1.0 Author-Name: T. Randolph Beard Author-X-Name-First: T. Randolph Author-X-Name-Last: Beard Author-Name: George Ford Author-X-Name-First: George Author-X-Name-Last: Ford Title: Are Unbundled and Self-supplied Telecommunications Switching Substitutes? An Empirical Study Abstract: The Telecommunications Act of 1996 requires incumbent monopoly phone companies to lease elements of their networks to rivals. An important policy question is whether these unbundled elements are substitutes for entry modes that are more facilities-based. In this article, we estimate demand curves for unbundled elements with the goal of assessing cross-price effects between two of the more popular entry modes that differ in the mix of unbundled and self-supplied inputs. As expected, we find downward sloping demand curves for unbundled elements. We also find own-price elasticities in the elastic region of demand. What we do not find is evidence of substitution; we are able to reject the hypothesis of effective substitution between the two entry modes. Journal: International Journal of the Economics of Business Pages: 163-181 Issue: 2 Volume: 12 Year: 2005 Keywords: Telecommunications, Regulation, Utilities, Policy, JEL Classifications: L9, L51, L96, L98, X-DOI: 10.1080/13571510500127139 File-URL: http://www.tandfonline.com/10.1080/13571510500127139 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:12:y:2005:i:2:p:163-181 Template-Type: ReDIF-Article 1.0 Author-Name: Enrico Santarelli Author-X-Name-First: Enrico Author-X-Name-Last: Santarelli Author-Name: Francesca Lotti Author-X-Name-First: Francesca Author-X-Name-Last: Lotti Title: The Survival of Family Firms: The Importance of Control and Family Ties Abstract: The aim of this article is to analyze the survival patterns of a group of family firms which have already spent at least 25 years in the market. To this end, we use the Kaplan-Meier product limit estimator supplemented with qualitative information gathered by direct observation and discussions with entrepreneurs. The main findings are that small family firms which have reached their 30th year in the market face a very high risk of sudden exit, increasing with firm age. Further control carried out by means of interviews with entrepreneurs identifies problems connected with succession as one of the main causes of the decision to close down. Journal: International Journal of the Economics of Business Pages: 183-192 Issue: 2 Volume: 12 Year: 2005 Keywords: Succession, Survival Function, Kaplan-Meier Estimator, Hazard Function, Italy, JEL Classifications: L20, C34, C41, M13, X-DOI: 10.1080/13571510500127246 File-URL: http://www.tandfonline.com/10.1080/13571510500127246 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:12:y:2005:i:2:p:183-192 Template-Type: ReDIF-Article 1.0 Author-Name: Matthias Krakel Author-X-Name-First: Matthias Author-X-Name-Last: Krakel Title: On the Benefits of Withholding Knowledge in Organizations Abstract: Transferring knowledge to an agent makes him more successful or productive, which is beneficial for the principal. However, knowledge transfer also increases the agent's outside option. I identify two reasons for withholding knowledge — to reduce labor costs within a principal-agent relationship, and to weaken the agent in case of a separation. Moreover, the role of synergy is discussed both for building up a principal-agent relationship and for transferring knowledge. While synergy is decisive for knowledge transfer, cooperation between the principal and agent may even take place in the absence of synergy. Furthermore, I analyze whether the principal is more likely to transfer knowledge to a more able or to a less able agent. Finally, the advantages and disadvantages of a noncompetition clause are briefly discussed. Journal: International Journal of the Economics of Business Pages: 193-209 Issue: 2 Volume: 12 Year: 2005 Keywords: Competition, Incentives, Knowledge Transfer, Limited Liability, Organizations, JEL Classifications: J3, M5, X-DOI: 10.1080/13571510500127493 File-URL: http://www.tandfonline.com/10.1080/13571510500127493 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:12:y:2005:i:2:p:193-209 Template-Type: ReDIF-Article 1.0 Author-Name: Keizo Mizuno Author-X-Name-First: Keizo Author-X-Name-Last: Mizuno Title: Pre-commitment to an Exclusive Contract under Partial Regulation Abstract: This article examines the welfare implications of an incumbent's pre-commitment to an exclusive contract in a partially regulated environment. It shows that the contract offered to customers in a competitive market makes the first-best allocation infeasible in the partially regulated environment. However, the contract can have a welfare-enhancing property through the exclusion of inefficient entry or cream skimming in the competitive market, especially when the regulated price ceiling is low and the incumbent's technology is characterized by a large proportion of common cost in total cost. Journal: International Journal of the Economics of Business Pages: 211-223 Issue: 2 Volume: 12 Year: 2005 Keywords: Pre-commitment, Exclusive Contract, Partial Regulation, Cream Skimming, JEL classifications: L43, L51, L97, X-DOI: 10.1080/13571510500127667 File-URL: http://www.tandfonline.com/10.1080/13571510500127667 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:12:y:2005:i:2:p:211-223 Template-Type: ReDIF-Article 1.0 Author-Name: Harumi Ito Author-X-Name-First: Harumi Author-X-Name-Last: Ito Author-Name: Darin Lee Author-X-Name-First: Darin Author-X-Name-Last: Lee Title: Comparing the Impact of the September 11th Terrorist Attacks on International Airline Demand Abstract: This article compares the impact of the September 11th terrorist attacks and its after-effects on airline demand in the Australia, Canada, Europe, Japan and the US. Using a variety of time-series data, we compare how changes in risk perception following the attacks impacted domestic and international demand. Moreover, we decompose the terrorist attacks' effects into their transitory and ongoing components on airline demand. Journal: International Journal of the Economics of Business Pages: 225-249 Issue: 2 Volume: 12 Year: 2005 Keywords: Airline Demand, International Terrorism, September 11th, Risk Perception, JEL Classifications: R41, L16, L93, X-DOI: 10.1080/13571510500127931 File-URL: http://www.tandfonline.com/10.1080/13571510500127931 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:12:y:2005:i:2:p:225-249 Template-Type: ReDIF-Article 1.0 Author-Name: Martin Bandulet Author-X-Name-First: Martin Author-X-Name-Last: Bandulet Author-Name: Karl Morasch Author-X-Name-First: Karl Author-X-Name-Last: Morasch Title: Would You Like to be a Prosumer? Information Revelation, Personalization and Price Discrimination in Electronic Markets Abstract: Electronic commerce and flexible manufacturing allow personalization of initially standardized products at low cost. Will customers provide the information necessary for personalization? Assuming that a consumer can control the amount of information revealed, we analyze how her decision interacts with the pricing strategy of a monopolist who may abuse the information to obtain a larger share of total surplus. We consider two scenarios, one where consumers have different tastes but identical willingness to pay and another with high and low valuation customers. In both cases full revelation may only result if the monopolist can commit to a maximum price before consumers decide about disclosure. Journal: International Journal of the Economics of Business Pages: 251-271 Issue: 2 Volume: 12 Year: 2005 Keywords: E-Commerce, Personalization, Asymmetric Information, Price Discrimination, JEL Classifications: D42, D82, L14, X-DOI: 10.1080/13571510500128038 File-URL: http://www.tandfonline.com/10.1080/13571510500128038 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:12:y:2005:i:2:p:251-271 Template-Type: ReDIF-Article 1.0 Author-Name: Robert Feinberg Author-X-Name-First: Robert Author-X-Name-Last: Feinberg Author-Name: Mieke Meurs Author-X-Name-First: Mieke Author-X-Name-Last: Meurs Title: Exchange Rate Effects on Domestic Prices in Bulgaria and Poland: Progress in Making Markets? Abstract: The economic liberalization which has occurred in Central and Eastern Europe (CEE) over the past 15 years generally has involved establishing domestic markets and privatizing state-owned firms, both with the intention of integrating the CEE economies into the global economy and allowing the benefits of competition to be realized. We explore how well this has been accomplished in two countries, Poland and Bulgaria, and the domestic conditions that contribute to its accomplishment. The sensitivity of domestic markets to international shocks, as reflected in exchange rate effects on domestic prices, may be viewed as an indicator of how integrated a country's markets are into the global economy, and a proxy for competition in those markets. In explaining variation in exchange-rate pass-through, we examine the impact of market structure, economic liberalization and infrastructure as factors contributing to the development of competitive markets. We find that although integration into global markets can significantly increase market competitiveness, domestic factors also play a significant role. Journal: International Journal of the Economics of Business Pages: 273-288 Issue: 2 Volume: 12 Year: 2005 Keywords: Transition, Market Reform, Exchange Rate Pass-through, Central and Eastern Europe, JEL Classifications: P3, F3, X-DOI: 10.1080/13571510500128111 File-URL: http://www.tandfonline.com/10.1080/13571510500128111 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:12:y:2005:i:2:p:273-288 Template-Type: ReDIF-Article 1.0 Author-Name: Antonio Nicita Author-X-Name-First: Antonio Author-X-Name-Last: Nicita Author-Name: Giovanni Ramello Author-X-Name-First: Giovanni Author-X-Name-Last: Ramello Author-Name: Frederic Scherer Author-X-Name-First: Frederic Author-X-Name-Last: Scherer Title: Intellectual Property Rights and the Organization of Industries: New Perspectives in Law and Economics Abstract: The process of innovation usually differs from one industry to another, according to level of expected rents, the uncertainty over the return of investments and competition dynamics. The diversity of industries is largely reflected not only in their rate of innovation and growth, but also in the evolution of their governance structures. Notwithstanding the pervasive diversity of the organization of industries, the legal protection accorded by IPRs has evolved as a standard rule that grants the same protection across heterogeneous industries. In order to avoid economic distortions and rent dissipation, IPRs' definition and enforcement should be implemented on a case by case basis. Journal: International Journal of the Economics of Business Pages: 289-296 Issue: 3 Volume: 12 Year: 2005 Keywords: Intellectual Property Rights, Innovation, Industry Organization, X-DOI: 10.1080/13571510500299029 File-URL: http://www.tandfonline.com/10.1080/13571510500299029 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:12:y:2005:i:3:p:289-296 Template-Type: ReDIF-Article 1.0 Author-Name: F. M. Scherer Author-X-Name-First: F. M. Author-X-Name-Last: Scherer Title: The Role of Patents in two US Monopolization Cases Abstract: The histories of two 'great' US monopolization cases involving high-technology monopolies are summarized in this article. Its foci are the practices that led to antitrust intervention, the timeliness of antitrust challenges, how the relevant authorities evaluated the role that innovation played as a possible explanation for monopoly, the remedies applied, and how those remedies affected incentives for continuing technological progress. Journal: International Journal of the Economics of Business Pages: 297-305 Issue: 3 Volume: 12 Year: 2005 Keywords: Patents, Innovation, Antitrust, Monopolization, X-DOI: 10.1080/13571510500299128 File-URL: http://www.tandfonline.com/10.1080/13571510500299128 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:12:y:2005:i:3:p:297-305 Template-Type: ReDIF-Article 1.0 Author-Name: Christine Greenhalgh Author-X-Name-First: Christine Author-X-Name-Last: Greenhalgh Author-Name: Mark Longland Author-X-Name-First: Mark Author-X-Name-Last: Longland Title: Running to Stand Still? - The Value of R&D, Patents and Trade Marks in Innovating Manufacturing Firms Abstract: We have constructed a novel panel dataset of UK manufacturing firms to examine how innovation, proxied by R&D and intellectual property (IP, covering both patents and trade marks), increases firm performance, as measured by firm net output (value added). Knowledge has public good characteristics of non-depletability and non-excludability. So, even with protection using intellectual property to exclude, imitation and inventing around novel products and processes is possible by competitors. We examine the size and duration of benefits to doing R&D and obtaining IP protection through both patents and trade marks. If non-depletability within the firm is correct, this implies that their absolute R&D effort and total IP assets are important. We examine this hypothesis against the alternative of depletability, where innovative intensity relative to firm size matters. Also if IP offers only weak protection against competition, then the duration of returns to these intangible assets will be short. The empirical results support depletability within firms and poor ability to exclude imitation, which implies that firms have to continually renew their portfolios of R&D-created knowledge and their IP assets to maintain their position in the market. Splitting the sample into industries designated as 'high' and 'low' technology, suggests a higher intensity of competition in high-technology sectors, as an increase in the intensity of patents and trade marks commands no premium in this sector, although persistent differences between firms are positively affected by whether or not firms are acquiring these IP assets. Journal: International Journal of the Economics of Business Pages: 307-328 Issue: 3 Volume: 12 Year: 2005 Keywords: Intellectual Property, R&D, Value Added, Manufacturing, X-DOI: 10.1080/13571510500299326 File-URL: http://www.tandfonline.com/10.1080/13571510500299326 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:12:y:2005:i:3:p:307-328 Template-Type: ReDIF-Article 1.0 Author-Name: Etienne Pfister Author-X-Name-First: Etienne Author-X-Name-Last: Pfister Author-Name: Bruno Deffains Author-X-Name-First: Bruno Author-X-Name-Last: Deffains Title: Patent Protection, Strategic FDI and Location Choices: Empirical Evidence from French Subsidiaries' Location Choices in Emerging Economies Abstract: This article studies the location choices of French firms in 17 developing countries. Detailed attention is paid to the role of the patent rights in the host country. On the one hand, the reduction in competition that follows greater patent protection can attract foreign subsidiaries. On the other hand, foreign direct investment (FDI) can have the 'strategic' purpose of deterring local competitors. In that case, FDI and patent protection are substitutes and a greater enforcement of patent rights may reduce the strategic incentives to invest in a country, especially if the markets are large enough. Our regressions indicate that on average, patent rights exert only a negligible influence on the location choices of French firms. However, if the market potential of the host countries is sufficiently large or if their expenditures on R&D are sufficiently small, a greater effectiveness of patents decreases the probability of location. Journal: International Journal of the Economics of Business Pages: 329-346 Issue: 3 Volume: 12 Year: 2005 Keywords: Location Choices, Patent, Conditional Logit, X-DOI: 10.1080/13571510500299458 File-URL: http://www.tandfonline.com/10.1080/13571510500299458 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:12:y:2005:i:3:p:329-346 Template-Type: ReDIF-Article 1.0 Author-Name: Shubha Ghosh Author-X-Name-First: Shubha Author-X-Name-Last: Ghosh Title: Market Entry and the Proper Scope of Copyright Abstract: The author presents a model of copyright law as a means to regulate entry into information markets. The model shows under what conditions copyright rules may lead to excessive or insufficient entry. The entry conditions are used to assess the efficacy of copyright rules in maximizing the sum of consumer and producer surplus. Journal: International Journal of the Economics of Business Pages: 347-359 Issue: 3 Volume: 12 Year: 2005 Keywords: Copyright, Market Entry, Industrial Organization, X-DOI: 10.1080/13571510500300231 File-URL: http://www.tandfonline.com/10.1080/13571510500300231 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:12:y:2005:i:3:p:347-359 Template-Type: ReDIF-Article 1.0 Author-Name: Ben Depoorter Author-X-Name-First: Ben Author-X-Name-Last: Depoorter Author-Name: Francesco Parisi Author-X-Name-First: Francesco Author-X-Name-Last: Parisi Author-Name: Sven Vanneste Author-X-Name-First: Sven Author-X-Name-Last: Vanneste Title: Problems with the Enforcement of Copyright Law: Is there a Social Norm Backlash? Abstract: As a result of technological changes, copyright norms have developed in opposition to existing copyright law. In this article we examine how copyright enforcement efforts, mainly lawsuits against private copying, may induce further copyright disobedience by reinforcing the moral and social beliefs against conventional copyright law. In this paper we review recent theoretical and empirical studies and assess the hypothesis of countervailing copyright norm effects from copyright enforcement. Journal: International Journal of the Economics of Business Pages: 361-369 Issue: 3 Volume: 12 Year: 2005 Keywords: Copyright Law, Expressive Law, Social Norms, Enforcement, X-DOI: 10.1080/13571510500300264 File-URL: http://www.tandfonline.com/10.1080/13571510500300264 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:12:y:2005:i:3:p:361-369 Template-Type: ReDIF-Article 1.0 Author-Name: Antonio Nicita Author-X-Name-First: Antonio Author-X-Name-Last: Nicita Author-Name: Giovanni Ramello Author-X-Name-First: Giovanni Author-X-Name-Last: Ramello Title: Exclusivity and Antitrust in Media Markets: The Case of Pay-TV in Europe Abstract: This paper challenges the traditional economic reasons supporting copyright licensing exclusivity in dealership agreements in media markets. It is argued how exclusive dealings in contents distributions acted in Europe as barriers to entry and/or raising rivals' costs strategies against new Pay-TV operators. The removal of exclusive dealing clauses, as recently implemented by the European Commission, can be economically justified when it generates positive impact on technological innovation and on the development of alternative transmission platforms for the delivery of multimedia services. Recent European Antitrust decisions seem to encourage a new 'open access approach' for premium contents distribution in media industry. Journal: International Journal of the Economics of Business Pages: 371-387 Issue: 3 Volume: 12 Year: 2005 Keywords: Exclusive Dealings, Copyrights, Market Foreclosure, Pay-TV, X-DOI: 10.1080/13571510500300348 File-URL: http://www.tandfonline.com/10.1080/13571510500300348 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:12:y:2005:i:3:p:371-387 Template-Type: ReDIF-Article 1.0 Author-Name: Richard Watt Author-X-Name-First: Richard Author-X-Name-Last: Watt Title: A Unifying Theory of Copyrights and Patents Abstract: Over the recent past, technological advances (among other effects) have opened a grey area of intellectual property that cannot be properly covered by either of the two existing legal regimes, patent and copyright. Some innovations do not fall easily into either regime, while others seem to fall into both. In this paper it is argued that it may be possible to define a single body of law that can be molded to fit all types of intellectual product. This idea is not new - it was suggested in the legal literature some 12 years ago - but it seems to have been ignored. In the current paper, the argument goes beyond the simple suggestion that the two existing regimes could be unified, and suggests that the degree of protection that is granted could usefully be made a choice variable for creators, at a price. This is nothing more than the imposition of a Pigouvian tax system to cater for the externality that legal protection implies for society. Journal: International Journal of the Economics of Business Pages: 389-402 Issue: 3 Volume: 12 Year: 2005 Keywords: Copyright, Patent, Pigouvian Tax, X-DOI: 10.1080/13571510500300611 File-URL: http://www.tandfonline.com/10.1080/13571510500300611 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:12:y:2005:i:3:p:389-402 Template-Type: ReDIF-Article 1.0 Author-Name: Eric Brousseau Author-X-Name-First: Eric Author-X-Name-Last: Brousseau Author-Name: Regis Coeurderoy Author-X-Name-First: Regis Author-X-Name-Last: Coeurderoy Title: Combining Institutional and Contractual Mechanisms to Control Transactional Hazards Related to Transfers of Technology: an Empirical Analysis of Supervision Provisions in Technology Licensing Agreements Abstract: Technology licensing provides innovators with the opportunity to substantially leverage their market expansion. But licensing also exposes valuable knowledge at appropriation and more generally to opportunism since it generates ex-post mutual interdependence. The long-term performance of the transfer for the licensor thus strongly depends upon its capability to govern the relationship successfully. Designing an efficient supervision mechanism is then key to good governance of licensing contracts. In this paper we analyse in detail the scope of supervision through three dimensions: supervision on sales; supervision on product quality; and supervision on industrial and R&D facilities. We show that licensors are likely to adjust the scope of supervision in line with contractual hazards, which depend upon the scope of the transfer, the competitive stakes, and the institutional and relational environment of the transfer. Evidence is provided by a cross-section sample of 207 licensing contracts by American, Japanese and European firms. Journal: International Journal of the Economics of Business Pages: 403-424 Issue: 3 Volume: 12 Year: 2005 Keywords: Technology Licensing Agreements, Knowledge Transfers, Intellectual Property Rights, Supervision Clauses, X-DOI: 10.1080/13571510500300652 File-URL: http://www.tandfonline.com/10.1080/13571510500300652 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:12:y:2005:i:3:p:403-424 Template-Type: ReDIF-Article 1.0 Author-Name: Atanu Saha Author-X-Name-First: Atanu Author-X-Name-Last: Saha Author-Name: Henry Grabowski Author-X-Name-First: Henry Author-X-Name-Last: Grabowski Author-Name: Howard Birnbaum Author-X-Name-First: Howard Author-X-Name-Last: Birnbaum Author-Name: Paul Greenberg Author-X-Name-First: Paul Author-X-Name-Last: Greenberg Author-Name: Oded Bizan Author-X-Name-First: Oded Author-X-Name-Last: Bizan Title: Generic Competition in the US Pharmaceutical Industry Abstract: We develop a simultaneous equations estimation framework to understand the interactions among generic entry, prices, and market shares. We base our estimates on a panel data sample of 40 brand-name drugs that first experienced generic competition during the period July 1992-January 1998. We find that generic share and price are simultaneously determined, while the number of generic entrants is a key determinant of generic market share and the generic-to-brand price ratio. In addition, we find generic competition to be particularly intense for blockbuster drugs, which experience significantly more generic entrants, price erosion, and generic penetration than other drugs. Journal: International Journal of the Economics of Business Pages: 15-38 Issue: 1 Volume: 13 Year: 2006 Keywords: Generic Entry, Competition, JEL Classifications: I11, L11, X-DOI: 10.1080/13571510500519905 File-URL: http://www.tandfonline.com/10.1080/13571510500519905 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:13:y:2006:i:1:p:15-38 Template-Type: ReDIF-Article 1.0 Author-Name: William Comanor Author-X-Name-First: William Author-X-Name-Last: Comanor Author-Name: Thomas Wilson Author-X-Name-First: Thomas Author-X-Name-Last: Wilson Title: Advertising and Steiner's Dual Stage Model: Our Assessment Abstract: Between 1967 and 1979, we produced a number of studies that explored different facets of the economics of advertising. This work culminated in our 1974 book entitled Advertising and Market Power. Our leading hypothesis was that heavy advertising expenditures often but not always had anti-competitive effects. And our primary empirical evidence in support of this hypothesis was that industries with heavy advertising expenditures also reported higher profit rates, which we interpreted as indicating that higher prices followed when manufacturers can effectively spend large amounts on advertising. Since that time, Robert Steiner has developed a model of firm behaviour for consumer goods industries. He finds that distribution margins are generally higher where manufacturer prices are lower. Furthermore, heavy manufacturer advertising is likely to depress distribution margins for heavily advertised products. While our earlier work implicitly assumed that distribution margins are generally the same regardless of the volume of advertising, Steiner's results raise doubt on this assumption. Steiner's model must therefore be acknowledged when interpreting our earlier findings. Journal: International Journal of the Economics of Business Pages: 39-44 Issue: 1 Volume: 13 Year: 2006 Keywords: Advertising, Steiner's Model, Manufacturers and Distributors, Market Power, Distribution Margins, JEL Classifications: L15, L22, X-DOI: 10.1080/13571510500519939 File-URL: http://www.tandfonline.com/10.1080/13571510500519939 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:13:y:2006:i:1:p:39-44 Template-Type: ReDIF-Article 1.0 Author-Name: Mark Pauly Author-X-Name-First: Mark Author-X-Name-Last: Pauly Author-Name: Bradley Herring Author-X-Name-First: Bradley Author-X-Name-Last: Herring Author-Name: David Song Author-X-Name-First: David Author-X-Name-Last: Song Title: Information Technology and Consumer Search for Health Insurance Abstract: We explore the impact of information technology on the level of premiums paid for individual health insurance by asking which kinds of buyers will have larger gains from the use of new technology. We compare 'asking price' data posted on an electronic insurance exchange with survey data on premiums actually paid before the advent of exchange and examine whether the pattern of differences between asking prices and transactions prices can be explained using a simple search theory. We hypothesize that older consumers, expecting to pay higher premiums for a given policy, had engaged in more intensive search than younger consumers, given the same distribution of prices and search costs. Therefore, the introduction of an electronic exchange that lowers the cost of search should have a larger effect on decreasing the level of premiums paid for those who previously searched less (i.e., younger consumers). We find evidence consistent with this hypothesis. Journal: International Journal of the Economics of Business Pages: 45-63 Issue: 1 Volume: 13 Year: 2006 Keywords: Consumer Search, Price Dispersion, Information Technology, Health Insurance, JEL Classifications: L1, D83, I11, X-DOI: 10.1080/13571510500519970 File-URL: http://www.tandfonline.com/10.1080/13571510500519970 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:13:y:2006:i:1:p:45-63 Template-Type: ReDIF-Article 1.0 Author-Name: Blandina Oliveira Author-X-Name-First: Blandina Author-X-Name-Last: Oliveira Author-Name: Adelino Fortunato Author-X-Name-First: Adelino Author-X-Name-Last: Fortunato Title: Testing Gibrat's Law: Empirical Evidence from a Panel of Portuguese Manufacturing Firms Abstract: The purpose of this paper is to use Dynamic Panel Data (DPD) models with serial correlation in the error term to see if Gibrat's law holds and to analyse the empirical determinants of firm growth. This paper makes significant contributions to the empirical literature on the dynamics of firm growth, since it updates the work carried out by previous researchers in this field using micro panel data, dynamic firm growth models with serial correlation in the error term, panel unit root tests and GMM-system estimator. To conduct this study we used an unbalanced panel of Portuguese manufacturing firms over the period from 1990 to 2001. The main implication of our findings is that firm growth is not quite random since there are some determinants which exert influence on firm growth. Journal: International Journal of the Economics of Business Pages: 65-81 Issue: 1 Volume: 13 Year: 2006 Keywords: Firm Growth, Gibrat's Law, GMM-System Estimator, Panel Unit Root Tests, JEL Classifications: L11, C23, X-DOI: 10.1080/13571510500519996 File-URL: http://www.tandfonline.com/10.1080/13571510500519996 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:13:y:2006:i:1:p:65-81 Template-Type: ReDIF-Article 1.0 Author-Name: Ian Dobbs Author-X-Name-First: Ian Author-X-Name-Last: Dobbs Title: Defining Markets for Ex Ante Regulation using the Hypothetical Monopoly Test Abstract: The EU is gradually systematizing its approach to ex ante regulation (notably with the publication of the recent regulatory framework for Electronic communications). Market definition is viewed as an essential first step in this, with the 'Hypothetical Monopoly Test' a useful conceptual tool for use in the assessment. This paper examines the use of this test for market definition when there are several differentiated goods or services under consideration. It sets out an analytic framework, discusses the pros and cons of using the test and illustrates its use in a Telecom context. Journal: International Journal of the Economics of Business Pages: 83-109 Issue: 1 Volume: 13 Year: 2006 Keywords: Market Definition, Hypothetical Monopoly Test, SSNIP Test, JEL Classifications: L41, L42, L5, X-DOI: 10.1080/13571510500520028 File-URL: http://www.tandfonline.com/10.1080/13571510500520028 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:13:y:2006:i:1:p:83-109 Template-Type: ReDIF-Article 1.0 Author-Name: Vicente Esteve Author-X-Name-First: Vicente Author-X-Name-Last: Esteve Author-Name: Francisco Requena Author-X-Name-First: Francisco Author-X-Name-Last: Requena Title: A Cointegration Analysis of Car Advertising and Sales Data in the Presence of Structural Change Abstract: This paper examines whether there is a long-run stable equilibrium relationship between advertising and sales across the market segments of the UK car industry over the period 1971-2001. In order to achieve this goal, we allow for structural breaks in the series using cointegration techniques. The results show the existence of long-run equilibrium relationships in all six market segments, although in four of them the relationship is not stable. In general, one structural change is detected in the late 1970s and another in the early 1990s, coinciding with two economic recessions. When we do not account for structural changes, the estimated long-run elasticities of advertising on sales are seen to be substantially downwardly biased. Finally, a noticeable increase is observed in long-run elasticities in most car market segments during the nineties with respect to previous decades. Journal: International Journal of the Economics of Business Pages: 111-128 Issue: 1 Volume: 13 Year: 2006 Keywords: Advertising, Sales, Cointegration, Structural Break, Car Industry, JEL Classifications: C12, C22, L10, X-DOI: 10.1080/13571510500520036 File-URL: http://www.tandfonline.com/10.1080/13571510500520036 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:13:y:2006:i:1:p:111-128 Template-Type: ReDIF-Article 1.0 Author-Name: Adnan Kasman Author-X-Name-First: Adnan Author-X-Name-Last: Kasman Author-Name: Saadet Kirbas-Kasman Author-X-Name-First: Saadet Author-X-Name-Last: Kirbas-Kasman Title: Technical Change in Banking: Evidence From Transition Countries Abstract: This paper investigates the effect of technical change on the costs of banking firms operating in 11 Central and Eastern European countries using Fourier-flexible cost function specification for the period 1995-2002. A common cost frontier with country-specific variables is employed in order to take into account macro-economic and regulatory conditions that vary over country and time. Our findings suggest that the rate of reduction in costs resulting from technical change increased during the sample period. Banks operating in Hungary, Czech Republic and Poland benefited more from technical change than their counterparts. In terms of cost reduction, large banks benefited more from technical progress. This indicates that large banks are more able to change their optimal input mix in response to changes in technology. Journal: International Journal of the Economics of Business Pages: 129-144 Issue: 1 Volume: 13 Year: 2006 Keywords: Technical Change, Banking, Transition Economies, JEL Classifications: G21, D21, X-DOI: 10.1080/13571510500520044 File-URL: http://www.tandfonline.com/10.1080/13571510500520044 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:13:y:2006:i:1:p:129-144 Template-Type: ReDIF-Article 1.0 Author-Name: Ashima Goyal Author-X-Name-First: Ashima Author-X-Name-Last: Goyal Title: Corporate Social Responsibility as a Signalling Device for Foreign Direct Investment Abstract: A rise in CSR (corporate social responsibility) has accompanied rise in foreign direct investment (FDI) to developing countries in the 1990s. CSR may be serving a signalling function when the entering firm is of an unknown type. Although countries are now competing keenly to attract foreign firms, even so, excessive tax or excess transfers by firms can still cause a Prisoner's Dilemma structure to the payoffs resulting in an inefficient Nash equilibrium. CSR allows the accommodating firm to reveal its type, making cooperation the equilibrium outcome. The game differs from standard models since signalling changes the payoffs. A unique separating equilibrium exists where only the accommodating firms signal. But, under certain parameter values, a pooling equilibrium where all firms signal, becomes possible. A number of results are derived including the size of CSR expenditure required as a fraction of profits. An example demonstrates their relevance in practical situations. Journal: International Journal of the Economics of Business Pages: 145-163 Issue: 1 Volume: 13 Year: 2006 Keywords: Foreign Direct Investment, Corporate Social Responsibility, Signalling, JEL Classifications: O19, F23, C72, D82, X-DOI: 10.1080/13571510500520077 File-URL: http://www.tandfonline.com/10.1080/13571510500520077 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:13:y:2006:i:1:p:145-163 Template-Type: ReDIF-Article 1.0 Author-Name: George Ford Author-X-Name-First: George Author-X-Name-Last: Ford Author-Name: T. Randolph Beard Author-X-Name-First: T. Randolph Author-X-Name-Last: Beard Title: Introduction: Issues in Empirical Merger Analysis Abstract: Journal: International Journal of the Economics of Business Pages: 165-168 Issue: 2 Volume: 13 Year: 2006 Keywords: Antitrust, Empirical Methods, Merger Simulation, Econometrics, X-DOI: 10.1080/13571510600783815 File-URL: http://www.tandfonline.com/10.1080/13571510600783815 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:13:y:2006:i:2:p:165-168 Template-Type: ReDIF-Article 1.0 Author-Name: Douglas Davis Author-X-Name-First: Douglas Author-X-Name-Last: Davis Author-Name: Bart Wilson Author-X-Name-First: Bart Author-X-Name-Last: Wilson Title: Equilibrium Price Dispersion, Mergers and Synergies: An Experimental Investigation of Differentiated Product Competition Abstract: This paper reports an experiment conducted to examine market performance and mergers in an asymmetric differentiated product oligopoly. We find that static Nash predictions organize mean market outcomes reasonably well. Markets on average respond to horizontal mergers with price increases as predicted and marginal cost synergies exert the predicted the power-mitigating price effects. Nash predictions, however, organize outcomes for specific markets and for the different firm-types less precisely. The variability of individual markets and firm-level decisions undermine the predictive capacity of merger simulations conducted with the Antitrust Logit Model, a merger device used by US antitrust authorities to help identify problematic mergers. Journal: International Journal of the Economics of Business Pages: 169-194 Issue: 2 Volume: 13 Year: 2006 Keywords: Differentiated products, Antitrust analysis, Synergies, Experimental economics, X-DOI: 10.1080/13571510600783922 File-URL: http://www.tandfonline.com/10.1080/13571510600783922 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:13:y:2006:i:2:p:169-194 Template-Type: ReDIF-Article 1.0 Author-Name: Geoffrey Pofahl Author-X-Name-First: Geoffrey Author-X-Name-Last: Pofahl Author-Name: Oral Capps Author-X-Name-First: Oral Author-X-Name-Last: Capps Author-Name: H. Alan Love Author-X-Name-First: H. Alan Author-X-Name-Last: Love Title: Retail Zone Pricing and Simulated Price Effects of Upstream Mergers Abstract: Despite the oft-recognized reality of zone pricing by food retailers, this form of price discrimination has received very little attention within the context of upstream merger analysis. Promoting this issue to 'center stage', we relax the conventional merger simulation assumption of uniform pass-through by retailers. Relaxing this assumption allows us to explore the potential impacts of zone pricing on post-merger price effects. Using the ready-to-eat cereals industry as a backdrop, we show empirically that high-income price zones are more significantly affected by post-merger price increases than low-income price zones. Ignoring retail price discrimination veils a potentially complex and diverse set of price effects that are otherwise lost by averaging across all price zones. Journal: International Journal of the Economics of Business Pages: 195-215 Issue: 2 Volume: 13 Year: 2006 Keywords: Merger simulation, Retail price discrimination, LA/AIDS demand model, X-DOI: 10.1080/13571510600784433 File-URL: http://www.tandfonline.com/10.1080/13571510600784433 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:13:y:2006:i:2:p:195-215 Template-Type: ReDIF-Article 1.0 Author-Name: T. Randolph Beard Author-X-Name-First: T. Randolph Author-X-Name-Last: Beard Author-Name: George Ford Author-X-Name-First: George Author-X-Name-Last: Ford Author-Name: Richard Saba Author-X-Name-First: Richard Author-X-Name-Last: Saba Title: An Econometric-Driven Merger Simulation: Considerations and Application Abstract: In this paper, we offer a hybrid approach to merger simulation in which we allow rather extensive pre-testing to suggest the 'correct', or most desirable, form for the underlying demand curves. Our application is the merger between the large mobile telephone companies Cingular and AT&T Wireless in 2004. While a somewhat novel approach, our findings are not radical in any way, so the econometric determination of demand forms does not appear to produce novel conclusion per se. That said, allowing the data to inform the researcher about the appropriate form of demand seems a worthwhile effort for merger simulations, data permitting. Journal: International Journal of the Economics of Business Pages: 217-228 Issue: 2 Volume: 13 Year: 2006 Keywords: Merger simulation, Demand models, Telecommunications, X-DOI: 10.1080/13571510600784466 File-URL: http://www.tandfonline.com/10.1080/13571510600784466 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:13:y:2006:i:2:p:217-228 Template-Type: ReDIF-Article 1.0 Author-Name: Michael Cichello Author-X-Name-First: Michael Author-X-Name-Last: Cichello Author-Name: Douglas Lamdin Author-X-Name-First: Douglas Author-X-Name-Last: Lamdin Title: Event Studies and the Analysis of Antitrust Abstract: A standard tool in economics and finance is the event study in which one examines the impact of an event on stock returns. While hundreds of such studies have been published, the concern here is with a small subset: the use of event studies to examine antitrust issues. After a brief review of the event study technique, we provide a review of the literature that is the nexus of event studies and antitrust. The goal is to not only chronicle the development of this literature and highlight the major findings, but also to comment on important issues concerning implementation of this research method and the interpretation of the results. Journal: International Journal of the Economics of Business Pages: 229-245 Issue: 2 Volume: 13 Year: 2006 Keywords: Antitrust, Empirical Methods, Event Studies, X-DOI: 10.1080/13571510600784557 File-URL: http://www.tandfonline.com/10.1080/13571510600784557 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:13:y:2006:i:2:p:229-245 Template-Type: ReDIF-Article 1.0 Author-Name: John Jackson Author-X-Name-First: John Author-X-Name-Last: Jackson Author-Name: Audrey Kline Author-X-Name-First: Audrey Author-X-Name-Last: Kline Author-Name: Sarah Skinner Author-X-Name-First: Sarah Author-X-Name-Last: Skinner Title: The Impact of Non-Normality and Misspecification on Merger Event Studies Abstract: Financial event studies using daily stock returns are frequently used to evaluate antitrust policy and to 'predict' the consequences of mergers. Although there is ample evidence that daily stock returns are not normally distributed, traditional asymptotic results are often used for hypothesis testing. We suggest some general results concerning the conditions under which using ±1.96 as critical values for hypothesis testing under or over state the true significance levels. Further, we investigate the cause of non-normal event study residuals and find that a possible alternative explanation to one in which non-normality of residuals is the consequence of omitted events. Journal: International Journal of the Economics of Business Pages: 247-264 Issue: 2 Volume: 13 Year: 2006 Keywords: Event Studies, Bootstrap Methods, Non-Normality, Market Model, X-DOI: 10.1080/13571510600784490 File-URL: http://www.tandfonline.com/10.1080/13571510600784490 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:13:y:2006:i:2:p:247-264 Template-Type: ReDIF-Article 1.0 Author-Name: Orley Ashenfelter Author-X-Name-First: Orley Author-X-Name-Last: Ashenfelter Author-Name: David Ashmore Author-X-Name-First: David Author-X-Name-Last: Ashmore Author-Name: Jonathan Baker Author-X-Name-First: Jonathan Author-X-Name-Last: Baker Author-Name: Suzanne Gleason Author-X-Name-First: Suzanne Author-X-Name-Last: Gleason Author-Name: Daniel Hosken Author-X-Name-First: Daniel Author-X-Name-Last: Hosken Title: Empirical Methods in Merger Analysis: Econometric Analysis of Pricing in FTC v. Staples Abstract: In 1997, the US Federal Trade Commission challenged the proposed merger of two office supply superstores, Staples and Office Depot in US District Court. Both the government and merging parties presented econometric studies examining the merger's likely impact on consumer pricing, predicting a price increase of 8.6% and 0.9% respectively. This article uses the extensive public record to provide a detailed discussion of the econometric models used in the case and to show how differences between the models led to the discrepancy between these estimates. Journal: International Journal of the Economics of Business Pages: 265-279 Issue: 2 Volume: 13 Year: 2006 Keywords: Antitrust, Merger Review, Econometrics, Empirical Methods, X-DOI: 10.1080/13571510600784706 File-URL: http://www.tandfonline.com/10.1080/13571510600784706 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:13:y:2006:i:2:p:265-279 Template-Type: ReDIF-Article 1.0 Author-Name: John Mayo Author-X-Name-First: John Author-X-Name-Last: Mayo Author-Name: Mirjam Schiffer Author-X-Name-First: Mirjam Author-X-Name-Last: Schiffer Title: Antitrust Economics Meets Antitrust Psychology: A View from the Firms Abstract: Many theoretical and empirical studies have examined the effects of antitrust policies on competition from the perspective of consumer welfare. In contrast, this paper examines antitrust policy impacts by exploring the perspective of firms subject to varying degrees of antitrust exposure. Specifically we draw upon a large, firm-level, worldwide survey of firms that allows us to address fundamental questions regarding the magnitude of anticompetitive abuses - as perceived by firms - and the consequence of the establishment of competition policies on these perceptions. Thus, while traditional antitrust economics seeks to collect data on market structure, firm conduct and policy interventions in markets to gain insights into the role of competition policies, this paper adopts the novel, essentially psychological, approach of examining the magnitude of anticompetitive threats as perceived by firms and how these perceptions vary depending on their market and policy environments. Journal: International Journal of the Economics of Business Pages: 281-306 Issue: 2 Volume: 13 Year: 2006 Keywords: Antitrust, International Antitrust, Anticompetitive Conduct, X-DOI: 10.1080/13571510600784821 File-URL: http://www.tandfonline.com/10.1080/13571510600784821 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:13:y:2006:i:2:p:281-306 Template-Type: ReDIF-Article 1.0 Author-Name: Mauro La Noce Author-X-Name-First: Mauro Author-X-Name-Last: La Noce Author-Name: Sergio Bolasco Author-X-Name-First: Sergio Author-X-Name-Last: Bolasco Author-Name: Elisabetta Allegra Author-X-Name-First: Elisabetta Author-X-Name-Last: Allegra Author-Name: Valerio Ruocco Author-X-Name-First: Valerio Author-X-Name-Last: Ruocco Author-Name: Federico Capo Author-X-Name-First: Federico Author-X-Name-Last: Capo Title: Merger Control in Italy 1995-2003: A Statistical Study of the Enforcement Practice by Mining the Text of Authority Resolutions Abstract: The paper provides a consistency analysis of the decisions taken by the Italian Competition Authority within the 1995-2003 period, concerning its control over mergers and acquisitions. An ample database was constructed using the tools of textual analysis. This data base was generated in a semi-automatic manner and handled with statistical methods, the final aim being the econometric specification - through a logit model - and estimation of the 'de facto' decision model of the Authority, thereby making its principles more transparent and predictable. Model simulation exercises, dependant on multivariate market scenarios, helped estimate the threshold levels triggering Authority intervention. Journal: International Journal of the Economics of Business Pages: 307-334 Issue: 2 Volume: 13 Year: 2006 Keywords: Antitrust, Competition Law, Merger, Merger Control, Text-Mining, X-DOI: 10.1080/13571510600784862 File-URL: http://www.tandfonline.com/10.1080/13571510600784862 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:13:y:2006:i:2:p:307-334 Template-Type: ReDIF-Article 1.0 Author-Name: Sourafel Girma Author-X-Name-First: Sourafel Author-X-Name-Last: Girma Author-Name: Steve Thompson Author-X-Name-First: Steve Author-X-Name-Last: Thompson Author-Name: Peter Wright Author-X-Name-First: Peter Author-X-Name-Last: Wright Title: International Acquisitions, Domestic Competition and Firm Performance Abstract: This paper investigates the impact of foreign acquisition on domestic firm productivity. In contrast to previous studies it applies a difference-in-differences methodology based on a matched panel of firms in order to trace out such changes. It finds evidence of significant positive productivity effects following acquisition by US and European multinationals, at least in technology importing industries. Higher productivity gains are achieved the more competitive the industry in which acquisition occurs. Journal: International Journal of the Economics of Business Pages: 335-349 Issue: 3 Volume: 13 Year: 2006 Keywords: Foreign, Acquisition, Productivity, X-DOI: 10.1080/13571510600961254 File-URL: http://www.tandfonline.com/10.1080/13571510600961254 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:13:y:2006:i:3:p:335-349 Template-Type: ReDIF-Article 1.0 Author-Name: Andrew Eckert Author-X-Name-First: Andrew Author-X-Name-Last: Eckert Author-Name: Douglas West Author-X-Name-First: Douglas Author-X-Name-Last: West Title: Exit and Upgrading in Response to Entry: The Case of Gasoline Retailing Abstract: Spatial competition models have established the importance of localized competition in determining competitive outcomes. However, few empirical studies attempt to determine to what extent actual local market conditions affect strategic decisions. This paper uses data provided by the acquisition of the Vancouver area Super-Save chain of retail gasoline stations by ARCO to study the role of geographic space in competition, and the spatial response of the major competitors in the market to entry. The possibility of both accommodating and aggressive capacity responses by the major incumbent firms to entry are considered. While the empirical results show that proximity to ARCO increased the probability that a station shuts down, proximity to ARCO can explain only a limited amount of shutdown after ARCO's entry. There is no evidence that incumbent firms used station locations and capacity changes to respond aggressively to ARCO's entry with a spatial predation strategy. Journal: International Journal of the Economics of Business Pages: 351-372 Issue: 3 Volume: 13 Year: 2006 Keywords: Gasoline Retailing, Spatial Competition, Predation, Accommodation, X-DOI: 10.1080/13571510600961270 File-URL: http://www.tandfonline.com/10.1080/13571510600961270 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:13:y:2006:i:3:p:351-372 Template-Type: ReDIF-Article 1.0 Author-Name: Oleksiy Andriychenko Author-X-Name-First: Oleksiy Author-X-Name-Last: Andriychenko Author-Name: Audrius Girnius Author-X-Name-First: Audrius Author-X-Name-Last: Girnius Author-Name: Atanu Saha Author-X-Name-First: Atanu Author-X-Name-Last: Saha Title: Complementary Goods: Prices and Consumer Welfare Under Duopoly and Monopoly Abstract: We examine prices, profits, and consumer surplus for differentiated complementary goods under duopoly and a multi-product monopoly. We find that little can be said about the relative magnitudes of prices of the components of a system of complementary goods under the alternative market structures. Although demand complementarity can lead to lower prices for either the primary or the secondary good under monopoly, both prices are not necessarily lower. The results unique to this paper are that, when two complementary goods form a system, the system price is unambiguously lower and consumer surplus and profits are higher under a multi-product monopoly. Journal: International Journal of the Economics of Business Pages: 373-386 Issue: 3 Volume: 13 Year: 2006 Keywords: Complements, Multi-Product Monopoly, X-DOI: 10.1080/13571510600961353 File-URL: http://www.tandfonline.com/10.1080/13571510600961353 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:13:y:2006:i:3:p:373-386 Template-Type: ReDIF-Article 1.0 Author-Name: Irene Bertschek Author-X-Name-First: Irene Author-X-Name-Last: Bertschek Author-Name: Helmut Fryges Author-X-Name-First: Helmut Author-X-Name-Last: Fryges Author-Name: Ulrich Kaiser Author-X-Name-First: Ulrich Author-X-Name-Last: Kaiser Title: B2B or Not to Be: Does B2B E-Commerce Increase Labour Productivity? Abstract: We implement an endogeneous switching-regression model for labour productivity and firms' decisions to use business-to-business (B2B) e-commerce. Our approach allows B2B usage to affect any parameter of the labour productivity equation and to properly take account of strategic complementarities between the input factors and B2B usage. Empirical evidence from 1,460 German firms shows that there is a simultaneous relationship between labour productivity and the adoption of B2B. Firms deciding to use B2B e-commerce employ their input factors more efficiently than non-B2B users. Conversely, firms refrain from engaging in B2B probably because they expect the cost of B2B adoption will not be sufficiently compensated by productivity gains. Journal: International Journal of the Economics of Business Pages: 387-405 Issue: 3 Volume: 13 Year: 2006 Keywords: Business-to-Business E-Commerce, Labour Productivity, Endogenous Switching Regression Model, Survey Data, X-DOI: 10.1080/13571510600961395 File-URL: http://www.tandfonline.com/10.1080/13571510600961395 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:13:y:2006:i:3:p:387-405 Template-Type: ReDIF-Article 1.0 Author-Name: Ricard Gil Author-X-Name-First: Ricard Author-X-Name-Last: Gil Title: Demand Shifts and Changes in Competition: Evidence from the Movie Theatre Industry Abstract: In this paper, I empirically examine how demand shifts affect firm behaviour. In particular, I study how competitive behaviour between firms changes across different demand states. For this purpose, I use price and concentration data from the Spanish movie theatre industry in 1995 and 2000. The evidence suggests that demand shifts change the competitive nature of the industry under study, and that this change differs across different demand shifts. Firms deviate less from tacit collusive behaviour when gains of deviation are smaller. Journal: International Journal of the Economics of Business Pages: 407-428 Issue: 3 Volume: 13 Year: 2006 Keywords: Competition, Conjectural Variations, Movie Theatres, X-DOI: 10.1080/13571510600961437 File-URL: http://www.tandfonline.com/10.1080/13571510600961437 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:13:y:2006:i:3:p:407-428 Template-Type: ReDIF-Article 1.0 Author-Name: Nuria Villalba Villalba Author-X-Name-First: Nuria Villalba Author-X-Name-Last: Villalba Title: Cost Flexibility and Firm Size: An Application to Spanish Manufacturing Abstract: This paper examines the relationship between flexibility and the size of establishments for Spanish manufacturing industry. This relationship is examined using the Encuesta Industrial, an annual survey which provides manufacturing sectorial information for six size categories over the period 1980-92. The theoretical framework is that proposed by Mills and Schumann (1985), finding in the evidence related to technological flexibility and demand fluctuations a greater capacity of small firms to adapt to environmental changes, allowing them, in addition, to resist competition based on costs, such as that stemming from scale economies. The results emerging from the estimations confirm that small establishments show greater production variability, employment variability and profit variability than large establishments. That is to say, small establishments are more flexible than large ones due to their greater capacity to absorb demand fluctuations. Journal: International Journal of the Economics of Business Pages: 429-446 Issue: 3 Volume: 13 Year: 2006 Keywords: Firm Flexibility, Technological Diversity, Demand Fluctuations, X-DOI: 10.1080/13571510600961460 File-URL: http://www.tandfonline.com/10.1080/13571510600961460 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:13:y:2006:i:3:p:429-446 Template-Type: ReDIF-Article 1.0 Author-Name: Laura Onofri Author-X-Name-First: Laura Author-X-Name-Last: Onofri Author-Name: Antonello Scorcu Author-X-Name-First: Antonello Author-X-Name-Last: Scorcu Title: The Life Cycle of Temporary Cultural Exhibitions: An Empirical Exploration Abstract: This paper investigates the product life-cycle of temporary cultural exhibitions. Using data drawn from 27 exhibitions that took place in Italy in the period 2000-01, we identify two different life-cycles patterns. For the group of short life exhibitions, except in a few cases of a positive 'premiere effect,' the number of admissions is roughly constant over time and the cycle is linear. For the group of long life exhibitions, the mean number of admissions is subject to a decrease over time and a non-linear life-cycle emerges. Journal: International Journal of the Economics of Business Pages: 447-460 Issue: 3 Volume: 13 Year: 2006 Keywords: Temporary Exhibitions, Product Life Cycle, X-DOI: 10.1080/13571510600961551 File-URL: http://www.tandfonline.com/10.1080/13571510600961551 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:13:y:2006:i:3:p:447-460 Template-Type: ReDIF-Article 1.0 Author-Name: Saralees Nadarajah Author-X-Name-First: Saralees Author-X-Name-Last: Nadarajah Author-Name: Samuel Kotz Author-X-Name-First: Samuel Author-X-Name-Last: Kotz Title: On the New Model for Estimating Damages in Mass Torts - A Note Abstract: Journal: International Journal of the Economics of Business Pages: 461-462 Issue: 3 Volume: 13 Year: 2006 Keywords: Damage estimation in mass torts, Failure rate, Lifetime distribution, X-DOI: 10.1080/13571510600961635 File-URL: http://www.tandfonline.com/10.1080/13571510600961635 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:13:y:2006:i:3:p:461-462 Template-Type: ReDIF-Article 1.0 Author-Name: Benjamin Klein Author-X-Name-First: Benjamin Author-X-Name-Last: Klein Title: The Economic Lessons of Fisher Body-General Motors Abstract: The Fisher Body-General Motors case illustrates the costs of using inherently imperfect long-term contracts to solve potential holdup problems, and therefore the advantages of vertical integration. Fisher Body held up General Motors by renegotiating its body supply contract so that, contrary to the original understanding, General Motors made half of the required investments in new body plants. This led to a decline in Fisher Body's capital to sales ratio and, under the unchanged cost-plus contract terms designed to provide Fisher Body with a return on its equity capital investments, produced a substantial wealth transfer from General Motors to Fisher Body. General Motors accepted this unfavourable contract adjustment because it was operating under a long-term exclusive dealing contract that limited its ability to negotiate with Fisher over co-located body plants. The exclusive dealing contract designed to protect Fisher Body's original GM-specific capacity investments against a potential holdup by General Motors thereby created a Fisher Body holdup of General Motors. The way in which Fisher Body accomplished its holdup demonstrates the importance of distinguishing inefficient holdup threats from efficient actual holdups. Journal: International Journal of the Economics of Business Pages: 1-36 Issue: 1 Volume: 14 Year: 2007 Keywords: Holdups, Vertical Integration, Exclusive Dealing, Contracts, X-DOI: 10.1080/13571510601141112 File-URL: http://www.tandfonline.com/10.1080/13571510601141112 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:14:y:2007:i:1:p:1-36 Template-Type: ReDIF-Article 1.0 Author-Name: Catherine Matraves Author-X-Name-First: Catherine Author-X-Name-Last: Matraves Author-Name: Laura Rondi Author-X-Name-First: Laura Author-X-Name-Last: Rondi Title: Product Differentiation, Industry Concentration and Market Share Turbulence Abstract: Building on the current theory of industrial concentration, we analyze the relation between market size and product differentiation, and show how product differentiation impacts market share turbulence. We first propose that in markets where vertical product differentiation dominates, firms will have an incentive to escalate investment in advertising and/or R&D as market size increases. Secondly, such (firm-specific) investments will make competitive advantage more sustainable as the firm is less imitable. This will not be the case if the market is primarily characterized by homogeneous products or horizontal product differentiation. Our predictions are tested using an original EU dataset for 1987 and 1997. Our results strongly support our predictions - the degree of market share turbulence increases with market size. However, this relation is weakened by competitive investment in advertising and R&D. Journal: International Journal of the Economics of Business Pages: 37-57 Issue: 1 Volume: 14 Year: 2007 Keywords: Product Differentiation, Market Size, Turbulence, X-DOI: 10.1080/13571510601097124 File-URL: http://www.tandfonline.com/10.1080/13571510601097124 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:14:y:2007:i:1:p:37-57 Template-Type: ReDIF-Article 1.0 Author-Name: R. Glenn Hubbard Author-X-Name-First: R. Glenn Author-X-Name-Last: Hubbard Author-Name: Atanu Saha Author-X-Name-First: Atanu Author-X-Name-Last: Saha Author-Name: Jungmin Lee Author-X-Name-First: Jungmin Author-X-Name-Last: Lee Title: To Bundle or Not to Bundle: Firms' Choices under Pure Bundling Abstract: We examine the economic implications of pure bundling under the settings of monopoly and duopoly. We show that under monopoly and pure bundling of goods with independent demands, the bundled price is strictly less than the sum of the unbundled prices. In the setting of duopoly and Nash prices, we examine whether bundling can be used as a tool to deter entry. In contrast to the findings of previous studies, we show that with low entry costs, entry is deterred by unbundled as opposed to bundled sales. With high entry costs, however, the incumbent chooses to bundle. Journal: International Journal of the Economics of Business Pages: 59-83 Issue: 1 Volume: 14 Year: 2007 Keywords: Pure Bundling, Monopoly, Duopoly, Entry Costs, X-DOI: 10.1080/13571510601097140 File-URL: http://www.tandfonline.com/10.1080/13571510601097140 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:14:y:2007:i:1:p:59-83 Template-Type: ReDIF-Article 1.0 Author-Name: Øystein Foros Author-X-Name-First: Øystein Author-X-Name-Last: Foros Title: Price Strategies and Compatibility in Digital Networks Abstract: We analyze competition between two horizontally differentiated network providers. New technologies help the providers to collect consumer-specific information, and such technologies increase the providers' ability to use price discrimination. One example is the mobile providers' choice of investing into third generation mobile systems (3G). Compared to the current 2G systems (GSM), 3G gives the providers more accurate customer specific information (e.g. with respect to customers' location at any time). Since new technologies give the opportunity to implement price discrimination, an interesting question is how the price strategies (price discrimination or not) affect the incentives to unilaterally establish a walled garden where the rival's customers have imperfect access. The main message of the paper is that walled garden strategies are more likely when firms use price discrimination than when they all use linear pricing. Journal: International Journal of the Economics of Business Pages: 85-97 Issue: 1 Volume: 14 Year: 2007 Keywords: Compatibility, Network Effects, Price Discrimination, Internet, Competition, X-DOI: 10.1080/13571510601097157 File-URL: http://www.tandfonline.com/10.1080/13571510601097157 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:14:y:2007:i:1:p:85-97 Template-Type: ReDIF-Article 1.0 Author-Name: Robert Feinberg Author-X-Name-First: Robert Author-X-Name-Last: Feinberg Author-Name: James Hartigan Author-X-Name-First: James Author-X-Name-Last: Hartigan Title: Antidumping and Plant Closure Abstract: As an indicator of 'material injury' in antidumping petitions, companies often claim plant closings have been caused by unfairly-traded imports or threaten plant closings if no relief is provided. This paper analyzes a sample of 91 companies involved in US antidumping proceedings in the 2002 to 2005 period to examine the determinants of plant closing activity with particular emphasis on the role of the antidumping process in the timing of plant closing announcements. We find that larger firms and firms in declining sectors are more likely to close plants, and that the prize of Byrd Amendment funds may help keep plants in operation (especially for smaller firms for whom these funds are likely to be more important). However, there does not appear to be a consistent and significant relationship between antidumping petitions and the timing of plant closings. Journal: International Journal of the Economics of Business Pages: 99-109 Issue: 1 Volume: 14 Year: 2007 Keywords: Plant Closure, Antidumping, Byrd Amendment, X-DOI: 10.1080/13571510601097165 File-URL: http://www.tandfonline.com/10.1080/13571510601097165 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:14:y:2007:i:1:p:99-109 Template-Type: ReDIF-Article 1.0 Author-Name: Maria De Paola Author-X-Name-First: Maria Author-X-Name-Last: De Paola Author-Name: Vincenzo Scoppa Author-X-Name-First: Vincenzo Author-X-Name-Last: Scoppa Title: Delegation, Skill Acquisition and Turnover Costs Abstract: The delegation of tasks to a subordinate and his access to key firm resources allow an organization to make optimal use of his knowledge and ability, but at the same time, thanks to on-the-job learning and the possibility of expropriation of these resources, this might increase the agent's outside options. We model these risks as an increase in the quit propensity of the agent which determines higher turnover costs for the firm. The choice of the degree of delegation a principal offers to her subordinate is analyzed taking into account its benefits and costs. We show that the level of delegation is influenced by the principal's and the agent's abilities, but it is lower the higher turnover costs are and the lower the degree of specificity of human capital is or the higher the degree of expropriability of resources is. Finally, bureaucratic rules establishing the documentation of the agent's activity are seen as a device to reduce turnover costs and to allow more delegation. Journal: International Journal of the Economics of Business Pages: 111-133 Issue: 1 Volume: 14 Year: 2007 Keywords: Organizational Design, Delegation, Human Capital, Turnover Costs, Bureaucracy, X-DOI: 10.1080/13571510601097173 File-URL: http://www.tandfonline.com/10.1080/13571510601097173 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:14:y:2007:i:1:p:111-133 Template-Type: ReDIF-Article 1.0 Author-Name: Stephanie Rosenkranz Author-X-Name-First: Stephanie Author-X-Name-Last: Rosenkranz Author-Name: Utz Weitzel Author-X-Name-First: Utz Author-X-Name-Last: Weitzel Title: Strategic Positioning of Alliances Abstract: In this paper we use a simple linear demand structure to analyze firms' and alliances' strategic positioning with regard to cost reduction and product differentiation. In particular, we compare investment decisions under competition and in alliances and analyze comparative static properties concerning changes in market size. In contrast to Porter (1980), this model explicitly allows firms to allocate their budget between the two strategies. The analysis reveals that the optimal allocation of resources for strategic positioning changes markedly when a firm enters an alliance: the general investment level decreases with a shift towards more cost reduction and less product differentiation. Another finding is that alliances (as well as independent firms) in larger markets invest more in both strategies and investment is driven towards product differentiation. These results are in line with Klepper's (1996) findings as they show that the attractiveness of following cost leadership or differentiation strategies changes through industry evolution. Journal: International Journal of the Economics of Business Pages: 135-149 Issue: 1 Volume: 14 Year: 2007 Keywords: Alliance, Strategic Positioning, Competitive Strategy, Cost Reduction, Product Differentiation, Innovation, Game Theory, X-DOI: 10.1080/13571510601097199 File-URL: http://www.tandfonline.com/10.1080/13571510601097199 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:14:y:2007:i:1:p:135-149 Template-Type: ReDIF-Article 1.0 Author-Name: Sourafel Girma Author-X-Name-First: Sourafel Author-X-Name-Last: Girma Author-Name: Steve Thompson Author-X-Name-First: Steve Author-X-Name-Last: Thompson Title: Control Transactions: Productivity, Wage and Employment Implications: An Introduction Abstract: Journal: International Journal of the Economics of Business Pages: 153-159 Issue: 2 Volume: 14 Year: 2007 X-DOI: 10.1080/13571510701343832 File-URL: http://www.tandfonline.com/10.1080/13571510701343832 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:14:y:2007:i:2:p:153-159 Template-Type: ReDIF-Article 1.0 Author-Name: John Marsh Author-X-Name-First: John Author-X-Name-Last: Marsh Author-Name: Donald S. Siegel Author-X-Name-First: Donald S. Author-X-Name-Last: Siegel Author-Name: Kenneth L. Simons Author-X-Name-First: Kenneth L. Author-X-Name-Last: Simons Title: Assessing the Effects of Ownership Change on Women and Minority Employees: Evidence from Matched Employer-Employee Data Abstract: While there have been numerous papers on the employment and wage effects of mergers and acquisitions, there has been no direct analysis of the impact of such ownership changes on minority and female workers. This is an unexplored 'equity' dimension of these transactions. We fill this gap by analyzing linked employer-employee data for the entire population of Swedish workers and approximately 16,000 manufacturing plants for the period 1985-1998. For each worker employed in these establishments (as well as the entire population of workers), we have data on gender, age, national origin, level of education, type of education, location, industrial sector, annual earnings, as well as each employee's complete work history during the period. We also have data on numerous plant and firm-level characteristics, which allows us to control for additional factors that might result in changes in labour composition and relative compensation. Our findings suggest that ownership change does not significantly alter the relative earnings and employment status of minority and female workers. Journal: International Journal of the Economics of Business Pages: 161-178 Issue: 2 Volume: 14 Year: 2007 Keywords: Mergers and Acquisitions, Human Capital, Earnings, X-DOI: 10.1080/13571510701343873 File-URL: http://www.tandfonline.com/10.1080/13571510701343873 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:14:y:2007:i:2:p:161-178 Template-Type: ReDIF-Article 1.0 Author-Name: Kevin Amess Author-X-Name-First: Kevin Author-X-Name-Last: Amess Author-Name: Mike Wright Author-X-Name-First: Mike Author-X-Name-Last: Wright Title: The Wage and Employment Effects of Leveraged Buyouts in the UK Abstract: Using a unique hand-collected dataset, this study determines and quantifies the effects of LBOs (leveraged buyouts) on wages and employment in 1,350 LBOs. Based on an unbalanced panel 5,369 firms observed over the period 1999-2004, we find that all LBOs taken together have an insignificant effect on employment growth but have significantly lower wage growth than non-LBOs. Disaggregating LBOs we find: (1) wage growth is 0.31 of a percentage point lower for MBOs (management buyouts) and 0.97 of a percentage point lower for MBIs (management buy-ins); and (2) employment growth is 0.51 of a percentage point higher for MBOs and 0.81 of a percentage point lower for MBIs. The results indicate that MBOs and MBIs have a differing impact on firms' wage and employment behaviour and should not be treated as homogenous. The results are consistent with: (1) MBIs and MBOs involving the adjustment of wages to a more sustainable basis; (2) MBOs exploiting growth opportunities that lead to greater employment growth; and (3) MBIs not creating new employment opportunities. Journal: International Journal of the Economics of Business Pages: 179-195 Issue: 2 Volume: 14 Year: 2007 Keywords: Private Equity, Management Buyouts, Management Buy-ins, Employment Demand, Wages, X-DOI: 10.1080/13571510701343923 File-URL: http://www.tandfonline.com/10.1080/13571510701343923 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:14:y:2007:i:2:p:179-195 Template-Type: ReDIF-Article 1.0 Author-Name: Yundan Gong Author-X-Name-First: Yundan Author-X-Name-Last: Gong Author-Name: Holger Gorg Author-X-Name-First: Holger Author-X-Name-Last: Gorg Author-Name: Sara Maioli Author-X-Name-First: Sara Author-X-Name-Last: Maioli Title: Employment Effects of Privatisation and Foreign Acquisition of Chinese State-owned Enterprises Abstract: This paper investigates the effects of domestic privatisation or foreign acquisition of Chinese State-owned Enterprises (SOEs) on employment growth, using firm level data for China and a combination of propensity score matching and difference-in-differences in order to identify the causal effect. Our results suggest that, controlling for output growth there is some evidence that domestic privatisation leads to contemporaneous reductions in employment growth compared to firms that did not undergo an ownership change. By contrast, there is some evidence that foreign acquisitions show higher employment growth in the post acquisition period than non-acquired SOEs. Journal: International Journal of the Economics of Business Pages: 197-214 Issue: 2 Volume: 14 Year: 2007 Keywords: FDI, Privatisation, Labour Demanding, Matching, China, X-DOI: 10.1080/13571510701343972 File-URL: http://www.tandfonline.com/10.1080/13571510701343972 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:14:y:2007:i:2:p:197-214 Template-Type: ReDIF-Article 1.0 Author-Name: Nigel Driffield Author-X-Name-First: Nigel Author-X-Name-Last: Driffield Author-Name: Jun Du Author-X-Name-First: Jun Author-X-Name-Last: Du Title: Privatisation, State Ownership and Productivity: Evidence from China Abstract: This paper examines the relationship between the transfer of ownership between the public and private sectors of Chinese industry, and its impacts on performance. We link ownership changes to productivity growth, and demonstrate that privatisation contributes significantly. We offer an extension that is generally ignored in the literature, in looking at firms that are taken back into state ownership, and evaluating the productivity growth effects of this. Further, we highlight the well-understood simultaneity problems, and demonstrate the hazard of ignoring the issue by comparing various estimators, including the modified control function approach. In general, the results stress the importance of allowing for such endogeneity when evaluating the productivity effects of ownership change. Journal: International Journal of the Economics of Business Pages: 215-239 Issue: 2 Volume: 14 Year: 2007 Keywords: China, Ownership Change, Productivity, X-DOI: 10.1080/13571510701344004 File-URL: http://www.tandfonline.com/10.1080/13571510701344004 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:14:y:2007:i:2:p:215-239 Template-Type: ReDIF-Article 1.0 Author-Name: Patrik Karpaty Author-X-Name-First: Patrik Author-X-Name-Last: Karpaty Title: Productivity Effects of Foreign Acquisitions in Swedish Manufacturing: The FDI Productivity Issue Revisited Abstract: This study analyzes the difference between foreign and domestic ownership of firms with respect to productivity. Recent literature has shown that it is important to study the counter-factual outcome, i.e. what would the outcome be had the domestic firm never been acquired? The analysis is based on a panel of Swedish firm level data. In order to isolate the casual effects due to a takeover a propensity score matching estimator is applied to compare similar treated and untreated firms. The difference-in-difference estimations show that there is a positive effect of foreign acquisition on productivity. Foreign acquisitions increase the productivity in the acquired Swedish firms by between 3 and 11% depending on the estimator chosen. Moreover, this productivity difference does not occur immediately but starts between 1-5 years post acquisition. Journal: International Journal of the Economics of Business Pages: 241-260 Issue: 2 Volume: 14 Year: 2007 Keywords: Multinational firms, Foreign acquisitions, Productivity, Matching, Difference-in-difference, X-DOI: 10.1080/13571510701344038 File-URL: http://www.tandfonline.com/10.1080/13571510701344038 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:14:y:2007:i:2:p:241-260 Template-Type: ReDIF-Article 1.0 Author-Name: Maria Eugenia Delfino Author-X-Name-First: Maria Eugenia Author-X-Name-Last: Delfino Title: Control Changes and Firm Performance in Banking Abstract: This paper examines the effect of control changes on efficiency and productivity in the banking industry of Argentina. This industry represents an interesting case study as banks underwent corporate changes of different types including privatization, foreign acquisition of domestic banks and mergers and acquisitions among local institutions. Bank productivity is measured and decomposed into the effects due to returns to scale, technical progress and efficiency, while bank efficiency is related to a set of variables controlling for changes in bank ownership. The evidence suggests that control changes due to privatization had a positive short-term effect on productivity in part as a result of efficiency gains, which were then gradually lost over time. Results also indicate that foreign acquisitions led to stronger productivity performance of acquired banks, though they did not have any significant effect on efficiency. Finally, mergers and acquisitions had a negative impact on productivity as a result of scale effects despite the long-term efficiency improvements. Journal: International Journal of the Economics of Business Pages: 261-281 Issue: 2 Volume: 14 Year: 2007 Keywords: Bank ownership, Privatization, Foreign acquisition, M&A, Efficiency, Productivity, X-DOI: 10.1080/13571510701344061 File-URL: http://www.tandfonline.com/10.1080/13571510701344061 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:14:y:2007:i:2:p:261-281 Template-Type: ReDIF-Article 1.0 Author-Name: Aoife Hanley Author-X-Name-First: Aoife Author-X-Name-Last: Hanley Author-Name: Vasilios Zervos Author-X-Name-First: Vasilios Author-X-Name-Last: Zervos Title: The Performance of UK Takeovers: Does the Nationality of Acquirers Matter? Abstract: Using data for 755 acquisitions of manufacturing firms in the UK over a seven year period from 1990 to 1996, we find that the direct effect of an acquisition induces a labour productivity dip in the immediate aftermath of a takeover. This dip is seen for UK, US and the rest of the world acquisitions and is of the magnitude of between 6 and 9%. Similar to Harris and Robinson (2002) we conclude that the decline in productivity is consistent with the adjustment costs of acquisition. Journal: International Journal of the Economics of Business Pages: 283-297 Issue: 2 Volume: 14 Year: 2007 Keywords: Acquisitions, Labour Productivity, Adjustment Costs, Multinationals, X-DOI: 10.1080/13571510701344095 File-URL: http://www.tandfonline.com/10.1080/13571510701344095 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:14:y:2007:i:2:p:283-297 Template-Type: ReDIF-Article 1.0 Author-Name: Richard Frank Author-X-Name-First: Richard Author-X-Name-Last: Frank Author-Name: Raymond Hartman Author-X-Name-First: Raymond Author-X-Name-Last: Hartman Author-Name: Benjamin Sommers Author-X-Name-First: Benjamin Author-X-Name-Last: Sommers Title: An Analysis of Price Discrimination in Brand Name Drug Wholesaling Abstract: Accounting measures of profitability are viewed by the academic literature with skepticism, perhaps even disdain. Accounting information and accounting rates of return are, however, relied upon extensively by market participants to compare and contrast the economic performance of alternative investments, alternative companies and alternative industries, at a single point in time and over time. We believe that accounting information and accounting measures of profitability can be useful under specific conditions. We agree that important concerns do arise about the appropriateness of accounting measures for certain analyses. However, one can take these concerns too far. We describe one such situation - one involving an antitrust complaint of price discrimination in a particular network industry - wholesaling in pharmaceutical product markets. Journal: International Journal of the Economics of Business Pages: 299-315 Issue: 3 Volume: 14 Year: 2007 Keywords: Network Industry, Accounting Data, Prescription Data, Antitrust, X-DOI: 10.1080/13571510701597395 File-URL: http://www.tandfonline.com/10.1080/13571510701597395 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:14:y:2007:i:3:p:299-315 Template-Type: ReDIF-Article 1.0 Author-Name: Neil Kay Author-X-Name-First: Neil Author-X-Name-Last: Kay Title: The Evolution of Co-operation, Pairings and Networks Abstract: In this paper we develop an approach that may be helpful in analysing a variety of issues related to the evolution of corporate activity. We analyse the firm as an integrated system concerned with the management and organisation of internal and external linkages between businesses, with the emergence of co-operative behaviour as an endogenous feature of growing systems. It is argued that such a perspective can help illuminate a number of topics relating to the theory of the firm, including its boundaries and the mode of co-ordination of economic activity, particularly the choice between integration and co-operative modes of operation. Journal: International Journal of the Economics of Business Pages: 317-349 Issue: 3 Volume: 14 Year: 2007 Keywords: Co-operation, Merger, Diversification, Pairings, Networks, X-DOI: 10.1080/13571510701597585 File-URL: http://www.tandfonline.com/10.1080/13571510701597585 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:14:y:2007:i:3:p:317-349 Template-Type: ReDIF-Article 1.0 Author-Name: Moshe Kim Author-X-Name-First: Moshe Author-X-Name-Last: Kim Author-Name: Ana Lozano-Vivas Author-X-Name-First: Ana Author-X-Name-Last: Lozano-Vivas Author-Name: Antonio Morales Author-X-Name-First: Antonio Author-X-Name-Last: Morales Title: Multistrategic Spatial Competition in Banking Abstract: This paper presents a model whereby banking firms use various strategies (price and non-price) simultaneously in a monopolistically competitive model of spatial competition when the various strategies are used across different markets in the presence of a multioutput technology. The theoretical model is estimated with Spanish data pertaining to the pre- and post-deregulatory periods in order to investigate the effects of deregulation of both interest rates and branches on the (differential) strategic conduct of private and savings bank. Journal: International Journal of the Economics of Business Pages: 351-366 Issue: 3 Volume: 14 Year: 2007 Keywords: Spatial Competition, Multistrategic, Banking, X-DOI: 10.1080/13571510701597502 File-URL: http://www.tandfonline.com/10.1080/13571510701597502 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:14:y:2007:i:3:p:351-366 Template-Type: ReDIF-Article 1.0 Author-Name: Christine Harbring Author-X-Name-First: Christine Author-X-Name-Last: Harbring Author-Name: Bernd Irlenbusch Author-X-Name-First: Bernd Author-X-Name-Last: Irlenbusch Author-Name: Matthias Krakel Author-X-Name-First: Matthias Author-X-Name-Last: Krakel Author-Name: Reinhard Selten Author-X-Name-First: Reinhard Author-X-Name-Last: Selten Title: Sabotage in Corporate Contests - An Experimental Analysis Abstract: In corporate contests, employees compete for a prize. Ideally, contests induce employees to exert productive effort which increases their probability of winning. In many environments, however, employees can also improve their own ranking position by harming their colleagues. Such negative incentive effects of corporate contests are largely unexplored, which can partly be attributed to the fact that sabotaging behavior is almost unobservable in the field. In this study we analyze behavior in experimental contests with heterogeneous players who are able to mutually sabotage each other. We find that sabotaging behavior systematically varies with the composition of different types of contestants. Moreover, if the saboteur's identity is revealed sabotage decreases while retaliation motives prevail. Our results promise to be valuable when designing corporate contests. Journal: International Journal of the Economics of Business Pages: 367-392 Issue: 3 Volume: 14 Year: 2007 Keywords: Bullying, Contest, Experiments, Sabotage, Tournament, X-DOI: 10.1080/13571510701597445 File-URL: http://www.tandfonline.com/10.1080/13571510701597445 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:14:y:2007:i:3:p:367-392 Template-Type: ReDIF-Article 1.0 Author-Name: Xuxin Yu Author-X-Name-First: Xuxin Author-X-Name-Last: Yu Title: The Industry Determinants of Exchange Rate Pass-Through to Chinese Domestic Prices, 1980-2002 Abstract: Previous research has found industry- and time-varying effects of the exchange rate on domestic producer prices in China for the years 1980-2002. In this study, I examine the determinants of these variations. The variation of pass-through elasticity across industries is explained by a set of variables that characterize market competitiveness, while the change of the pass-through elasticity over time is interpreted by infrastructure development and the increasing proportion of non-state-owned enterprises in the economy, along with the structural break in years 1993-94. This study sheds light on the current debate on the effect of the urged appreciation of the Chinese Yuan. Journal: International Journal of the Economics of Business Pages: 393-408 Issue: 3 Volume: 14 Year: 2007 Keywords: Exchange Rate, Pass-Through, Domestic Prices, Determinants, Industry, China, X-DOI: 10.1080/13571510701597536 File-URL: http://www.tandfonline.com/10.1080/13571510701597536 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:14:y:2007:i:3:p:393-408 Template-Type: ReDIF-Article 1.0 Author-Name: Stephen Standifird Author-X-Name-First: Stephen Author-X-Name-Last: Standifird Author-Name: Marc Weinstein Author-X-Name-First: Marc Author-X-Name-Last: Weinstein Title: The Transaction Cost Economics of Market-based Exchange: The Impact of Reputation and External Verification Agencies Abstract: In this analysis, we empirically investigate market-based transaction costs. We measure market-based transaction costs indirectly by examining variations in market prices when selling Morgan Silver Dollars on eBay. We find that the reputation of both the seller and the coin-rating agency employed significantly influences the price premium obtained. Moreover, we find that the use of a coin-rating agency with a poor reputation proved more damaging than the use of no coin-rating agency. Thus, we find support for the suggestion that the reputation of sellers and third-party verification agencies have a significant influence on perceived market-based transaction costs. Journal: International Journal of the Economics of Business Pages: 409-431 Issue: 3 Volume: 14 Year: 2007 Keywords: Transaction Costs, Reputation, Online Auctions, X-DOI: 10.1080/13571510701597510 File-URL: http://www.tandfonline.com/10.1080/13571510701597510 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:14:y:2007:i:3:p:409-431 Template-Type: ReDIF-Article 1.0 Author-Name: Ekkehardt Bauer Author-X-Name-First: Ekkehardt Author-X-Name-Last: Bauer Author-Name: Hans-Peter Burghof Author-X-Name-First: Hans-Peter Author-X-Name-Last: Burghof Title: The Economics of State Subsidies in Early Stage Financing Abstract: We analyze the effect of state subsidies on early stage investments. In a two-period investment model with incomplete stage financing contracts, we describe optimal and second-best investment levels. Optimality depends on external effects: given that private early stage financing generates positive external effects, the subsidies might be designed to use scarce state money most efficiently to mobilize private investment capital. However, a subsidy might also contribute to greater efficiency of the contractual relationship itself without regard to external effects. Refinancing subsidies can be optimal under both perspectives and are always optimal under last of the two approaches. The comparison of the main types of subsidies, i.e. refinancing subsidies, guarantees and direct investments, speaks against the use of guarantees. Finally, we show that our results do also hold if some investors (e.g. venture capitalists) have a superior screening capability. Journal: International Journal of the Economics of Business Pages: 433-457 Issue: 3 Volume: 14 Year: 2007 Keywords: Early Stage Financing, State Subsidies, Investment Decision, Venture Capital, X-DOI: 10.1080/13571510701597353 File-URL: http://www.tandfonline.com/10.1080/13571510701597353 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:14:y:2007:i:3:p:433-457 Template-Type: ReDIF-Article 1.0 Author-Name: James Langenfeld Author-X-Name-First: James Author-X-Name-Last: Langenfeld Author-Name: Wenqing Li Author-X-Name-First: Wenqing Author-X-Name-Last: Li Title: Price Discrimination and the Cruise Line Industry: Implications for Market Definition, Competition, and Consumer Welfare Abstract: This article extends the price discrimination literature and applies it to market definition and competitive effects analysis in recent mergers in the cruise line industry. In that industry, short run output is fixed. If firms want to increase price and restrict output to price-insensitive customers, they have to increase the output and lower price to the price-sensitive customers. We show that with fixed output (1) it is in firms' interest to engage in price discrimination, (2) firms have increased ability to engage profitably in price discrimination as the intensity of competition decreases, and (3) the average price of price-sensitive and -insensitive consumers increase with reduced competition. Unlike the economists at the Federal Trade Commission, our analysis suggests that cruise lines engage in third-degree price discrimination. Moreover, the cruise industry could be a separate market and a reduction in the number of competitors might raise average prices. Journal: International Journal of the Economics of Business Pages: 1-25 Issue: 1 Volume: 15 Year: 2008 Keywords: Price Discrimination, Fixed Output, Oligopolistic Competition, Antitrust, Merger, Cruise Industry, X-DOI: 10.1080/13571510701830440 File-URL: http://www.tandfonline.com/10.1080/13571510701830440 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:15:y:2008:i:1:p:1-25 Template-Type: ReDIF-Article 1.0 Author-Name: Pascal Courty Author-X-Name-First: Pascal Author-X-Name-Last: Courty Author-Name: Mario Pagliero Author-X-Name-First: Mario Author-X-Name-Last: Pagliero Title: Do Consumers Care about how Prices are Set? Abstract: Using a survey approach, we ask consumers to reveal their preferences over pricing schemes that may differ in terms of the average price of consumption, the amount of price variation, and the probability of being rationed. We find that consumers dislike pricing schemes that vary prices more but that they are willing to trade off price variation and rationing. Surprisingly, they are not willing to trade off an increase in price variation for a decrease in expected prices. We discuss the implications of these findings for firm pricing policies. Journal: International Journal of the Economics of Business Pages: 27-43 Issue: 1 Volume: 15 Year: 2008 Keywords: Consumer Demand, Rationing, Demand Fluctuation, Antagonism, Fairness, X-DOI: 10.1080/13571510701830457 File-URL: http://www.tandfonline.com/10.1080/13571510701830457 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:15:y:2008:i:1:p:27-43 Template-Type: ReDIF-Article 1.0 Author-Name: Brian Diepold Author-X-Name-First: Brian Author-X-Name-Last: Diepold Author-Name: Robert Feinberg Author-X-Name-First: Robert Author-X-Name-Last: Feinberg Author-Name: David Round Author-X-Name-First: David Author-X-Name-Last: Round Author-Name: Jeremy Tustin Author-X-Name-First: Jeremy Author-X-Name-Last: Tustin Title: Merger Impacts on Investor Expectations: An Event Study for Australia Abstract: In previous work, little evidence of share-price response to Australian price-fixing investigations was found. However, these investigations often involve a small part of a company's operations and antitrust penalties have tended to be relatively small; in fact, some weak support was found for a greater response by investors when penalties were expected to be more significant. Mergers, on the other hand, clearly represent a much more significant event, and we would anticipate a clearer share-price response both to announced mergers and to associated antitrust challenges. While such studies have been done in other countries (primarily for the US), we know of no prior research of this sort for Australia. In this paper we focus on a sample of about 50 mergers and acquisitions involving Australian companies from 1996 to 2003, examining the impact on share prices of the announcement of these mergers both on the firms involved and on rival firms. For those which were challenged by the Australian antitrust enforcers, we also consider the impact of the announcement of such a challenge. Journal: International Journal of the Economics of Business Pages: 45-62 Issue: 1 Volume: 15 Year: 2008 Keywords: Mergers, Australian Enforcement, Returns to Acquirers, Event Study, X-DOI: 10.1080/13571510701830465 File-URL: http://www.tandfonline.com/10.1080/13571510701830465 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:15:y:2008:i:1:p:45-62 Template-Type: ReDIF-Article 1.0 Author-Name: David Paton Author-X-Name-First: David Author-X-Name-Last: Paton Title: Advertising as an Entry Deterrent: Evidence from UK firms Abstract: Advertising is widely considered to be an important isolating mechanism through which firms may defend an established competitive advantage. However, there is relatively little empirical evidence on the extent of the strategic use of advertising either to deter or in response to entry. In this paper, I report on a study of the advertising practices of 843 medium-sized and large UK-based firms. Nearly one-quarter of all the advertisers surveyed state that they attribute importance to entry deterrence as an aim of their advertising. Further, one in five managers of advertising firms state that they would increase advertising expenditure if a new rival company appeared in their market. It is also apparent that there is a strong correlation between the perceived importance of advertising as an entry-deterring tool and the intensity of advertising spending. Multivariate modelling provides confirmation that the existence of a sheltered market position, and the profitability that typically accompanies this, provides a statistically significant determinant of the decision to use advertising as a strategic entry-deterring weapon. Journal: International Journal of the Economics of Business Pages: 63-83 Issue: 1 Volume: 15 Year: 2008 Keywords: Advertising, Survey Data, Entry, X-DOI: 10.1080/13571510701830507 File-URL: http://www.tandfonline.com/10.1080/13571510701830507 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:15:y:2008:i:1:p:63-83 Template-Type: ReDIF-Article 1.0 Author-Name: Lukasz Grzybowski Author-X-Name-First: Lukasz Author-X-Name-Last: Grzybowski Title: The Competitiveness of Mobile Telephony across the European Union Abstract: This paper analyses the competitiveness of the mobile telecommunications industry across the European Union. A structural model of demand and supply has been estimated for annual data on 15 EU countries from 1998 to 2002. Estimates of country-specific conjectural variations allow us to compare the competitiveness of mobile telephony across the EU, and can offer an alternative to the evaluation of competition based on direct cross-country price comparisons. Average industry conjectural variations decrease over time as a result of regulation. The liberalization of fixed telephone lines and the introduction of number portability for mobiles increase the competitiveness of the mobile industry. Journal: International Journal of the Economics of Business Pages: 99-115 Issue: 1 Volume: 15 Year: 2008 Keywords: Regulatory Policy, Structural Model, Conjectural Variation, X-DOI: 10.1080/13571510701830549 File-URL: http://www.tandfonline.com/10.1080/13571510701830549 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:15:y:2008:i:1:p:99-115 Template-Type: ReDIF-Article 1.0 Author-Name: Magali Chaudey Author-X-Name-First: Magali Author-X-Name-Last: Chaudey Author-Name: Muriel Fadairo Author-X-Name-First: Muriel Author-X-Name-Last: Fadairo Title: Contractual Design as a Determinant of Performance: Evidence from Franchising Abstract: This empirical note deals with the contractual design of relationships between producers and retailers. It provides evidence on the links between the features of vertical contracts organizing franchising networks and the performances of these networks. An agency perspective is used to understand the structure of contracts. We focus on the relevance of vertical restraints by the upstream firm to prevent retailers from free-riding in the distribution networks. From six frequent contractual provisions we distinguish two types of contracts according to the degree of constraint imposed on the franchisees. Econometric estimations carried out on this basis offer evidence consistent with the hypothesis that within franchising systems, more constrained contracts for retailers encourage better performance at the network level. Journal: International Journal of the Economics of Business Pages: 117-127 Issue: 1 Volume: 15 Year: 2008 Keywords: Vertical Restraints, Franchising Network Performance, Agency Theory, X-DOI: 10.1080/13571510701830556 File-URL: http://www.tandfonline.com/10.1080/13571510701830556 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:15:y:2008:i:1:p:117-127 Template-Type: ReDIF-Article 1.0 Author-Name: Paul Natke Author-X-Name-First: Paul Author-X-Name-Last: Natke Title: Asset Substitution and Capital Use by Firms Facing Financial Repression Abstract: Firm behavior is examined during a period of financial repression in Brazil. Empirical findings indicate that firms experiencing rising inflation rates: (1) increase their capital stock while reducing liquid asset holdings; (2) experience increases in the productivity of capital (i.e. a rise in the output-capital ratio); (3) increase the scale of the firm's operations both because of the rising capital productivity and the greater quantity of capital; (4) most firms increase liquid asset holdings as they expand production, although Brazilian firms do so at about twice the rate of multinational firms; (5) do not change overall inventory holdings; however, inventories increase as output rises for multinational firms while for Brazilian firms inventories decrease as output rises; and (6) firms that are more likely to face financial constraints expand their scale of operations at a faster rate as they accumulate more debt. Journal: International Journal of the Economics of Business Pages: 129-145 Issue: 1 Volume: 15 Year: 2008 Keywords: Complementarity Hypothesis, Capital Utilization, Asset Substitution, Financial Repression, X-DOI: 10.1080/13571510701830564 File-URL: http://www.tandfonline.com/10.1080/13571510701830564 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:15:y:2008:i:1:p:129-145 Template-Type: ReDIF-Article 1.0 Author-Name: Natsuko Iwasaki Author-X-Name-First: Natsuko Author-X-Name-Last: Iwasaki Author-Name: Yasushi Kudo Author-X-Name-First: Yasushi Author-X-Name-Last: Kudo Author-Name: Carol Horton Tremblay Author-X-Name-First: Carol Horton Author-X-Name-Last: Tremblay Author-Name: Victor Tremblay Author-X-Name-First: Victor Author-X-Name-Last: Tremblay Title: The Advertising-price Relationship: Theory and Evidence Abstract: The relationship between advertising and price is important because the welfare effect of advertising depends upon the price effect of advertising. We attempt to provide a better understanding of the theoretical relationship between advertising and price. We establish theoretical conditions sufficient for advertising to raise prices. This will occur, for example, when firms play a supermodular game - a structure that considers the type of advertising (i.e., persuasive, image creating, or informative) and the effect that advertising has on a firm's demand and costs. We also compare results from two simple duopoly models, one with horizontal and the other with vertical differentiation, and find that only the model with horizontal differentiation is supermodular for the forms of advertising that are thought to raise price (e.g., persuasive advertising). In consideration of these theoretical issues, we then develop an empirical model to determine whether advertising raises prices in the US brewing and cigarette industries. Journal: International Journal of the Economics of Business Pages: 149-167 Issue: 2 Volume: 15 Year: 2008 Keywords: Advertising, Price, Supermodularity, Brewing Industry, Cigarette Industry, X-DOI: 10.1080/13571510802134213 File-URL: http://www.tandfonline.com/10.1080/13571510802134213 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:15:y:2008:i:2:p:149-167 Template-Type: ReDIF-Article 1.0 Author-Name: Joachim Wagner Author-X-Name-First: Joachim Author-X-Name-Last: Wagner Title: Export Entry, Export Exit and Productivity in German Manufacturing Industries Abstract: This paper contributes to the flourishing literature on exports and productivity by using a unique newly available panel of exporting establishments from the manufacturing sector of Germany from 1995 to 2004 to test three hypotheses motivated by a theoretical model by Hopenhayn (Econometrica 1992): (H1) Firms that stop exporting in year t were in t-1 less productive than firms that continue to export in t. (H2) Firms that start to export in year t are less productive than firms that export both in year t-1 and in year t. (H3) Firms from a cohort of export starters that still export in the last year of the panel were more productive in the start year than firms from the same cohort that stopped exporting in between. While results for West Germany support all three hypotheses, this is only the case for (H1) and (H2) in East Germany. Journal: International Journal of the Economics of Business Pages: 169-180 Issue: 2 Volume: 15 Year: 2008 Keywords: Export Entry, Export Exit, Productivity, X-DOI: 10.1080/13571510802134270 File-URL: http://www.tandfonline.com/10.1080/13571510802134270 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:15:y:2008:i:2:p:169-180 Template-Type: ReDIF-Article 1.0 Author-Name: Magnus Talberg Author-X-Name-First: Magnus Author-X-Name-Last: Talberg Author-Name: Christian Winge Author-X-Name-First: Christian Author-X-Name-Last: Winge Author-Name: Stein Frydenberg Author-X-Name-First: Stein Author-X-Name-Last: Frydenberg Author-Name: Sjur Westgaard Author-X-Name-First: Sjur Author-X-Name-Last: Westgaard Title: Capital Structure Across Industries Abstract: The purpose of this article is to examine the capital structure across different industries for companies quoted on a stock exchange and headquartered in the United States. The paper demonstrates significant difference in the capital structure depending on the industry where the company operates. The debt ratio sensitivities to the explanatory variables differ significantly between the five industries studied. Almost every significant coefficient obtained in our regressions is in accordance with capital structure theory and other studies. Debt ratio is negatively related to profitability, growth, and age, while asset structure and company size are positively related. However, the debt ratio of the 50 largest companies in the sample is negatively related to company size, which gives support to a currency hedging hypothesis. Journal: International Journal of the Economics of Business Pages: 181-200 Issue: 2 Volume: 15 Year: 2008 Keywords: Capital Structure, Static Trade-off, Pecking Order, Industry Effects, Listed Companies, X-DOI: 10.1080/13571510802134304 File-URL: http://www.tandfonline.com/10.1080/13571510802134304 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:15:y:2008:i:2:p:181-200 Template-Type: ReDIF-Article 1.0 Author-Name: John Cable Author-X-Name-First: John Author-X-Name-Last: Cable Author-Name: Dennis Mueller Author-X-Name-First: Dennis Author-X-Name-Last: Mueller Title: Testing for Persistence of Profits' Differences Across Firms Abstract: We review the logic and implications underlying both static and dynamic models of competition, and associated tests of competitive effectiveness. Complications arising due to innovation, mergers and cyclical factors are discussed. Points raised in the theoretical discussion are illustrated with case histories and estimates for a number of US and UK companies. The empirical analysis tests a larger set of models than has been used in most previous work, and uses longer time series of company profits. We conclude that the patterns of profits observed in both countries are consistent with a larger and more complicated set of models of the competitive process than has been assumed until now, and that further work remains to be done in clarifying both why some firms are persistently profitable, and the nature of the 'shocks' that appear to produce structural breaks in the time series of companies' profits. Journal: International Journal of the Economics of Business Pages: 201-228 Issue: 2 Volume: 15 Year: 2008 Keywords: Profit Persistence, Competition, Structural Time Series, X-DOI: 10.1080/13571510802134353 File-URL: http://www.tandfonline.com/10.1080/13571510802134353 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:15:y:2008:i:2:p:201-228 Template-Type: ReDIF-Article 1.0 Author-Name: John Cable Author-X-Name-First: John Author-X-Name-Last: Cable Author-Name: Richard Jackson Author-X-Name-First: Richard Author-X-Name-Last: Jackson Title: The Persistence of Profits in the Long Run: A New Approach Abstract: We present a trend-based alternative to the standard first-order autoregression model in persistence of profits studies. This is motivated by reservations over the interpretation of the standard model, and rests on a different concept of dynamic competition. A nine-category taxonomy of long-run persistence stereotypes is developed. Structural time series estimates are presented for a sample of UK companies. We find the null of long run competitive equilibrium not rejected in nearly a third of cases, but non-eroding persistence to be present in around 60%. Journal: International Journal of the Economics of Business Pages: 229-244 Issue: 2 Volume: 15 Year: 2008 Keywords: Profit persistence, Competition, Structural Time Series, X-DOI: 10.1080/13571510802134403 File-URL: http://www.tandfonline.com/10.1080/13571510802134403 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:15:y:2008:i:2:p:229-244 Template-Type: ReDIF-Article 1.0 Author-Name: John Cable Author-X-Name-First: John Author-X-Name-Last: Cable Author-Name: Adelina Gschwandtner Author-X-Name-First: Adelina Author-X-Name-Last: Gschwandtner Title: On Modelling the Persistence of Profits in the Long Run: A Test of the Standard Model for 156 US Companies, 1950-99 Abstract: 'Persistence of profits' studies of competitiveness across samples of firms, and for individual firms, have almost always employed a simple first order autoregression model. Reservations over the use and interpretation of the AR1 in this context raise questions both over the reliability of previous results, and for future research strategy. We test the standard model on a common sample of 156 US companies over a 50 year period against a recently proposed, alternative model that adopts structural time series methods. A statistically significant degree of consistency is found between the two approaches in identifying firms persistently above or below the competitive norm in the long run. However, the structural time series method detects a much higher overall incidence of persistence, and appears to offer advantages in cases where the profit dynamics are more complex. Journal: International Journal of the Economics of Business Pages: 245-263 Issue: 2 Volume: 15 Year: 2008 Keywords: Profit Persistence, Competition, Structural Time Series, X-DOI: 10.1080/13571510802134411 File-URL: http://www.tandfonline.com/10.1080/13571510802134411 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:15:y:2008:i:2:p:245-263 Template-Type: ReDIF-Article 1.0 Author-Name: Timothy Brennan Author-X-Name-First: Timothy Author-X-Name-Last: Brennan Title: Conspiracy in Industry or Conspiracy in Academe? A Review of Yoshiro Miwa and J. Mark Ramseyer, The Fable of the Keiretsu: Urban Legends of the Japanese Economy Abstract: During the 1980s, a widespread belief that the Japanese economy was outperforming that of the US led to a search for causes. Perhaps top on the list was a view that the Japanese had rejected the US model of private market competition, substituting for it the use of very large horizontal and vertical cooperatives, known as keiretsu. These keiretsu were thought to follow the instruction of main banks and the Japanese government rather than their own entrepreneurial insight. Miwa and Ramseyer's book (2006) sets out a detailed case against all of these claims. While the argument about the role of the keiretsu is significant, perhaps more important is the authors' explanation of why the 'fable' was thought real by academics as well as the policy and business community. Journal: International Journal of the Economics of Business Pages: 265-279 Issue: 2 Volume: 15 Year: 2008 Keywords: Keiretsu, Japan, Industrial Organization, Methodology, X-DOI: 10.1080/13571510802134528 File-URL: http://www.tandfonline.com/10.1080/13571510802134528 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:15:y:2008:i:2:p:265-279 Template-Type: ReDIF-Article 1.0 Author-Name: Andrew Eckert Author-X-Name-First: Andrew Author-X-Name-Last: Eckert Author-Name: Douglas West Author-X-Name-First: Douglas Author-X-Name-Last: West Title: Radius Restrictions on Retail Chains and the Similarity of Neighboring Shopping Centers Abstract: In Canada and the US, shopping center developers may impose 'radius restrictions' on tenants in their shopping centers, prohibiting tenants in a particular shopping center from opening another store within a certain radius. Whether a radius restriction is imposed on a chain will depend upon the relative bargaining positions of the chain and the developer. This paper presents an empirical analysis of regional shopping center composition in Canada, using variables that reflect the bargaining power of retail chains and shopping center developers. We find that large, well established, and growing chains are more likely to enter neighboring malls, consistent with the hypothesis that whether a chain enters neighboring malls depends upon its bargaining power. As well, we find that a chain is more likely to enter neighboring malls owned by large developers, consistent with large developers trying to keep retail chains out of the malls of small developers. Journal: International Journal of the Economics of Business Pages: 281-300 Issue: 3 Volume: 15 Year: 2008 Keywords: Retail Chain, Shopping Center, Bargaining Power, Exclusive Dealing, X-DOI: 10.1080/13571510802465088 File-URL: http://www.tandfonline.com/10.1080/13571510802465088 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:15:y:2008:i:3:p:281-300 Template-Type: ReDIF-Article 1.0 Author-Name: Fabio Manenti Author-X-Name-First: Fabio Author-X-Name-Last: Manenti Author-Name: Ernesto Somma Author-X-Name-First: Ernesto Author-X-Name-Last: Somma Title: One-Way Compatibility, Two-Way Compatibility and Entry in Network Industries Abstract: We study the strategic choice of compatibility between two initially incompatible network goods in a two-stage game played by an incumbent and an entrant firm. Compatibility may be achieved by means of a converter. We derive a number of results under different assumptions about the nature of the converter (one-way vs two-way), the existence of property rights and the possibility of side payments. With incompatibility, entry deterrence occurs for sufficiently strong network effects. In the case of a two-way converter, which can only be supplied by the incumbent, incompatibility will result in equilibrium unless side payments are allowed and the network externalities are sufficiently low. When both firms can build a one-way converter and there are no property rights on the necessary technical specifications, the unique equilibrium involves full compatibility. Finally, when each firm has property rights on its technical specifications, full incompatibility is observed at the equilibrium with no side payments; when these are allowed the entrant sells access to its network to the incumbent which refuses to do the same and asymmetric one-way compatibility results in equilibrium. Journal: International Journal of the Economics of Business Pages: 301-322 Issue: 3 Volume: 15 Year: 2008 Keywords: Network Externalities, One-way Compatibility, Two-way compatibility, Entry, X-DOI: 10.1080/13571510802465096 File-URL: http://www.tandfonline.com/10.1080/13571510802465096 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:15:y:2008:i:3:p:301-322 Template-Type: ReDIF-Article 1.0 Author-Name: Uriel Spiegel Author-X-Name-First: Uriel Author-X-Name-Last: Spiegel Author-Name: Uri Ben-Zion Author-X-Name-First: Uri Author-X-Name-Last: Ben-Zion Author-Name: Tchai Tavor Author-X-Name-First: Tchai Author-X-Name-Last: Tavor Author-Name: Joseph Templeman Author-X-Name-First: Joseph Author-X-Name-Last: Templeman Title: The Network Industry, Monopoly Regulation, and Social Optimum Abstract: This paper examines pricing policy, quality levels, consumer surplus and social welfare for the monopoly and non-monopoly case. It is shown that given certain realistic assumptions, the network industry under unregulated monopoly would yield more social welfare than in the case of several producers in the industry, and would therefore be socially preferred. Journal: International Journal of the Economics of Business Pages: 323-337 Issue: 3 Volume: 15 Year: 2008 Keywords: Monopoly, Duopoly, Quality, Network Externalities, Social Optimum, X-DOI: 10.1080/13571510802465104 File-URL: http://www.tandfonline.com/10.1080/13571510802465104 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:15:y:2008:i:3:p:323-337 Template-Type: ReDIF-Article 1.0 Author-Name: Rosa Forte Author-X-Name-First: Rosa Author-X-Name-Last: Forte Author-Name: Antonio Brandao Author-X-Name-First: Antonio Author-X-Name-Last: Brandao Title: A Signalling Model of Firms' Foreign Direct Investment Relocation Decision Abstract: We analyse whether the foreign government can influence the multinational firm's relocation decision, through signalling the amount of subsidy it can grant. The foreign country is one of two possible types which differ on their investment conditions. Comparing the results obtained with an adverse selection model (the government knows the country type but the firm does not) with the results of a signalling model, we conclude that relocation is more likely, and the necessary subsidy is smaller, in the signalling model than with adverse selection. This can explain the proliferation of Investment Support Agencies worldwide. Journal: International Journal of the Economics of Business Pages: 339-357 Issue: 3 Volume: 15 Year: 2008 Keywords: Multinational Firms, Relocation of Production, Signalling Model, X-DOI: 10.1080/13571510802465112 File-URL: http://www.tandfonline.com/10.1080/13571510802465112 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:15:y:2008:i:3:p:339-357 Template-Type: ReDIF-Article 1.0 Author-Name: Francis Fishwick Author-X-Name-First: Francis Author-X-Name-Last: Fishwick Title: Book Prices in the UK Since the End of Resale Price Maintenance Abstract: After the Net Book Agreement was abandoned in 1995 and struck down by the Restrictive Practices Court in 1997, retail book prices were widely expected to fall. Despite deeper and wider retail discounts, official indices show that book prices have subsequently risen more than general inflation. This apparent anomaly may be explained by an argument accepted at the 1962 Restrictive Practices Court hearing: that price competition would lead to concentration and greater buying power in bookselling and to bigger trade discounts from publishers, who would seek to maintain profits by raising list prices. Discounts by retailers would fail to compensate. Evidence provides some support for this explanation. While more research is required to confirm this analysis, it is relevant wherever there is debate about retention of resale price maintenance for books. It also supports the argument for case by case consideration of resale price maintenance, rather than condemnation on principle Journal: International Journal of the Economics of Business Pages: 359-377 Issue: 3 Volume: 15 Year: 2008 Keywords: Resale Price Maintenance, Book Publishing, Price Indices, X-DOI: 10.1080/13571510802465120 File-URL: http://www.tandfonline.com/10.1080/13571510802465120 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:15:y:2008:i:3:p:359-377 Template-Type: ReDIF-Article 1.0 Author-Name: Donald Boudreaux Author-X-Name-First: Donald Author-X-Name-Last: Boudreaux Title: Review of Jean-Jacques Rosa, The Second Twentieth Century Abstract: The book reviewed here contends that production techniques - and in particular today, techniques embodying modern information technology - determine political attitudes and, hence, the structure and role of the state. The book's author, Jean-Jacques Rosa, is not successful in making a compelling case for this thesis. He does, though, offer a host of fascinating observations along the way. Journal: International Journal of the Economics of Business Pages: 379-382 Issue: 3 Volume: 15 Year: 2008 Keywords: Computer, Information Technology, Decentralization, Role of the State, Ideology, X-DOI: 10.1080/13571510802465138 File-URL: http://www.tandfonline.com/10.1080/13571510802465138 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:15:y:2008:i:3:p:379-382 Template-Type: ReDIF-Article 1.0 Author-Name: Lee Mobley Author-X-Name-First: Lee Author-X-Name-Last: Mobley Author-Name: H. E. Frech Author-X-Name-First: H. E. Author-X-Name-Last: Frech Author-Name: Luc Anselin Author-X-Name-First: Luc Author-X-Name-Last: Anselin Title: Spatial Interaction, Spatial Multipliers and Hospital Competition Abstract: The hospital competition literature shows that estimates of the effect of local market structure (concentration) on pricing (competition) are sensitive to geographic market definition. Our spatial lag model approach effects smoothing of the explanatory variables across the discrete market boundaries, resulting in robust estimates of the impact of market structure on hospital pricing, which can be used to estimate the full effect of changes in prices inclusive of spillovers that cascade through the neighboring hospital markets. The full amount, generated by the spatial multiplier effect, is a robust estimate of the impacts of market factors on hospital competition. We contrast ordinary least squares and spatial lag estimates to demonstrate the importance of robust estimation in analysis of hospital market competition. In markets where concentration is relatively high before a proposed merger, we demonstrate that Ordinary Least Squares (OLS) can lead to the wrong policy conclusion while the more conservative lag estimates do not. Journal: International Journal of the Economics of Business Pages: 1-17 Issue: 1 Volume: 16 Year: 2009 Keywords: Spatial Econometrics, Hospital Competition, Market Size, Market Extent, Market Boundary, X-DOI: 10.1080/13571510802638908 File-URL: http://www.tandfonline.com/10.1080/13571510802638908 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:16:y:2009:i:1:p:1-17 Template-Type: ReDIF-Article 1.0 Author-Name: Nigel Driffield Author-X-Name-First: Nigel Author-X-Name-Last: Driffield Author-Name: P.C. (Michelle) Chiang Author-X-Name-First: P.C. Author-X-Name-Last: (Michelle) Chiang Title: The Effects of Offshoring to China: Reallocation, Employment and Productivity in Taiwan Abstract: We examine the extent to which outward FDI from Taiwan to mainland China has contributed to the rising unemployment rate in Taiwan. Further, it examines whether outward FDI has contributed to productivity growth in Taiwan, and the importance of linkages between sectors in determining these effects. We provide strong evidence that Taiwanese firms have increased their investments in China, and that this has lead to a reduction in employment in such sectors at home. Further, we show that these effects are also translated up the supply chain, such that outward FDI also leads to a reduction in employment upstream in the supply chain. Journal: International Journal of the Economics of Business Pages: 19-38 Issue: 1 Volume: 16 Year: 2009 Keywords: FDI, Offshoring, Productivity, X-DOI: 10.1080/13571510802638916 File-URL: http://www.tandfonline.com/10.1080/13571510802638916 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:16:y:2009:i:1:p:19-38 Template-Type: ReDIF-Article 1.0 Author-Name: Shinsuke Kamoto Author-X-Name-First: Shinsuke Author-X-Name-Last: Kamoto Title: Strategic Investment Decisions under Uncertainty, Tacit Collusion and Product Differentiation Abstract: This paper examines the effects of uncertainty, tacit collusion and product differentiation on strategic investment policy. The model demonstrates the equilibrium under competitive investments and under cooperative investments. In competitive investments, two firms compete by investing to preempt each other, and ultimately one firm invests earlier than its rival. In cooperative investments, two firms invest simultaneously and collude on their outputs. Cooperative investments are likely to be sustainable only under conditions of high volatility of future demand, low probability of market extinction and high degree of product differentiation, while competitive investments are sustainable for any set of these parametric values. Journal: International Journal of the Economics of Business Pages: 39-54 Issue: 1 Volume: 16 Year: 2009 Keywords: Real Options, Imperfect Competition, Tacit Collusion, Product Differentiation, X-DOI: 10.1080/13571510802638924 File-URL: http://www.tandfonline.com/10.1080/13571510802638924 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:16:y:2009:i:1:p:39-54 Template-Type: ReDIF-Article 1.0 Author-Name: Kevin Green Author-X-Name-First: Kevin Author-X-Name-Last: Green Title: Competition in the Pharmaceutical Industry: The Case of PAH Drugs Abstract: The nature and extent of competition between different therapies for a given medical condition often is an important and controversial issue in both antitrust cases and general strategic analysis in the pharmaceutical industry. The market for pulmonary arterial hypertension ('PAH') therapies provides an interesting case study for analyzing these issues. An event study analyzing how the stock prices of PAH therapy providers respond to competitive developments in the industry sheds light on the nature of competition among different types of therapies. The results support the view that the strength of competition between any two drugs for the same condition can vary greatly depending on factors such as the stage of the patient's disease, the mode of drug delivery, the mechanism of action, convenience/ease of use and other characteristics. Journal: International Journal of the Economics of Business Pages: 55-71 Issue: 1 Volume: 16 Year: 2009 Keywords: Pharmaceutical Industry, Relevant Markets, Antitrust, Mergers, X-DOI: 10.1080/13571510802638932 File-URL: http://www.tandfonline.com/10.1080/13571510802638932 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:16:y:2009:i:1:p:55-71 Template-Type: ReDIF-Article 1.0 Author-Name: Prabirjit Sarkar Author-X-Name-First: Prabirjit Author-X-Name-Last: Sarkar Title: Do the English Legal Origin Countries have More Dispersed Share Ownership and More Developed Financial Systems? Abstract: The essence of the legal origin hypothesis is that a country with an English legal origin provides better investor and creditor protection and experiences greater financial development; financial institutions and stock markets flourish, the general public participate more in financing investment projects of companies and so shareholding is less concentrated. The present paper examines this hypothesis on the basis of a cross-country study of 85 countries. We find no evidence of more dispersed share ownership in the English law countries than in other countries with different legal origins irrespective of whether we adjust for the existence of transitional economies and less developed countries in the sample. Using three indicators of development of banking and other credit institutions and four indicators of stock market developments, we also find no evidence of more developed financial systems in the English law countries. As expected, there is some evidence of lower financial development in the less developed countries and transitional countries. It is not the English law heritage but the security of persons and goods that appears to explain the cross-country variations in financial development. Journal: International Journal of the Economics of Business Pages: 73-86 Issue: 1 Volume: 16 Year: 2009 Keywords: Law and Finance, Legal Origins, Comparative Law, Share Ownership, X-DOI: 10.1080/13571510802638940 File-URL: http://www.tandfonline.com/10.1080/13571510802638940 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:16:y:2009:i:1:p:73-86 Template-Type: ReDIF-Article 1.0 Author-Name: Eleonora Bartoloni Author-X-Name-First: Eleonora Author-X-Name-Last: Bartoloni Author-Name: Maurizio Baussola Author-X-Name-First: Maurizio Author-X-Name-Last: Baussola Title: The Persistence of Profits, Sectoral Heterogeneity and Firms' Characteristics Abstract: The analysis of the persistence of profits has long been a controversial issue within empirical industrial organisation literature. The aim of our paper is to provide new empirical findings that may account for patterns of both sectoral and firm profit persistence. The distinctive feature of our study is that we analyse a number of firms' ergodic distribution in each sector according to their profit level; we then calculate the difference between such a distribution and that prevailing in manufacturing as a whole. Finally, we break down this distribution; the resulting breakdown highlights the impact of each transition probability on inter-sectoral differences clearly, and it also emphasises the role of intra-sectoral dynamics in determining different persistence patterns. We then apply this methodology to both innovating and non-innovating firms, and conclude that among surviving firms innovation is indeed crucial to the persistence of profits. In addition, we set up an econometric test which enables us to estimate the impact of firm and sectoral characteristics on a firm's profit condition. Journal: International Journal of the Economics of Business Pages: 87-111 Issue: 1 Volume: 16 Year: 2009 Keywords: Persistence, Profitability, Markov Chains, Ordered Probit, X-DOI: 10.1080/13571510802638973 File-URL: http://www.tandfonline.com/10.1080/13571510802638973 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:16:y:2009:i:1:p:87-111 Template-Type: ReDIF-Article 1.0 Author-Name: Martin Campbell-Kelly Author-X-Name-First: Martin Author-X-Name-Last: Campbell-Kelly Author-Name: Daniel Garcia-Swartz Author-X-Name-First: Daniel Author-X-Name-Last: Garcia-Swartz Title: Persistence and Change at the Top of the IT Sector Abstract: We use the DATAMATION index of the top 50 domestic IT companies (1975-1995) to track persistence and change at the top of the sector. The trends that we uncover are increasing instability, rejuvenation (declining average age of entrants coupled with increasing average age of quitters), democratization (diminishing revenue inequality at the top) and growing supply-side intertwining of sub-sectors and industries within IT due to diversification by long-term survivors. Journal: International Journal of the Economics of Business Pages: 113-138 Issue: 1 Volume: 16 Year: 2009 Keywords: Industry Studies (Services): Information and Internet Services, Computer Software, Industry Studies (Manufacturing): Microelectronics, Computers, Communication Equipment, X-DOI: 10.1080/13571510802638981 File-URL: http://www.tandfonline.com/10.1080/13571510802638981 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:16:y:2009:i:1:p:113-138 Template-Type: ReDIF-Article 1.0 Author-Name: John Marshall Author-X-Name-First: John Author-X-Name-Last: Marshall Title: Review of Guillaume Plantin and Jean-Charles Rochet, When Insurers Go Bust: An Economic Analysis of the Role and Design of Prudential Regulation Abstract: When Insurers Go Bust applies agency theory and the theories of adverse selection and moral hazard as the motivation for prudential regulation of insurance. The resulting scheme has strong flavors of verifiability, simplicity, consistency, and transparency. In consequence, ruin theory does not have an operational role. Theory is applied in familiar ways that are at best convenient shorthand for correct ideas and at worst acceptably suggestive. As in other sources, there is inappropriate emphasis on the general theory of excessive risk-taking, which tends to deflect attention from the specific nature of insurance firms, but the theoretical excess is adequately counterbalanced by thoughtful case studies. This book is useful for the insurance scholar and feasible as a segment of an advanced undergraduate course. Journal: International Journal of the Economics of Business Pages: 139-146 Issue: 1 Volume: 16 Year: 2009 Keywords: Moral Hazard, Adverse Selection, Agency Theory, Insurance Regulation, Ruin Theory, X-DOI: 10.1080/13571510802638999 File-URL: http://www.tandfonline.com/10.1080/13571510802638999 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:16:y:2009:i:1:p:139-146 Template-Type: ReDIF-Article 1.0 Author-Name: Paul Legerer Author-X-Name-First: Paul Author-X-Name-Last: Legerer Author-Name: Thomas Pfeiffer Author-X-Name-First: Thomas Author-X-Name-Last: Pfeiffer Author-Name: Georg Schneider Author-X-Name-First: Georg Author-X-Name-Last: Schneider Author-Name: Joachim Wagner Author-X-Name-First: Joachim Author-X-Name-Last: Wagner Title: Organizational Structure and Managerial Decisions Abstract: We investigate how the organizational structure of a firm influences the decision making of its top management. Different organizational structures lead information to be processed in different ways by the individual decision makers, potentially creating an informational cascade within the organization. We analyze two organizational structures: the first inducing sequential information processing, the second inducing batch information processing. In particular, we characterize the optimal organizational structure using the signal precision of the top manager, i.e., the value of his private information. Journal: International Journal of the Economics of Business Pages: 147-159 Issue: 2 Volume: 16 Year: 2009 Keywords: Organization, Informational Cascade, Decision Theory, X-DOI: 10.1080/13571510902917483 File-URL: http://www.tandfonline.com/10.1080/13571510902917483 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:16:y:2009:i:2:p:147-159 Template-Type: ReDIF-Article 1.0 Author-Name: Rosa Bernardini Papalia Author-X-Name-First: Rosa Bernardini Author-X-Name-Last: Papalia Author-Name: Silvia Bertarelli Author-X-Name-First: Silvia Author-X-Name-Last: Bertarelli Title: The Role of Local Agglomeration Economies and Regional Characteristics in Attracting FDI: Italian Evidence Abstract: The objective of this paper is to test for the importance of local agglomeration externalities in determining inward foreign direct investment (FDI) intensity, viewed as a measure of regional attractiveness to FDI. The links between the degree of FDI inflow penetration into Italy and its determinants at the regional level are examined using alternative fixed effects panel data model specifications, also extended to include spatial effects. It is found that sectoral and regional specificities are relevant in attracting inward FDI into Italy and the different effects of intra-sector and inter-sector spillovers can be distinguished. There is also evidence that the importance of agglomeration spillovers connected to the geographical distance varies across regions, indicating both substitution and complementarity effects from FDI inflows into neighboring regions. Journal: International Journal of the Economics of Business Pages: 161-188 Issue: 2 Volume: 16 Year: 2009 Keywords: International Capital Mobility, Agglomeration Spillovers, Spatial Dependence, Censored Panel Data Models, X-DOI: 10.1080/13571510902917442 File-URL: http://www.tandfonline.com/10.1080/13571510902917442 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:16:y:2009:i:2:p:161-188 Template-Type: ReDIF-Article 1.0 Author-Name: Jim Lee Author-X-Name-First: Jim Author-X-Name-Last: Lee Title: Does Size Matter in Firm Performance? Evidence from US Public Firms Abstract: This paper reexamines the determinants of firm performance and, in particular, the role that firm size plays in profitability. A fixed-effects dynamic panel data model for over 7,000 US publicly-held firms during the period 1987-2006 provides evidence that profit rates are positively correlated with firm size in a non-linear manner, holding an array of firm- and industry-specific characteristics constant. In addition, industry-specific fixed effects play a negligible role in the presence of firm-specific fixed effects. Journal: International Journal of the Economics of Business Pages: 189-203 Issue: 2 Volume: 16 Year: 2009 Keywords: Profit Rates, Panel Data, Firm Size, Industry Effects, Firm Effects, X-DOI: 10.1080/13571510902917400 File-URL: http://www.tandfonline.com/10.1080/13571510902917400 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:16:y:2009:i:2:p:189-203 Template-Type: ReDIF-Article 1.0 Author-Name: Vicky Bamiatzi Author-X-Name-First: Vicky Author-X-Name-Last: Bamiatzi Author-Name: Graham Hall Author-X-Name-First: Graham Author-X-Name-Last: Hall Title: Firm versus Sector Effects on Profitability and Growth: The Importance of Size and Interaction Abstract: In this study we contribute to the long-standing debate on the impact of firm versus industry effects on firm performance in three distinct ways; firstly by testing the firm, industry and their interaction effects on performance, secondly by examining the impact of each effect for different size groups, and lastly by measuring performance in terms of sales growth in addition to profitability. We use data of 71,750 UK firms, between 2002 and 2004, and employ moderated regression analysis for three sub-samples namely micro, SMEs and large firms. With regards to profitability, we find the interaction effect to be significant in all sub-samples for broad level of industrial aggregation (SIC4). For narrow industrial aggregation (SIC2), the interaction effect is only significant for micro firms. Neither of the above effects is significant for sales growth. Journal: International Journal of the Economics of Business Pages: 205-220 Issue: 2 Volume: 16 Year: 2009 Keywords: Firm Effect, Industry Effect, Interaction, Profitability, Growth, X-DOI: 10.1080/13571510902917517 File-URL: http://www.tandfonline.com/10.1080/13571510902917517 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:16:y:2009:i:2:p:205-220 Template-Type: ReDIF-Article 1.0 Author-Name: Chrysovalantis Gaganis Author-X-Name-First: Chrysovalantis Author-X-Name-Last: Gaganis Author-Name: Fotios Pasiouras Author-X-Name-First: Fotios Author-X-Name-Last: Pasiouras Title: Efficiency in the Greek Banking Industry: A Comparison of Foreign and Domestic Banks Abstract: This study uses a sample of foreign and domestic banks operating in Greece during 1999-2004 to examine the impact of ownership on efficiency. We estimate an input oriented data envelopment analysis (DEA) model under variable returns to scale with inputs and outputs selected on the basis of a profit-oriented approach. The results indicate an average pure technical efficiency equal to 0.7325 showing that the banks in sample could improve their efficiency by 26.75%. Over the same period, scale efficiency was equal to 0.6830. The comparison of the efficiency scores by group of ownership shows that domestic banks have higher pure technical efficiency and lower scale efficiency; however, the differences are not statistically significant. A DEA window-analysis confirms the results of the cross-section estimations. We also estimate a Tobit regression model but consistent with the univariate results we find no evidence to support the argument that ownership has a statistically significant impact on efficiency. Journal: International Journal of the Economics of Business Pages: 221-237 Issue: 2 Volume: 16 Year: 2009 Keywords: Banks, DEA, Efficiency, Foreign, Greece, X-DOI: 10.1080/13571510902917533 File-URL: http://www.tandfonline.com/10.1080/13571510902917533 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:16:y:2009:i:2:p:221-237 Template-Type: ReDIF-Article 1.0 Author-Name: Adnan Kasman Author-X-Name-First: Adnan Author-X-Name-Last: Kasman Author-Name: Evrim Turgutlu Author-X-Name-First: Evrim Author-X-Name-Last: Turgutlu Title: Total Factor Productivity in the Turkish Insurance Industry Abstract: This paper employs the Malmquist total factor productivity (TFP) index to examine the total factor productivity change in the life and non-life branches of the Turkish insurance sector for the period 2000-2005. The Malmquist productivity index is decomposed into two components: the efficiency change component and the technical change component. The results indicate a decrease of 19.4 % in total factor productivity in the life insurance sector and an increase of 6.1% in the non-life insurance sector during the sample period. Significant TFP growth in the non-life insurance sector has occurred during 2003-2005. This growth is seen to be mainly due to the change in production technology. The firms are then split into two groups, domestic and foreign firms, according to their ownership composition. The results indicate a decline in total factor productivity for both groups in the life insurance sector whereas in the non-life insurance sector, an increase in the total factor productivity of domestic firms is observed. Journal: International Journal of the Economics of Business Pages: 239-247 Issue: 2 Volume: 16 Year: 2009 Keywords: Malmquist TFP Index, Turkish Insurance Industry, Technical Efficiency, Scale Efficiency, X-DOI: 10.1080/13571510902917558 File-URL: http://www.tandfonline.com/10.1080/13571510902917558 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:16:y:2009:i:2:p:239-247 Template-Type: ReDIF-Article 1.0 Author-Name: Claude Crampes Author-X-Name-First: Claude Author-X-Name-Last: Crampes Author-Name: Corinne Langinier Author-X-Name-First: Corinne Author-X-Name-Last: Langinier Title: Are Intellectual Property Rights Detrimental to Innovation? Abstract: Intellectual property rights are legal constraints that limit conditions of entry in industries where incumbents are innovators. The set of legal constraints is the same for all industries, and there is no consideration of the possibility that the externalities created by entry in a given industry may not necessarily be negative for the incumbent, or that the incumbent's R&D expenditures might actually be detrimental to new entrants. We show that one unique set of legal rules can foster innovation in some industries and be detrimental in others. Our model is illustrated by case studies from the Information and Communication Technologies industry. Journal: International Journal of the Economics of Business Pages: 249-268 Issue: 3 Volume: 16 Year: 2009 Keywords: Innovation, Spillover, Leadership, Intellectual Property Rights, X-DOI: 10.1080/13571510903227007 File-URL: http://www.tandfonline.com/10.1080/13571510903227007 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:16:y:2009:i:3:p:249-268 Template-Type: ReDIF-Article 1.0 Author-Name: Stephen Wilks Author-X-Name-First: Stephen Author-X-Name-Last: Wilks Title: The Impact of the Recession on Competition Policy: Amending the Economic Constitution? Abstract: The strengths of the European competition regime are outlined before identifying challenges presented by the financial crisis. The argument moves from enforcement to systemic threats to the credibility of the economic models on which modern competition policy is based. It then turns from banking failures to the crisis in the European motor industry. It suggests that competition policy comprises an 'economic constitution' for the EU which is under threat, but registers the relative complacency of the competition agencies, and argues for a redefinition of policy. The conclusion suggests that the regulatory relationship between the state and the private sector will reflect scepticism about the market and that political changes in the UK and Europe offer radical choices between a reinforced or a marginalised competition policy which the competition policy 'community' needs to confront. Journal: International Journal of the Economics of Business Pages: 269-288 Issue: 3 Volume: 16 Year: 2009 Keywords: Competition Policy, Competition Agencies, Economic Constitution, Industrial Policy, Welfare Economics, Motor Industry, X-DOI: 10.1080/13571510903227015 File-URL: http://www.tandfonline.com/10.1080/13571510903227015 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:16:y:2009:i:3:p:269-288 Template-Type: ReDIF-Article 1.0 Author-Name: Dongsoo Shin Author-X-Name-First: Dongsoo Author-X-Name-Last: Shin Author-Name: S. Andrew Starbird Author-X-Name-First: S. Andrew Author-X-Name-Last: Starbird Title: Risk Taking as Self Discipline in Contractual Relationships Abstract: This paper considers an agency model in which the principal is privately informed of her production technology. In our model, the principal can require the agent to adopt the principal's technology for production, or alternatively, to adopt a technology in the market. Information about the market technology's efficiency is publicly available, and thus can be acquired. We show that, if the variation in technological efficiency is large, the principal prefers to delay acquisition of information about the market technology. The reason is that, the principal uses uncertainty as a device to provide a truth-telling incentive to herself, which, in turn, lowers the cost of inducing the agent to accept the contract. Journal: International Journal of the Economics of Business Pages: 289-304 Issue: 3 Volume: 16 Year: 2009 Keywords: Informed Principal, Self-discipline, Uncertainty, X-DOI: 10.1080/13571510903227023 File-URL: http://www.tandfonline.com/10.1080/13571510903227023 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:16:y:2009:i:3:p:289-304 Template-Type: ReDIF-Article 1.0 Author-Name: Giulio Cainelli Author-X-Name-First: Giulio Author-X-Name-Last: Cainelli Author-Name: Donato Iacobucci Author-X-Name-First: Donato Author-X-Name-Last: Iacobucci Title: Do Agglomeration and Technology Affect Vertical Integration? Evidence from Italian Business Groups Abstract: The aim of this paper is to analyse the role of technology and spatial agglomeration in decisions about vertical integration. It starts from the hypothesis that the business group, defined as a set of firms under common ownership and control, is the appropriate unit to delimit the firm's boundary. We use information drawn from input-output tables to detect the presence of positive inter-industry exchanges and whether or not activities in a group are vertically related. Accounting for endogeneity problems, we estimate Probit and Linear Probability models to investigate the role of technology and spatial agglomeration on vertical integration decisions empirically. Consistent with property rights theory, our results show that the technology intensity of acquirers matters for backward integration choices and, moreover, that agglomeration plays a role in vertical integration only when it operates jointly with technology. Journal: International Journal of the Economics of Business Pages: 305-322 Issue: 3 Volume: 16 Year: 2009 Keywords: Business Groups, Spatial Agglomeration, Technology, Vertical Integration, X-DOI: 10.1080/13571510903227049 File-URL: http://www.tandfonline.com/10.1080/13571510903227049 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:16:y:2009:i:3:p:305-322 Template-Type: ReDIF-Article 1.0 Author-Name: Elias Moreno Author-X-Name-First: Elias Author-X-Name-Last: Moreno Author-Name: Francisco Javier Giron Author-X-Name-First: Francisco Javier Author-X-Name-Last: Giron Author-Name: Francisco Jose Vazquez-Polo Author-X-Name-First: Francisco Jose Author-X-Name-Last: Vazquez-Polo Author-Name: Miguel Negrin Author-X-Name-First: Miguel Author-X-Name-Last: Negrin Title: A Bayesian Net Benefit Approach to Cost-effectiveness Analysis in Health Technology Assessment Abstract: The economic literature on cost-effectiveness analysis in the context of decisions by health technology assessment agencies assumes as the quantity of interest a linear combination of the mean of the sampling distribution of the effectiveness and the cost. We argue that this is not always reasonable. Our reasons for this assertion are that (i) treatments are compared on the basis of mean values, and for some useful models the mean of the distribution of the cost, which is conditional on the available data, does not exist, and (ii) even for models for which the mean does exist, it might not constitute an accurate reflection of the distribution. This paper presents a general Bayesian cost-effectiveness analysis of a single treatment, where the quantity of interest is the distribution, conditional on the data, of the net benefit. This approach permits a natural extension to several treatments, which enables us to make a statistical comparison. Illustrations with treatment comparisons for real and simulated data are given. Journal: International Journal of the Economics of Business Pages: 323-345 Issue: 3 Volume: 16 Year: 2009 Keywords: Bayesian Analysis, Cost-effectiveness of a Treatment, logStudent Distribution, Net Benefit, Treatment Comparison, X-DOI: 10.1080/13571510903227056 File-URL: http://www.tandfonline.com/10.1080/13571510903227056 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:16:y:2009:i:3:p:323-345 Template-Type: ReDIF-Article 1.0 Author-Name: Donald Vitaliano Author-X-Name-First: Donald Author-X-Name-Last: Vitaliano Author-Name: Gregory Stella Author-X-Name-First: Gregory Author-X-Name-Last: Stella Title: A Frontier Approach to Testing the Averch-Johnson Hypothesis Abstract: The mathematical programming technique Data Envelopment Analysis is used to test the famous hypothesis of Averch and Johnson that utility regulation leads to overuse of capital because the regulated firm earns a return s greater than its cost of capital r, an implicit capital subsidy resulting in allocative inefficiency. Technical and allocative inefficiency are based on cost and production frontiers from 337 electric generating plants using 1970 data, and r is based on the Capital Asset Pricing Model. Significant capital overuse and general failure to minimize costs is detected, but a second-step regression analysis finds no relationship between the overuse and the s-r subsidy. A small updated data set covering the period 1980-2004 suggests that overuse of capital is no longer a problem, a result that may be owing to recente deregulation and restructuring. Journal: International Journal of the Economics of Business Pages: 347-363 Issue: 3 Volume: 16 Year: 2009 Keywords: Electric Utilities, Economics of Regulation, Programming Models, X-DOI: 10.1080/13571510903227031 File-URL: http://www.tandfonline.com/10.1080/13571510903227031 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:16:y:2009:i:3:p:347-363 Template-Type: ReDIF-Article 1.0 Author-Name: Robert Sugden Author-X-Name-First: Robert Author-X-Name-Last: Sugden Title: On Nudging: A Review of Nudge: Improving Decisions About Health, Wealth and Happiness by Richard H. Thaler and Cass R. Sunstein Abstract: This paper reviews the case for libertarian paternalism presented by Thaler and Sunstein in Nudge. Thaler and Sunstein argue that individuals' preferences are often incoherent, making paternalism is unavoidable; however, paternalistic interventions should 'nudge' individuals without restricting their choices, and should nudge them towards what they would have chosen had they not been subject to specific limitations of rationality. I argue that the latter criterion provides inadequate guidance to nudgers. It is inescapably normative, and so allows nudgers' conceptions of well-being to override those of nudgees. Even if nudgees' rationality were unbounded, their revealed preferences might still be incoherent. Journal: International Journal of the Economics of Business Pages: 365-373 Issue: 3 Volume: 16 Year: 2009 Keywords: Libertarian Paternalism, Soft Paternalism, Nudging, X-DOI: 10.1080/13571510903227064 File-URL: http://www.tandfonline.com/10.1080/13571510903227064 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:16:y:2009:i:3:p:365-373 Template-Type: ReDIF-Article 1.0 Author-Name: Pedro Barros Author-X-Name-First: Pedro Author-X-Name-Last: Barros Author-Name: Joseph Clougherty Author-X-Name-First: Joseph Author-X-Name-Last: Clougherty Author-Name: Jo Seldeslachts Author-X-Name-First: Jo Author-X-Name-Last: Seldeslachts Title: How to Measure the Deterrence Effects of Merger Policy: Frequency or Composition? Abstract: We show that the number of merger proposals (frequency-based deterrence) is a more appropriate indicator of underlying changes in merger policy than the relative anti-competitiveness of merger proposals (composition-based deterrence). This has strong implications for the empirical analysis of the deterrence effects of merger policy enforcement, and potential implications regarding how to reduce anti-competitive merger proposals. Journal: International Journal of the Economics of Business Pages: 1-8 Issue: 1 Volume: 17 Year: 2010 Keywords: Antitrust, Deterrence, Merger Policy, X-DOI: 10.1080/13571510903516920 File-URL: http://www.tandfonline.com/10.1080/13571510903516920 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:17:y:2010:i:1:p:1-8 Template-Type: ReDIF-Article 1.0 Author-Name: Thomas Hoehn Author-X-Name-First: Thomas Author-X-Name-Last: Hoehn Title: Structure Versus Conduct - A Comparison of the National Merger Remedies Practice in Seven European Countries Abstract: This paper provides a comparative analysis of 234 national merger remedies decisions in the six major EU countries plus one non-EU country, Switzerland. While structural remedies tend to dominate, there are significant differences between countries and sectors. Overall, the analysis reveals a complex interaction between the features of markets which may give rise to competition concerns, the scope for remedial solutions and, not least, the extent of structural interventions in well established antitrust jurisdictions. In the wholesale and retail sector, shop and outlet divestitures are classic. However, they are often accompanied by behavioural remedies that seek to remedy vertical competition issues. In contrast, there is a preference for behavioural remedies in the network and infrastructure industries, with access remedies prominent as the case study of the information and communications sector shows. Journal: International Journal of the Economics of Business Pages: 9-32 Issue: 1 Volume: 17 Year: 2010 Keywords: Merger Law and Policy, Concentration, Remedies, X-DOI: 10.1080/13571510903516938 File-URL: http://www.tandfonline.com/10.1080/13571510903516938 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:17:y:2010:i:1:p:9-32 Template-Type: ReDIF-Article 1.0 Author-Name: Oindrila De Author-X-Name-First: Oindrila Author-X-Name-Last: De Title: Analysis of Cartel Duration: Evidence from EC Prosecuted Cartels Abstract: This study first analyses the life span of the cartels convicted by the European Commission during 1990-2008 and explores certain issues regarding the empirical definition of cartel duration. The cross-section analysis then investigates the determinants of cartel break up using a competing risk Cox proportional hazard model. The result shows that external disturbances and changes in the cartels' own structures play a crucial role in cartel demise. Moreover, the cartel members' ability to enforce their agreement through better organization also dictates its success. The analysis also reveals that when a leniency regime is in operation, cartels tend to be more fragile. Journal: International Journal of the Economics of Business Pages: 33-65 Issue: 1 Volume: 17 Year: 2010 Keywords: Cartels, Duration Analysis, External Disturbances, EU Leniency Policy, Cartel Enforcement, X-DOI: 10.1080/13571510903516946 File-URL: http://www.tandfonline.com/10.1080/13571510903516946 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:17:y:2010:i:1:p:33-65 Template-Type: ReDIF-Article 1.0 Author-Name: Eleanor Morgan Author-X-Name-First: Eleanor Author-X-Name-Last: Morgan Title: Criminal Cartel Sanctions Under the UK Enterprise Act: An Assessment Abstract: The focus of this paper is on the deterrence of 'hard core' cartels through appropriate sanctions. The UK has the toughest provisions in the EU, with a dual system of administrative regulation and fines directed at firms and penalties, including criminal proceedings, targeted at the individuals involved. The paper considers experiences since the introduction of personal criminal sanctions for the UK's 'cartel offence' under the Enterprise Act 2002. Although an enforcement lag was to be expected, the threat of criminal sanctions against individuals to date has seemed more apparent than real. Problems in applying the policy are identified through an assessment in terms of the necessary prerequisites for the successful criminalisation of antitrust offences proposed by Wils (2005) and ongoing developments in the UK are discussed. The findings shed some light on the difficulties of introducing effective criminal sanctions on individual cartel behaviour at Member State level and suggest more general consideration be given to non criminal director disqualifications. Journal: International Journal of the Economics of Business Pages: 67-86 Issue: 1 Volume: 17 Year: 2010 Keywords: UK Competition Policy, Cartels, Cartel Offence, Criminalisation, Criminal Sanctions, Director Disqualification, X-DOI: 10.1080/13571510903516953 File-URL: http://www.tandfonline.com/10.1080/13571510903516953 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:17:y:2010:i:1:p:67-86 Template-Type: ReDIF-Article 1.0 Author-Name: Caroline Elliott Author-X-Name-First: Caroline Author-X-Name-Last: Elliott Author-Name: Yingqi Wei Author-X-Name-First: Yingqi Author-X-Name-Last: Wei Title: The Impact of Regulatory Intervention in the UK Store Card Industry Abstract: The paper examines the impact of regulatory intervention on store card interest rates, for a panel of UK store cards. Panel data estimation methods are used in conjunction with intervention analysis so that the impact of the investigations on store card interest rates can be examined. Results suggest that there is a significant negative impact on store card interest rates. The impact of macroeconomic factors and credit card interest rates on store card interest rates are also taken into account, results indicating that store cards and credit cards should be considered as competing sources of credit. Journal: International Journal of the Economics of Business Pages: 87-98 Issue: 1 Volume: 17 Year: 2010 Keywords: Store Card Industry, Competition Policy, Panel Data Estimation, X-DOI: 10.1080/13571510903516961 File-URL: http://www.tandfonline.com/10.1080/13571510903516961 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:17:y:2010:i:1:p:87-98 Template-Type: ReDIF-Article 1.0 Author-Name: Sven Michal Author-X-Name-First: Sven Author-X-Name-Last: Michal Author-Name: Frank Stussi Author-X-Name-First: Frank Author-X-Name-Last: Stussi Title: Evaluation of Swiss Competition Law Abstract: After several decades of a rather cooperative approach towards the prosecution of competition restrictions in Switzerland, the Federal Act on Cartels and Other Restraints of Competition (Cartel Act) of 1995 introduced a range of new provisions into Swiss competition law. In 2003, the Cartel Act was partially revised and new instruments were introduced, namely financial sanctions, a leniency program and dawn raids. The revised Cartel Act requires the Swiss government to evaluate the effectiveness of the Cartel Act and to submit a report and recommendations on further steps to Parliament. In the evaluation, 15 legal and economic studies were conducted along a policy model comprising concept, implementation, output, impact and economic outcome of competition policy in Switzerland. All in all, the instruments provided in the revision of the Cartel Act in 2003 accomplish the goals of the legislator. However, the studies together suggest that some improvements are feasible and necessary in order to achieve its goals more efficiently from an economic perspective. Journal: International Journal of the Economics of Business Pages: 99-109 Issue: 1 Volume: 17 Year: 2010 Keywords: Competition Policy, Antitrust, Evaluation, X-DOI: 10.1080/13571510903516979 File-URL: http://www.tandfonline.com/10.1080/13571510903516979 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:17:y:2010:i:1:p:99-109 Template-Type: ReDIF-Article 1.0 Author-Name: Joseph Clougherty Author-X-Name-First: Joseph Author-X-Name-Last: Clougherty Title: Competition Policy Trends and Economic Growth: Cross-National Empirical Evidence Abstract: Motivated by the general lack of empirical scholarship concerning the cross-national environment for competition policy, I present measures here of the overall resources dedicated to competition policy and the merger policy work-load for thirty-two antitrust jurisdictions over the 1992-2007 period. The data allow a number of perceived trends in competition policy over the last two decades to be analysed, and allow the generation of some factual insights concerning these trends: e.g. the budgetary commitment to competition policy in the cross-national environment for antitrust has substantially increased over this period; budgetary increases appear to be commensurate with increased antitrust workloads, and yet, the role of economics does not appear to have substantially increased relative to the role of law. Moreover, I am also able to provide some evidence that budgetary commitments to antitrust institutions yield economic benefits in terms of improved economic growth: i.e. higher budgetary commitments to competition policy are associated with higher levels per-capita GDP growth. Journal: International Journal of the Economics of Business Pages: 111-127 Issue: 1 Volume: 17 Year: 2010 Keywords: Growth, Antitrust, Competition Policy, Trends, X-DOI: 10.1080/13571510903516995 File-URL: http://www.tandfonline.com/10.1080/13571510903516995 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:17:y:2010:i:1:p:111-127 Template-Type: ReDIF-Article 1.0 Author-Name: David Mills Author-X-Name-First: David Author-X-Name-Last: Mills Title: Inducing Downstream Selling Effort with Market Share Discounts Abstract: Loyalty discounts and rebates are pricing schemes that offer incentives to buyers for reaching or exceeding certain sales thresholds. In the case of market share discounts, thresholds are expressed as a percentage of the buyer's total purchase requirements. Although market share discounts may have exclusionary effects under certain circumstances when a seller has significant market power, there are plausible non-exclusionary reasons for offering them as well. Two such reasons - rent extraction and inducing downstream selling effort - are explored in this paper. The paper considers the case of a manufacturer who sells a differentiated good through a network of heterogeneous, non-exclusive retailers. The manufacturer offers market share discounts to induce non-contractible selling effort such as brand-specific information or customer service from those retailers who possess certain unobservable characteristics. In some instances, market share discounts induce increased selling effort and improve market performance as compared to linear pricing. In other instances, they have no effect on aggregate benefits, but merely shift the rents created by induced selling effort upstream to the manufacturer. In no instance, as long as the producers of substitute goods retain sufficient sales to remain viable, do market share discounts impair market performance. Journal: International Journal of the Economics of Business Pages: 129-146 Issue: 2 Volume: 17 Year: 2010 Keywords: Market Share Discounts, Loyalty Discounts, Exclusionary Behavior, Procompetitive Effects, X-DOI: 10.1080/13571516.2010.483082 File-URL: http://www.tandfonline.com/10.1080/13571516.2010.483082 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:17:y:2010:i:2:p:129-146 Template-Type: ReDIF-Article 1.0 Author-Name: Jay Squalli Author-X-Name-First: Jay Author-X-Name-Last: Squalli Title: Advertising Expenditure, Enplanement, and Market Concentration Abstract: This paper investigates the long-run relationship between advertising expenditure and enplanement (representing the number of passengers boarding an aircraft), advertising expenditure across carriers, and advertising expenditure and market concentration for the six largest US airlines. Advertising expenditure is evidenced to be strategic, although not clearly effective at increasing enplanement, suggesting collusive behavior. Advertising is also evidenced to be, for the most part, balancing in nature across rival carriers. Further tests suggest a positive and linear relationship with positive bi-directional causality between advertising and market concentration. This paper's findings raise three important questions. First, if advertising is not clearly effective at increasing enplanement, then why advertise? Second, if advertising increases market concentration, then shouldn't airline activities be under some degree of scrutiny, or even be partially regulated? Third, could airline advertising be important in explaining higher post-deregulation fares? Journal: International Journal of the Economics of Business Pages: 147-166 Issue: 2 Volume: 17 Year: 2010 Keywords: Airlines, Advertising, Market Concentration, Enplanement, Bounds Test, Causality, X-DOI: 10.1080/13571516.2010.483084 File-URL: http://www.tandfonline.com/10.1080/13571516.2010.483084 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:17:y:2010:i:2:p:147-166 Template-Type: ReDIF-Article 1.0 Author-Name: Gregory Goering Author-X-Name-First: Gregory Author-X-Name-Last: Goering Title: Distribution Channel Decentralization and Strategic Durability Choice Abstract: In a simple two-period setting we examine a decentralized distribution (marketing) channel consisting of an up-stream durable-goods manufacturer and down-stream retailer. The manufacturer sets the wholesale price and the product's durability while the retailer selects an output level. We show that in this setting, the profit-maximizing manufacturer unambiguously selects a higher durability than the socially efficient (cost-minimizing) level in both uncommitted sales and rental markets. We show this 'reversed planned obsolescence' result is due to the strategic benefit of durability in this double-marginalization (double monopoly mark-up) setting. This is in stark contrast to the usual integrated channel result where the profit-maximizing manufacturer will select an efficient level of durability in rental markets and an inefficiently low durability in uncommitted sales markets (due to the selling firm's commitment problem with potential buyers). Intuitively, with a decentralized distribution channel, the manufacturer faces potential commitment problems with both current buyers and its down-stream retailer. We show, only in cases where both sources of commitment issues are removed (i.e. the manufacturer can credibly commit to both potential buyers and its retailer), will the profit-maximizing durability choice be socially efficient. Journal: International Journal of the Economics of Business Pages: 167-186 Issue: 2 Volume: 17 Year: 2010 Keywords: Channel Decentralization, Durable Goods, Strategy, X-DOI: 10.1080/13571516.2010.483086 File-URL: http://www.tandfonline.com/10.1080/13571516.2010.483086 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:17:y:2010:i:2:p:167-186 Template-Type: ReDIF-Article 1.0 Author-Name: Franz Wirl Author-X-Name-First: Franz Author-X-Name-Last: Wirl Title: Optimal Pricing of Nondurables when Demand is Dynamic and Stochastic Abstract: This paper derives optimal pricing strategies for nondurables if demand is sluggish and stochastic. The puzzling result is that moving from a static demand to a dynamic relation alters the marketing strategy dramatically if the equilibrium demand is convex (in price): the profit maximizing price policy is to switch between a low and a high price depending on current demand while a continuous price policy is optimal for concave demand relations. However, the formal existence of such a price switching policy is restricted to the anyway more realistic stochastic version of the model. The clear cut implications of the model provide also a criterion to test empirically the characteristics and the optimality of actual price strategies. Journal: International Journal of the Economics of Business Pages: 187-206 Issue: 2 Volume: 17 Year: 2010 Keywords: Price Switching, Ito Process, Sluggish, Stochastic and Convex Demand, Nondurables, X-DOI: 10.1080/13571516.2010.483096 File-URL: http://www.tandfonline.com/10.1080/13571516.2010.483096 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:17:y:2010:i:2:p:187-206 Template-Type: ReDIF-Article 1.0 Author-Name: Leonard Wang Author-X-Name-First: Leonard Author-X-Name-Last: Wang Author-Name: Ya-Chin Wang Author-X-Name-First: Ya-Chin Author-X-Name-Last: Wang Title: Input Pricing and Market Share Delegation in a Vertically Related Market: Is the Timing Order Relevant? Abstract: This paper adds to the literature on the strategic use of managers' contracts in competition by examining whether market-share delegation, in which managers receive rewards based on a combination of profits and market share, and the order of moves affect input pricing in a vertically related market. It shows that: (i) input pricing is not affected by delegation form and the order of moves between upstream and downstream firms under quantity competition; (ii) downstream firms obtain the same profit as in the simple Nash equilibrium regardless of delegation forms in a delegation-input price-quantity competition game; and (iii) the upstream monopolist will set input price beforehand regardless of the delegation form. Since the outcomes in our model create higher quantity and lower price in a Cournot product market, it lessens the double-marginalization problem in such a vertically separated industry. Journal: International Journal of the Economics of Business Pages: 207-221 Issue: 2 Volume: 17 Year: 2010 Keywords: Vertical Externality, Input Pricing, Market-share Delegation, Sales Delegation, Timing Order, X-DOI: 10.1080/13571516.2010.483088 File-URL: http://www.tandfonline.com/10.1080/13571516.2010.483088 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:17:y:2010:i:2:p:207-221 Template-Type: ReDIF-Article 1.0 Author-Name: Martin Campbell-Kelly Author-X-Name-First: Martin Author-X-Name-Last: Campbell-Kelly Author-Name: Daniel Garcia-Swartz Author-X-Name-First: Daniel Author-X-Name-Last: Garcia-Swartz Title: The Move to the Middle: Convergence of the Open-Source and Proprietary Software Industries Abstract: In this paper we focus on open-source software within the broader framework of the software industry. More specifically, we compare proprietary and open-source software (OSS) companies in terms of three criteria: (a) approaches to the production of software; (b) business models; and (c) strategic interactions. We postulate three convergence hypotheses. First, there is evidence of convergence in production approaches: leading OSS firms tend to rely on R&D and acquisitions as intensely as leading proprietary companies do. Second, there is evidence of convergence in business models: through dual-licensing models, top OSS firms derive substantial portions of their revenues from licenses, just as many proprietary companies do. Third, there is evidence of convergence in strategic interactions: the competitive strategies that a company follows do not really hinge on the 'proprietary versus open-source' dichotomy, but on whether a firm feels threatened in the software layer where its core assets are located. This evidence of convergence raises a number of interesting questions for economic theory and for the analysis of the industry's future evolution. Journal: International Journal of the Economics of Business Pages: 223-252 Issue: 2 Volume: 17 Year: 2010 Keywords: Industry Studies, Software, Open-Source Software, Production of Software, Business Models, Price Discrimination, X-DOI: 10.1080/13571516.2010.483091 File-URL: http://www.tandfonline.com/10.1080/13571516.2010.483091 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:17:y:2010:i:2:p:223-252 Template-Type: ReDIF-Article 1.0 Author-Name: Rumki Majumdar Author-X-Name-First: Rumki Author-X-Name-Last: Majumdar Title: Did Liberalization Impact Productivity of the Indian Electronics Hardware Industry? Abstract: In this paper, we analyse the trends in productivity, both partial and total, in the four sectors of the Indian electronics hardware industry after liberalization. Using an innovative combination of two established but independent methodologies, we estimate the contributions of technical efficiency change and technological progress to total factor productivity growth (TFPG) and thereby to output growth. Contrary to expectations, we found that none of the four sectors in the industry achieved impressive growth in capital productivity and TFPG despite the new economic reforms. The firms emphasised technological progress at the cost of technical efficiency change but failed to sustain TFPG as the liberalization of policies intensified further. Surprisingly the firms' effort to employ skilled labour, larger scales of production and their strategy to improve production technology through R&D and/or imports did not benefit productivity substantially. In a comparative study with China, we found that the Indian electronics hardware industry did not perform as well as that of China due to the persistent rigid and bureaucratic procedures, labour market inefficiencies and inadequate infrastructure, among others. Journal: International Journal of the Economics of Business Pages: 253-273 Issue: 2 Volume: 17 Year: 2010 Keywords: Indian Electronics Hardware Industry, Total Factor Productivity Growth, Stochastic Production Function, Liberalization, Technical Efficiency Change, Partial Productivity, Technological Progress, X-DOI: 10.1080/13571516.2010.483093 File-URL: http://www.tandfonline.com/10.1080/13571516.2010.483093 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:17:y:2010:i:2:p:253-273 Template-Type: ReDIF-Article 1.0 Author-Name: Michelle Haynes Author-X-Name-First: Michelle Author-X-Name-Last: Haynes Author-Name: Steve Thompson Author-X-Name-First: Steve Author-X-Name-Last: Thompson Title: Proposal for special issue of the International Journal of the Economics of Business on the theme of Developments in Electronic Markets Abstract: Journal: International Journal of the Economics of Business Pages: 275-276 Issue: 2 Volume: 17 Year: 2010 X-DOI: 10.1080/13571516.2010.492669 File-URL: http://www.tandfonline.com/10.1080/13571516.2010.492669 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:17:y:2010:i:2:p:275-276 Template-Type: ReDIF-Article 1.0 Author-Name: Mei Qiu Author-X-Name-First: Mei Author-X-Name-Last: Qiu Author-Name: Bo La Author-X-Name-First: Bo Author-X-Name-Last: La Title: Firm Characteristics as Determinants of Capital Structures in Australia Abstract: This study investigates capital structures of Australian firms in relation to firm characteristics. Using an unbalanced panel of 367 firms observed over a 15-year period from 1992 to 2006, our panel data regression results show that debt-asset ratio is positively related to asset tangibility but inversely related to growth prospects and business risk measured by unlevered beta of equity. We also find that although levered firms are generally more profitable than unlevered firms, profitability decreases the debt ratio of levered firms. We do not find that firm size affects the capital structure of Australian firms. These results are consistent with the pecking order and the agency cost theories but contradict the trade-off theory. Journal: International Journal of the Economics of Business Pages: 277-287 Issue: 3 Volume: 17 Year: 2010 Keywords: Capital Structure, Asset Tangibility, Growth, Business Risk, Profitability, X-DOI: 10.1080/13571516.2010.513810 File-URL: http://www.tandfonline.com/10.1080/13571516.2010.513810 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:17:y:2010:i:3:p:277-287 Template-Type: ReDIF-Article 1.0 Author-Name: Jenny Meyer Author-X-Name-First: Jenny Author-X-Name-Last: Meyer Title: Does Social Software Support Service Innovation? Abstract: Recent Internet technologies and web-based applications, such as social software, are being increasingly applied in firms. Social software can be employed for knowledge management and for external communication enabling access to internal and external knowledge. Knowledge, in turn, constitutes one of the main inputs to service innovation. Hence, social software has the potential to support service innovation. Using data from German IT and knowledge-intensive service firms, this is the first paper that empirically analyses whether the use of social software applications triggers innovation. It refers to a knowledge production function in which social software use constitutes the knowledge sourcing activity. The results reveal a positive relationship between social software and service innovation. Since this result is robust when controlling for former innovative activities and the previous propensity to adopt new technologies and to change processes, the analysis suggests that the causality runs from social software to innovation. Journal: International Journal of the Economics of Business Pages: 289-311 Issue: 3 Volume: 17 Year: 2010 Keywords: Social Software, Web 2.0, Service Innovation, Knowledge Management, X-DOI: 10.1080/13571516.2010.513814 File-URL: http://www.tandfonline.com/10.1080/13571516.2010.513814 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:17:y:2010:i:3:p:289-311 Template-Type: ReDIF-Article 1.0 Author-Name: Johannes Schoder Author-X-Name-First: Johannes Author-X-Name-Last: Schoder Author-Name: Michele Sennhauser Author-X-Name-First: Michele Author-X-Name-Last: Sennhauser Author-Name: Peter Zweifel Author-X-Name-First: Peter Author-X-Name-Last: Zweifel Title: Fine-Tuning of Health Insurance Regulation - Unhealthy Consequences for an Individual Insurer Abstract: This paper sheds light on some unexpected consequences of health insurance regulation that may pose a big challenge to insurers' risk management. Because mandated uniform contributions to health insurance trigger risk-selection efforts, risk adjustment (RA) schemes become necessary. A good deal of research into the optimal RA formula has been performed. A recent proposal in Switzerland has been to add 'Hospitalization exceeding three days during the previous year' as an indicator of high risk. Applying the new formula to an individual Swiss health insurer, its payments into the RA scheme are predicted to increase substantially, reaching up to 13% of premium income. Its mistake had been to implement Managed Care successfully, resulting in low rates of hospitalization. The expected risk management response is to extend hospital stays beyond three days, contrary to stated policy objectives. Journal: International Journal of the Economics of Business Pages: 313-327 Issue: 3 Volume: 17 Year: 2010 Keywords: Health Insurance, Regulation, Risk Management, Risk Adjustment, X-DOI: 10.1080/13571516.2010.513812 File-URL: http://www.tandfonline.com/10.1080/13571516.2010.513812 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:17:y:2010:i:3:p:313-327 Template-Type: ReDIF-Article 1.0 Author-Name: Bhagaporn Wattanadumrong Author-X-Name-First: Bhagaporn Author-X-Name-Last: Wattanadumrong Author-Name: Alan Collins Author-X-Name-First: Alan Author-X-Name-Last: Collins Author-Name: Martin Snell Author-X-Name-First: Martin Author-X-Name-Last: Snell Title: Still Big in Bangkok? An Empirical Analysis of the Regional Distribution of Foreign Direct Investment in Thailand Abstract: This paper analyses regional Foreign Direct Investment (FDI) in Thailand. Its determinants are identified using a unique assembled panel dataset comprising all 76 Thai provinces during the period 1985-2005. The work is premised on the view that foreign investors consider various determinants of location choices in each province (including labour costs, Gross Provincial Products (GPP) per head, areas of industrial estates, communication and transportation issues, population characteristics, educational attainment, population density and distance from the centre of town to the main ports of Thailand) as well as government incentives, before deciding to undertake FDI in a given region. Our econometric model estimates suggest that government regional policy, and the effect of zoning in particular, however, has a significant and positive effect on regional FDI, drawing FDI to those zones where the greatest incentives are on offer. The other possible determinants of FDI amongst regions are largely shown to be insignificant. Journal: International Journal of the Economics of Business Pages: 329-348 Issue: 3 Volume: 17 Year: 2010 Keywords: Multinational Firms, Asia, Regional Economic Development, X-DOI: 10.1080/13571516.2010.516105 File-URL: http://www.tandfonline.com/10.1080/13571516.2010.516105 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:17:y:2010:i:3:p:329-348 Template-Type: ReDIF-Article 1.0 Author-Name: Vicente Salas-Fumas Author-X-Name-First: Vicente Author-X-Name-Last: Salas-Fumas Title: Governance of Knowledge-Intensive Firms in the Modern Market Economy Abstract: We model contracting for joint production between workers and shareholders when investment in knowledge is non-verifiable and the resulting specific human capital embedded in the workers is non-tradable. The model explains how the effective cost of human capital services will vary depending on whether the investment in knowledge is financed by the workers or by the shareholders. We apply the results of the modeling to identify which firms are expected to gain and which to lose from posted trends in higher employability and lower empowerment of workers in modern market economies. Finally, we present conditions on the self-interest of current shareholders to empower workers as a way to stimulate their investment in firm-specific human capital. Journal: International Journal of the Economics of Business Pages: 349-372 Issue: 3 Volume: 17 Year: 2010 Keywords: Corporate Governance, Specific Human Capital, Stakeholders, Knowledge Management, X-DOI: 10.1080/13571516.2010.513811 File-URL: http://www.tandfonline.com/10.1080/13571516.2010.513811 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:17:y:2010:i:3:p:349-372 Template-Type: ReDIF-Article 1.0 Author-Name: Dirk Schindler Author-X-Name-First: Dirk Author-X-Name-Last: Schindler Author-Name: Guttorm Schjelderup Author-X-Name-First: Guttorm Author-X-Name-Last: Schjelderup Title: Profit Shifting in Two-Sided Markets Abstract: We investigate how multinational two-sided platform firms set their prices on intra-firm transactions. Two-sided platform firms derive income from two customer groups that are connected through at least one positive network externality from one group to the other. A main finding is that, even in the absence of taxation, transfer prices deviate from marginal cost of production. A second result of the paper is that it is inherently difficult to establish arm's length prices in two-sided markets. Finally, we find that differences in national tax rates may be welfare enhancing, despite the use of (abusive) transfer prices as a profit-shifting device. Journal: International Journal of the Economics of Business Pages: 373-383 Issue: 3 Volume: 17 Year: 2010 Keywords: Multinational Enterprises, Two-Sided Markets, Profit Shifting, X-DOI: 10.1080/13571516.2010.513815 File-URL: http://www.tandfonline.com/10.1080/13571516.2010.513815 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:17:y:2010:i:3:p:373-383 Template-Type: ReDIF-Article 1.0 Author-Name: Fatma Abdel-Raouf Author-X-Name-First: Fatma Author-X-Name-Last: Abdel-Raouf Title: Trade-Adjusted Concentration Ratios in the US Manufacturing Sector Abstract: This paper incorporates international trade into the four-firm concentration ratio to get a more realistic measure of market structure in the US manufacturing sector using 1997 and 2002 NAICS data. As expected, trade-adjusted CR4 is significantly lower than the published CR4. Moreover, the effect of international trade is higher in 2002 than in 1997, offsetting the increase in domestic concentration and leaving the US manufacturing sector in 2002 as competitive as it was in 1997. Furthermore, different tests are used to check the validity of the results. All of them confirm that trade-adjusted CR4s are significantly lower than their published counterparts. Journal: International Journal of the Economics of Business Pages: 385-403 Issue: 3 Volume: 17 Year: 2010 Keywords: Concentration Ratio, International Trade, Manufacturing Sector, NAICS, X-DOI: 10.1080/13571516.2010.513816 File-URL: http://www.tandfonline.com/10.1080/13571516.2010.513816 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:17:y:2010:i:3:p:385-403 Template-Type: ReDIF-Article 1.0 Author-Name: Jin Luo Author-X-Name-First: Jin Author-X-Name-Last: Luo Author-Name: Li Way Lee Author-X-Name-First: Li Way Author-X-Name-Last: Lee Title: Supramonopoly: Theory and Evidence from the US Air Passenger Service Markets Abstract: A supramonopoly is the market structure of a homogeneous good that is priced higher than the monopoly level. We present evidence of supramonopoly in the US air passenger service. For four airline mergers during the period of 1993 to 2009, we identify routes that dropped fares for no other reason than the increase in market power due to merger. Therefore each of those routes had fare higher than the monopoly level before the merger to monopoly. We explain supramonopoly as the result of a cartel with strongly punitive matching rules. We also discuss the striking implications for antitrust and regulatory policies. Journal: International Journal of the Economics of Business Pages: 405-426 Issue: 3 Volume: 17 Year: 2010 Keywords: Supramonopoly, Cartel, Airline Mergers, Antitrust, Regulation, X-DOI: 10.1080/13571516.2010.513817 File-URL: http://www.tandfonline.com/10.1080/13571516.2010.513817 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:17:y:2010:i:3:p:405-426 Template-Type: ReDIF-Article 1.0 Author-Name: Deborah Haas-Wilson Author-X-Name-First: Deborah Author-X-Name-Last: Haas-Wilson Author-Name: Michael Vita Author-X-Name-First: Michael Author-X-Name-Last: Vita Title: Mergers between Competing Hospitals: Lessons from Retrospective Analyses Abstract: In April 2002, the Federal Trade Commission (FTC) announced the Hospital Merger Retrospective Project to study consummated hospital mergers. This project was precipitated by a long string of unsuccessful hospital merger challenges by the FTC, the US Department of Justice, and the state of California. Accordingly, a principal goal of the retrospective study included "studying consummated hospital mergers to determine whether particular hospital mergers have led to higher prices". The studies presented here represent the output of this project. Collectively, these studies provide important empirical insights into a variety of issues relevant to hospital antitrust analysis, including the scope of relevant geographic markets in hospital merger analysis, the relevance of not-for-profit status on post-merger pricing behavior, and the impact of hospital mergers on clinical quality. Journal: International Journal of the Economics of Business Pages: 1-4 Issue: 1 Volume: 18 Year: 2011 Keywords: Hospital Mergers, Competition in Markets for Hospital Services, Antitrust Policy, X-DOI: 10.1080/13571516.2011.542947 File-URL: http://www.tandfonline.com/10.1080/13571516.2011.542947 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:18:y:2011:i:1:p:1-4 Template-Type: ReDIF-Article 1.0 Author-Name: Orley Ashenfelter Author-X-Name-First: Orley Author-X-Name-Last: Ashenfelter Author-Name: Daniel Hosken Author-X-Name-First: Daniel Author-X-Name-Last: Hosken Author-Name: Michael Vita Author-X-Name-First: Michael Author-X-Name-Last: Vita Author-Name: Matthew Weinberg Author-X-Name-First: Matthew Author-X-Name-Last: Weinberg Title: Retrospective Analysis of Hospital Mergers Abstract: Retrospective analyses of hospital mergers may be uniquely valuable because they speak directly to two important issues - the methods used for delineating relevant geographic markets in hospital merger analysis, and the implications of not-for-profit status on post-merger hospital pricing - that have been systematically misunderstood by the courts and other policy analysts, and which likely have led to systematically biased judicial decisions. By identifying these systematic analytical errors and their implications for judicial decision making, retrospective studies of consummated hospital mergers have the capacity to greatly improve the quality of future antitrust policy making. Journal: International Journal of the Economics of Business Pages: 5-16 Issue: 1 Volume: 18 Year: 2011 Keywords: Anticompetitive Practice, Concentration, Horizontal Integration, X-DOI: 10.1080/13571516.2011.542951 File-URL: http://www.tandfonline.com/10.1080/13571516.2011.542951 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:18:y:2011:i:1:p:5-16 Template-Type: ReDIF-Article 1.0 Author-Name: Deborah Haas-Wilson Author-X-Name-First: Deborah Author-X-Name-Last: Haas-Wilson Author-Name: Christopher Garmon Author-X-Name-First: Christopher Author-X-Name-Last: Garmon Title: Hospital Mergers and Competitive Effects: Two Retrospective Analyses Abstract: We present empirical analyses of the effects of two hospital mergers - both occurring in the northern suburbs of Chicago in 2000 - on the pre- and post-merger prices negotiated with commercial health insurers. Using difference-in-differences methodology and data on actual transaction prices, specifically the prices paid by private health insurance companies and patients for inpatient care, we find one of the mergers was anticompetitive. Relative to price increases at other hospitals, the merger between Evanston Northwestern and Highland Park Hospitals led to large and statistically significant post-merger price increases. Our results are robust across data sources, control groups, and case-mix adjustment methods. Journal: International Journal of the Economics of Business Pages: 17-32 Issue: 1 Volume: 18 Year: 2011 Keywords: Hospital Mergers, Competition in Markets for Health Care Services, Antitrust Policy, X-DOI: 10.1080/13571516.2011.542952 File-URL: http://www.tandfonline.com/10.1080/13571516.2011.542952 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:18:y:2011:i:1:p:17-32 Template-Type: ReDIF-Article 1.0 Author-Name: Gregory Adams Author-X-Name-First: Gregory Author-X-Name-Last: Adams Author-Name: Monica Noether Author-X-Name-First: Monica Author-X-Name-Last: Noether Title: Comment on "Hospital Mergers and Competitive Effects: Two Retrospective Analyses" Abstract: This note explains why the difference-in-differences methodology, as applied by Deborah Haas-Wilson and Christopher Garmon in their paper "Hospital Mergers and Competitive Effects: Two Retrospective Analyses" contained in this issue, does not produce credible results when applied to an assessment of the merger of Evanston and Highland Park Hospital, north of Chicago. Because of data deficiencies, an inability to control adequately for variation in factors that might affect the rate of price changes, and questionable assumptions about the pre-merger equilibrium, the econometric results are inconsistent with other market factors that indicated that the merging hospitals were not close competitors. These market conditions are instead consistent with the view of the largest payer, who opined that the transaction had no effect on its ability to obtain competitive rates. Journal: International Journal of the Economics of Business Pages: 33-40 Issue: 1 Volume: 18 Year: 2011 Keywords: Difference-in-Differences Analysis, Hospital Merger, Competition, Antitrust, Retrospective Analysis, X-DOI: 10.1080/13571516.2011.542953 File-URL: http://www.tandfonline.com/10.1080/13571516.2011.542953 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:18:y:2011:i:1:p:33-40 Template-Type: ReDIF-Article 1.0 Author-Name: Christopher Garmon Author-X-Name-First: Christopher Author-X-Name-Last: Garmon Author-Name: Deborah Haas-Wilson Author-X-Name-First: Deborah Author-X-Name-Last: Haas-Wilson Title: The Use of Multiple Control Groups and Data Sources as Validation in Retrospective Studies of Hospital Mergers Abstract: Journal: International Journal of the Economics of Business Pages: 41-44 Issue: 1 Volume: 18 Year: 2011 Keywords: Hospital Mergers, Competition in Markets for Health Care Services, Antitrust Policy, X-DOI: 10.1080/13571516.2011.542954 File-URL: http://www.tandfonline.com/10.1080/13571516.2011.542954 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:18:y:2011:i:1:p:41-44 Template-Type: ReDIF-Article 1.0 Author-Name: Patrick Romano Author-X-Name-First: Patrick Author-X-Name-Last: Romano Author-Name: David Balan Author-X-Name-First: David Author-X-Name-Last: Balan Title: A Retrospective Analysis of the Clinical Quality Effects of the Acquisition of Highland Park Hospital by Evanston Northwestern Healthcare Abstract: In 2004, the Federal Trade Commission brought a legal action retrospectively challenging the 2000 acquisition of Highland Park Hospital by Evanston Northwestern Healthcare in Evanston, Illinois. A major issue in that case was whether the merger had resulted in improved clinical quality at Highland Park. In this paper, we describe the conceptual framework that guided our analysis of that issue and we report our findings. Specifically, we examine numerous quantitative measures of clinical quality. We find little evidence that the merger improved quality. We also discuss the applicability of our framework to the prospective analysis of unconsummated hospital mergers. Journal: International Journal of the Economics of Business Pages: 45-64 Issue: 1 Volume: 18 Year: 2011 Keywords: Hospital Mergers, Merger Retrospectives, Antitrust Enforcement, Health Care Quality, X-DOI: 10.1080/13571516.2011.542955 File-URL: http://www.tandfonline.com/10.1080/13571516.2011.542955 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:18:y:2011:i:1:p:45-64 Template-Type: ReDIF-Article 1.0 Author-Name: Steven Tenn Author-X-Name-First: Steven Author-X-Name-Last: Tenn Title: The Price Effects of Hospital Mergers: A Case Study of the Sutter-Summit Transaction Abstract: We conduct a retrospective study of the Sutter-Summit hospital merger to assess whether antitrust enforcement in this matter was appropriate. This consummated merger combined two hospitals located close together in the Oakland-Berkeley region of the San Francisco Bay Area. The greater metropolitan area contained many other hospitals that offered a similar range of services, but which were located farther away. A central issue raised by the Sutter-Summit transaction was whether travel costs were low enough such that these hospitals were a sufficient constraint on the merging parties to prevent an anticompetitive price increase. We use detailed claims data from three large health insurers to compare the post-merger price change for the merging parties to the price change for a set of control-group hospitals. Our results show that Summit's price increase was among the largest of any comparable hospital in California, indicating this transaction may have been anticompetitive. Journal: International Journal of the Economics of Business Pages: 65-82 Issue: 1 Volume: 18 Year: 2011 Keywords: Hospital, Merger, Antitrust, X-DOI: 10.1080/13571516.2011.542956 File-URL: http://www.tandfonline.com/10.1080/13571516.2011.542956 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:18:y:2011:i:1:p:65-82 Template-Type: ReDIF-Article 1.0 Author-Name: Gautam Gowrisankaran Author-X-Name-First: Gautam Author-X-Name-Last: Gowrisankaran Title: Estimating the Impact of a Hospital Merger Using the Difference-in-Differences of Prices Abstract: This paper comments on "The Price Effects of Hospital Mergers: A Case Study of Sutter-Summit Transaction" by Steven Tenn. I exposit a simple model of differentiated products competition and consider the implications of Tenn's findings in the context of this model. I find that Tenn provides compelling evidence that the merger led to a price increase at Summit Hospital. The causes of the price increase and the welfare implications of the merger are less clear, particularly since anecdotal evidence suggests that quality increased at Summit Hospital post-merger. A difference-in-differences analysis using quality and quantity data can shed more light on the consequences of the merger. Journal: International Journal of the Economics of Business Pages: 83-89 Issue: 1 Volume: 18 Year: 2011 Keywords: Hospital Mergers, Hospital Quality, Discrete Choice Models, Bertrand Equilibrium, X-DOI: 10.1080/13571516.2011.542957 File-URL: http://www.tandfonline.com/10.1080/13571516.2011.542957 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:18:y:2011:i:1:p:83-89 Template-Type: ReDIF-Article 1.0 Author-Name: Aileen Thompson Author-X-Name-First: Aileen Author-X-Name-Last: Thompson Title: The Effect of Hospital Mergers on Inpatient Prices: A Case Study of the New Hanover-Cape Fear Transaction Abstract: The Federal Trade Commission initiated a Hospital Merger Retrospective Project in 2002 to analyze the effects of consummated mergers. One of the mergers studied was the 1998 acquisition by New Hanover Regional Medical Center ("New Hanover") of Columbia Cape Fear Memorial Hospital ("Cape Fear") in Wilmington, North Carolina. In this paper, we employ patient-level claims data from four different insurers to estimate the effects of this merger on inpatient prices. Our results provide mixed evidence. Two of the insurers experienced substantial post-merger price increases relative to the control group of hospitals. The post-merger price changes for another insurer, however, were comparable to those for the control group, while the fourth insurer actually experienced a significant price decrease following the merger. Thus it is difficult to draw conclusions about the impact of this merger on inpatient pricing. Journal: International Journal of the Economics of Business Pages: 91-101 Issue: 1 Volume: 18 Year: 2011 Keywords: Hospital Competition, Mergers, Nonprofit, X-DOI: 10.1080/13571516.2011.542958 File-URL: http://www.tandfonline.com/10.1080/13571516.2011.542958 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:18:y:2011:i:1:p:91-101 Template-Type: ReDIF-Article 1.0 Author-Name: Gregory Leonard Author-X-Name-First: Gregory Author-X-Name-Last: Leonard Author-Name: G. Steven Olley Author-X-Name-First: G. Steven Author-X-Name-Last: Olley Title: What Can Be Learned About the Competitive Effects of Mergers from "Natural Experiments"? Abstract: Journal: International Journal of the Economics of Business Pages: 103-107 Issue: 1 Volume: 18 Year: 2011 X-DOI: 10.1080/13571516.2011.542959 File-URL: http://www.tandfonline.com/10.1080/13571516.2011.542959 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:18:y:2011:i:1:p:103-107 Template-Type: ReDIF-Article 1.0 Author-Name: Ryan Mutter Author-X-Name-First: Ryan Author-X-Name-Last: Mutter Author-Name: Patrick Romano Author-X-Name-First: Patrick Author-X-Name-Last: Romano Author-Name: Herbert Wong Author-X-Name-First: Herbert Author-X-Name-Last: Wong Title: The Effects of US Hospital Consolidations on Hospital Quality Abstract: The spate of hospital consolidations that occurred in the late 1990s and early 2000s had a profound impact on the US hospital industry. However, only two published studies using data from five states examined the effects of these consolidations on inpatient quality of care. This paper examines the impacts of hospital consolidations that occurred in 1999 and 2000 in 16 states on 25 measures of quality using pre-post, difference-in-differences models. We categorize hospitals participating in consolidations as acquiring institutions, target institutions, or participants in a "merger of equals". We find that the quality effects of consolidations differ by the hospital's role and the quality measure used. Acquiring hospitals experienced significantly improved quality with respect to iatrogenic pneumothorax and postoperative hemorrhage or hematoma, but the quality impacts for target hospitals and "mergers of equals" were mixed. Hospital consolidations appear to have complex, inconsistent effects on quality, as measured using all-payer administrative data, suggesting the need for antitrust agencies to conduct prospective and retrospective reviews of individual mergers. Journal: International Journal of the Economics of Business Pages: 109-126 Issue: 1 Volume: 18 Year: 2011 Keywords: Hospitals, Consolidations, Quality, X-DOI: 10.1080/13571516.2011.542961 File-URL: http://www.tandfonline.com/10.1080/13571516.2011.542961 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:18:y:2011:i:1:p:109-126 Template-Type: ReDIF-Article 1.0 Author-Name: Robert Town Author-X-Name-First: Robert Author-X-Name-Last: Town Title: The Effects of US Hospital Consolidations on Hospital Quality: A Comment Abstract: Journal: International Journal of the Economics of Business Pages: 127-131 Issue: 1 Volume: 18 Year: 2011 X-DOI: 10.1080/13571516.2011.542962 File-URL: http://www.tandfonline.com/10.1080/13571516.2011.542962 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:18:y:2011:i:1:p:127-131 Template-Type: ReDIF-Article 1.0 Author-Name: Kenneth Elzinga Author-X-Name-First: Kenneth Author-X-Name-Last: Elzinga Author-Name: Anthony Swisher Author-X-Name-First: Anthony Author-X-Name-Last: Swisher Title: Limits of the Elzinga-Hogarty Test in Hospital Mergers: The Evanston Case Abstract: The Elzinga-Hogarty (E-H) test for geographic market definition has been widely used by both government enforcement agencies and merging parties in hospital merger cases. However, two characteristics of hospital services markets - the Silent Majority Fallacy and the Payer Problem - may tend to undermine the utility of the E-H test in hospital merger cases. Where direct evidence of anticompetitive effects attributable to a merger is available, its use may diminish the need to rely on geographic market definition tools such as the E-H test. Such direct evidence is most readily available in post-closing merger challenges such as the FTC's Evanston case. It remains to be seen, however, whether the E-H test will continue to be relied on in more traditional, pre-closing merger challenges. Journal: International Journal of the Economics of Business Pages: 133-146 Issue: 1 Volume: 18 Year: 2011 Keywords: Hospital Mergers, Elzinga-Hogarty Test, Relevant Markets, Antimerger Policy, X-DOI: 10.1080/13571516.2011.542963 File-URL: http://www.tandfonline.com/10.1080/13571516.2011.542963 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:18:y:2011:i:1:p:133-146 Template-Type: ReDIF-Article 1.0 Author-Name: Eleanor Morgan Author-X-Name-First: Eleanor Author-X-Name-Last: Morgan Author-Name: H.E. Frech III Author-X-Name-First: H.E. Author-X-Name-Last: Frech III Title: International Journal of the Economics of Business Best Paper Prize Announcement Abstract: Journal: International Journal of the Economics of Business Pages: 147-147 Issue: 1 Volume: 18 Year: 2011 X-DOI: 10.1080/13571516.2011.559817 File-URL: http://www.tandfonline.com/10.1080/13571516.2011.559817 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:18:y:2011:i:1:p:147-147 Template-Type: ReDIF-Article 1.0 Author-Name: C. Daniel Mullins Author-X-Name-First: C. Daniel Author-X-Name-Last: Mullins Author-Name: John Vernon Author-X-Name-First: John Author-X-Name-Last: Vernon Title: Introduction: Economics of the Pharmaceutical Industry: Essays in Honor of Henry G. Grabowski Abstract: Journal: International Journal of the Economics of Business Pages: 149-150 Issue: 2 Volume: 18 Year: 2011 X-DOI: 10.1080/13571516.2011.584415 File-URL: http://www.tandfonline.com/10.1080/13571516.2011.584415 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:18:y:2011:i:2:p:149-150 Template-Type: ReDIF-Article 1.0 Author-Name: Ernst Berndt Author-X-Name-First: Ernst Author-X-Name-Last: Berndt Title: An Overview of Henry Grabowski's Scholarly Contributions Abstract: Journal: International Journal of the Economics of Business Pages: 151-154 Issue: 2 Volume: 18 Year: 2011 X-DOI: 10.1080/13571516.2011.584417 File-URL: http://www.tandfonline.com/10.1080/13571516.2011.584417 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:18:y:2011:i:2:p:151-154 Template-Type: ReDIF-Article 1.0 Author-Name: F. M. Scherer Author-X-Name-First: F. M. Author-X-Name-Last: Scherer Title: Academic Research and Public Policy Abstract: Journal: International Journal of the Economics of Business Pages: 155-160 Issue: 2 Volume: 18 Year: 2011 X-DOI: 10.1080/13571516.2011.584419 File-URL: http://www.tandfonline.com/10.1080/13571516.2011.584419 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:18:y:2011:i:2:p:155-160 Template-Type: ReDIF-Article 1.0 Author-Name: Henry Grabowski Author-X-Name-First: Henry Author-X-Name-Last: Grabowski Title: The Evolution of the Pharmaceutical Industry Over the Past 50 Years: A Personal Reflection Abstract: The pharmaceutical industry has an outstanding record of innovative performance over the past 50 years. The R&D process has become more knowledge-based and a market for innovation has emerged between research start-ups, development-stage firms, and the larger, multinational companies. At the same time, R&D costs have increased several fold over time and generic products now dominate many traditional therapeutic areas. The current challenge for the industry is to discover new therapies for chronic diseases with high unmet needs like Alzheimer's disease and various auto-immune diseases and cancers that afflict an increasingly aging population. Recent advances in molecular biology and related fields provide a scientific foundation to undertake these R&D efforts, although the time path and outcomes remain subject to many risks and uncertainties. Journal: International Journal of the Economics of Business Pages: 161-176 Issue: 2 Volume: 18 Year: 2011 Keywords: Pharmaceuticals, Innovation, R&D, Biotechnology, Generics, Alliances, X-DOI: 10.1080/13571516.2011.584421 File-URL: http://www.tandfonline.com/10.1080/13571516.2011.584421 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:18:y:2011:i:2:p:161-176 Template-Type: ReDIF-Article 1.0 Author-Name: Ernst Berndt Author-X-Name-First: Ernst Author-X-Name-Last: Berndt Author-Name: Murray Aitken Author-X-Name-First: Murray Author-X-Name-Last: Aitken Title: Brand Loyalty, Generic Entry and Price Competition in Pharmaceuticals in the Quarter Century after the 1984 Waxman-Hatch Legislation Abstract: We examine market share and price trends in the quarter century since the 1984 Waxman-Hatch legislation. The generic share of US retail prescriptions has grown from 18.6% in 1984 to 74.5% in 2009, with a notable acceleration in recent years. Whereas in 1994 the generic price index fell from 100 to 65 in the 24 months following initial generic entry, in 2009 the comparable price index was 28. For the prescription drugs most commonly used by beneficiaries in Medicare Part D, rather than increasing by 25-28% as has been reported by the American Association of Retired Persons (focusing entirely on brand prices), we find that once one incorporates substitution to lower priced generics following patent expiration, average price per prescription fell by 21.3% from 2006-09. Finally, we find that the weighted mean reduction in pharmaceutical daily treatment cost across nine therapeutic areas equaled 35.1% at 24 months post-generic entry. Journal: International Journal of the Economics of Business Pages: 177-201 Issue: 2 Volume: 18 Year: 2011 Keywords: Pharmaceuticals, Waxman-Hatch Legislation, Price Competition, Brand Drugs, Generic Drugs, Branded Generic Drugs, X-DOI: 10.1080/13571516.2011.584423 File-URL: http://www.tandfonline.com/10.1080/13571516.2011.584423 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:18:y:2011:i:2:p:177-201 Template-Type: ReDIF-Article 1.0 Author-Name: Ernst Berndt Author-X-Name-First: Ernst Author-X-Name-Last: Berndt Author-Name: Nathan Blalock Author-X-Name-First: Nathan Author-X-Name-Last: Blalock Author-Name: Iain Cockburn Author-X-Name-First: Iain Author-X-Name-Last: Cockburn Title: Diffusion of New Drugs in the Post-TRIPS Era Abstract: We examine the international diffusion of new drugs under the post-TRIPS intellectual property rights regime. Even after controlling for drug characteristics and variation in national health expenditure, we find substantial differences across countries in the probability of a drug being commercially available, lowest in countries such as Brazil, China and India with historically weak patent protection. Notwithstanding obligations now in force under the TRIPS Agreement to provide patent protection for pharmaceutical products, sellers of new drugs are much less likely to have market exclusivity in these countries. Conditional upon being launched, a drug is five to 25 times more likely to be generic/multisource in these countries than in, for example, Spain. Journal: International Journal of the Economics of Business Pages: 203-224 Issue: 2 Volume: 18 Year: 2011 Keywords: TRIPS Agreement, Pharmaceuticals, Patents, Multisource, X-DOI: 10.1080/13571516.2011.584426 File-URL: http://www.tandfonline.com/10.1080/13571516.2011.584426 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:18:y:2011:i:2:p:203-224 Template-Type: ReDIF-Article 1.0 Author-Name: Joseph Cook Author-X-Name-First: Joseph Author-X-Name-Last: Cook Author-Name: Joseph Golec Author-X-Name-First: Joseph Author-X-Name-Last: Golec Author-Name: John Vernon Author-X-Name-First: John Author-X-Name-Last: Vernon Author-Name: George Pink Author-X-Name-First: George Author-X-Name-Last: Pink Title: Real Option Value and Path Dependence in Oncology Innovation Abstract: Drug innovation relies on cumulative, path-dependent, incremental research and development (R&D). In oncology, path-dependence may not be along a single dimension, such as steadily improving efficacy or survival against a given endpoint in the same population, but innovation builds on itself. The next innovation may use a recently developed drug in a new way - e.g., a new line of therapy, or a new indication in a different population, or in combination with other drugs. Of course, in some cases, innovation on a current drug can be the development of a next generation drug. Yet, few have studied how path-dependence impacts the decisions of oncology pharmaceutical producers, consumers, and insurers/payers. This study illustrates how real options can be used to value the effects of path-dependence, that is, the additional value that incremental innovation adds when the innovation is a first step along a path to a major innovation. We show how rational pharmaceutical producers and consumers recognize the additional real option value. However, today, many payers, particularly European governments, may use some form of drug evaluation method that ignores this option value. Observers may wonder how closely the US will follow Europe in its development of comparative-effectiveness research (CER). The American Recovery and Reinvestment Act of 2009 authorizes $1.1 billion to study CER. Previous attempts to measure or compare the value of medicines typically focus only on the direct effect on the initial setting for which the drug receives regulatory approval, and, hence, they ignore real option value. If CER were interpreted this way, its widespread use could reduce oncology R&D, and reduce intermediate innovations that could have led to breakthrough innovations more rapidly and simply. When a particular drug has option value, but payers who set the terms of exchange do not account for that value, the resulting mix of R&D spending will be suboptimal from a social economic welfare perspective. Journal: International Journal of the Economics of Business Pages: 225-238 Issue: 2 Volume: 18 Year: 2011 Keywords: Pharmaceutical R&D, Real Options, Innovation, Path Dependence, Oncology Drugs, X-DOI: 10.1080/13571516.2011.584428 File-URL: http://www.tandfonline.com/10.1080/13571516.2011.584428 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:18:y:2011:i:2:p:225-238 Template-Type: ReDIF-Article 1.0 Author-Name: Patricia Danzon Author-X-Name-First: Patricia Author-X-Name-Last: Danzon Author-Name: Nuno Sousa Pereira Author-X-Name-First: Nuno Author-X-Name-Last: Sousa Pereira Title: Vaccine Supply: Effects of Regulation and Competition Abstract: In US vaccine markets, competing producers with high fixed, sunk costs face relatively concentrated demand. The resulting price and quality competition leads to the exit of all but one or very few producers per vaccine. Our empirical analysis of exits from US vaccine markets supports the hypothesis that high fixed costs and both price and quality competition contribute to vaccine exits. We find no evidence that government purchasing has significant effects, possibly because government purchase tends to increase volume but lower price, with offsetting effects. Evidence from the flu vaccine market confirms that government purchasing is not a necessary condition for exits and the existence of few suppliers per vaccine in the US. Journal: International Journal of the Economics of Business Pages: 239-271 Issue: 2 Volume: 18 Year: 2011 Keywords: Vaccines, Government, Procurement, Firm Exit, Pharmaceuticals, X-DOI: 10.1080/13571516.2011.584429 File-URL: http://www.tandfonline.com/10.1080/13571516.2011.584429 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:18:y:2011:i:2:p:239-271 Template-Type: ReDIF-Article 1.0 Author-Name: David Grabowski Author-X-Name-First: David Author-X-Name-Last: Grabowski Author-Name: John Bowblis Author-X-Name-First: John Author-X-Name-Last: Bowblis Author-Name: Judith Lucas Author-X-Name-First: Judith Author-X-Name-Last: Lucas Author-Name: Stephen Crystal Author-X-Name-First: Stephen Author-X-Name-Last: Crystal Title: Labor Prices and the Treatment of Nursing Home Residents with Dementia Abstract: An important aspect of dementia care for nursing home residents is the management of symptoms such as behavioral problems and wandering. Nursing homes can manage these symptoms using a mix of labor, medications and physical restraints. Medications such as antipsychotics are hypothesized to be a substitute for direct care staff, while physical restraints are considered to be a complement to staff time. Using an instrumental variables approach, we investigate whether an increase in nursing home wages leads to greater substitution towards antipsychotic medications and away from the use of physical restraints. Our results suggest a 10% increase in weekly nursing home wages increases the inappropriate use of antipsychotics among dementia patients by 1.1% to 3.5%, while it decreases the use of physical restraints by roughly 26% to 28%. These findings suggest policymakers should consider nursing home market factors when overseeing and regulating issues of nursing home quality. Journal: International Journal of the Economics of Business Pages: 273-292 Issue: 2 Volume: 18 Year: 2011 Keywords: Factor Substitution, Nursing Homes, Long-Term Care, X-DOI: 10.1080/13571516.2011.584431 File-URL: http://www.tandfonline.com/10.1080/13571516.2011.584431 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:18:y:2011:i:2:p:273-292 Template-Type: ReDIF-Article 1.0 Author-Name: Frank Lichtenberg Author-X-Name-First: Frank Author-X-Name-Last: Lichtenberg Title: Has Pharmaceutical Innovation Reduced Social Security Disability Growth? Abstract: This paper analyzes longitudinal state-level data during the period 1995-2004 to investigate whether use of newer prescription drugs has reduced the ratio of the number of workers receiving Social Security Disability Insurance benefits to the working-age population (the "DI recipiency rate"). All of the estimates indicate that there is a significant inverse relationship between disability recipiency and a good indicator of pharmaceutical innovation use: the mean vintage (FDA approval year) of Medicaid prescriptions. From 1995 to 2004, the actual disability rate increased 30%, from 2.62% to 3.42%. The estimates imply that in the absence of any post-1995 increase in drug vintage, the increase in the disability rate would have been 30% larger: the disability rate would have increased 39%, from 2.62% to 3.65%. This means that in the absence of any post-1995 increase in drug vintage, about 418,000 more working-age Americans would have been DI recipients. Journal: International Journal of the Economics of Business Pages: 293-316 Issue: 2 Volume: 18 Year: 2011 Keywords: Pharmaceutical, Innovation, Disability Social Security, X-DOI: 10.1080/13571516.2011.584432 File-URL: http://www.tandfonline.com/10.1080/13571516.2011.584432 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:18:y:2011:i:2:p:293-316 Template-Type: ReDIF-Article 1.0 Author-Name: C. Daniel Mullins Author-X-Name-First: C. Daniel Author-X-Name-Last: Mullins Author-Name: Jonathan Ratner Author-X-Name-First: Jonathan Author-X-Name-Last: Ratner Author-Name: Daniel Ball Author-X-Name-First: Daniel Author-X-Name-Last: Ball Title: How Do US Health Care Payers React to and Use Pharmacoeconomic Information? Abstract: In 1997, Grabowski and Mullins described why pharmacy benefit management use of pharmacoeconomics was limited. The current manuscript examines recent changes in health care payers' use of pharmacoeconomic information, payers' perceptions of that information's value for informing formulary decision making, and payers' attitudes toward the generation and dissemination of pharmacoeconomic evidence. Despite a perceived improvement in the scientific rigor and "real-world applicability" of pharmacoeconomic information, payers remain skeptical of pharmacoeconomic evidence generated or funded by pharmaceutical manufacturers. This skepticism is reinforced when transparency is limited and when the picture provided of the comparative effectiveness of alternative products is incomplete. Payers suggest that greater two-way communications between payers and drug manufacturers could improve the usefulness of pharmacoeconomic information. Journal: International Journal of the Economics of Business Pages: 317-330 Issue: 2 Volume: 18 Year: 2011 Keywords: Insurance, Pharmacoeconomics, Cost-effectiveness Analysis, Decision Making, X-DOI: 10.1080/13571516.2011.584433 File-URL: http://www.tandfonline.com/10.1080/13571516.2011.584433 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:18:y:2011:i:2:p:317-330 Template-Type: ReDIF-Article 1.0 Author-Name: Adrian Towse Author-X-Name-First: Adrian Author-X-Name-Last: Towse Author-Name: Priya Sharma Author-X-Name-First: Priya Author-X-Name-Last: Sharma Title: Incentives for R&D for New Antimicrobial Drugs Abstract: Antimicrobial resistance (AMR) is becoming a major global public health threat and has begun to command attention from European and US policy makers. An initial focus on monitoring AMR and conserving existing treatments by cutting down on misuse has been complemented by moves towards addressing the paucity of new drugs in the R&D pipeline of the pharmaceutical industry. We identify five economic challenges: the utilisation externality; the lack of incentives for R&D arising from use restrictions, low prices, and scientific and regulatory challenges; the global joint sunk nature of R&D cost; the need for access to drugs in middle and low income countries; and failures in the market for point of care diagnostics. We analyse "push," "pull" and hybrid incentives and conclude that higher prices linked to targeted use with diagnostic tests and/or an AMC-based "prize" for registering (but not necessarily using) desired new drugs would be effective, and could be linked to push measures. US and European collaboration on incentives would be desirable but not if achieving agreement leads to delays. Action on conservation needs to be global and linked to use of new products. This will not be easy given TRIPS provisions and national sensitivities on this issue as seen in the 2010 reaction to evidence on the origins of NDM-1. Journal: International Journal of the Economics of Business Pages: 331-350 Issue: 2 Volume: 18 Year: 2011 Keywords: Antimicrobial Resistance, Incentives, Research and Development, Antibacterials, Net Present Value and Europe, X-DOI: 10.1080/13571516.2011.584434 File-URL: http://www.tandfonline.com/10.1080/13571516.2011.584434 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:ijecbs:v:18:y:2011:i:2:p:331-350 Template-Type: ReDIF-Article 1.0 Author-Name: John Baldwin Author-X-Name-First: John Author-X-Name-Last: Baldwin Author-Name: Yanling Wang Author-X-Name-First: Yanling Author-X-Name-Last: Wang Title: Plant Size, Nationality, and Ownership Change Abstract: