Regulatory Risk and Market Reactions — Empirical Evidence from Germany

In this article we measure the effects of events on risk and return and analyze the persistence of the influencing variables on German energy companies. Therefore, we refer to event-study methods by means of the Capital Asset Pricing Model, GARCH-Modeling and Kalman filters. We find that the discussed events do not affect all companies in an equal manner. Moreover, we show that the impact on risk and returns is not persistent and does not lead to an increase in the overall systematic risk for the considered utility operators in Germany.     

Training and Labour Market Flexibility: Is There a Trade-off?

This paper explores the nexus between work-related training and labour market 'flexibility' (which we proxy by contract type, part-time employment and lack of union coverage), using the first five waves of the British Household Panel Survey (BHPS) conducted over the period 1991–5. Our results show that workers on short-term employment contracts, who are working part-time or are not covered by a union collective agreement, are significantly less likely to be involved in any work-related training to improve or increase their skills. These findings suggest that there is a trade-off between expanding the more marginal forms of employment and expanding the proportion of the work-force getting work-related training.     

How Do Switching Costs Affect Market Concentration and Prices in Network Industries?

I investigate the effects of switching costs on the market outcome in network industries using a dynamic duopoly model of price competition in the presence of an outside option. I find that the role of switching costs depends on network effects and the outside option. Without a viable outside option, high switching costs can neutralize the tendency towards high market concentration associated with network effects, but with a viable outside option, switching costs increase market concentration. Furthermore, switching costs lower prices if network effects are modest and there exists a viable outside option, but generally raise prices otherwise.     

Dis-harmony in European Natural Gas Market(s)—Discussion of Standards and Definitions

The European Union attempts to harmonise the European natural gas market(s). In general, this is supported on national levels. Nevertheless, such harmonisation is not yet fully accomplished: neither for the rules nor for the quality specifications nor for the physical quantities and their units. Even if the current economic impact of such dis-harmony is negligible, i.e. that market participants for the time being do not have to bear additional costs caused by the lack of harmonisation, participants in the commodity market are exposed to contractual risks. Potentially, this might lead to reduced competition and reduced liquidity of each single and the European internal market for natural gas. However, as the costs for a potential harmonisation of European gas markets are estimated to be significant, the dilemma is evident and the ‘political’ solution of the ‘harmonisation problem’ will necessarily deviate from the traders’ one.     

Forced financial information restatements and management turnover: Market discipline and large family shareholders’ intervention in an emerging economy

Using data from Taiwan, this paper investigates the market discipline effects associated with the forced financial information restatement on management turnover, and how family governance intervenes with such market discipline. By integrating legitimacy theory, the institution-based view, and multiple agency perspective, we find that market discipline associated with the forced financial information restatement can be effective to trigger management turnover in an emerging economy. Family ownership strengthens such market discipline by promoting ex-ante management turnover but weakens such market discipline by deterring immediate/ex-post management turnover. On the other hand, family board control weakens market discipline in mitigating families-minority shareholders conflicts by deterring all ex-ante, immediate, and ex-post management turnover. The analysis contributes to our understanding of a firm’s legitimacy as the dominating force in supporting an effective market discipline on management turnover in a weak institutional environment. Families play multiple governance roles to intervene with such market discipline in a weak institutional environment in order to build a management team for their investment safety and maintain a management team for family private benefits of control.     

Strategy for Entering the US Retail Market

China has set aggressive goals to increase the production of branded textile and clothing goods. According to a circular published by the Ministry of Commerce and six other government industries in June, China is determined to foster a number of internationally recognized name brands by 2010. The circular     

Upgrading Textile & Apparel Market in 2007

In 2007,as the process of economic globalization is speeding up,China’s market became more open and attractive to the world.The Chinese apparel industry gained a rare historical opportunity to strengthen self-upgrading and improvement,while facing the competition and challenges from domestic and overseas markets.     

How Do Land Auction Formats Influence the Market Structure and Aggregate Surplus of Real Estate Development?

This article proposes a duopoly dynamic game theoretic model to investigate the market structure and aggregate surplus of real estate development when land is sold in a sealed‐bid first price auction vis‐à‐vis an open English auction. It relaxes the assumption of symmetric bidders. The land values have common value and private value components. We find that the sealed‐bid first price auction introduces competition in the real estate development market. The open English auction leads a monopoly market. State agencies are recommended to increase the aggregate surplus of real estate development by publishing past bidding information under the sealed‐bid first price auction and reducing information asymmetry between bidders.     

The Impacts of Eliminating the Step 2 Program on the U.S.and World Cotton Market

IntroductionBrazil made a formal complaint to the World Trade Or- ganization (WTO) Dispute Settlement Panel against U.S. cotton programs in 2003, alleging that these subsidies de- pressed world cotton price and were injurious to Brazilian farmers. The petition was supported by Australia and West and Central African cotton producing countries. After long deliberations, the WTO appellate body came out with their final ruling in March 2005 that upheld most of the initial decisions of the …     

Sharing New World—International Textile&Apparel Market Development Seminar

On Sep. 21, a Seminar with the theme of “Sharing New World”, organized by China Na- tional Textile and Apparel Council and Wuxi Municipal Government, took place in the site of China (Wuxi) International Textile & Clothing Fair 2005. The speakers are: Mr. Robert Antoshak (President of Globecot, Inc.), Mr. Peter Hsia (Kurt Salmon Associative), Professor Gail Taylor (Institute of Textiles & Clothing, The Hong Kong Polytech- nic University), Miss Valeria Luo (Representative of …     

Who Invented the Lerner Index? Luigi Amoroso, the Dominant Firm Model, and the Measurement of Market Power

The invention of the price/cost margin (P-MC)/P as an index of market power is usually credited to Lerner (Rev Econ Stud 1(3):157?C175, 1934). Landes and Posner (Harv Law Rev 94(5):937?C996, 1981) is similarly often considered the main reference for the generalized version of the index in the case of a dominant firm that shares the market with price-taking rivals. From the viewpoint of the history of industrial economics both claims are incorrect. It was not Lerner who invented the price/cost margin index and the generalized version was fully derived before WWII. In both cases, priority should be given to Luigi Amoroso, the leading Italian mathematical economist in the interwar decades. In the latter case the names of Heinrich von Stackelberg and George Stigler also deserve credit.     

Are EU Leading Firms Returning to Core Business? Evidence on Refocusing and Relatedness in a Period of Market Integration

This paper tests, for 108 diversified EU manufacturing leaders faced by the EU integration shock (1987–1997), if firms responded to increased competitive pressure by readjusting their industry-mix around a core of related activities. Our results show that, in spite of limited reduction in diversification, firms pursued strategies of related constrained diversification by expanding the output of industries related to the core. We also find that complementarity amongst the firm’s operations – i.e., sharing common intermediary products or common output markets – drives the refocusing. The effect is stronger for highly diversified firms. Our findings suggest that EU leaders are moving toward a more efficient use of their resources.     

Can Tightness in the Housing Market Help Predict Subsequent Home Price Appreciation? Evidence from the United States and the Netherlands

This article assesses the predictive power of variables that measure market tightness, such as seller's bargaining power and sale probabilities, on future home prices. Theoretical insights from a stylized search‐and‐matching model illustrate that such indicators can be associated with subsequent home price appreciation. The empirical analysis employs listings data on residential units offered for sale through a real estate broker in the Netherlands and for certain U.S. regions. Individual records are used to construct quarterly home price indices, an index that measures seller's bargaining power and (quality‐adjusted) home sale probabilities. Using conventional time‐series models we show that current sale probabilities and bargaining power can significantly reduce home price appreciation forecast errors and help to predict turning points in local area housing markets. The measures and approaches in this article help to demonstrate ways in which researchers and practitioners can leverage listings data to gain knowledge about the current and future state of the housing market.     

The Survival of the Fittest,the Market Philosophy Works

In China, the cotton textile industry undertakes over 50% of the total fiber processing volume, rendering a great number of quality yarns & cloth to its downstream pipelines, such as knitting, dyeing & finishing, home-textiles and apparels industries. In 2005, the export of Chinese cotton textiles & apparels reached US$41.13 billion, import US$5.393 billion. At present, the total employment in the large-scale cotton textile enterprises is estimated for 2.512 million people, holding 26.5% of …     

Industry Upgrading-Aiming at the Targeted Market Demand of New Century

According to the projections from relevant sources, in the next 50 years, the world fiber consumption will continue to grow at the rate of 2% annually, and the fiber growth will rely largely on the increased production of chemical fiber and other new fibers. And also from international sources, about a quarter of the existing yarn-spinning capacity is excessive, and 13% of the weaving capacity is also overloaded on a global basis. Therefore, it can be affirmed that in the early days of the new century, the market of China's textile machinery rests largely with the renovation and technical upgrading programs in the existing capacities in our textile industry, apart from a few capacity-in-creasing proiects     

Market representations in industrial marketing: Could representations influence strategy?

A central question in industrial marketing is whether the form in which the market of a firm is represented influences the marketing strategy. This question has been studied generally through case study research, and quantitative evidence is limited. In response to this limitation, this paper reports on a quasi-experiment investigating whether market representations have a constructive aspect in business. Empirically, this study compares two types of market representations - ostensive and performative - in order to test for influence exacted in two well-established strategies in industrial marketing - service focus and product differentiation. Results indicate that service focus is selected when market representations rely on agency in firms (i.e., performative), and product strategies are selected when structures are emphasized (i.e., ostensive). This paper contributes to methodology development by expanding the link between a case study approach and quasi-experiments explaining how quasi-experiments can replicate findings in industrial marketing.     

Is Radio Advertising a Distinct Local Market? An Empirical Analysis

The recent relaxation of regulations limiting the ability of an entity to own multiple radio stations has led to a dramatic increase in ownership concentration in local radio markets. As a result, the Department of Justice has, on several occasions, required limited divestiture of multiple station owners. Implicit in the agency's action is that radio advertising constitutes an antitrust market. Using the framework established by the Merger Guidelines, this paper evaluates whether or not radio advertising is a distinct local market by estimating an own-price elasticity of demand for radio advertising. Our results support the assertion that radio advertising is an antitrust market.     

Estimation of the Effects of New Brands on Incumbents’ Profits and Consumer Welfare: The U.S. Processed Cheese Market Case

I estimate the effects of new brands on market competition and consumer welfare in the U.S. processed cheese market. I find that an observed increase in consumer welfare was attributable mainly to an increase in the number of brands in the sample market, while the price effect, which measures welfare change caused by adding new brands to existing brands, decreased welfare as the prices of the existing brands increased in a large portion of sample markets. The price increase was most pronounced among the introducers existing brands. I also find that the data used in the paper identify a significant enhancement of consumer welfare as a result of the change in product characteristics provided by new brands even if a large portion of welfare gain is explained by the assumption on the error term in the utility function.JEL classification: D40, D60, L13, L66, H20     

What Does the Stock Market Tell Us About Real Estate Returns?

This paper analyzes the risks and returns of different types of real estate-related firms traded on the New York and American stock exchanges (NYSE and AMEX). We examine the relation between real estate stock portfolio returns and returns on a standard appraisal-based index, and find that lagged values of traded real estate portfolio returns can predict returns on the appraisal-based index after controlling for persistence in the appraisal series. The stock market reflects information about real estate markets that is later imbedded in infrequent property appraisals. Additional analysis suggests that the differences in the return and risk characteristics across different types of traded real estate firms can be explained in part by appealing to real estate market fundamentals relating to the degree of dependence of the real estate firm upon rental cash flows from existing buildings. These findings highlight the heterogeneity of securitized real estate-related firms.