Perspektiven der Doha–Entwicklungsrunde

Die Doha-Runde hat im Sommer 2004 wieder Tritt gefasst. Wo steht sie heute? Wird die Förderung wirtschaftlicher und sozialer Entwicklung zum „Hauptstrom“ der Verhandlungen? Verträgt sich multilaterale Liberalisierung mit regionaler und bilateraler Marktöffnung? Ist eine institutionelle Reform der WTO notwendig? Wie könnte sie aussehen?Georg Koopmann, 59, Dipl.-Volkswirt, ist wissenschaftlicher Mitarbeiter in der Abteilung „Weltwirtschaft“ im Hamburgischen Welt-Wirtschafts_Archiv (HWWA).*Dieser Artikel basiert auf einem Beitrag des Verfassers für den am 7./8. Juni 2005 vom Entwicklungspolitischen Forum (EF) der InWEnt gGmbH in Berlin veranstalteten internationalen Politikdialog „Doha Entwicklungsrunde: Stand und Erfolgsaussichten“.     

Pricing practices and firms' market power in international cellular markets, an empirical study

Previous studies on international marketing have typically asked the question: “how is the demand characterized across countries?” Such analysis is then used to provide guidelines for firms to enter new markets and/or to allocate marketing resources across countries. To provide such normative guidelines, however, one also needs to analyze the supply-side of the problem, i.e., ask: “what is the likely market power that firms will be able to command in different countries?” Building on the New Empirical Industrial Organization (NEIO) framework, recent research in marketing provides marketers with a variety of models to explore competitive interactions among firms in the context of a single market. The goal of this paper is to extend this literature to a multimarket/multinational context to help international marketers assess the likely market power they face when entering new countries. We illustrate the proposed method on the mobile telecommunications industry, using price and quantity data from 10 countries around the world, estimating firms' market power as a function of a number of country characteristics.The results indicate that, while the simple presence of competition diminishes firms' market power, it does not lead to perfect competition. Interestingly, a higher number of competitors in a country does not seem to have significant incremental effect on market power. In contrast, the country's commitment to a severe antitrust policy has a significant negative effect, while the monopolist's lead-time before competition is allowed has a significant positive effect on market power. These findings, together with a change in price elasticities as a result of competition, suggest that market power in different countries may originate from two sources: (i) collusive pricing among cellular operators and (ii) consumers' switching costs across service providers. For international marketers, the findings imply that the attractiveness of wealthier countries (with usually faster diffusion rates and larger market potential) may be mitigated by higher levels of competition (as a result of developed antitrust regulation and more consumer exposure to competitive marketing practices). From a policy point of view, it suggests that (in contrast to the conventional wisdom) simple deregulation may not be enough to reduce prices to competitive levels. In addition, a severe antitrust policy is crucial to achieve this goal.     

On the efficiency of monetary policy rules with flexible prices and rational expectations

The classic Sargent–Wallace–Lucas (SWL) rational expectations-flexible price model is usually interpreted as implying “policy ineffectiveness”: systematic monetary rules cannot affect the distribution of real output. A contrary but not widely-appreciated result of Dotsey and King suggests that there exist “prospective feedback” rules (future money depending systematically on current but as yet unobserved information) which improve output distribution by means of improving agents’ ability to perceive relative prices.We show the Dotsey–King proposition in fact to be a colossal understatement: prospective feedback rules applied vigorously enough (and even “contemporaneous feedback” rules based on current interest rates, provided at least one prospective feedback is active) can in the limit drive price-perception errors to zero. This is not to say such a policy would be desirable. Feedback parameter combinations that reduce current price level misperception tend to produce high forecast error variances with respect to future prices, with attendant loss in capital market efficiency. Whatever the desirable frontier among these different social cost-producing variables, feedback parameters will in general be needed in order to get on the frontier as well as to move along it. Monetary policy clearly produces social gain even in a version of this model which contains no elements of price “friction,” inefficient use of available information, or asymmetry in information as between the government and the public.     

Varying monetary policy regimes: A vector autoregressive investigation

Recently, two stylized facts about the behavior of the U.S. economy have emerged: first, macroeconomic aggregates appear to be less volatile post-1984 than in the preceding 2 decades; second, monetary policy appears more responsive to inflationary pressures – and thereby more “stabilizing” – during the Volcker/Greenspan chairmanships relative to earlier regimes. Does a causal relationship exist between these two observations? In particular, has “better” policy by the Federal Reserve Board contributed significantly to the lessened volatility of the U.S. economy? This paper uses a structural vector autoregressive (VAR) specification to address these questions, examining the advantages and limitations of such an approach. In contrast with much of the existing research on these topics, I find that most of the quantitatively significant changes in volatility are attributed to breaks in the non-policy portion of the structural VAR, and not to the identified policy equation.     

Building industrial cooperation through Japanese strategies

Joint industrial policies undergird Japanese international growth. That policy of “unite and conquer” already has caught on in other Asian countries and in Europe. American companies, although hamstrung by laws that equate “big” with “bad,” are doing their utmost to remain competitive by pursuing Japan's cooperative strategies.     

A note on closet-indexing

Actively managed equity mutual funds with returns that are highly correlated with popular stock market indices like the S&P 500 often are accused of “closet-indexing”. We ask whether a trading strategy that shorts these funds and buys “true” index funds makes money for investors. Using a sample of high-R² growth-and-income funds from the CRSP survivor bias free mutual fund file, we document that the Sharpe ratio of this trading strategy and the market Sharpe ratio are statistically indistinguishable in the 1991–2000 sample period. The result is consistent with the view that widespread closet-indexing does not exist in the mutual fund industry.     

Increasing returns: Competing for customers in the global market

This paper discusses emerging, increasing returns notions, comparing it to the diminishing returns model of the industrial era, with the consequent implications for the global manager. Increasing returns, it is argued, comes from a different set of management premises: capitalising on the time value of individual customers in new “market spaces”, rather than from making and moving more “things” in traditional product/market categories; leveraging intangibles, abundant and infinite, which increasingly deliver the value to customers; and sharing markets, resources and technologies with others in new “competitive spaces”, rather than adopting proprietary behaviour, in order to get critical market mass and lock in. These premises, if consciously managed and translated into strategy, the paper argues, lead to an accumulating advantage and disproportionate returns for corporations.     

Liberalising Services Trade in the EU

The internal market for services, which are estimated to account for 60 to 70 per cent of economic activity in the European Union, is still rife with legal and administrative barriers to cross-border trade. The problems involved in integrating national services markets into one large internal market are highlighted by the ongoing fierce controversy over the Commission’s proposed services directive. The following contributions discuss some pertinent issues.

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*The article is based in part on a paper prepared for the World Trade Forum 2004 in Berne (“The Single Undertaking After Cancun: Diversity and Variable Geometry in the World Trading System”). All references in the following are to the European Communities, reflecting its membership status in the WTO, rather than to the European Union. The views expressed are those of the author and cannot be attributed to the WTO Secretariat.     

Going public: The impact of insiders' holdings on the price of initial public offerings

Many entrepreneurs dream of seeing their company's securities trading in the public marketplace. Although going public has many benefits for a firm's founders and insiders, the process is often confusing and intimidating. One of the questions that investment bankers are asked frequently by insiders is, “What determines the price of a stock in the initial public offering?” This article presents empirical evidence that the stock price in an initial public offering (IPO) is directly related to the percentage of the firm's equity retained by the insiders. In other words, the offering price is relatively high when it appears that the insiders are not “bailing out” when the firm goes public.This research investigates equity ownership structure as a determinant of the pricing of IPOs. The hypothesis to be tested is: IPOs with higher (lower) insider holdings at the time of the offering are priced higher (lower) as a result of lower (higher) required rates of return. Support for the hypothesis is based on agency theory, which postulates that additional risk is created when there is a perceived separation of ownership and control.There are several implications of this research. First, a greater appreciation of the sophistication of the IPO market with regard to the actions of the insiders should be gained. Second, the reader's knowledge of the activity and relative pricing of IPOs during the 1978–1985 time period should be enhanced. Third, insiders should realize that actions regarding their relative equity holdings at the time of the offering have an impact on the price of the offering. Finally, the reader should recognize that even in “hot markets” the actions of insiders at the time of an initial public offering regarding the sale of equity are monitored by the market.     

Considerations on “Research on non-market actions: A commentary essay”

This commentary is in response to the commentary, “Research on Non-Market Actions: A Commentary Essay” [Wang, C-J. Research on Non-Market Actions: A Commentary Essay. J Bus Res (2008)] on the paper, “First come, first served: How market and non-market actions influence pioneer market share” [Usero B, Fernández Z, First come, first served: How market and non-market actions influence pioneer market share. J Bus Res (2008), doi:10.1016/j.jbusres.2008.07.005]. The commentary responds directly to Wang's [Wang, C-J. Research on Non-Market Actions: A Commentary Essay. J Bus Res (2008)] comments and proposes further lines of research that integrate the competitive dynamic approach with studies of non-market actions.     

Choosing and upgrading financial services dealers in the US and UK

This paper addresses a gap in the international literature aimed at understanding the impact of the marketing mix on choosing and upgrading business-to-business financial services dealers. This study involves two important financial services markets (foreign exchange and bonds) in two leading countries in financial services (the United States and the United Kingdom). It provides a comparative analysis of the effectiveness of marketing mix variables (“price”, “product”, and “promotion” in this case) in determining (a) choice of dealers and (b) how a utilized dealer may achieve the sought-after status of being among the top three dealers of a customer. The impact of the marketing mix variables on the choice of dealer is significantly greater in the US relative to the UK. However, a two-stage analysis shows no significant country differences in the impact of the marketing mix on how a dealer is upgraded to a top three status with a customer. Further, the effects of the individual marketing mix variables are more nearly equal in the determination of whether a utilized dealer is among the top three dealers relative to the choice stage. Finally, consistent with our hypothesis, the bond market is more price sensitive relative to foreign exchange and the foreign exchange market is more product sensitive than the bond market.     

Bounded entrepreneurship and internationalisation of indigenous Chinese private-owned firms

Based on 16 in-depth case studies this paper argues that the internationalisation behaviour of indigenous Chinese private-owned firms can only be partially explained by the Uppsala model and the theory of international new ventures. Instead, the so-called “bounded entrepreneurship” may be the key influence on the unique internationalisation patterns and competitive positions of these firms. Managerial and policy implications and limitations of the study are discussed.     

Linking multi-channel customer behavior with shopping motives: An empirical investigation of a German retailer

Operating multiple channels, in store as well as non-store, allows a retailer to cater to the different shopping motives of its customers. This research into the buying behavior of 525 customers of a multi-channel retailer that operates five channels in Germany shows that most customers use only one channel within a buying process, selecting the channel that best satisfies their shopping motives in each situation. Based on exploratory qualitative and quantitative research, this study identifies five shopping motives: “recreational orientation”, “convenience orientation”, “independence orientation”, “delivery-related risk aversion” and “product- and payment-related risk aversion”. In the majority of the store channels examined in this study (chain stores and bakeries), single-channel users primarily look to satisfy emotional and social needs. Single-channel users of non-store channels (catalogue and online-shop) look for convenience and strive for independence. Multi-channel users, who obtain their information from the online-shop and then make their purchase in the chain store, are combining the independence of online-shop information with the reduction of risks associated with buying products in the chain store. These findings can be used to develop recommendations for managing the individual channels.     

Does self-employment reduce unemployment?

This paper investigates the dynamic relationship between self-employment and unemployment rates. On the one hand, high unemployment rates may lead to start-up activity of self-employed individuals (the “refugee” effect). On the other hand, higher rates of self-employment may indicate increased entrepreneurial activity reducing unemployment in subsequent periods (the “entrepreneurial” effect). This paper introduces a new two-equation vector autoregression model capable of reconciling these ambiguities and estimates it for data from 23 OECD countries between 1974 and 2002. The empirical results confirm the existence of two distinct relationships between unemployment and self-employment: the “refugee” and “entrepreneurial” effects. We also find that the “entrepreneurial” effects are considerably stronger than the “refugee” effects.     

The changing consumer in the Netherlands : Recent changes in environmental variables and their consequences for future consumption and marketing

Changes in many environmental (exogenous) factors during the eighties and early nineties affect marketing management and consumer behaviour in the Netherlands. Some of these factors relate to the effects of the economic recessions in the early eighties and the early nineties. Other factors are autonomous trends in a number of economic, demographic, and cultural factors. These factors determine a “macro marketing mix” for marketing management decisions of companies. In this article, we discuss the changing consumer environment and its impact on production and retailing of consumer goods and services in the Netherlands for the last decade of this century. This information on the Netherlands, as well as on the other nations of the European Community, is relevant for marketers operating in, or considering entering, the Dutch market. For governmental decision makers and scientists this information on future consumption and marketing is relevant for their policy and research.     

Socially Responsible Investors and the Microentrepreneur: A Canadian Case

Socially responsible investors buy financial securities with two goals: to make a market-based return, and to make companies act in a more socially responsible way. Most research on socially responsible investment deals with investing in stocks traded on major exchanges. We add the case of loaning small amounts of funds to microentrepreneurs through a discussion of a particular case. The case is that of Calmeadow which, in conjunction with the Royal Bank of Canada, set up a microlending project in rural Nova Scotia (Canada). Using Hirschman’s analysis of “exit” and “voice”, we show that while socially responsible investors may make market-based returns for their investments in stocks traded on major exchanges, they have no effect on corporate behaviour because their action consists of exit, and they are easily replaced by other investors. They attain their first goal but not their second. On the other hand, in the Calmeadow/Royal Bank of Canada case, we see that those who lend money to microenterprises can more easily use voice. The relative power difference between the lender and the microentrepreneur enables the lender to make the microentrepreneur act in a more socially responsible way, although only marginally. But because of the market imperfections existing in this case (the very high transactions costs associated with administering small loans), the lender concluded it could not attain a market rate of return. In this case, then, the lender attained its second goal but not its first.     

Dominant firms, “deep pockets,” and local market competition in banking

It has been argued that “deep pockets” and the diversified structure of large firms enable them to engage in predatory pricing in order to force their pricing policy on smaller firms in a market. Although there is some case history evidence that large firms may actively intimidate smaller rivals, there is no evidence of a more generalized nature. Therefore, this study undertakes a cross section investigation of the effects of large, dominant firms on competition in local markets. The basic hypothesis is that the presence of large firms in a market will be reflected in relatively limited rivalry and poor profit and price performance. The analysis focuses on 259 local markets in commercial banking in each of the years 1966, 1970, and 1976. Regression results provide tentative support for the hypothesis. Prices tend to be relatively high and rivalry is weak in markets where dominant firms are relatively important.     

EC Agricultural reform ad infinitum?

After protracted negotiations, the EC Ministers of Agriculture agreed on a reform of the Common Agricultural Policy on July 1st. Will this reform solve the fundamental problems plaguing the common agricultural market? Is it compatible with the GATT?     

Effects of differential information on the after-market valuation of initial public offerings

This paper examines the after-market for initial public offerings (IPOs), particularly the security valuation effects of structural differences in available information. There is a diversity of information among issuing firms at the time of their offering and particularly under certain market conditions. Because this diversity decreases with time and after-market trading, the IPO market provides an ideal setting for testing errors due to differential information levels in early after-market valuation of IPO firms. We find evidence that during “hot” market conditions and for firms characterized by low levels of available information, the market values of issuing firms are more likely to be overestimated in the immediate after-market. We also find positive overestimation of market values to be more likely for larger IPOs and for those marketed by the less prestigious underwriters.