Bank competition,concentration and financial stability in the Turkish banking industry

This paper analyzes the impact of competition and concentration on bank stability in the Turkish banking industry over the period 2002–2012. The Boone indicator and the efficiency-adjusted Lerner index are used as proxies for competition, while the non-performing loans (NPL) ratio and Z-scores are used as proxies for bank stability. The main results indicate that competition is negatively related to the NPL ratio but positively related to the Z-score. The results further indicate that greater concentration has a positive impact on the NPL and a negative impact on the Z-score. We also use a quadratic term of the competition measures to capture a possible non-linear relationship between competition and stability. The results show that the coefficient of the quadratic term is negative for the NPL model and positive for the Z-score model. Overall, our findings provide support for the competition-fragility view.     

Competition,firm size and returns to skills: Evidence from currency shocks and market liberalisations

We investigate the impact of product market competition on returns to skills in Italy using a longitudinal dataset on individual working histories. This impact is identified using three exogenous shocks affecting competition: the unforeseen devaluation of the Lira in 1992, its return to a fixed exchange regime in 1996 and the market liberalisation in the utility and transport sectors in the late 1990s–early 2000s. We analyse how firm heterogeneity and shocks of different types and signs affect the impact of competition on skill premia. We find that opposite shocks have opposite effects: an increase (resp. decrease) in international competition increases (resp. decreases) skill premia. Moreover, international shocks have greater effects on medium sized firms, while domestic liberalisation shocks have greater effects on large incumbents.     

Risk pricing of wholesale funds and the behavior of retail deposit rates

We explore the relationship between bank risk and retail deposits. Predicted risk premiums on wholesale funds explain retail rate heterogeneity through two channels. First, increased bank risk premiums encourage the bank to substitute from wholesale funds to small certificates of deposits (CD) by increasing small CD rates. Second, increased rival risk premiums in a local market require the bank to increase small CD rates even more. Our results are consistent with risk encouraging the use of small CDs as a marginal source of funds and promoting local market competition for small CDs. As risk premiums rise, banks also reduce rates on other retail deposits. Our approach has implications for regulatory and monetary policies and financial stability.     

REGULATION STRATEGIES FOR THE PROVISION OF PATERNALISTIC GOODS

In this study, we analyze the regulation of markets for the provision of services whose costs are subsidized for paternalistic reasons. We model the choice of a benevolent regulator who wants to maximize consumer welfare in a setting where quality cannot be verified and the good provided is fully subsidized. The choice is thus made between two types of providers (profit maximizers and altruistic providers) and two frameworks (monopoly franchise and quality competition). Our analysis shows that in this environment the performance of mixed markets is always dominated by pure forms. Moreover, although making efficient providers compete for the market minimizes cost, the choice of quality competition with altruistic providers may be preferable from a welfare point of view whenever service quality is relevant and the productivity differential is not substantial.     

Optimal order display in limit order markets with liquidity competition

Order display is associated with benefits and costs. Benefits arise from increased execution-priority, while costs are due to adverse market impact. We analyze a structural model of optimal order placement that captures trade-off between the costs and benefits of order display. For a benchmark model of pure liquidity competition, we give a closed-form solution for optimal display sizes. We show that competition in liquidity supply incentivizes the use of hidden orders to prevent losses due to over-bidding. Thus, because aggressive liquidity competition is more prevalent in liquid stocks, our model predicts that the proportion of hidden liquidity is higher in liquid markets. Our theoretical considerations ares supported by an empirical analysis using high-frequency order-message data from NASDAQ. We find that there are no benefits in hiding orders in il-liquid stocks, whereas the performance gains can be significant in liquid stocks.     

Robustness to strategic uncertainty

We introduce a criterion for robustness to strategic uncertainty in games with continuum strategy sets. We model a player's uncertainty about another player's strategy as an atomless probability distribution over that player's strategy set. We call a strategy profile robust to strategic uncertainty if it is the limit, as uncertainty vanishes, of some sequence of strategy profiles in which every player's strategy is optimal under his or her uncertainty about the others. When payoff functions are continuous we show that our criterion is a refinement of Nash equilibrium and we also give sufficient conditions for existence of a robust strategy profile. In addition, we apply the criterion to Bertrand games with convex costs, a class of games with discontinuous payoff functions and a continuum of Nash equilibria. We show that it then selects a unique Nash equilibrium, in agreement with some recent experimental findings.     

Quality in competitive fresh produce supply chains with application to farmers' markets

Fresh produce supply chains have special characteristics, notably, that the quality of the product (fruit or vegetable) deteriorates continuously over time, even under ideal conditions. In this paper, we begin with explicit formulae for fresh produce quality deterioration based on chemistry and temperature and provide a path-based framework. We then focus on farmers' markets, the popularity of which has been growing due to consumers' greater awareness of and interest in product quality and emphasis on health. Farmers' markets, as examples of direct to consumer channels and shorter supply chains, are studied in the framework of game theory in both uncapacitated and capacitated versions. A case study of apples in Massachusetts, under various scenarios, including production disruptions, provides quantitative evidence of the applicability of our supply chain network approach.     

绿色资源整合能力、漂绿行为与企业绩效——恶性竞争的调节中介作用

本文以漂绿行为为中介变量，恶性竞争为调节变量，构建了绿色资源整合能力对企业绩效影响的概念模型。通过实证研究发现：绿色资源整合能力对漂绿行为有负向影响；漂绿行为在绿色资源整合能力和企业绩效间有部分中介作用；恶性竞争正向调节漂绿行为在绿色资源整合能力和企业绩效关系中的中介作用。     

外资进入、竞争与性别就业差异

在中国性别就业差异持续扩大的背景下，文章基于2004-2007年的中国工业企业数据库检验了外资进入是如何通过竞争效应对企业性别就业差异产生影响的。结果显示，外资进入程度越高的地区与行业具有越低的性别就业差异，外资进入程度每增加1%，我国内资企业女性就业份额将会增加0.0407%，且这一结果在考虑了抽样偏倚、不同外资范围的界定、使用不同外资进入程度衡量标准和控制内生性后依然十分稳健。进一步的研究显示，外资进入通过提高企业面临的竞争程度来促使以利润最大化为目标的企业雇佣更多成本较低的女性劳动力，进而降低性别就业差异。更为重要的是，外资进入产生的竞争效应对于性别差异的影响在不同受教育群体之间存在差异，其对受过高等教育，特别是受过研究生以上教育的群体影响最大。文章结论表明，在经济全球化背景下完善市场竞争机制和提高女性受教育程度将有利于减少性别就业差异。此外，文章也为研究外资进入的社会经济影响提供了不一样的思路。     

The role of London airports in providing connectivity for the UK: regional dependence on foreign hubs

In a context of ongoing debate about the future UK aviation policy and its implications for regional economic development, this paper discusses the role of London Heathrow and the South East airports in providing connectivity for the UK, with particular focus on the international markets that originate from regional UK airports. Using an MIDT dataset of worldwide passenger itineraries served by the European airport network during May 2013, we first establish whether London Heathrow can currently be considered the most important hub for the UK, in terms of traffic generation, connectivity, and centrality, while also measuring the dependence of UK regions on foreign airports and airlines to remain connected with the rest of the world. Results show that, despite the competition, London Heathrow benefits from its massive traffic generation to remain the most central gateway for overall UK air transport markets. However, when only regional markets are considered, significant dependence on foreign hubs appears in many destinations, particularly to Asia–Pacific or the BRIC countries where above 80% of passengers use transfer flights. These results fit nicely with the observed trends of seat de-concentration and hub-bypassing in the airline industry. While dependence on foreign hubs can be interpreted as a sign of vulnerability, there is also the argument that bypassing Heathrow allows regional airports to develop new markets and reduce the level of congestion in the London airport system.