The stability of market shares in UK manufacturing industry 1979–1986

Competition is a selection process in which the winners survive and expand, and the losers contract and disappear. This paper examines the selection process applied to the leading five firms in a large sample of UK manufacturing industries over the period 1979 to 1986. Selection pressures are seen to vary substantially the rank of the firm, and much but not all of the selection pressures that these firms faced originated in the capital market.     

Foreign Market Competition as a Determinant of Exporter Performance: Evidence from Slovenian Manufacturing Firms

Most studies on the link between exporting status and firm productivity find no evidence of learning‐by‐exporting, whereas self‐selection of more productive firms into exporting is most often confirmed. Furthermore, empirical tests of the learning‐by‐exporting hypothesis rarely rely on a specific learning mechanism and instead estimate very general tests of the effects of exporting on improvements of firm efficiency. Lack of explicit controls for specific learning mechanisms in turn biases the empirical estimates against finding the learning effects. Here I undertake a more targeted approach to learning‐by‐exporting by using data on Slovenian manufacturing enterprises between 1994 and 2002 to explore a specific channel for learning in the export markets. Using a variety of empirical tests, I show that competition in exporting markets serves as an added criterion in firm self‐selection as only the most productive and fastest growing firms choose to enter more competitive foreign markets. Once home‐market competition is explicitly controlled, a significant productivity adjustment effect of exporting firms in response to intensification of export market competition is revealed. Crucially, this provides tentative evidence of learning‐by‐exporting, which has so far been elusive in the relevant literature.     

Export Premium,Self‐selection and Learning‐by‐Exporting: Evidence from Chinese Matched Firms

This study empirically focuses on examining the hypotheses of export premium (exporters are more productive than non‐exporters), selection‐into‐exporting (more productive firms are ones that tend to become exporters) and learning‐by‐exporting (new export market entrants have higher productivity growth than non‐exporters in the post‐entry period). The propensity score matching method is used to adjust for observable differences of firm characteristics between exporters and non‐exporters, allowing an adequate ‘like‐for‐like’ comparison. We also use the difference‐in‐difference matching estimator to capture the magnitude of different productivity growth between matched new export market entrants and non‐exporters in the post‐entry period up to two years. Drawing on 2,340 Chinese firms in the period 2000–02, we find evidence for export premium and self‐selection, and once the firm has entered the export market there is additional productivity growth from the learning effect, in particular in the second year after entry.     

Make pricing power a strategic priority for your business

In the face of rising business complexity and competitive pressure, many firms succumb to price pressures and enter pricing wars. Others focus on creating, quantifying, and capturing pricing power from their market. Since 2011, with help from Warren Buffet and Jim Cramer, Wall Street financial analysts have begun paying close attention to firms with great pricing power. But what is pricing power? How do firms know whether they have it? And how does it affect profit? This research, based on a survey of 128 organizations, identifies and validates the drivers of pricing power and its impact on firm performance. In this article, I create and validate a pricing power assessment instrument that firms can use to get started. This article offers practical recommendations for go-to-market functions on how to start the pricing power discussion, how to measure it, and how to operationalize it.     

(De)Unionization,Trade Liberalization and Selection

The effects of union bargaining power and trade liberalization on industry selection are analysed within a two‐country heterogeneous‐firm model with firm‐specific unions and inter‐country asymmetries in size and union power. Union bargaining power is shown to have more nuanced effects on efficiency and welfare than what typically suggested by conventional wisdom. While the higher wages resulting from an unfavourable union power differential harm firms' competitiveness, by reinforcing standard market access mechanisms, they give rise to aggregate demand effects that can act as a catalyst for industry and result in a pro‐variety effect.     

Strategic Capabilities and Performance in Women‐Owned Businesses in Mexico

The dire economic situation in Mexico, with its high rate of unemployment, makes it necessary for many women to find some form of economic activity to provide income for their families. Although such conditions could encourage the creation of new firms, the results of the Global Entrepreneurship Monitor 2006 Report show a gap between the number of women involved in nascent and young entrepreneurship initiatives and the number who owns established firms. This gap may indicate that the firms created need to improve their competitiveness and their ability to survive. The model proposed adopts the resource‐based view of the firm as a theoretical framework from which to study how entrepreneurial orientation, market orientation, and learning orientation, as well as the interactions between them, influence the achievement of competitive advantage and superior performance in businesses owned by women. Our investigation analyzes businesses established and managed by women in Mexico and registered with the Asociación Mexicana de Mujeres Empresarias A.C. (Mexican Association of Business Women) and the Red de Empresarias del Instituto Nacional de Mujeres (Women Entrepreneurs Network of the National Women's Institute). To gather the information needed, the study used a questionnaire as a measuring instrument. The results are based on the 90 complete answers received from the questionnaires distributed. The results show that all of relationships in our model are positive except the hypothesis that learning orientation mediates in the relationship between market orientation and performance. The results suggest that entrepreneurial orientation reinforces the effect of two capabilities, market orientation and learning orientation, on firm performance. They also reaffirm that the three capabilities assessed may lead an organization to differentiate itself from its competitors by improving its performance. In addition to contributing to the literature on female entrepreneurship, the results have important implications for management. Understanding the relationships between capabilities and the performance of women‐owned businesses in Mexico can permit the identification of areas for improvement to promote the growth and survival of this type of firm.     

Quality wars in the North

This paper investigates two stylised facts about quality wars between Northern firms and a Southern copycat firm in the North. First, due to low wage, a foreign or Southern copycat firm may enter the market of a developed economy inhabited by a high‐quality firm and a low‐quality domestic copycat. When the products of the high‐quality firm and the foreign copycat are vertically differentiated, the foreign copycat firm may choose an intermediate quality between the quality levels of domestic high‐ and low‐quality firms. In the second scenario where the products of the high‐quality firm and the foreign copycat are horizontally differentiated, the quality of the foreign copycat may surpass that of the domestic high‐quality firm. As the wage gap between the developed and developing countries widens, the foreign copycat is more likely to survive in the markets of developed economies.     

The entry‐mode decision of Chinese outward FDI: Firm resources,industry conditions,and institutional forces

How do Chinese firms make their entry‐mode decision for their outward investments? Based on the three theoretical perspectives that balance the “strategy tripod,” our study conducted empirical tests using survey data collected from outward‐investing Chinese firms. We found that the cost advantage of the investing firm and learning opportunities in the host industry have positive effects on the likelihood of a Chinese firm opting for wholly owned subsidiary against joint‐venture entry mode, while the market attractiveness of the host industry, host‐country restrictions, cultural barriers, and cognitive pressures have negative effects. © 2011 Wiley Periodicals, Inc.     

(Not So) Easy Come, (Still) Easy Go? Footloose Multinationals Revisited

The central question of this paper is to test whether multinational firms (MNFs) are more likely to exit the local market than domestic firms. Using firm‐level data for Belgium, we estimate a random effects probit model taking into account the endogeneity of firm size, total factor productivity (TFP) and sunk costs in firm exit. Our results highlight two features of the ‘footloose’ nature of MNFs. First, controlling for firm and sector characteristics, the exit probability of MNFs is larger than that of domestic firms. Second, MNFs have a lower sensitivity to TFP and size than do domestic firms. This means that an improvement in economic performance on the local market will not prevent a multinational from closing its local plant as much as it would for a domestic firm.     

Lower‐boundary violations and market efficiency: Evidence from the German DAX‐index options market

The informational efficiency of the market for options on the German stock index DAX is examined using intraday transactions data. Problems of previous studies on options‐market efficiency, arising from dividend estimation and the early‐exercise effect, are avoided, because the DAX is a performance index and DAX options are European options. Ex‐post and ex‐ante tests are carried out to simulate trading strategies that exploit irrational lower‐boundary violations of observed option prices. Because the lower‐boundary conditions are solely based on arbitrage considerations, the test results do not depend on the assumption that investors use a particular option‐pricing model. The investigation shows that ex‐post profits are, in general, dramatically reduced when the execution of arbitrage strategies is delayed and/or transaction costs are accounted for. However, arbitrage restrictions, which rely on short selling of the component stocks of the index, tend to be violated more often and with higher persistence. An analysis of consecutive subsamples suggests that, over time, traders have been subjected to a learning process when pricing this relatively new instrument. © 2000 John Wiley & Sons, Inc. Jrl Fut Mark 20: 405–424, 2000     

Internal Restructuring and Firm Survival

We examine the impact of two common methods of internal restructuring, layoffs and divestitures on the survival of a sample of UK firms. Using a Poisson regression model, we find that divestitures improve survival likelihood by reducing the probability and speed of market exit via takeover or bankruptcy, whereas layoffs increase the probability and speed of market exit via bankruptcy. Surprisingly, classifying firms into financially distressed and healthy groups, we find that distressed firms are less likely to restructure. Furthermore, while divestitures improve survival likelihood in both groups, layoff firms are less likely to survive, irrespective of whether they are distressed or healthy. Our findings are consistent with event studies that examine the market reaction to layoffs and divestiture decisions, and so provide some support for the view that the market correctly values the consequences of these restructuring actions on firm survival. The results are robust to several econometric and modeling issues, including controlling for potential self‐selection bias.     

Firm Heterogeneity,Endogenous Quality,and Traded Goods Prices

A model with endogenous quality and firm heterogeneity is developed. Firms can invest in quality, and quality investment is relatively skill intensive. The model is used to account for two findings in the empirical literature on traded goods prices, lacking a formal explanation in the theoretical literature thus far. First, the model provides a theoretical explanation for Schott's (Quarterly Journal of Economics 2004, 119, 647) empirical finding that relatively skill‐abundant countries export higher priced goods. Firms in these countries invest more in quality and therefore sell higher quality, higher priced goods. Second, the opposite effects of importer market size on traded goods prices at the firm level (positive) and at the aggregate level (negative) identified in the empirical literature can be explained with the model. In a larger market, the incentive to invest in quality is larger for each firm, leading to higher firm‐level prices. Due to a selection effect, also less productive firms selling goods of lower quality can export to larger markets, implying lower aggregate prices.     

Social Sustainability in Selecting Emerging Economy Suppliers

Despite the growing public awareness of social sustainability issues, little is known about what drives firms to emphasize social criteria in their supplier management practices and what the precise benefits of such efforts are. This is especially true for relationships with international suppliers from the world’s emerging economies in Asia, Latin America, and Eastern Europe. Building on stakeholder theory, we address the issue by examining how pressures from customers, the government, and employees as primary constituencies of the firm determine the extent to which firms consider social aspects in the selection of emerging economy suppliers. Further, we analyze how such socially sustainable supplier selection relates to the capabilities of the firm’s suppliers, its market reputation, and the learning in its supply management organization. We test the developed research framework empirically using data from 244 U.S. and German corporations. Our findings, consistent with our hypothesized model, suggest that middle-level supply managers as internal stakeholders play a major driving role for firms’ socially sustainable supplier selection, and that strong positive links exist between that selection and the investigated outcomes.     

Input Pricing and Market Share Delegation in a Vertically Related Market: Is the Timing Order Relevant?

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.     

Product Characteristics and the Effectiveness of Dow’s Countermeasure for Predatory Pricing

Predatory pricing theoretically occurs when a firm cuts its price below cost with the intention of driving competitors out of the market so that the predatory firm can then act as a monopolist. Herbert H. Dow, founder of the Dow Chemical Company, saw his company face such a predator, the German Bromkonvention, in the American market for bromine in the early 20^th century. Dow responded with an ingenious gambit – he secretly purchased the low cost German bromine and then repackaged and resold it on the European market at a profit. This case has been offered as evidence that predatory pricing is unlikely to exist in the real world, since the prey can simply do what Dow did. This paper explores the product and market attributes that must be present in order for the Dow Gambit, or variations of it, to be used as a successful countermeasure for predatory pricing. We examine product and market attributes in 15 other well-known cases of predatory pricing to gain some empirical insight. In only two of these were the product and market characteristics as favorable for the prey to employ the Dow Gambit as they were toward Dow himself. We conclude that the Dow Gambit can only be employed in a narrow set of circumstances     

激励规制、市场势力与接入定价——以电信业为例

政府规制的目标是矫正市场失灵,不当的规制方案会限制市场竞争活力,阻碍技术创新.本文将规制机构、厂商和消费者纳入到激励相容框架下,通过考察信息约束条件下的接入定价问题,解释了产品的需求价格弹性、政府转移支付、税收政策、技术创新和网络外部性与接入定价的关系,引申出主导性厂商市场势力的来源及激励性接入定价政策,得出电信监管部门实施对网间结算费的直接规制,没有减弱市场势力,反而抑制了主导性厂商提高接入质量和研发创新.     

Is it ‘you’ or ‘your workplace’? Predictors of job‐related training in the Anglo‐American world

This paper examines the determinants of job‐related training and workplace voice. Using data from a unique 2016 cross‐national survey of Australian, British, Canadian and American employees, the paper contrasts two classic formulations in the literature; (1) the neoclassical/human capital approach which predicts that individual characteristics (such as age and education) which increase the efficiency of learning, will have the largest impact on the allocation of training (i.e. younger and more educated employees will be afforded training) and (2) the traditional institutional approach which favors the structural characteristics present at the industry and firm level, the nature of the job itself and the strategic choices of firms as the major predictors of job‐related training. We find that age – a key factor in the human capital model – plays a significant role in the allocation of training but that education (in keeping with recent evidence) does not. In sum the human capital model provides, at best, only a partial explanation for the differences in training observed across individuals. In contrast, variables invoked by the institutional literature (i.e. occupation level; industry; ownership type; and market structure) are highly significant and account for a much greater proportion of the variance in training observed across workers. Other institutional factors such as the presence of a union and a human resource department were strong positive predictors of job‐related training. But most important were product‐market strategy and employee voice. Respondents working in firms utilizing a ‘high road/high quality’ product/service strategy and with a workplace consultative committee were significantly more likely to receive training than similar workers employed in observably similar firms. This last finding supports the industrial relations view of voice as an important channel by which training is optimally delivered inside the firm.     

Duopolists’ Retail Pricing Behavior in Multiple Markets

The law of one price asserts that, with costless trade, prices for identical goods in different countries should be equal after accounting for the exchange rate. The empirical literature suggests that exchange rate pass-through to prices is low and that the law of one price fails; instead, firms are more likely to price to market. This study adds to the literature by examining the pricing strategy of comic book firms within the context of the competition’s pricing behavior in a duopoly industry. Comic books, uniquely, display their retail prices in multiple countries on their cover giving us detailed information about the pricing behavior of each individual firm and their competition which allows us to test a pricing-to-market model. We find that an empirical model of an imperfectly applied law of one price outperforms a simple competitive, pricing-to-market model of pricing. Retail exchange rate pass-through rates between Canada and the United States average 76.8 %. This high exchange rate pass-through rate for comic books exists despite the existence of sticky prices and convenience pricing.     

Can Banning Spatial Price Discrimination Improve Social Welfare?

We analyze a two-stage sequential-move model of location and pricing to identify firm’s location, output, and welfare. We consider two pricing regimes (mill pricing and spatial price discrimination) and, unlike previous literature, allow in each of them for a non-uniform population density, non-constant location costs (i.e., the setup costs, such rental costs and land prices, differ by firm’s location), and endogenous market boundaries. Under constant location costs, our results show the firm locates at the city center under both mill and discriminatory pricing, and that output is larger under spatial price discrimination. Welfare comparisons are, however, ambiguous. Under non-constant location costs, we find the optimal location can move away from the city center, and does not coincide across pricing regimes. Compared with mill pricing, spatial price discrimination generates a higher level of output. We also find that welfare is higher (lower) under mill than under discriminatory pricing when transportation rates are low (high, respectively).