Competitive bidding strategies for European public contracts

Public contracts would seem a wonderful opportunity for firms outside the EC, but European public contracts seem closed to competition between European countries, let alone countries outside the EC. Recent new directives by the European Commission suggest a change, albeit a slow one, in the situation, and there are as well competitive bidding strategies European and US. Jirms may want to consider to open the door for their participation in this large marketplace.     

The demand for regulation of financial disclosures: The case of the insurance industry

Policyholders and other claimants in insurance companies are interested in “solidity,” i.e., the ability of insurers to meet their claims obligations in both the short run and the long run. Insurance regulators exist in order to represent the interests of consumers. Great emphasis is placed by the regulators of the market on the mandatory and uniform disclosure of relevant financial and operating aspects of insurers. This paper employs simple gametheoretic techniques to address two aspects of the general issue of the desirability of establishing a regulator to assess the solidity of insurers. First, why would uniform information about insurers be desirable? Given that uniformity is desirable, it could be achieved by voluntary agreement of insurers or via regulation. The second issue is how that uniformity is to be achieved; that is, what is the value of a regulator in achieving uniformity? Insurance provides an interesting instance of the general problem. A key determinant is the structure of costs and benefits of securing voluntary agreements across firms.     

Mutuality as a control for information asymmetry: A historical analysis of the claims experience of mutual and stock fire insurance companies in Sweden, 1889 to 1939

We test two competing arguments regarding the influence of organisational form on underwriting performance using data from the Swedish fire insurance industry for the years 1889 to 1939 – a period of both economic growth and stagnation. Since mutuality is a response to information asymmetry problems, mutual insurers are expected to report lower annual claims relative to premiums than stock insurance companies. However, an alternative view is that stock insurers seek to reduce information asymmetry problems by issuing non-participatory rights insurance contracts with high deductibles that induce risk-sharing between the insurer's shareholders and policyholders. This implies that stock insurers are likely to report lower annual claims than mutual insurers. Our results show that organisational form is an important determinant of the claims experience of Swedish fire insurers, suggesting that mutuality acts as an effective control for information asymmetries in the market.     

International Competitiveness and the Single Currency

This article puts together the results of a five-year comparative study of UK and Irish manufacturing exporters and discusses its implications for currency unions and particularly the Euro. Overall, the results indicate a positive linkage between exchange-rate stability and individual firms' competitiveness. Irish exporters have benefited from their government's approach to European Monetary Union (EMU) and will continue to do so. The research identifies changes in firm-level competitive activity that occur where the exchange rate is fixed, and argues that exchange-rate stability leads to sustained long-run competitive advantage for firms located within the currency area (over those that are not). European currency while existing Euro-zone countries will be assessing whether they have benefited from it. At the same time, countries elsewhere in the world may need to consider abandoning their independent currencies in favour of the dollar, the Euro, or the Yen.     

Policy implications

Abstract: In the European Union, the framework of financial services legislation at EU level has been aimed primarily at forming a single market for banks, insurers and other financial services firms. Substantial progress has been made towards this objective. Also, the EU initiatives have stimulated a reappraisal of national regulatory systems. Most of this EU legislation (with the exception of the consumer credit directives) has not had consumer protection as one of its main aims, although it has been assumed that consumers will eventually benefit from a wide choice of financial services providers and from price competition. However, partly in response to consumer pressure, the European Commission is developing a set of initiatives more closely geared to protecting consumers’ interests. Within the context of the EU’s approach, there remain considerable variations in the approach to protecting consumers’ interests in different member states as a result of legal and cultural differences.     

The Strategic Implications of EMU for European Banking

This paper reviews the broad impact of the European SMP (Single Market Programme) and approach of EMU (European Monetary Union) on European bank strategies.

Select but key aspects of the competitive strategies that banks might pursue in this ‘New Europe’ are then considered. Within this review; the key strategic question is explored whether banks necessarily have to be bigger in order to be more efficient and even ultimately to survive in a post-EMU world. It is argued thut efficiency considerations should dominnte over size per se. The strategic perspective that will be developed is to

view EMU as the next stage on from the present SMF! This perspective avoids the mistake of visuulising any kind of EMU as likely to precipitate dramatic ‘breaks’ in the present

strategic development of European banking. Since the SMP is well advanced, we already have some experience of the

strategic reactions of banks towards a single European banking market; this provides a useful indicator of at least some of the broader bank strategic reactions that might be expected to EMU.     

EU accession: Negotiating “environmental dumping”?

“Environmental dumping” is a concern frequently raised in discussions on the potential risks involved in the eastern enlargement of the European Union¹ (EU).² There is a general concern that the Central and Eastern European accession countries may be neither willing nor able to fully apply the EU’s environmental acquis communautaire, the body of Community environmental legislation, once they have joined the EU. As a result, these countries would benefit from a competitive advantage when selling their goods on the Internal Market. This article asks whether, and in which specific cases, such concerns may be justified.     

Gefährden institutionelle Anleger den Wettbewerb?

The Monopolies Commission, which advises the German government in competition policy making, warns against potential anti competitive effects of indirect horizontal links between competitors via institutional investors. Through such common ownership, the competitive conduct between suppliers could be alleviated, because their (joint) institutional shareholders interest in the overall market return may outweigh their interest in the individual firms’ returns. Taking account of the ubiquity of such common ownership in European and global markets as well as a non consideration in current competition law, the Monopolies Commission’s call for more research and vigilance appears to be appropriate.     

The heterogeneous competitive effects of trade and foreign direct investment: Firm‐level evidence for European countries

This study evaluates the pro‐competitive effect of foreign market penetration with a broad firm‐level database that covers manufacturing industries in six European countries. The main contribution is the demonstration of the heterogeneous effects on host country competition of the two main channels of foreign market penetration that have been assigned fundamental differences by economic theory: imports and foreign direct investment. The results of dynamic estimates of firm‐level markups reveal a pro‐competitive effect of imports, while foreign direct investment shows no clear overall impact, suggesting a cancelling out of competitive pressure and spillovers. These findings matter for both future empirical research and policy considerations that must weigh the positive and negative effects of foreign market integration on the competitive environment and consumer welfare.     

Gesundheitsfonds: Regelbindung für stabile GKV-Finanzen und sinnvollen Kassenwettbewerb

An unexpected surplus in the German statutory health insurance central fund has led to unwise discretionary decisions which should be avoided in the future. First, the setting of the contribution rate, which is currently politically determined, should be replaced by a rule-based procedure to adjust contribution revenues to expected expenditures. Furthermore, in view of the European Fiscal Compact’s debt criteria becoming effective in 2014, health care financing’s dependence on the state budget should be reduced. However, reorganising health care financing is only one area of reform. It should be accompanied by implementing workable solutions for increased competition among health insurers as well as providers.     

Strategic actions in European soccer: Do they matter?

The objective of this paper is to discover (if and) what kind of strategic actions European football clubs conduct and whether these actions affect their financial performance and therefore their competitive position. In this paper we measure the context, content and process dimensions of strategic renewal and relate these to financial performance. The individual strategic actions undertaken by eight football organisations during the period 1995–2002 were examined. In total, 963 strategic actions could be assigned to three dimensions of strategic action. Our study shows that even in an environment in which other factors are crucial for surviving, undertaking strategic actions does contribute to the financial performance of firms. In the European football industry that requires some kind of ‘competitive balance’, strategic actions positively contribute to financial performance.     

Whose interests do hired top managers pursue? An examination of select mutual and stock life insurers

In this article theoretical and empirical explorations that have addressed the question, Whose interests do top managers pursue? are synthesized and grouped under two categories. Based on the review of the literature, three propositions are tested on two groups of organizations—mutual insurers and stock insurers. The results of the study lend support the premise that top executives do not necessarily act in the best interests of owners.     

New Members in the European Union and foreign direct investment

The expansion of the European Union in 2004 to new members from beyond the former Iron Curtain could boost the competitiveness of firms located in the enlarged Union. The competitive advantage of new locations is derived from labor productivity —not from lower taxes and large transfers from the European Union budget, as is sometimes claimed. Compared to opportunities, the foreign direct investment inflows of the new members have been so far small and slow‐growing. Part of this performance may be due to the wrapping up of privatizations and the slow take‐off of large greenfield projects in those countries. Part of the blame, however, goes to protectionist pressures in the old members of the Union, prompted by fears of massive relocation of economic activities to new members. © 2006 Wiley Periodicals, Inc.     

Regulatory competition between company laws in the European Union: The Überseering case

The strengthening of choice of law in the field of company law by the recent decision of the European Court of Justice in the Überseering case may lead in the near future to the mutual recognition of national business forms by the EU Member States. This will mean an increase in regulatory competition between company laws. But will this competition necessarily lead to an improvement in the quality of company laws, or could the opposite be the case? What would be the appropriate features of a regulatory framework that would guide a competitive race of company laws to the top and not to the bottom?     

Wettbewerbsfreiheit oder Effizienz?

Further to the philosophical debate between Mestmäcker and Schmidtchen on the relationship between competitive freedom and economic efficiency, this article depicts the impact of an effect-based application of antitrust law in the decision practice of the European Commission. Methodological criticism of that practice is explicitly presented and reinforced by a hint at the problems of legal security for the corporations concerned. The author argues that the economic methods for measuring efficiency could mainly serve the purpose of giving discretionary powers to the European Commission/Directorate General of Competition to conduct industrial policy.     

When do spinouts benefit from market overlap with parent firms?

We examine how market overlap with parent organizations impacts the performance of startups founded by the former employees of these incumbent firms. Building on knowledge inheritance and competitive dynamics theories, we propose that the degree to which the operating markets of spinouts overlap with their parent organizations has a curvilinear relationship with their likelihood of survival. Market overlap is beneficial to spinouts because it reduces uncertainty during the early stages of new venture development. However, substantial market overlap may spark hostile actions by the parent organizations, thereby creating disruptive competition that may lower the likelihood of spinouts' survival. Furthermore, we hypothesize that the previous hierarchical position of founders in parent organizations moderates the overlap–performance relationship. Using a sample of European biotech spinouts and their parent firms, we find support for our hypotheses.     

Marketing in Russia

ABSTRACT

This paper offers a study of the development of the commercial banking system in two East European countries. Based on surveys conducted in Hungary and Poland, the authors discuss elements of the competitive market structure in the banking sector. Findings indicate that the commercial banks in Hungary and Poland have become more competitive, but there are differences between the two countries, especially in the way that the banks use sources of foreign funds.     

Der deutsche Telekommunikationsmarkt im europäischen und internationalen Vergleich

According to current discussions, the German and European market for telecommunications is not as competitive as in the US or Asia. This paper shows — based on official data — that Germany has a high availability of broadband internet connections. It is not the availability but the usage that lags behind. Fixed telephone calls as well as broadband internet connections are rather cheap in Germany, but to be prepared for the digitalisation of the economy and society, more investments in infrastructure are needed. Surprisingly the US does have a higher number of network providers than Europe. What is missing in Europe is a provider that covers all countries of the European Union; current EBITDA does not show that the European market is too fragmented to make a profit.     

Large banks' efficiency in the single European market

This paper examines cost and profit efficiency of large banking firms by defining a common European frontier over the period immediately following the completion of the Single Market Programme in 1992. Despite a slight increase in cost efficiency, country-specific characteristics appear to play important roles in the explanation of cost efficiency scores and significant differences, including varying competitive conditions, seem to exist across European banking markets. In contrast, results derived from the estimation of an alternative profit function seem to suggest that the efficiency gap among countries decreased substantially over the years under study.     

外资巨头进入中国保险市场的动机和影响

当前,进入我国已经成为诸多国际保险巨头国际化战略的重要一环。随着外资保险公司进入的步伐不断加大,如何看待、分析、应对外资保险公司的进入对我国保险业十分关键。对此,本文遵循保险公司国际化的一般规律,分析了外资保险公司进入我国的主要形式、动机以及对我国保险业的影响。并通过分析得出：在一段时期内,外资保险公司还不会对我国民族保险业产生重大威胁。