The timing of antitrust effects on pricing

Using data from the Chinese manufacturing industry for 2001, this article examines the impacts of foreign presence on the performance of locally owned Chinese firms. Our key result supports a curvilinear functional form. Foreign penetration rates in excess of just about two–thirds of industrial capital are associated with declining spillover benefits, indicating the dominance of negative spillovers. The curvilinear relationship is found to be particularly strong in labour-intensive industries, contrasting with a standard linear relationship in technology-intensive sectors. The finding of the complexity of spillover effects challenges the laissez-faire view that ‘the more inward foreign direct investment (FDI), the better’ and that inward FDI into all types of domestic industry is equally valuable, in terms of performance benefits. Our findings argue for policy measures to strengthen domestically owned Chinese industry, to provide effective competition to foreign firms and to absorb the benefits from spillovers more effectively.     

Robust political economy: The case of antitrust

The notion of robust political economy is applied to antitrust. It is argued that the universalizability of policy rules is crucial if both the knowledge problem and the incentive problem in antitrust are taken seriously. Policy recommendations of Williamson are compared with those of Hayek. It is further argued that the notion of universalizability is central not only with regard to antitrust but also with regard to a host of other policy areas. JEL Code B52, B53, D02, D80, K21, K40, L40. The author thanks his collaborators Lorenz Blume, Kim Eun Young, Janina Satzer and Michael Seebauer as well as Anne van Aaken for helpful comments and suggestions.     

Legal tradition and antitrust effectiveness

This article uses cross-country data to empirically investigate through which channel legal origin can influence antitrust effectiveness. The evidence shows that the adaptability channel (legal flexibility) is more important for explaining antitrust effectiveness than the political channel (authority independence). The evidence also suggests that countries in which a judicial decision is a source of law will provide more legal flexibility and will adapt more easily to changing economic circumstances. They will therefore also have better enforcement of antitrust rules. On the other hand, a legal tradition that takes no formal notice of legal precedent will make the competition environment much less predictable. To the extent that these findings are true, one would expect competition agencies in Common law countries to perform better than those in Civil law countries.     

Local loop unbundling and antitrust policy

This paper examines economic effects of local loop unbundling. We confirm the common belief that the incumbent can deter entry effectively by denying local loop unbundling. However, contrary to the widely held perception, the incumbent may also benefit from local loop unbundling if it is obliged to accommodate entry, because denying the entrant’s request for local loop unbundling may compel the entrant to build its own facilities and this is just to abandon the incumbent’s chance to reap rental revenues. Furthermore, the model demonstrates that local loop unbundling itself does not weaken the entrant’s incentive of building facilities.     

新产品预告中的反垄断问题

在传统的营销学研究中,预告往往被当作一种营销手段,配合新产品的推出和市场推广。随着信息技术的飞速发展,新产品预告作为信号传递方式,逐渐成为企业遏制市场进入或鼓励合作的一种竞争策略。通过梳理博弈论框架下把新产品预告作为竞争策略的相关研究,着重介绍“雾件”竞争的福利效应及其对反垄断的意义与启示。     

Endogenous market structures and antitrust policy

I revisit the post-Chicago approach to antitrust issues examining markets whose structure is endogenous. The usual analysis of oligopolies with strategic interactions and an exogenous number of firms is extended to the case of endogenous entry, which determines the degree of market power. The role of predation is evaluated within a generalization of the contestability theory to strategic interactions. Endogenous entry requires a revision of our understanding of the role of incumbents in pricing, producing in the presence of network externalities, bundling products, price discriminating, and delegating to retailers through vertical restraints: when entry is endogenous, leaders adopt aggressive strategies typically without exclusionary purposes and without reducing welfare. Endogenous entry has also implications for the analysis of mergers, that take place only if they create enough cost efficiencies and do not harm consumers, beneficial concentration, technology transfers, and cartels. The spirit of the policy recommendations of the Chicago school is broadly supported by our analysis.     

Private enforcement,corruption, and antitrust design

We examine how the rationale for enabling versus precluding private antitrust enforcement depends on whether antitrust enforcement is corruption-free or plagued by corruption. Corruption in courts affects the incentives to bring forth private antitrust lawsuits. This, in turn, along with corruption in antitrust agency enforcement, alters the incentives to commit antitrust violations. The social welfare effect of enabling private antitrust enforcement in the presence of corruption depends on whether corrupt officials in the ensuing bribery contests favor a particular firm and if so which one and to what extent. Under some circumstances, corruption actually increases the social desirability of private antitrust enforcement relative to the no-corruption scenario. Our analysis highlights that the effects of a given legal arrangement for antitrust enforcement critically depend on the corruption environment and, thus, that the appropriate design of antitrust institutions is context-specific.     

State antitrust enforcement in the US and implications for small business entry and relocation

This article examines the impact of the important, yet little studied, state-level antitrust enforcement activity on entry and relocation behaviour by small US firms. Feinberg and Husted (2011) have shown that this enforcement, especially nonhorizontal cases, may be viewed by potential entrants as a negative aspect of the state business climate. However, they did not pursue a more disaggregate analysis of small firm entry behaviour; nor did they investigate different responses between manufacturing, wholesaling and retailing firms. Another related issue is the extent to which state cases filed in tandem with federal investigations have the same impact on establishment entry as do purely ‘independent’ cases. These considerations are dealt with in this article. The author uses annual state-level data from the Statistics of US Business to examine entry and relocation reactions to state antitrust enforcement by firms within three small-business categories: 1–19 employees; 20–99 employees; 100–499 employees. Generally speaking, the smallest retail and wholesale firms seem to favour vigorous antitrust activity, especially enforcement targeted against cartel behaviour by suppliers. The largest small-firm retailers and wholesalers (those with 100–499 employees) seem somewhat threatened by such activity, especially the more controversial nonhorizontal enforcement. However, it must be acknowledged that the effects on entry or relocation of small firms – both positive and negative – are quite small.