Multinational Companies and Entrant Start-up Size: Evidence from Quantile Regressions

This paper analyses the impact of foreign multinationals on the start-up size ofdomestic entrants in Irish manufacturing industries. We use the regression quantileestimator, which allows us to take account of the heterogeneity of entrants' start-upsize. Estimation results show that the presence of foreign multinationals in a sectorimpacts negatively on the start-up size of domestic entrants of all sizes in modernsectors and on the start-up size of large domestic entrants in traditional sectors. Thisnegative effect may be attributed to competition of domestic plants with foreignmultinationals and other domestic plants in the final goods and/or the intermediategoods market.     

Estimating Differential Dynamic Merger Effects on Market Structure and Entry in Related Markets

The U.S. and EU merger guidelines emphasize “ease of entry” arguments but little is known about the dynamic impact of realized mergers on market structure. This study provides insights on this topic with the use of detailed firm-level data on the memory chip market. Our estimation results provide evidence for differential merger effects on market structure. These effects depend on whether the mergers are dominated by market-power or efficiency gains. While efficiency-dominated mergers cause exit, market-power-dominated mergers attract entrants, and these effects are increasing over time. We also find that market-power mergers have a larger effect on entry than efficiency mergers have on exit. Our results show that mergers can reduce the number of potential entrants into related product markets and serve as an instrument to “reduce the likelihood of entry”.

     

ADVERTISING SUNK COSTS AND CREDIBLE SPATIAL PREEMPTION

Large sunk investments in advertising allow managers to credibly preempt potential entrants by introducing new products prior to anticipated increases in market growth. Previous investment in advertising can lower a firm's cost to introduce new products allowing it to credibly preempt potential entrants. Entrants may not have enough residual share to find it profitable to enter later, and incumbents find it profitable to keep new products in the market even if entrants choose to enter. I present empirical evidence from the RTE cereal industry.     

Domestic and international impacts of the rice trade policy reform in the Philippines

Faced with high domestic rice prices that have fueled inflation above the 2018 target and penalized poor consumers the most, the government of the Philippines has decided to abandon the quantitative restrictions on imports and replace them with tariffs. This paper uses a global rice model based on a partial equilibrium framework to assess the possible impacts of this reform on imports, production, consumption and prices. In contrast with past similar studies, we address three key concerns (i) the heterogeneity in farm price across 16 regions in response to the combined effect of the tarriffication and the average historical trend in productivity increase at 1.5% between 2001 and 2018, (ii) the differentiation of imports by origin partly due to the different tariffs applied to countries within and beyond the Association of South East Asian Nations, and (iii) the effect on domestic prices in third countries. The simulation results suggest that the reform would increase imports by 2.47 million tons (20.7%) in 2019. We also find a large decline in farm prices and retail prices respectively by PhP 6.1/kg (30.1%) and PhP 7.6/kg (17.4%) in 2019 that explains an increase in rice consumption. We estimate the fall in total inflation at 1.2% in 2019 but less over time. Further, the large fall in farm prices in 2019 is shared quite evenly among regions in the short term but returns to pre-reform levels in the near term. Using a higher price elasticity of supply for one region obtained from panel data surveys, we show a more pronounced decline in production than the national average. Such differentiated results confirm the relevance of using a regionally disaggregated model to design more targeted policies. We also show a slight increase in world prices, which led to small increases in the domestic prices of South and Southeast Asian rice markets. While this reform is largely pro-poor consumers, policy makers would need to use the additional tariff revenue to help rice growers either increase their competitiveness and modernize their rice production or shift to other crops.     

产品兼容、网络效应与企业竞争力

在网络效应较强的产业中，技术设置的兼容性是左右企业成长的关键因素。随着技术进步、新兴产业的发展和市场竞争的加剧，产品兼容、网络效应对企业竞争力具有越来越重要的意义。在计算机、电信、银行、旅游、媒体、软件等产业中，用户在购买时十分注重产品或服务的兼容性和网络效应。本文以差异产品竞争模型为基础，考察了产品兼容、网络效应对企业竞争力的影响，就在位企业和新进入企业如何利用这两个产品差异变量增强其竞争力进行了分析。     

Strategic entry and potential competition: Evidence from compressed gas fuel retail

We provide novel evidence on the effect of the threat of potential competition on the timing of entry in a new and growing industry. Exploiting a change in regulation in the Italian retail fuel market that generates exogenous variation in the number of potential entrants in the emerging Compressed Natural Gas segment, we show that markets with a higher number of potential entrants witness speedier entry decisions. We document that this result is likely driven by an increase in the incentives to preempt the market due to heightened risk of being anticipated by competitors.     

Why Do Firms Enter a New Product Market? A Two‐Dimensional Framework for Market Entry Motivation and Behavior

What are the energetic forces that induce established firms to enter new product markets? While most previous research has explained the economic profits expected from a new product market as firms' distinctive motivation for market entry, some recent studies also emphasize interfirm competition and benchmarking activities as another important factor that motivates firms' new market entry. To explain the established firms' diverse new product market entry behaviors, this study presents a two‐dimensional scheme of entry motivation in terms of the degrees of target market profit focus and competitor focus. The first dimension captures the economic motivation of firms' new market entry that ranges from focusing on the direct expected profits from the target market to considering more strategic/indirect benefit incentives. The second dimension captures the degree of firms' external motivation for entry affected by competitors that ranges from independent entry decisions to fully competitor‐oriented entry decisions. Using multiple‐industry survey data, the current study empirically verifies that these two entry motivation dimensions explain a great portion of actual firms' new product market entry behaviors and that they are independent of each other. Subsequently, this study validates that firms' operational size and their environmental factors like perceived technological uncertainty and competitive intensity upon new market entry affect the degrees of the two dimensions of firms' new product market entry motivation. More specifically, large firms less emphasize target‐market profits than small firms, and when perceived technological uncertainty is high, potential market entrants become less target market profit focused but more competitor focused. Under a highly competitive new market condition, firms focus on both target‐market profits and competitors. Based on the analysis of new market entry motivation dimensions, the current study proposes a new typology of established firms' market entry behaviors. The suggested typology represents the four different types of new product market entrants and examines specific characteristics and entry strategies for each type of potential entrants. This entry‐motivation framework should provide a deeper understanding of the backgrounds of entry behaviors and assist firms in developing appropriate entry strategies and in advantageously responding to rival firms' actions with regard to entry.     

Will the Biosafety Protocol hinder or protect the developing world: Learning from China’s experience

Uncertainties about the effect of Biosafety Protocol (BSP) on global agricultural trade have caused concern among those with a stake in agrifood imports and exports. The primary goal of this paper is to analyze the potential economic impacts of the BSP on both importing countries with a specific emphasis on China and exporting countries of soybean and maize. The results show that in absolute terms the BSP will require large investments internationally and will induce compliance costs. The BSP will increase the international price and domestic production in importing countries, and lower international trade and domestic production in the exporting countries. In absolute terms the impacts are large, amounting for each commodity into the tens of millions of dollars and varying largely among different scenarios. But in the percentage the impacts are small. Much smaller impacts are found in China because China has already invested in a system that provides almost all of the services that could be required by the BSP. Other developing nations may need more help; and that it will be more costly.     

Firm resources and entry-related advantages: An empirical study in China

The majority of research on order of market entry has focused on market pioneer advantages or the specialized assets that industry incumbents would need to possess. However, relatively little attention has been paid to whether and how certain firm resources or capabilities may provide latecomers with entry-related advantages. This issue is of particular interest when multinational organizations decide to enter emerging markets, such as China, where the transitional economy provides both opportunities and challenges. This study attempts to bridge this gap by discussing the entry-related advantages in terms of pioneer advantages, early follower advantages, and late entrant advantages, and by investigating how each of the entry-related advantages has unique impacts on market performance. In particular, this study examines the relations between innovation management, firm resources, entry-related advantages, and market performance simultaneously with cross-sectional data from 191 firms in China. Our findings reveal that technical resources and skills (R&S), marketing R&S, and market intelligence are associated with different advantages for market pioneers, early followers, and late entrants. Technical R&S is also found to have significant impacts on order of market entry as pioneers. Furthermore, the findings show that remarkable differences exist among the three entrant types (i.e., market pioneers, early followers, and late entrants) in their strategic approaches to attain market performance. We offer implications to foreign firms operating in China or intending to enter China's markets.     

Capacity signals and entry deterrence

If potential entrant firms are well informed they will generally not believe incumbent's threats to expand output when experiencing entry. But this expectation underlies most excess capacity models. We demonstrate an asymmetric information equilibrium in which potential entrants rationally fear output expansion by oligopolists with excess capacity. Less effective collusive oligopolies may be destabilized (expanding output) upon entry. One symptom of less effective collusion is excess capacity. Hence excess capacity becomes a signal of the potential for output expansion. In a rational expectations equilibrium this signal may also be mimicked by oligopolies which would not otherwise carry excess capacity.     

Foreign Direct Investment,Imports and Innovations in the Service Industry

The paper analyses for the first time empirically the impact of foreign competition due to inward foreign direct investment and imports on the innovation activities using data of German service firms. Based on the hypothesis that foreign competition has a disciplining effect on domestic markets derived from the manufacturing sector, a positive impact can be expected on innovation in the service sector, while other theoretical considerations do not absolutely support this optimistic view. In the empirical analysis, variants of two probit models are estimated for a sample of 2,019 service firms to explain their product and process innovation activities. The results show that both foreign direct investment and imports have highly significant positive effects on product and process innovations. Vice versa, the export and foreign production activities of domestic firms support innovations, too.     

Asymmetry of information and contestability theory

In this paper, contestability theory is examined under conditions of asymmetric information. Signals of economic profitability to potential entrants are the incumbent's list price and accounting rate of return. A disequilibrium analysis indicates that, while potential entry imposes a price discipline, incumbents can earn profits, although not indefinitely under stable conditions. Also, there may be wasteful entry even into industries where prices approximate the optimum.     

Consequences of further opening of the Korean dairy market

This paper develops a simulation of Korean dairy policy that is tailored to the data, institutions, and policies in South Korea. It compares potential effects of changes in trade and domestic policy to baseline projections to 2015. Beverage milk continues to be supplied from domestic sources, implying imports compete in the manufacture of tradable products. We model manufactured dairy product supply, demand, and trade on a milk fat and non-fat-solid component basis reflecting product fungibility over the 10-year horizon used for our trade policy analysis. We find that if the domestic price support is removed with no change in trade policy, the market price of raw milk falls by about 2% and raw milk production declines by 4.5%. Under substantial tariff cuts of 30–40% with no effective change in domestic dairy policy, Korean fat and non-fat-solid prices fall by 7% and 11%, fat and non-fat-solid imports rise by 9% and 7% and Korea raw milk production falls by about 2% relative to the baseline. Prices of Korean farmer-owned dairy inputs, labor, and capital fall by about 1%.     

All-Unit Discounts and the Problem of Surplus Division

All-unit discounts (AUD) are non-linear pricing schemes whereby buyers who reach a specific quantity threshold get rebates also retroactively for all units bought before. This sets high incentives for buyers to meet the quantity threshold, and may also have foreclosure effects on potential entrants. In a model where an incumbent faces second-period competition by entrants, we show that AUD can indeed be abused to shift rents from entrants. In contrast to exclusive dealing which is usually seen as very similar to AUD, inefficient quantity distortions may arise even with perfect information if and only if there is sufficiently intense competition among potential entrants.     

苯乙烯行业发展前景预测

介绍了国内苯乙烯行业的发展情况,运用SWOT(机会、威胁、优势、劣势)分析法和五力模型(同行业竞争、原料供应、客户市场、市场新进入者和替代产品)等分析方法和工具,分析了华东地区苯乙烯市场的发展前景。对苯乙烯行业未来发展进行了预测,并提出了发展建议。     

Growth and survival: The moderating effects of local agglomeration and local market structure

One of the central explanations of the high failure rates of de novo entrants is the liability of smallness. As a corollary, most prior literature has suggested that firms should experience survival benefits from growth. In this paper, we argue that survival benefits need to be balanced against the potential cost of rapid growth, and they are contingent upon the structure of the environment. We predict a curvilinear relationship between an entrant's growth rate and failure, and argue that the relationship is contingent upon the local agglomeration of economic activity and the local structure of competition. We test and find support for our predictions using firm‐level longitudinal data of all de novo entrants into the Canadian manufacturing sector between 1984 and 1998. Copyright © 2014 John Wiley & Sons, Ltd     

Battle on the Wrong Field? Entrant Type,Dominant Designs,and Technology Exit

Research summary : Startups often compete with diversifying entrants in the technology race to define dominant designs, which can be platform technology‐based or non‐platform technology‐based. However, little research has examined the relative risk of technological exits for startups vs. diversifying entrants in such “dominance battles.” We develop a contingency framework that links a firm's technology exit to its pre‐entry experience and the characteristics of the dominance battle. With a sample of 134 technologies involved in 31 dominance battles in the information technology industry from 1979 to 2007, we show that technologies of startups were more likely than those of diversifying entrants to exit from platform technology‐based dominance battles; however, this relationship did not exist in non‐platform technology‐based dominance battles, or after the emergence of dominant designs. Managerial summary : How can a startup that tries to create a dominant design strategize to survive the fierce technology race? This study demonstrates that choosing the right battlefield is of paramount importance. Two aspects of a battlefield are shown as relevant: the type of technology and the stage of industrial evolution. Our results show that technologies sponsored by startups tend to have higher exit rates than those sponsored by diversifying entrants in dominance battles characterized by platform technologies, but this penalty is not evident in dominance battles characterized by non‐platform technologies or after the emergence of dominant designs. Furthermore, our study suggests that lack of organizational legitimacy, complementary assets, and integrative capabilities may explain why startups have a higher risk of technology exit than diversifying entrants. Copyright © 2017 John Wiley & Sons, Ltd.     

基于需求信息泄露的企业利润及社会效益研究

供应链中的信息对于供应链参与者的利益及供应链的绩效是有价值的,旨在对需求信息的泄露问题展开分析。给出了1个供应商2个零售商的基本模型,从供应商是否泄露零售商信息上给出了非泄露均衡和分离均衡下的零售商利润及供应商利润,并进一步从社会效益角度对2种信息保有情况展开了对比分析。研究得出:对跟随者而言,高需求下以及低需求且θ≥3下的零售商利润可以通过平均市场需求的范围进行确定;对于社会效益而言,高需求且非泄露信息下带来的社会效益总是优于分离均衡下的社会效益。     

中国参与全球生产链的技术溢出效应分析

全球生产链背景下的中国进口和外资表现出两个典型化特征:一是全部进口中中间产品占比非常高;二是在华外资企业对进口依赖程度高并且具有很强的外向型特征。这些特征影响了进口和外资这两大渠道对中国企业的技术溢出效果。本文的实证研究发现,中间产品进口对内资企业没有产生理想的技术溢出,且拉大了外资、内资企业间的技术差距;外资企业对进口依赖度越小,其技术溢出效果越好,且进口依赖度和外资数量的技术溢出效果存在正的交互作用;外资企业出口导向特征越明显,技术溢出效果越差。     

Barriers to entry and competitive strategies

The relationships between the difficulty of entry and competitive strategies in five industries, chosen for their differing structural contexts, were tested. Statistical support was found for the value of pre-entry analysis of entry barriers and of firms' predicted responses to potential entry. In particular, the creation of idle productive capacity appears to be a potent deterrent to new entrants.