Convergence between telecommunications and other media: How should regulation adapt?

The paper examines the regulatory issues raised by technological convergence between telecommunications and other media. Market uncertainty for broadband services has gone hand in hand with both uncertainty over how to supply those services and a regulatory framework that will facilitate growth in the sector, ensure a competitive market and provide the necessary protections for consumers and the public. Development of the information market should be determined primarily by market forces. Intervention may be justified but a clear distinction needs to be drawn between regulation in the public interest and regulation to protect against market failure.     

Cannibalize and combine? The impact of ambidextrous innovation on organizational outcomes under market competition

How can a firm achieve ambidexterity? The present study proposes that the answer to this question lies in the distinction between ambidextrous culture and ambidextrous innovation. Drawing upon organizational learning theory and the source-position-performance framework, we propose that ambidexterity requires the adoption of two important organizational cultures, willingness to cannibalize (WTCA) and willingness to combine existing knowledge (WTCO), which allow firms to attain superior performance through the implementation of both radical and incremental (i.e., ambidextrous) innovations. Our major contribution lies in addressing the important debate in the literature on whether exploration and exploitation are complements or substitutes. Furthermore, competition intensity is a key condition that determines the degree to which the two types of organizational cultures and the two types of innovations are necessary for superior firm performance. The study uses data from multiple respondents from 199 Chinese firms. Our findings thus suggest that WTCA and WTCO, which are traditionally treated as opposites, are complements in generating radical innovations.     

Lysine and Price Fixing: How Long? How Severe?

In October 1996 the Archer Daniels Midland Company(ADM) pleaded guilty to criminal price fixing withrespect to sales of lysine and agreed to pay a $70million fine. Earlier, in August 1996 two Japaneseproducers and a Korean producer of lysine had agreedto plead guilty to criminal price fixing charges. Andearlier still, in July 1996 ADM and the two Japanesecompanies settled the civil suits filed by some harmedbuyers by agreeing to pay a sum of $45 million.It is this last event that serves as the focus forthis paper. The adequacy of the settlement amount wasa major area of dispute. Connor (1996, 1997, 1998)has claimed that the trebled damages to lysinepurchasers were an order of magnitude larger. Crucialto Connor's conclusions are his assumptions as to thetime period during which the conspiracy had an effecton prices and the but for price that otherwise wouldhave prevailed in the absence of the conspiracy. Thispaper will argue that Connor substantiallyover-estimated the period of the conspiracy andunder-estimated the but-for price.     

Certifying catfish in Vietnam and Bangladesh: Who will make the grade and will it matter?

Certification is an increasingly pervasive form of market governance through which retailers and NGOs are able to exert control over producers of primary products in order to secure their commercial and institutional interests. This paper assesses the likely outcomes of emerging certification standards intended to govern production of a new global commodity, Pangasius catfish. This evaluation focuses on Pangasius producers in Vietnam and Bangladesh, and one of the key areas which standards seek to regulate; the environment. We conclude that certification is likely to result in greater differentiation and polarisation between larger and smaller farm operators and will increasingly act to exclude of the latter from access to Western European and North American markets, and that any local environmental gains produced may be of relatively minor significance.     

Is there a U-shaped relation between competition and investment?

We consider a two-stage game with cost-reducing investments followed by a linear differentiated Cournot duopoly. With competition inversely parameterized by the extent of product differentiation, investment in the subgame perfect equilibrium is typically minimal for intermediate levels of competition. Laboratory experiments partly confirm the U-shape in a reduced one-stage version of the game. In the two-stage version, there is no evidence for positive effects of moving from intermediate to intense competition.     

How do country‐level governance characteristics impact the relationship between R&D and firm value?

This article addresses the question of how country‐level governance characteristics moderate the market valuation of research and development (R&D). Using a valuation model and panel data from companies in the European Union, United States, and Japan, we find that effective corporate governance allows the market to better assess a firm's R&D investments. This finding is the conjunction with the effect of the legal system, the financial system, and mechanisms of control. First, as effectiveness of investor protection increases, the market valuation of R&D projects also increases. Second, more developed financial systems do a better job assessing R&D. Third, effective control mechanisms reinforce the positive effect of R&D on a firm's market value. In sum, our findings shed light on how policymakers can increase the benefits from firms' R&D spending and thus foster economic growth and social welfare using these country‐level governance characteristics.     

How does firm experience and institutional distance impact ownership choice in high‐technology acquisitions?

One of the critical reasons for a firm to acquire other firms is to access new technology. This study seeks to understand what ownership position a firm should take in foreign markets if the target is in a high‐technology industry. Specifically, it looks at how firm‐level experience and institutional distance could impact this ownership. Using logistic regression models on a sample of 1,091 cross‐border acquisitions undertaken by firms from 36 countries over an 8‐year time period (2001–2008), we find that when firms acquire targets in a high‐technology industry, they resort to partial acquisitions. Our analysis further suggests that when firms seek targets in high‐technology industries but have experience with acquisitions or face higher institutional distance, the likelihood of full acquisitions over partial ones increases. Study findings contribute to our understanding of the interactive relationship among technology, experience, and institutional distance in determining appropriate ownership choices.     

Competition law and regulation in the Turkish telecommunications industry: Friends or foes?

The interaction between national competition authorities (NCAs) and national regulatory authorities (NRAs) plays a vital role in institutionalizing competition policy during regulatory reforms. Questions about jurisdictional authority over competition policy are far from settled     

Decomposition analysis of the telecommunications sector in Indonesia: What does the cellular era shed light on?

Indonesia is currently enjoying rapid development in the telecommunications sector despite the economy having been heavily dependent for almost four decades on the two largest sectors: the manufacturing industry and trade. The telecommunications sector has played an important role in stimulating economic growth in the country during the last few years, with an annual growth rate higher than that of other sectors. This contribution is supported to a great extent by the rapid diffusion of telephony, in particular cellular telephony, as the number of subscribers increased from just 2.1 million in 1999 to 170 million in 2011. Previous studies investigating the impact of the telecommunications sector on the economy aggregate the impact of the sectors on Gross Domestic Product (GDP) without further scrutiny of what sources of growth telecommunications has contributed. Hence, an interesting question arises as to whether the achievement of cellular diffusion is also followed by structural change in the telecommunications sector. That said, this study aims to decompose the output of telecommunications into several sources of growth: domestic final demand, export effect, import substitution effect and technological coefficient effect. A particular interest in this study is to compare the source of growth concerning domestic final demand and the technological coefficient effect. The main tool for analysis in this study is the Input–Output (IO) method, while the time series of the investigation covers the period 1975–2008, allowing comparison of structural changes in the telecommunications sector between the pre- and post-cellular eras. The study found that the coefficient multiplier of the telecommunications sector, which was approximately 1.8 during the 1980s, had decreased to only 1.3 by the end of 2008. Consequently, the final demand from the telecommunications sector contributed less to economic output in the late 2000s compared to the impact in the 1980. Moreover, the cellular era that started in the early 2000s also brought about a trend of changes in telecommunications output. While final demand remains very dominant, the technological coefficient effect has diminished as the source of telecommunications output. This finding indicates a lower ability of the telecommunications sector to build an inter-industry relationship with other sectors. A possible explanation for this result is the cellular uses which are much less related to business activities than that of fixed telephony dating back to the 1970s in Indonesia.     

How much to make and how much to buy? An analysis of optimal plural sourcing strategies

While many theories of the firm seek to explain when firms make rather than buy, in practice firms often make and buy the same input—they engage in plural sourcing. We argue that explaining the mix of external procurement and internal sourcing for the same input requires a consideration of complementarities across and constraints within modes of procurement. We create analytical foundations for making empirical predictions about when plural sourcing is likely to be optimal and why the optimal mix of internal and external sourcing may vary across situations. Our framework also proves useful for assessing the possible estimation biases in transaction level make‐or‐buy studies arising from ignoring complementarities and constraints. Copyright © 2013 John Wiley & Sons, Ltd.     

Provider competition and healthcare quality: More bang for the buck?

Public and private entities around the world are trying to induce the provision of higher-quality health care by adopting institutional arrangements intended to promote competition among care providers. I selectively survey and supplement the literature to show that an increase in competition—modeled either as a larger number of care providers or greater precision of signals available to consumers regarding provider quality—may result in lower equilibrium quality, holding prices fixed. These findings are an indication that considerable opportunities exist for industrial organization theorists to contribute to our understanding of healthcare markets.     

How can the EU climate targets be met? A combined analysis of technological and demand-side changes in food and agriculture

To meet the 2 °C climate target, deep cuts in greenhouse gas (GHG) emissions will be required for carbon dioxide from fossil fuels but, most likely, also for methane and nitrous oxide from agriculture and other sources. However, relatively little is known about the GHG mitigation potential in agriculture, in particular with respect to the combined effects of technological advancements and dietary changes. Here, we estimate the extent to which changes in technology and demand can reduce Swedish food-related GHG emissions necessary for meeting EU climate targets. This analysis is based on a detailed representation of the food and agriculture system, using 30 different food items.We find that food-related methane and nitrous oxide emissions can be reduced enough to meet the EU 2050 climate targets. Technologically, agriculture can improve in productivity and through implementation of specific mitigation measures. Under optimistic assumptions, these developments could cut current food-related methane and nitrous oxide emissions by nearly 50%. However, also dietary changes will almost certainly be necessary. Large reductions, by 50% or more, in ruminant meat (beef and mutton) consumption are, most likely, unavoidable if the EU targets are to be met. In contrast, continued high per-capita consumption of pork and poultry meat or dairy products might be accommodated within the climate targets. High dairy consumption, however, is only compatible with the targets if there are substantial advances in technology. Reducing food waste plays a minor role for meeting the climate targets, lowering emissions only by an additional 1–3%.     

Shareholders and stakeholders: How do directors decide?

This study examines how directors make decisions that involve shareholders and other stakeholders. Using vignettes derived from seminal court cases, we construct an index of directors' shareholderism as a general orientation on this issue. In a survey of the entire population of directors and CEOs in public corporations in one country, we find that directors' personal values and roles play an important part in their decisions. Directors and CEOs are more pro‐shareholder the more they endorse entrepreneurial values—specifically, higher achievement, power, and self‐direction values and lower universalism values. While employee representative directors exhibit a lower baseline level of shareholder orientation, they nonetheless often side with shareholders. Copyright © 2011 John Wiley & Sons, Ltd.     

How much trustworthy and salubrious an organic jam should be? The impact of organic logo on the Italian jam market

This paper studies the impact of organic logo in the Italian jam market. Using data on true sales in Italian supermarkets in the 2002–2004 period we estimate the structural demand model developed by Berry (1994). This approach allows us to solve potential endogeneity problem in the estimation of the price coefficient in the demand equation, as well as other aspects related to multiple sources of differentiation. In a market where 62 percent of organic jams are diet this approach allows us to identify separately the market power induced by the organic logo and by the low content of sugar. The estimation results from various specifications of GEV class of models show that the organic attribute guarantees a degree of market power greater than the diet attribute. However, the protection from competition entailed by the organic logo is not particularly strong, and the diet attribute does not guarantees additional protection to organic jams. Most importantly, our findings show that consumers trust more big organic producers thus suggesting important policy implications on the supply and marketing side of the jam market.     

Convergence and unbundling of corporate R&D in telecommunications: is software taking the helm?

This paper presents a view of the changing structure of corporate R&D in telecommunications – one that is close to Adam Smith’s insightful and enduring idea of division of labor – that perhaps we are witnessing the beginnings of vertical disintegration and unbundling of important segments of the industry’s R&D activity. The paper maintains that the emergence of an independent software industry – aided by the convergence of computer, telecommunications and imaging technologies – and the rapid growth of technology-based alliances are at the heart of this trend. So extensive is the vertical disintegration of R&D that, in 1997, the top 10 independent software vendors in the US spent more on R&D than the combined spending by AT&T and Lucent whose sales were well over three times as large. It appears that the source of future innovation in the telecommunications industry lies not in its services segment but rather in telecommunications and Internet equipment firms and independent software firms. Increasingly, the fortunes of large service providers like AT&T will depend less on innovation and more on their ability to configure and market complete one-stop-shopping solutions to customers by combining internal resources with outsourced technologies, products and services.     

How do internal capabilities and external partnerships affect innovativeness?

How do a firm’s internal capabilities and external partnerships contribute to its product and process innovativeness? How do their impacts differ? Based on the theoretical framework of exploitation and exploration, we develop an integrative model linking the impact of both internal capabilities and external partnerships on product and process innovativeness. Survey responses from Taiwanese biotechnology firms indicate that research and development (R&;D), marketing, and manufacturing capabilities have different effects on product and process innovativeness. Of the four types of external partnerships, only partnerships with universities and research institutes seem to add value, whereas partnerships with suppliers, customers, and competitors do not contribute to innovativeness. Moreover, marketing capability and customer partnerships have a positive interaction effect on product innovativeness, while manufacturing capability and supplier partnerships have a positive interaction effect on process innovativeness.     

How do standards committees affect the success of a standard? Comparative analysis of RCS and VoLTE and proposed hybrid standards development model of open and bandwagon approaches

Standards have become enablers of complex digital systems that provide a foundation for the present-day digital economy. While existing literature analyzes the factors behind the dominance of one standard over another, there has been little focus on the standards committees that define the standards. This study comparatively analyzes the case of the Rich Communication Services (RCS) and Voice over LTE (VoLTE) standards to examine the characteristics of standards committees. The findings provide lessons learned for standards committees, including non-tiered open membership, and sufficient depth of specifications. Most importantly, a new model is proposed for standards development, based on which the standards committee focuses on technical specifications with open membership, while industry consortia focus on commercial profiling of the technical specifications with the lead of influential players. The new model is expected to resolve the tradeoff between the development speed and stability of communications standards.     

What really is alliance management capability and how does it impact alliance outcomes and success?

Strategy scholars have asserted that a firm's alliance capability provides competitive advantage. As interest in alliance capability has grown, we see two streams of research emerge that address different, but equally important, issues related to this subject: one stream that focuses on how alliance capability develops in firms, and a second stream that investigates what elements specifically constitute a firm's alliance capability. In recent literature, the question of how firms develop alliance capability has received greater attention than the question of what elements actually comprise it; therefore, in this study we address the latter issue in great depth. We do this by building on prior research and on our fieldwork, to conceptualize alliance management capability as a multidimensional construct that comprises three distinct but related aspects or skills to address the following aspects in managing a given individual alliance after it is up and running: coordination, communication, and bonding. We then test our conceptualization in a framework that also links this capability to relevant outcomes at the alliance and firm level. We use survey and secondary data from a large sample of interfirm relationships between software service providers and three major global software vendors. We find general empirical support for our conceptualization of alliance management capability and for its predictive validity in impacting certain alliance outcomes. Copyright © 2009 John Wiley & Sons, Ltd.