Estimating scale economies of the wireless telecommunications industry using EVA data

This paper proposes a new estimation method of total cost and average cost curves and applies it to the telecommunications industry. The method is more flexible and entails less hassle for data collection than traditional methods. The results show that the long-run average cost (LRAC) curve is downward sloping, revealing the presence of economies of scale in production. The two largest Korean mobile network operators are realizing full economies of scale, while the smallest operator is not. Finally, the paper recommends three policy alternatives that the Ministry of Information and Communication of Korea can draw on to increase efficiency in the Korean mobile telecommunications market.     

Choice of organizational form in the life insurance industry: New Zealand evidence

Two forms of ownership structure characterize the insurance industry—the stock company owned by shareholders and the mutual form which is owned by its policyholders. The academic literature suggests that ownership structure is dependent upon the efficiency of the endogenous contracting mechanisms and governance structures in firms. Mutuals are predicted to exist and successfully compete with stock companies in insurance markets because they merge the ownership-customer functions and introduceex-ante contracting mechanisms andex-post modes of governance which restrict managerial discretion. Drawing a framework from transaction cost theory, this study tests empirically the proposition that choice of ownership structure in the life insurance industry is related to contracting mechanisms and governance structures in the firm. Individual cross-sectional logistic regression models are estimated using 1991–1993 data gathered from New Zealand's life insurance industry. Consistent with expectations our results suggest that mutuals are more likely to have higher asset specificity than stock companies. By contrast, stocks appear to be more reinsured and incur higher governance expenditures than mutual companies. Furthermore, contrary to what was hypothesized, our findings indicate that mutuals may be bigger than stock companies. Therefore, overall the empirical evidence does not support the predictions drawn from transaction cost theory.The authors are lecturers, Department of Accounting and Finance, University of Glasgow, and Department of Accountancy, Massey University, New Zealand, respectively.The authors thank Lars Hassel, Leung Hing-Man, Bill Maughan, Mike Pickford, Kulwant Singh and two anonymous reviewers for their comments on original drafts of this paper. However, they are solely responsible for any errors or omissions that remain. They also appreciate the cooperation of members of New Zealand's life insurance industry for supplying information. Finally, the financial support of Price Waterhouse (Wellington, New Zealand) is gratefully acknowledged.     

Media substitution and economies of scale in advertising

Two important issues in the economics of advertising are media substitutability in generating sales and scale economies in advertising. If media are substitutes then partial bans, e.g., broadcast bans on cigarettes or alcoholic beverages, may be ineffective; and mergers among radio and TV firms, currently widespread in the U.S. and Mexico, are unlikely to result in market power in setting advertising rates. If there are scale diseconomies in advertising, concerns that advertising increases entry barriers may be unfounded. Using U.S. beer firm data over 1983:Q1–1993:Q4 for three media categories, we find evidence of high substitutability and diseconomies of scale.     

On scale economies and exhaustible resource markets

This paper considers an exhaustible resource market where firms realize economies of scale in the production of the resource, and may augment reserves through exploration. With the non-convexities inherent in this model, the typical firm's optimal decisions are corner solutions. It either operates at full intensity or not at all. Firms with larger current reserves have a greater incentive to produce today; firms with smaller reserves will tend to hold their reserves for production at a later date. It follows that the market supply curve in any given period is a step function. As price rises, production increases discontinuously: at discrete intervals, the marginal firm will change from not producing today to producing all of its reserves. With such a supply curve, the market may or may not clear. Simulation of this model suggests: (i) the chance of market clearing in any period is near 1/2; (ii) such an industry is unlikely to exhibit a significant increase in concentration over time.     

Research, development and technology transfer in the Canadian construction industry

. This article highlights the observations made and conclusions reached in a recent background study for the Science Council of Canada (Boyd & Wilson, 1975). It examines the interdependence of research and development activities associated with the building and engineering sectors of the construction industry in Canada. It also examines several important factors influencing the effectiveness of the transfer of technology into, and within, these two sectors.     

Mergers,coordinated effects and efficiency in the Portuguese non-life insurance industry

We evaluate the impact on market power and efficiency of a series of mergers on three Portuguese non-life insurance markets. We specify and estimate, with a panel of firm-level data, a structural model which includes: preferences, technology, and a market equilibrium condition. Firms' demand curves are not very elastic. Firms' technologies exhibit scale and scope economies and high cost efficiency scores. We find that, for the period following the mergers, there is no evidence of: (i) an increase in market power through coordinated behavior, or (ii) changes in cost efficiency levels. In addition, social welfare increased.     

Gas plant problems and the insurance industry

The methodology used by insurance companies in evaluating risk covers both property and casualty insurance. Topics of discussion include: Total Loss Control (How to achieve it, and its relationship to Governmental Regulations), and the importance of equipment design and maintenance in preventing catastrophic losses. This discussion is based on studies of hundreds of large losses over the past twenty-five years.     

Interfirm differences in scale economies and the evolution of market shares

Evolutionary and resource‐based theories imply that firms in an industry with different resources and capabilities may differ in critical characteristics of their production functions, such as economies of scale. This paper measures these inter‐firm differences in economies of scale and examines how they affect the subsequent evolution of the market share distribution in the money market mutual fund industry. The findings indicate that fund families with larger marginal benefits to increasing their scale do subsequently gain market share at the expense of their rivals, but that this effect diminishes as the fund family ages, perhaps as a consequence of imitation. Copyright © 1999 John Wiley & Sons, Ltd.     

周边典型国家和地区成品油市场化改革及其启示

从上世纪80年代起,中国周边典型国家和地区逐步实施成品油市场化改革。除印度外,台湾地区、日本和韩国的改革总体上比较成功,未对经济体内经济产生剧烈影响,基本实现了成品油的内外市场接轨。周边经济体的实践表明,成品油市场化改革必须具备一定的前提条件——区域内炼油能力大于需求、市场避险体系趋于完善、油品税收体系逐渐成熟、市场定价体系基本完整。目前,中国成品油市场供需基本平衡,并将转向供过于求;成品油税收体系逐步完善。未来中国成品油市场化改革需要在以下几个方面推动：1）择机快速启动价格机制市场化改革;2）积极打造成品油现货交易中心;3）着力推动自建或共建成品油期货市场;4）稳步推进成品油进出口市场放开;5）推动建立与对外依存度相匹配的、具有一定规模和法制完备的石油金融体系。     

Technical change and scale economies given stochastic demand and production

This paper provides a formal attempt to separate the effects of changes in scale and technology for a relatively general class of queuing models. The paper makes a distinction between the output rate and capacity. While changes in technology affect the output rate and lead to larger, indivisible production units, this change in the output rate has often been confused in the literature as a change in scale. As a result, the importance of scale economies claimed has often been due more to the potential for technological change, not the potential for scale economies inherent to these queuing processes.     

Cellular economies of scale and why disparities in spectrum holdings are detrimental

Now that traffic volumes are increasing rapidly, the cost of expanding capacity has become a large portion of expenditures for Mobile Network Operators (MNOs). This paper uses an engineering-economic model to show that there are strong economies of scale when expanding capacity, because an MNO with more spectrum benefits more from every new cell tower, and an MNO with more towers benefits more from every new MHz of spectrum. While it is technically possible to expand capacity by increasing either towers or spectrum holdings, we find that the cost-effective approach is to increase both types of assets at a similar rate. In the absence of countervailing policies, the big MNOs are well positioned to get bigger, in terms of spectrum holdings, towers, and ultimately market share. For policymakers, this economy of scale creates a trade-off between two important objectives: reducing the cost of cellular capacity, and increasing competition. This paper derives the Pareto optimal division of spectrum with respect to these two competing objectives, and shows that any Pareto optimal assignment will split the spectrum fairly evenly among competing MNOs. This is not simply a method of ensuring that there are many competitors; spectrum should be divided fairly evenly regardless of whether the number of competitors is large or small. A large disparity in spectrum holdings may yield poor results with respect to both objectives, i.e. the lower cost-effectiveness of a larger number of MNOs, and the lower competitive pressure of a smaller number of MNOs. One effective way to achieve a division of spectrum that is close to Pareto optimal is a spectrum cap, provided that this cap is set at a level consistent with other policies and policy objectives, including antitrust policy.     

建筑业中工程保险应用研究

建筑市场风险莫测,保险公司参与工程运作过程将有助于工程风险管理的操作。文章针对工程保险在我国的发展机遇与障碍进行了分析,并根据我国的国情提出了在我国发展工程保险的措施与方法。     

Innovative productivity and returns to scale in the pharmaceutical industry

This study shows that firms in the pharmaceutical industry experience decreasing returns to scale in R & D as the level of R & D expenditures rises. The paper presents the results of our study of the innovative output of 16 pharmaceutical firms over a 19 year period. Given the strong correlation between R & D budgets and firm size, our study suggests the wave of mergers in the industry may yield less innovative productivity than managers expect.     

Innovative clusters and the industry life cycle

The purpose of this paper is to link the propensity for innovative activity to spatially cluster to the stage of the industry life cycle. The theory of knowledge spillovers, based on the knowledge production function for innovative activity, suggests that geographic proximity matters the most where tacit knowledge plays an important role in the generation of innovative activity. According to the emerging literature of the industry life cycle, tacit knowledge plays the most important role during the early stages of the industry life cycle. Based on a data base that identifies innovative activity for individual states and specific industries for the United States, the empirical evidence suggests that the propensity for innovative activity is shaped by the stage of the industry life cycle. While the generation of new economic knowledge tends to result in a greater propensity for innovative activity to cluster during the early stages of the industry life cycle, innovative activity tends to be more highly dispersed during the mature and declining stages of the life cycle, particularly after controlling for the extent to which the location of production is geographically concentrated. This may suggest that the positive agglomeration effects during the early stages of the industry life cycle become replaced by congestion effects during the latter stages of the industry life cycle.     

Revisiting technical workers: professional and organisational identities in the software industry

This paper eradicates some of the myths of software workers as prototypes of the knowledge worker. Based on qualitative and quantitative research conducted in five Information Technology (IT) organisations, it examines how the factors of education, skill level and work role determine the opportunities presented to these workers, and how they are associated with differing levels of organisational identity. At the same time, the data reveal a consistently high professional identity, regardless of work role and qualifications.     

Experience and scale and scope economies: trade‐offs and performance in development

This paper examines how knowledge created by firm experience (learning economies) and scale and scope economies affect performance in firms' development activities. The empirical results suggest that each factor has a significant effect on development performance. Moreover, knowledge that results from greater experience within a particular technological area, when combined with knowledge spillovers from greater scope in other technological areas, significantly improves development performance. The results suggest that experience shapes and facilitates firms' abilities to absorb knowledge spillovers. Our empirical findings thus provide a more nuanced examination of the drivers of performance and have implications for the management of firms' development activities. Copyright © 2006 John Wiley & Sons, Ltd.     

Stakeholder influences on sustainability practices in the Canadian forest products industry

We examined how managers' perceptions of different types of stakeholder influences in the Canadian forestry industry affect the types of sustainability practices that their firms adopt. Both influences involving withholding of resources by social and ecological stakeholders and those involving directed usage of resources from economic stakeholders were found to drive such practices. We found that the industry and its stakeholders have moved beyond a focus on early stages of sustainability performance such as pollution control and eco‐efficiency. However, more advanced practices, such as those involving the redefinition of business and industrial ecosystems where firms locate in a region so that they can exchange and utilize wastes generated by other firms, are in their infancy. Stakeholders and firms in the industry are focused on the intermediate sustainability phases involving recirculation of materials and redesign of processes including sustainable harvesting of lumber. Copyright © 2004 John Wiley & Sons, Ltd.     

依靠科技进步发展中国煤炭工业：2006中国国际煤炭展览会暨中国煤炭科技创新成果展在京开幕

日前,由中国煤炭工业协会、中国国际贸易促进委员会煤炭行业分会(中国国际商会煤炭行业商会)主办的“2006中国国际煤炭展览会暨中国煤炭科技创新成果展”在北京举行。本届展览会的主题是“依靠科技进步,发展中国煤炭工业”。     

美国和加拿大页岩气产业政策借鉴

美国、加拿大政府为鼓励非常规资源开发,出台了一系列页岩气产业扶持政策,其中包括对页岩气勘探、开发实行税收减免及财政补贴;建立专项基金资助研究机构开展技术研发;打造多元化的投资环境,建立市场机制等等。这些举措降低了页岩气开发成本,促进了页岩气产业的快速发展。在鼓励页岩气发展的同时,两国还加强行业监管,出台了严格的环境保护政策,对作业区水资源、渔业资源和野生动物进行保护。本研究在综合分析了美、加两国页岩气产业政策之后,建议我国政府借鉴北美页岩气发展经验,针对页岩气产业出台一定的扶持政策;设立基金扶持项目,通过多领域技术合作,最终形成一套完整的页岩气开发配套技术;同时制定严格的环境保护政策,减少环境污染,保障我国页岩气资源的安全、有效开发。