The problem of market size for Canadian cable television regulation

The policy of the Canadian radio television and telecommunications commission of awarding an exclusive right to provide cable television (CATV) service within a given licensed service area (LSA) rests partly on the presumption that CATV costs reflect economies of scale that are large relative to market size. Cost estimates from crosssections of CATV operations from 1985–1991 show increasing returns to scale and suggest that many LSAs were too small to capture these economies. The results also indicate that economies of scale for basic service declined over the 1980s and that the ‘natural monopoly’ characteristics of CATV may be eroded by further technological and regulatory changes.     

The market response to product safety litigation

This paper examines the stock market impact of 29 product liability lawsuits reported in the Wall Street Journal from 1970–1985, an additional series of Agent Orange events, and a set of regulatory events involving product risks. If these events and the costs associated with them were fully anticipated, then there would be no effect on the stock market price. Adverse stock market effects increase if the event involves a product liability action, bodily injury, or a court decision. Lengthy newspaper coverage and initial reports also have a strong effect. If there are multiple defendants, the market cost per firm is reduced. One widely publicized good news event—the final Agent Orange decision—led to a dramatic increase in stock prices.     

E-commerce and the market structure of the recorded music industry

In this article, we study the impact of the development of e-commerce on the concentration of the recorded music industry in France, for the period 2003–2010. First, we find that over the whole period, CD sales, measured at the distributor level, are less concentrated online than offline. Second, we find that sales concentration online has increased between the early period of e-commerce (2003–2006) and the later period (2007–2010).     

Solvency regulation in the property-liability insurance industry

This paper evaluates guaranty funds and solvency regulations. One main question addressed is how solvency regulations will benefit consumers. Many previous studies have found that most forms of solvency regulations do not have significant deterrent effects on insolvency. Even when solvency regulations are effective, they might still adversely affect consumers. This could happen because increasing the probability of solvency usually requires raising premiums. Therefore, it is interesting to see how regulators should design insurance regulations that benefit consumers. Insolvency of insurance firms provides a unique environment under which one is able to analyze the effects of solvency regulations and guaranty funds on the quality of insurance products and on consumers. This paper shows that guaranty funds are always desirable, but solvency regulations are of certain value only when they have the effect of protecting guaranty funds and alleviating the disincentives which they create.     

Income distribution, market size and the evolution of industry

An industry typically experiences initial mass entry and later shakeout of producers over its life cycle. However, the timing of the evolution varies substantially across markets. By exploring the dynamic interactions between technology progress and demand diffusion, our theory suggests that the cross-market differences of industrial evolution are largely the result of underlying demand factors. Particularly, higher consumer income or larger market size tends to drive faster demand diffusion and earlier industry shakeout. A comparative study on the US and UK television industries supports the theoretical findings.     

内地制药行业企业进入西藏市场的战略模式选择

内地制药行业企业进入西藏市场对其自身发展壮大和西藏居民健康状况的改善具有双重的意义，因此对进入的战略模式选择的研究是至关重要的。本文分析了内地制药行业企业进入西藏市场的必要性、可行性，在此基础上研究了进入市场的四种主要战略模式选择，阐述了不同战略模式的特征。希望本文的研究能够给我国制药企业的发展和西藏的医疗卫生进步作出贡献。     

Primary market and aftermarket competition in the bicycle component industry

This study examines the bicycle component industry. This industry is characterized by one dominant firm, Shimano Inc., and four or five smaller players. Firms in the component industry produce components for sale in two related markets, the market for original equipment manufacturers (OEM) and the component aftermarket. A unique data set containing information on aftermarket prices and OEM market shares is used to determine whether or not market power in the aftermarket is a function of OEM market power. The results indicate that concentration in the OEM market is positively related to aftermarket price, while an individual firm's OEM market share is inversely related to aftermarket price.     

Business regulation and labor market performance around the world

Using data from 74 industrial, developing and transition countries for the years 2000–2003, this paper analyzes empirically whether and to what extent anticompetitive business regulations affect the performance of the labor market. According to the regression results, they appear to increase unemployment rates and lower employment rates. It seems that they particularly worsen the employment situation of young people. Our results are robust to variations in specification.      

产业集群与专业市场的互动机制研究

产业集群与专业市场之间存在相互促进的关系:产业集群的需求聚集效应与供给聚集效应能使专业市场产生明显的外部性,降低市场交易费用,增强专业市场的竞争力,而专业市场也能促进产业集群的产生,并使之良性发展,形成对集群产业升级的强有力的支撑.     

Changing economic mechanisms: A model of the transition from budget regulation to the competitive market

Summary In the framework of dynamic equilibrium theory we propose a model of gradual transition from an Economy with centralized budgets regulation to a Market Economy (with self-financing). It is assumed that information about possible change of the economic mechanism affects essentially the behavior of agents. The duration of the transition period is regarded as a random variable. We study conditions when such a transition allows firms to adapt their plans to future markets and guarantees the existence of equilibrium paths. We also discuss the case of Shock Therapy (instantaneous transition) which may cause bankruptcy, jumps in prices and deficits.This work is supported by Russian Foundation of Basic Researches, grant 93-06-10356     

Measuring embodied technical change in the US local telephone industry

This study attempts to measure the rate of embodied technical change by using a short-run variable cost function that contains arguments for labour and capital quality. In this short-run variable cost model, the expansion of the amount of physical capital increases variable costs due to more maintenance outlays, and then it leads to improvements in capital quality. When a measure of competition is included as a proxy for organizational efficiency, improvements in labour and capital quality explain more than two-thirds of productivity growth. The degree of returns to scale and the shadow cost of capital input in the embodiment cost model are presented as well. The study is based on pooled time-series and cross-section data of eight US local exchange carriers.     

Assessing market penetration combining scenario analysis, Delphi, and the technological substitution model: The case of the OLED TV market

The technological substitution model, proposed in 1971, was designed to analyze the penetration process of new-generation technologies replacing old ones. It was expanded in 1979 to consider more than two generations and the substitution process among various entities in the market. However, this expanded model is often limited by a relative lack of data on the latest-generation technology.On the other hand, scenario analysis, as another breed to forecasting tool, provides rich and complex portraits of possible future development of technologies. However, it fails to provide quantifiable forecasts. Therefore, previous researchers combined these two methods to analyze the development of new technologies.Nevertheless, to make forecasting more holistic, the current opinions of seasoned experts should also be taken into account. However, because of the often-diverged expert opinions, a method for consensus building, such as the Delphi method, is also necessary. Therefore, we combined the scenario analysis with the Delphi method and the technological substitution model to analyze the development of a new technology, namely, the latest-generation television (TV), or the organic light-emitting diode (OLED) TV. We elaborate three possible scenarios, and forecast the market share of OLED TV and four other TV technologies in the global market over the next 10 years: cathode ray tube, rear projection, plasma display panel, and liquid crystal display.     

Indigenous technological capabilities,emerging market firms and the aerospace industry

While emerging market economies have developed significant technological capabilities and increased their share of global value-added in aerospace, they have done so largely through utilising foreign direct investment (FDI) and offset arrangements to enter supply chains that remain dominated by European and American firms. The paper examines whether emerging markets are developing indigenous technological capability in aerospace technologies. Drawing on patent data from the Thomson Innovation database, the study seeks to understand whether anchor tenant capability is indeed forming in emerging markets. A tech-mining method is applied. The study suggests that China, in particular, has dramatically increased its innovative capacity in the area. However, the data also demonstrate the significant advantages enjoyed by incumbent firms from Europe and the USA, suggesting that the complexity of aircraft R&D remains a formidable barrier that can only be surmounted by determined government policies and anchor firms equipped with substantial innovation capabilities.     

Factor market structure and technology choice in the Colombian brick industry

This paper examines the relationship between factor markets and an industry structure such that capital-intensity is correlated with size, and firms of different sizes coexist in the long run. Empirical evidence shows that wages vary positively with firm size after correcting for education, experience, turnover and firm location. Secondary source evidence suggests that capital access differs across entrepreneurs, according to their positions in Colombian society. These assumptions are combined in a model which can generate the industry structure observed. The alternative hypothesis that capital access improves over a firm's lifetime, so that industry structure represents a growth path, is examined and rejected.     

Pareto improving price regulation when the asset market is incomplete

Summary. Incomplete asset markets cause competitive equilibria to be constrained suboptimal and provides scope for Pareto improving interventions. In this paper, we examine how intervention in prices in asset or spot commodity markets serves this purpose. We show that, if fix-price equilibria behave sufficiently regularly near Walrasian equilibria, Pareto improving price regulation is generically possible. An advantage of price regulation, contrasted with interventions in individuals asset portfolios, is that it operates anonymously, on market variables.Received: 12 August 2002, Revised: 10 July 2003, JEL Classification Numbers: D45, D52, D60.Earlier and longer versions were circulated as Discussion Paper No. 9841 (June, 1998), CORE, Université Catholique de Louvain, and Working Paper No. 01-31 (2001), Department of Economics, Brown University.The research of Herings was made possible by a fellowship of the Royal Netherlands Academy of Arts and Sciences and a grant of the Netherlands Organization for Scientific Research (NWO); while this paper was being written, he enjoyed the generous hospitality of the Cowles Foundation.John Geanakoplos and Hamid Sabourian asked questions that clarified a number of points in earlier drafts of the paper. An anonymous referee made comments that were insightful and helpful.     

Technology and incentive regulation in the Italian motorways industry

Making use of an original dataset containing information on 20 Italian motorways concessionaires over the 1992–2004 period, we study the technology prevailing in the motorways industry in Italy. We focus on the estimation of the technical progress for the years covered by our sample, and on the measurement of the economies of scale and density. We find that the industry has experienced significant technical progress and that there are sizeable economies of density and scale (at least up to a medium-large network size). These results provide valuable insights for regulatory purposes, notably for the definition of the optimal dimension of the network of a concessionaire and the correct setting of the X factor in the price cap formula, which is used to regulate the toll levels. We also control for the effects on the performance of the concessionaires due to the changes in the ownership structure and the regulatory regime, both introduced by the recent reform of the industry. We find that the productivity of the concessionaires has not increased with the adoption of a price cap regime, while it has benefited from the privatization process.      

Uncertainty,trust, and the regulation of the banking industry

This paper suggests that, in presence of uncertainty, individual choices are made on the basis of subjective evaluations, and the transmission of information is too expensive, so that the decision-making process must largely be based on other agents’ knowledge. Banks operate by developing a network of personal relationships, based on trust, that allows agents to make use of the subjective knowledge of others. The deregulation process of the financial industry of the 1990s was based on the principle that information disclosure would make the market for securities more efficient, increasing risk diversification, and making the financial system safer. Many innovative financial contracts, however, were not backed by trust and reputation mechanism as traditional banking activities. The shadow banking system emerging from these market-based transactions was thus much more risky and fragile than the traditional one, based on private information and unwritten rules of conduct.