Static or Dynamic Efficiency: Horizontal Merger Effects in the Wireless Telecommunications Industry

Review of Industrial Organization - This paper studies five mergers in the European wireless telecommunication industry and analyzes their impact on prices and capital expenditures of both merging...     

Corporate Governance and Globalization

This survey gives an overview of the current state of knowledgeon the question of whether corporate-governance structures worldwideare determinants of differences in economic performance. Welook at the identities of owners, monitoring boards, and legalsystems and find that some, though not all, corporate-governancestructures give rise to differences in performance. The paperends with a tentative look at the prospects of corporate-governancestructures converging worldwide.     

World cities in poor countries: conclusions from case studies of the principal regional and global players

This is a brief report on a study of world cities in the under‐researched poor countries. Whereas previous work has focused rather haphazardly on one or a few cities beyond the West, this is the first study to systematically cover such ‘second‐tier’ world cities. Fourteen leading authorities from diverse backgrounds bring their expertise to bear on twelve world cities across four continents. Alongside the economic, they consider the political and cultural role these cities play within their regions and at the global level. The study leads to three principal conclusions: (1) these cities are extraordinarily diverse; (2) the city centers have become elite enclaves; and (3) along with the forces of globalization, the state and popular movements are important actors. These findings indicate the need for research that moves beyond the focus on globalization to take into account the multiple forces shaping world cities. And they demonstrate the benefits of overcoming an ethnocentrism in urban studies that privileges Western cities as locales of study and sources of generalization. Ce compte rendu résume une étude sur les grandes villes mondiales situées dans les pays pauvres délaissés par les recherches. Tandis que les travaux précédents s'étaient consacrés, plutôt au hasard, à quelques grandes villes hors d'Occident, cette étude est la première à couvrir systématiquement les villes mondiales ‘de second ordre’. Quatorze auteurs éminents d'appartenances diverses apportent leur expertise à l'égard de douze grandes villes mondiales réparties sur quatre continents. Ces chercheurs s'intéressent non seulement à la fonction économique, mais aussi aux rôles politique et culturel de ces villes au niveau régional et international. Trois conclusions majeures se dégagent: ces villes sont extraordinairement diverses, les centres‐villes sont devenus des enclaves pour élites et, parallèlement aux poussées de la mondialisation, l'État et les mouvements populaires sont des acteurs importants. Ces résultats montrent la nécessité de réaliser des recherches qui dépassent le seul plan de la mondialisation pour tenir compte des forces multiples qui façonnent les villes mondiales. De plus, ils prouvent qu'il vaut mieux s'émanciper de l'ethnocentrisme des études urbaines, lequel privilégie les villes occidentales comme sites d'étude et sources de généralisation.     

The determinants of merger waves: An international perspective

One of the most conspicuous features of mergers is that they come in waves that are correlated with increases in share prices and price/earnings ratios. We use a natural way to discriminate between pure stock market influences on firm decisions and other influences by examining merger patterns for both listed and unlisted firms. If “real” changes in the economy drive merger waves, as some neoclassical theories of mergers predict, both listed and unlisted firms should experience waves. We find significant differences between listed and unlisted firms as predicted by behavioral theories of merger waves.     

On the political economy of urbanization in the Third World

Cette analyse de l'urbanisation d'aprés-guerre en Afrique Occidentale est proposée comme un jalon pour l'économie politique de l'urbanisation dans le Tiers Monde. L'Afrique Occidentale est une des régions les moins urbanisées du monde qui cependant a récemment connu une urbanisation plus rapide que toute autre. Cette explosion urbaine est associée avec des inégalités sévères à trois niveaux:

• 1 un déséquilibre profond dans les conditions de travail et de vie entre le secteur urbain et le secteur rural
• 2 une forte concentration des ressources dans les capitales
• 3 une énorme disparité économique à l'intérieur des villes entre les masses et une petit élite

Si l'urbanisation en Afrique Occidentale est caractérisée par ces inégalités, il apparait qu'elle entraîne aussi des pertes économiques. Deux approches suggèrent que l'allocation des ressources est loin d'ětre optimale pour la croissance économique. D'une part des ressources sont gaspillées dans le chǒmage et le sous-emploi urbain, dans la croissance des grands centres métropolitains, et dans la construction des ‘quartiers spontanés’. D'autre part la présupposition que la forme prise par l'urbanisation est le résultat d'une allocation optimale des ressources est mise en doute quand les facteurs qui affectent les paramètres économiques ou qui interferent directement avec les décisions d'investissement sont soumis à l'examen, et quand l'attention est dirigée sur le processus politique qui s'avère constamment dominé par les intérěts et les préoccupations d'un petit groupe de dirigeants.     

Are there demonstration-related spillovers from FDI?: Evidence from Switzerland

This paper examines whether there are signs of demonstration-related spillovers from foreign direct investment (FDI). It hypothesizes that the size and the extent of such benefits vary according to the level of the absorptive capacity of local firms. Using detailed firm data from Swiss manufacturing and services/construction, we find strong evidence for demonstration-related spillovers when (a) local firms are not far behind the technological frontier of the industry with a technological gap slightly greater than one, and (b) local firms demonstrate high investment in the absorptive capacity. The results are found to be more consistent in manufacturing than services/construction.     

Corporate growth convergence in Europe*

It is widely believed that the implementation of the SingleMarket Programme in 1992 has induced a transformation in industrialstructures across Europe. Some people believe that it has drivenEurope towards a common industrial structure. However, usinga newly available database covering nearly every firm above100 employees in 14 European countries over the time period1994 to 1998, the hypothesis of convergence in corporate sizeswithin industries is unambiguously rejected by the data. A Gibratprocess best describes the growth of very large and mature firms,but smaller and younger firms depart from this prediction. Pre-post1992 comparisons using another database for larger listed firmsreveal that the speed of convergence actually decreased post-1992.     

Market Concentration and Product Variety under Spatial Competition: Evidence from Retail Gasoline

We show that for a spatially differentiated economy reduced product variety is the likely outcome of mergers except in cases where exit costs in relation to (outlet specific) fixed costs are high. Our empirical analysis of the Austrian retail gasoline market confirms that increases in concentration reduce product variety. Ignoring this product variety effect is likely to lead to an underestimate of market power in structural merger analysis.     

The determinants of rent extraction in the parent-subsidiary relation

A recurring problem in financial development is to understand which poor quality institutions lead to substantial rent extraction by controllers. When rent extraction is high and its extent difficult to predict, outside investment in firms may decline. Recent work has emphasized the quality of the legal system and the overall quality of political institutions as explaining the degree to which rent extraction can occur. Here we exploit a comprehensive parent-subsidiary data-set to shed light on these questions. Using the relation between parent and subsidiary Tobin’s Q to measure the extent of parent companies’ rent extraction from partially-owned subsidiaries, the results indicate that governmental quality, legal origin, rules on self-dealing and political stability all predict the degree of rent extraction.     

Locational choice and price competition: some empirical results for the austrian retail gasoline market

Using data from the Austrian retail gasoline market we find that a higher station density reduces average prices. Market (i.e. ownership) concentration does not significantly affect average price, however is negatively related to the density of stations. Estimation of the pricing and entry equations as simultaneous equations does not alter our conclusions, and suggests causality running from station density to price. We argue that the spatial dimension of markets allows the identification of market conduct, which is particularly relevant for competition policy.