Competition Effects of Supermarket Services

This article investigates the competition effects of supermarket services using fluid milk as a case study. A simultaneous equation model for services and price competition is estimated with scanner data from fifteen supermarket chains using two alternative measures of services, namely store size and principal components of in-store services. Empirical results show that increasing services results in economies of scope, greater supermarket chain-level demand, lower price elasticity of demand, and enhanced market power, leading to higher milk prices and quantity sold. We conclude that, as result of service competition, supermarkets differentiate themselves from competitors and successfully attract less price-sensitive consumers.     

New firm formation in Italian industry: 1985–89

This paper deals with the process of new firm formation in Italian manufacturing industry during the second half of the 1980s. For this purpose we use the data base made available by the National Institute of Social Security, which provides information on both newly and already established firms with at least one employee. Two birth rates are computed and analysed for the relevant industries: the first one is the ratio between new enterprises and already established firms and the second is the share of new enterprises on industry employees. We show that Italian industries are characterized by marked differences in terms of birth rates but also that the ranking of industries is different by using the first or the second index of new firm formation. Looking at the determinants of this process, we found that industry growth affects positively both birth rates; small firm presence is effective only when the second index of new firm formation is used while inter-industry differences in profitability are always not significant. These results seem peculiar to the Italian case in which the size of newly established firms is very small in comparison with the size of previously existing firms.     

On the cost-benefit of the regionalisation of the National Health Service

In this paper we analyse in formal terms the desirability of the regionalisation of a National Health Service. The policy consists of a devolution process, i.e. the increase in the health services provision to be decided by a region and financed by an increase in its revenues. The change is a marginal one, as it regards the part of supply of the health services exceeding a minimum standard, which for purposes of equity is maintained uniform in the national territory. As the central government is responsible for this component of the provision of health care (a federal “mandate”), the level of the said component is chosen by this authority and financed by federal taxation. Moreover, the government also applies an equalisation scheme based on the difference between a standard level of tax revenues and the revenues which the region is deemed able to raise for this purpose. Within the theoretical context of welfare improving reforms with distortionary taxation, we derive two conditions which focus on the regional, as well as the social, convenience of regionalisation. Received: May 5, 1999 / Accepted: January 21, 2000     

The price effect of tariff liberalization: Measuring the impact on household welfare

Trade policy literature has for many years emphasized open policies positive impact on economic growth and development. While these results generally hold when measured on averages, empirical evidence suggests that trade liberalization is unlikely to produce beneficial results across all households. This study adds to the literature by providing an analysis of the distributive effects of tariff liberalization in Mexico. The paper examines the effect of tariff liberalization from the perspective of households both as consumers and factor owners allowing for imperfect domestic price transmission. The results indicate the overall positive effect of tariff liberalization masks significant differences in the distribution of gains both across income levels and across geographic regions. Richer households are found to have gained relatively more. Urban areas, as well as Mexican states closest to the United States border, are also found to be larger beneficiaries while southernmost states have been largely bypassed by the effects of tariff liberalization. Those results can be explained not only in relation to the different endowments of the households, but also by the diverse effects on local prices that has resulted from Mexican trade liberalization.     

Boosting Manufacturing Productivity Through R&D: International Comparisons with Special Focus on Italy

Using data for twelve manufacturing industries of five developed countries over the period 1980–2002, we perform a dynamic panel estimation of the long-run elasticity of TFP with respect to R&D capital. The highest elasticity is found for the US (0.39), followed by Germany (0.29–32); intermediate values are achieved by France (0.19–0.21) and Spain (0.19), while Italy records the lowest R&D impact (0.08–0.12). The latter finding, supported by an in depth analysis based on a longer time-span and more accurate data, can be ascribed to the declining R&D efforts undertaken, during the Nineties, by Italian manufacturing industries.