Tacit collusion, firm asymmetries and numbers: Evidence from EC merger cases

This paper estimates the implicit model, especially the roles of size asymmetries and firm numbers, used by the European Commission to identify mergers with coordinated effects. This subset of cases offers an opportunity to shed empirical light on the conditions where a Competition Authority believes tacit collusion is most likely to arise. We find that, for the Commission, tacit collusion is a rare phenomenon, largely confined to markets of two, more or less symmetric, players. This is consistent with recent experimental literature, but contrasts with the facts on ‘hard-core’ collusion in which firm numbers and asymmetries are often much larger.     

The Citizen‐Consumer as Industrial Relations Actor: New Ways of Working and the End‐user in Social Care

This article explores the role of the citizen‐consumer as an actor in public service industrial relations. Based on research into the New Types of Worker programme in social care, the article considers how new work roles engage end‐users as citizen‐consumers in work relations and their consequences for stakeholders. It highlights the forms assumed by these roles and the factors influencing their development and impact, concluding that if the citizen‐consumer is to be treated as an actor in industrial relations, researchers must show greater sensitivity to the categories of end‐users and to the service context.     

Does Zero Tillage Improve the Livelihoods of Smallholder Cropping Farmers?

The biophysical benefits of zero tillage (ZT) are well documented in the literature. However, the literature on its economic benefits, especially in the context of small and medium‐scale farmers in the temperate developing world is scanty. Using a study of 621 wheat farmers in Syria, we provide empirical evidence on the impacts of adoption of ZT on farm income and wheat consumption. We use propensity score matching (PSM) and endogenous switching regression (ESR) approaches to account for potential selection biases. After controlling for confounding factors, we find that adoption of the ZT technology leads to a US$ 189/ha (33%) increase in net crop income and a 26 kg (34%) gain in per capita wheat consumption per year (adult equivalent) – an indication of meaningful changes in the livelihoods of the farm households. Besides the biophysical and environmental benefits documented elsewhere, our results suggest that adoption of ZT can also be justified on economic and food security grounds. Therefore, ZT can have sizeable impacts in transforming the agricultural sector in the temperate developing world provided that the technology is well promoted and adopted.     

The Economic Impact of a Foot‐and‐Mouth Disease Outbreak for Ontario's Beef Sector

Biosecurity is an increasingly prominent concern to the Canadian agri‐food sector given heightened public awareness of animal welfare and the continued importance of trade. Due to the potential for large‐scale animal depopulation and uncertain trade flow restrictions, the economic costs and animal welfare implications of disease outbreaks have prompted efforts to control their spread within and across trade boundaries. We build a partial equilibrium model of the beef supply chain in Ontario to examine the welfare impacts of a foot‐and‐mouth disease outbreak inside and outside the province. Somewhat surprisingly, economic impacts for Ontario are not dramatically different between an outbreak within the province versus an outbreak in western Canada: losses total $245 and $217 million, respectively. When the outbreak occurs outside Ontario and provincial zoning is recognized, losses total only $93 million. Restrictions on international and, inter‐ and intra‐provincial movement of livestock and beef products are the main driver of losses. A strength of our model is that we are able to disaggregate these impacts across the various market participants (i.e., producers, processors, retailers, consumers). Retailers and consumers incur little to no losses as imports from the United States easily fill shortages in supply. Production losses from livestock movement restrictions and depopulation are partially offset by higher prices, while processors bear the brunt of the losses due to reduced supply and higher livestock prices. La biosécurité revêt de plus en plus d'importance dans le secteur agroalimentaire canadien en raison de la sensibilisation accrue du public au bien‐être animal et de l'importance soutenue du commerce. Compte tenu de l’éventualité d'un dépeuplement animal à grande échelle et de mesures pouvant restreindre le flux des échanges commerciaux, le coût économique des éclosions de maladies et leurs répercussions sur le bien‐être animal ont stimulé les efforts afin de maîtriser leur propagation tant à l'intérieur qu’à l'extérieur des frontières commerciales. Dans la présente étude, nous avons élaboré un modèle d’équilibre partiel de la chaîne d'approvisionnement du b?uf en Ontario afin d'examiner les répercussions d'une éclosion de fièvre aphteuse à l'intérieur et à l'extérieur de la province. Étonnamment, que l’éclosion survienne en Ontario ou dans l'Ouest canadien, l'impact économique pour l'Ontario ne diffère pas considérablement : les pertes totales étant de 293 millions de dollars (M$) et de 267 M$ respectivement. Lorsque l’éclosion survient à l'extérieur de l'Ontario et que les zones de contrôle provinciales sont déterminées, les pertes totales s’élèvent à 27 M$ seulement. Les restrictions concernant le déplacement du bétail et des produits de b?uf entre pays, entre provinces et à l'intérieur d'une même province constituent les principaux facteurs entrainant des pertes. L'une des forces de notre modèle tient au fait que nous avons été en mesure de désagréger les impacts entre les différents acteurs dans le marché (producteurs, transformateurs, détaillants et consommateurs). Les détaillants et les consommateurs subissent peu ou pas de pertes étant donné que les importations en provenance des États‐Unis comblent facilement les pénuries de l'offre. Du côté des producteurs, les pertes causées par le déplacement et le dépeuplement du bétail sont en partie contrebalancées par des prix élevés, tandis que les transformateurs essuient les pertes les plus lourdes en raison d'une diminution de l'offre et du prix du bétail élevé.     

The Limitations of Bankruptcy Prediction Models: Some Cautions for the Researcher

The purpose of this study is to demonstrate potential problems associated with the use of bankruptcy prediction models in current research. The tests in this study demonstrate the problems that may arise when bankruptcy prediction models are inappropriately applied. This analysis evaluated the Zmijewski (1984) and Ohlson (1980) models using time periods, industries, and financial distress situations other than those used to originally develop the models. The findings indicated that both models were sensitive to time periods. That is, the accuracy of the models declined when applied to time periods different from those used to develop the models. The findings also suggest that the accuracy of each model continues to decline moving from the 1988–1991 to the 1992–1999 sample period. Additionally, Ohlson's (Zmijewski's) model was (was not) sensitive to industry classifications. The findings of this study also suggest that the Ohlson and Zmijewski models are not sensitive to financial distress situations other than those used to develop the models. Thus, the models appear to be more generally useful for predicting financial distress, not just bankruptcy.In sum, the results of this study suggest that researchers should use bankruptcy prediction models cautiously. Applying the models to time periods and industries other than those used to develop the models may result in a significant decline in the models' accuracies. Additionally, some bankruptcy prediction models may be more appropriate for evaluating various forms of financial distress as opposed to just bankruptcy. To avoid erroneous applications of bankruptcy prediction models in the future, it is necessary for researchers not only to understand the uses of prediction models, but also to understand the limitations of the models.     

Regime switching and oligopsony power: the case of U.S. beef processing

In this article, we estimate a model of oligopsony behavior under imperfect monitoring of rival actions to analyze weekly marketing margin data for the U.S. beef packing industry. Oligopsonists are hypothesized to follow a discontinuous pricing strategy in equilibrium, and we focus on shocks in the normal throughput of supply as a potential catalyst for regime switching between cooperative and noncooperative phases. We adopt an algorithm developed by Bellone (2005) that relies on Hamilton’s (1989) multivariate first‐order Markov process to test for the cooperative/noncooperative switching behavior. We find strong evidence that links switching conduct by packers to disruptions in coordinating the derived demands for processed beef with the supply of live cattle. Once switched, cooperative regimes lasted an average of 21 weeks, while noncooperative regimes averaged 33 weeks. The average marketing margin for processed beef was 68% lower in the noncooperative regimes compared to the cooperative regimes. This led to an annual average increase in profits of 408 million dollars to the beef packing industry and about an 8–9% reduction in live cattle prices.     

Soil and cropping system research in semi-arid West Africa as related to the potential for conservation agriculture

Semi-arid West Africa faces challenges to increase sorghum and pearl millet production to meet food needs for a growing human population while increasing soil carbon (C), nutrient levels, and water holding capacity that are documented benefits of conservation agriculture. This review focuses on the wealth of research on cropping systems, tillage, crop residue, nutrient, and weed management as related to conservation agriculture. It also identifies needs for multidisciplinary, integrative research to assist the transition from current production systems to conservation agriculture. Crop residue use as livestock feed, or fuel are major constraints to adoption of conservation agriculture, which could be reduced by wood production in agroforestry systems, alternate energy sources, and increased forage supply. Crop residue and grain yields are related, thus improved crop, soil, water, nutrient, and weed management to increase grain yield would also increase the supply of crop residue with potential for ‘left over’ crop residue being available for soil mulching. Incorporating indigenous shrubs and/or cover crops could also increase crop residue supply. Species diversity can be increased through crop rotation, agroforestry, cover crops, and intercrops. Higher grain and stover yields and increased profit potential for resource-poor farmers in West Africa will be required before wide-scale adoption of conservation agriculture will be possible.     

Cross-Generation Correlations of Union Status for Young People in Britain

This paper investigates whether young people whose fathers are union members are themselves more likely to join a union. We find that young people with unionized fathers are twice as likely to be unionized as those with non‐union fathers; this rises to three times higher for those whose fathers are active in the union. This supports the idea that socialization within the family plays a role in encouraging union membership. It is not the case that the cross‐generation correlations we observe are driven by common within‐family characteristics (like occupation, industry and political persuasion) that are strongly related to union membership.