How Strategic Groups Act Competitively Within and Across Markets

Our study analyzes rivalry within and across markets of size‐defined strategic groups in the banking industry. We consider that, owing to group‐level effects, like efficiency and funding, the degree of rivalry of size‐defined strategic groups depends on whether the competitor is acting in the same or in a different market and whether the competing firms are within the same strategic group or in different groups. We estimate the effect of group interactions within and across loans and deposits markets on firm performance in the Spanish banking industry. We find evidences of rivalry as described in our hypotheses. Copyright © 2017 John Wiley & Sons, Ltd.     

Tunneling, overlapping owner and investor protection： Evidence from merger and acquisition in Asia

Tunneling is to describe transfer resource out of the firm for benefit of their controlling shareholders. Better legal protection and stronger social norms improve minority shareholders＇ protection from expropriation. They consequently reduce the private benefits of controlling shareholders （La Porta, 1999）. This study aims to investigate tunneling in the context merger and acquisition （M＆A） and to examine whether tunneling occurs only in emerging markets with poor law enforcement or whether it also occurs in developed countries. This study documents that managers are more likely to overpay target in merger and acquisition with high overlapped owner which have stakes in bidder and target firm. That overpayment, a transfer of wealth from owners of bidder＇s firm to overlapping owners, is a type of tunneling. This study concludes that tunneling occurs in nations not only with low investor protection, but also with high investor protection.     

Industry Characteristics and Anti-Competitive Behavior: Evidence from the European Commission’s Decisions

We analyze all the European Commission’s decisions on antitrust cases between 1999 and 2004 using a unique dataset that also contains information on all the cases that were filed for the Commission’s consideration but were never pursued. This data allow us to determine whether there is any type of bias in the selection process followed by the Commission when deciding which cases to pursue until a final decision is reached. We find that the selection of cases is not random and that it is quite efficient but not very significant. We also find that the economic literature criteria are important for the Commission’s decisions.     

Asymmetric rivalry within and between strategic groups

Our study examines asymmetric rivalry within and between strategic groups defined according to the size of their members. We hypothesize that, owing to several forms of group‐level effects, including switching costs and efficiency, strategic groups comprising large firms expect to experience a large amount of retaliation from firms within their group and accommodation from the group comprising smaller firms. Small firms, on the other hand, expect to experience a small amount of retaliation from the group comprising large firms and no reaction from the other firms in their group. We estimate the effect of group‐level strategic interactions on firm performance. Our analysis reveals that the rivalry behavior within and between groups is asymmetric, which supports the dominant‐fringe relation between firms, as described in our hypothesis. Copyright © 2013 John Wiley & Sons, Ltd.     

Rivalry within strategic groups and consequences for performance: the firm‐size effects

Our study examines how, in a given industry, rivalry functions within strategic groups defined according to the size of their member firms and how this rivalry affects performance. We hypothesize that, owing to several forms of group‐level effects including market power, efficiency, differentiation, and multimarket contact, strategic groups that comprise smaller firms will exhibit both increased rivalry and decreased performance compared with strategic groups that comprise larger firms. We test our hypotheses by estimating the effect of group‐level strategic interactions (i.e., conjectural variations) on firm performance. Ultimately, our analysis of empirical data on loans in the Spanish banking industry demonstrates that increased rivalry and decreased performance indeed characterizes firms belonging to a strategic group that comprises smaller firms. Copyright © 2011 John Wiley & Sons, Ltd.     

INCENTIVES AND THE RESOLUTION OF BANK DISTRESS

Unlike prudential regulations that are put in place prospectivelyto develop banks, procedures for dealing with banks in distressare generally determined on an ad hoc basis. Often the lackof clarity in the policy framework creates incentives for bankmanagers, shareholders, depositors, and regulators that undercutprompt resolution of financial distress. The result is ofteninaction, the accumulation of bad debts, and ultimately theassumption of losses by the state. This article argues thatgovernment intervention to relieve financial distress shouldbe institutionalized in a set of regulations that forces theauthorities to comply with reporting and decisionmaking processes.Only in this way can inherent disincentives for dealing withdistress be curtailed.