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Flavio Felice and Massimiliano Vatiero

It is often “assumed,” even among well-informed lawyers and economists, that European competition law is an emulation of the US antitrust law because of American influence…

Abstract

It is often “assumed,” even among well-informed lawyers and economists, that European competition law is an emulation of the US antitrust law because of American influence on European political and economic debates after the Second World War. However, such an assumption is disputable: in accordance with Professor Gerber, the competition law in Europe is an indigenous product based primarily on ideas developed in Germany by the so-called ordoliberal thought. In this respect, the article 102 TFEU may be considered a proof. The aims of this article are to furnish a critical examination of ordoliberal ideas of anticompetitive conducts and underline the relevance of ordoliberal thought for the development of the modern European competition law.

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A Research Annual
Type: Book
ISBN: 978-1-78441-154-1

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Article

Madhav Regmi and Allen M. Featherstone

The number of US commercial banks has declined by about 50% over the last two decades. This change could lead to a potential decline in competition and a potential…

Abstract

Purpose

The number of US commercial banks has declined by about 50% over the last two decades. This change could lead to a potential decline in competition and a potential increase in market power in the agricultural banking market. The focus of this study is to examine whether the risk of failure and the performance of agricultural banks has been affected by bank consolidations.

Design/methodology/approach

The impact of bank competition on performance and financial stability of agricultural banks is studied using a Lerner index as a measure of market power. A Z-score is constructed to measure bank stability. Similarly, the return on assets (net income to total assets ratio), return on equity (net income to the total equity ratio), agricultural loan ratio and agricultural loan volume are used as performance measures for agricultural banks. Two-way fixed effect regression models are estimated to measure the impact of competition on financial stability and performance.

Findings

Results indicate that bank competition has a U-shaped effect on the probability of default and an inverted U-shaped effect on volume and proportion of agricultural lending. There also exists evidence of a positive but non-linear effect of bank market power on the profitability of agricultural banks.

Originality/value

There is limited literature on the impact of bank competition on financial stability and performance of US agricultural banks. Agricultural banks hold more than 40% of US farm debt. A decrease in the number of banks or the level of competition in agricultural banking may cause an adverse effect on relationship lending. The key findings imply that bank regulatory strategies should focus on enhancing (reducing) competition in more (less) concentrated banking markets to improve the financial health and performance of agricultural banks.

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Agricultural Finance Review, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 0002-1466

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Article

Walid Abdmoulah

This study aims to shed new light on the nexus between market competition and financial development (FD), using the new FD index developed by the IMF, covering financial…

Abstract

Purpose

This study aims to shed new light on the nexus between market competition and financial development (FD), using the new FD index developed by the IMF, covering financial institutions and markets access, depth and efficiency.

Design/methodology/approach

The author uses panel data from 140 countries over 2000–2014 period and a dynamic generalized method of moments (GMM) model, along with a sensitivity analysis over 2008 financial crisis.

Findings

Strong evidence of the positive impact of market competition, as measured by Boone index, on financial institutions and markets development is found, whereas banks concentration has a damaging effect on FD. Commonly used Lerner index is found to be irrelevant. Interestingly, none of the competition indexes in this study affects financial institutions returns, which hold even over 2008 financial crisis, likely at the expense of depth and access in developing countries. Institutions, as proxied by control of corruption, have broader positive impact on FD, particularly on financial markets. These findings have important implications for developing countries keen to foster the development of their financial system.

Practical implications

Policymakers should take into consideration that FI are unlikely to undertake deep improvements in terms of credit allocation depth and inclusion on a volunteer basis, unless constrained by regulations. When promoting bank competition, it is recommended to diversify methods targeting market competition, notably by promoting financial business diversification and intermediary efficiency, and tackling collusion arrangements or interest groups influence. Second, it is important to support households and small and medium enterprises’ access to finance. Third, it is highly recommended to promote good institutions given their overall beneficial role in promoting the financial system as a whole, notably financial markets.

Originality/value

To the best of the author’s knowledge, this study is the first to fully use the new IMF Financial Development index. It covers financial institutions and markets access, depth and efficiency, whereas most of previous findings focus on access to credit or cost of credit. Besides, the study uses a larger panel data from 140 countries over 2000–2014 period and a dynamic GMM estimator, along with a sensitivity analysis over (2007–2009) crisis. By exploring the impact of three different competition indicators, namely, Boone, Lerner and banks concentration indexes, the study responds to the concerns regarding the limitations of each of them.

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Journal of Financial Economic Policy, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1757-6385

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Article

Shuqin Zhang, Qian Huang, Hefu Liu and Youying Wang

This study aims to explore how team task-related social media usage (TSMU) and social-related social media usage (SSMU) affect employees' perceptions of intra-team…

Abstract

Purpose

This study aims to explore how team task-related social media usage (TSMU) and social-related social media usage (SSMU) affect employees' perceptions of intra-team cooperation and competition and further individual creativity.

Design/methodology/approach

This study conducted a questionnaire survey on enterprises in China that have implemented social media and obtained 348 useable questionnaires from 55 work teams.

Findings

The results revealed that employees' perceptions of intra-team cooperation and competition can promote employees' creativity. Employees' cooperation perception can be significantly positively affected by TSMU and SSMU, whereas employees' competition perception can be significantly positively affected by TSMU. Regarding congruence, the results indicated that the more balanced between TSMU and SSMU, the stronger the competition perception.

Practical implications

Managers should pay critical attention to the role of team social media usage (SMU) in shaping employees' perceptions of their team environments. They should realize the different outcomes and the joint effects of the different types of SMU.

Originality/value

This study contributes to the social media literature by explaining the impact of team SMU on employees' perceptions and evaluations of team environments based on the social information processing theory. The study presents the relationships among team SMU, employees' perceptions of cooperation and competition and employee creativity. Moreover, this study expands research on the trade-off of SMU by exploring the impact of balanced and imbalanced SMU in a work team.

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Information Technology & People, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 0959-3845

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Article

Vahab Rostami and Leyla Rezaei

This study aims to track product market competition and financial flexibility on firms’ business strategies.

Abstract

Purpose

This study aims to track product market competition and financial flexibility on firms’ business strategies.

Design/methodology/approach

For this purpose, 187 listed firms on the Tehran Stock Exchange were selected by the systematic elimination for 2012–2018. The hypotheses were examined using the linear regression model. Ittner and Larcker’s (1997) model assesses the business strategy (dependent variable). The Herfindahl–Hirschman index is used to assess the product market competition (independent variable). Finally, the Frank and Goyal’s (2009) model investigates financial flexibility (independent variable).

Findings

The findings indicate that competition in the product market has significantly declined the resort of defensive and invasive business strategies and intensified opportunistic analytical and opportunistic strategies, benefiting from financial flexibility and facilitating defensive and opportunistic adaptation and decreased analytic and invasive strategies. Besides, the product market competition contributes to the firm’s financial flexibility and analytical, opportunistic, invasive and defensive strategies. Most of the studies in the field of business strategy analyzed some factors, such as performance (Zhang, 2016), tax avoidance (Higgins et al., 2015) and share pricing risk (Habib and Hasan, 2017). There is no study to assess the effect of business strategy on product market competition and financial flexibility.

Originality/value

The present study’s findings provide some invaluable concepts for firm managers on the significance of competition in the product market and financial flexibility. Focusing on competition intensity and flexibility level can deal with the board’s ambiguities on market structure and competitive status. The use of profitably competitive investment opportunities leads to selecting the most beneficial strategies, leading to a more efficient allocation of scarce resources and, finally, the enhancement of organizational performance.

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Journal of Facilities Management , vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1472-5967

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Article

Richard E. Wagner

The Theory of Economic Equilibrium was written in the period of what George Shackle calls the “Years of High Theory”. Unlike the works that Shackle discusses, da Empoli’s…

Abstract

The Theory of Economic Equilibrium was written in the period of what George Shackle calls the “Years of High Theory”. Unlike the works that Shackle discusses, da Empoli’s volume received little attention and played no part in shaping the analytical formulations of the time. The Theory of Economic Equilibrium offered an alternative to the then conventional approach to the treatment of competition as an adjective. For da Empoli, competition was a rivalrous process, a verb. It is arguable that had da Empoli’s formulations found their way into the literature of the time, the recent revival of interest in competition as a process would now be at a more advanced state.

Details

Journal of Economic Studies, vol. 28 no. 4/5
Type: Research Article
ISSN: 0144-3585

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Article

Diego Fornaciari and Stefaan Callens

Competition rules maximise consumer welfare by promoting efficient use of scarce resource and thus high output, low prices, high quality, varied services, innovation…

Abstract

Purpose

Competition rules maximise consumer welfare by promoting efficient use of scarce resource and thus high output, low prices, high quality, varied services, innovation, production and distribution. European courts consider doctors and hospital staff as undertakings (any entity that performs economic activities), so that if they enter into agreements then they have to comply with competition rules. This paper's objective is to determine whether competition law, which applies to undertakings, can in fact be applied to different healthcare‐sector players and whether specific rules are needed regarding competition between healthcare undertakings.

Design/methodology/approach

Data were selected from relevant European and national case law, European institution legal documents (such as regulations, guidelines and communications) and healthcare competition law literature, and then examined.

Findings

The paper finds that competition rules are applicable to healthcare players considering the consequences if competition rules are applied to the healthcare market. For market processes to result in the appropriate cost, quality and output, competition law must be proactive. In other words, quality must be fully factored into the competitive mix, allowing consumers to weigh healthcare price and non‐price characteristics.

Research limitations/implications

Countries have different healthcare system and competition rules (although similar), competition rule impact is different for each country. Some healthcare systems are more regulated and there will be less opportunity for healthcare players to compete.

Practical implications

Efficiently applying competition law to healthcare players means that several challenges need facing, such as healthcare quality complexity and court scepticism.

Originality/value

This article points out the challenges when competition law is applied to the healthcare sector and how these challenges are faced in certain countries such as The Netherlands.

Details

International Journal of Health Care Quality Assurance, vol. 25 no. 5
Type: Research Article
ISSN: 0952-6862

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Article

Gerrit Meijer

Tries to assess the place of Da Empoli’s Theory of Economic Equilibrium, a book on the development of thinking on market structures and price theory. It is an early and…

Abstract

Tries to assess the place of Da Empoli’s Theory of Economic Equilibrium, a book on the development of thinking on market structures and price theory. It is an early and important, though almost neglected, contribution. Neglected because the main developments in the 1930s and later on were on market classifications and theories of pricing within these market structures, as developed by Chamberlin, Robinson, Stackelberg, Triffin, and de Jong. Chamberlin and Robinson who knew the study either did not pay attention to and/or did not understand the true nature of the work. The approach was too different from theirs. Da Empoli’s work is on the process of competition. In this he has affinity to work of Knight and Clark written in the 1920s. This approach had some later defenders in the 1940s in Clark, Eucken and Hayek. Around 1960 it got a more prominent place in the work of Clark, Hayek, de Jong and Stigler. At almost the same time the other approach petered out, casu quo came to a close.

Details

Journal of Economic Studies, vol. 28 no. 4/5
Type: Research Article
ISSN: 0144-3585

Keywords

Abstract

Purpose

The goal of this chapter is to analyse the decisions of the Croatian Competition Agency in the field of grocery retail mergers in the 2004–2009 period. In particular, various criteria used by the Competition Agency to evaluate grocery retail mergers are identified and discussed.

Design/methodology/approach

Using the comparative approach the author attempts to detect the relevant sources for certain solutions embraced by the Competition Agency by examining especially the relevant practice of the European Commission as well as relevant decisions adopted by some competition authorities in EU member states.

Findings

The grocery retail market in Croatia has seen a flurry of mergers since 2004 with the largest competitor spreading to various local markets. For the Croatian competition authority this merger wave has perhaps been the biggest challenge since its inception. In the face of growing market concentration, the authority saw fit to shift from initially providing green light to duly notified transactions to subsequently addressing serious competition concerns by ordering a number of remedies. The Croatian competition authority relied extensively on EU acquis when deciding on specific merger cases, especially as regards the relevant market definition.

Originality/value

The value of the chapter is reflected in the fact that this kind of comparative analysis of Croatian merger cases in the field of grocery retail mergers was not available before. It is especially in the light of the accession of Croatia to the EU, as foreseen on 1 July 2013, that this kind of study becomes useful both for domestic but also EU audience.

Details

Challenges for the Trade of Central and Southeast Europe
Type: Book
ISBN: 978-1-78190-833-4

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Book part

Luigi Siciliani

Hospitals are complex organisations accounting for most of total health expenditure. They play a critical role in providing care to patients with high levels of need. A…

Abstract

Hospitals are complex organisations accounting for most of total health expenditure. They play a critical role in providing care to patients with high levels of need. A key policy concern is that patients receive high quality care. Policymakers have attempted to influence hospital quality in different ways. This chapter focuses on three key policy levers: the extent to which hospital competition and higher hospital tariffs (of the DRG type) can stimulate quality, and whether non-profit hospitals provide higher or lower quality than for-profit ones. The chapter outlines key methodological challenges and selectively reviews the main findings from the literature. While several studies suggest that hospital competition reduces mortality rates for heart attack cases when hospital tariffs are fixed (under a DRG system), at this stage is unclear whether the effect holds across a range of quality indicators. Moreover, the limited literature on hospital mergers tends to suggest that hospital quality does not change following a merger. Finally, whether non-profit hospitals provide higher or lower quality varies across regions and institutional arrangements. The economic theory suggests several mechanisms with opposite effects on quality. To guide policy, future work needs to further unpack the various mechanisms through which these three key policy issues affect hospitals incentives.

Details

Health Econometrics
Type: Book
ISBN: 978-1-78714-541-2

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