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Book part
Publication date: 31 May 2016

Jia Yan, Xiaowen Fu, Tae Hoon Oum and Kun Wang

This chapter reviews the key results obtained in previous studies of airline mergers. It is found that the effect of mergers on airfares is dependent on the network…

Abstract

This chapter reviews the key results obtained in previous studies of airline mergers. It is found that the effect of mergers on airfares is dependent on the network configurations of merging airlines. Fare increases are frequently observed on overlapped routes. However, if the networks of two merging airlines are complementary, the expanded network after the merger leads to cost savings, increase in travel options, and improvement in service quality. Therefore, in a deregulated market, with few entry barriers, relaxing merger regulations is likely to improve welfare. However, most welfare evaluations do not incorporate quality changes or dynamic competition effects. Empirical investigations are primarily ex post analysis of mergers that have already passed antitrust reviews. The relationship between market concentration and welfare might be nonlinear and market specific. Therefore, airline mergers and alliances should be reviewed case by case. Methodological improvements are needed in future studies to control for the effects of complicating factors inherent in ex post evaluations.

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Airline Efficiency
Type: Book
ISBN: 978-1-78560-940-4

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Abstract

Many jurisdictions fine illegal cartels using penalty guidelines that presume an arbitrary 10% overcharge. This article surveys more than 700 published economic studies and judicial decisions that contain 2,041 quantitative estimates of overcharges of hard-core cartels. The primary findings are: (1) the median average long-run overcharge for all types of cartels over all time periods is 23.0%; (2) the mean average is at least 49%; (3) overcharges reached their zenith in 1891–1945 and have trended downward ever since; (4) 6% of the cartel episodes are zero; (5) median overcharges of international-membership cartels are 38% higher than those of domestic cartels; (6) convicted cartels are on average 19% more effective at raising prices as unpunished cartels; (7) bid-rigging conduct displays 25% lower markups than price-fixing cartels; (8) contemporary cartels targeted by class actions have higher overcharges; and (9) when cartels operate at peak effectiveness, price changes are 60–80% higher than the whole episode. Historical penalty guidelines aimed at optimally deterring cartels are likely to be too low.

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The Law and Economics of Class Actions
Type: Book
ISBN: 978-1-78350-951-5

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Article
Publication date: 1 April 2003

Georgios I. Zekos

Aim of the present monograph is the economic analysis of the role of MNEs regarding globalisation and digital economy and in parallel there is a reference and examination…

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Abstract

Aim of the present monograph is the economic analysis of the role of MNEs regarding globalisation and digital economy and in parallel there is a reference and examination of some legal aspects concerning MNEs, cyberspace and e‐commerce as the means of expression of the digital economy. The whole effort of the author is focused on the examination of various aspects of MNEs and their impact upon globalisation and vice versa and how and if we are moving towards a global digital economy.

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Managerial Law, vol. 45 no. 1/2
Type: Research Article
ISSN: 0309-0558

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Article
Publication date: 27 July 2011

Lamia Ben Hamida

The purpose of this paper is two‐fold: to discuss the key factors determining foreign direct investment (FDI) intra‐industry spillovers and to examine the presence and the…

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1113

Abstract

Purpose

The purpose of this paper is two‐fold: to discuss the key factors determining foreign direct investment (FDI) intra‐industry spillovers and to examine the presence and the extent of these spillovers in Switzerland, by testing them for the services/construction industry, where there is currently a scarcity of evidence.

Design/methodology/approach

The assessment of spillovers calls for a detailed analysis of these effects according to the mechanisms by which they occur (namely, the increase in competition, demonstration effects, and worker mobility), and whether the size and the extent of spillovers depend on the interaction between their mechanisms and the existing technological capacities of domestic firms.

Findings

The regression results are affirmative, in that domestic firms with high technological capacities appear to gain spillover benefits from FDI heightening competition, while mid‐ and low‐technology firms benefit a lot from demonstration effects. In addition, spillovers for high‐ and mid‐technology firms appear to be largely co‐determined by the level of their human capital. Only domestic firms that invested heavily in absorptive capacity benefit from spillovers.

Research limitations/implications

The evidence on spillover effects has not yet been conclusive. Hence, this paper proposes some components for a research agenda on FDI and intra‐industry spillovers.

Practical implications

The study provides insights for Swiss policy makers about how to promote the beneficial spillover effects of FDI.

Originality/value

The process of spilling over is correctly described in a more satisfactory model and then the impact of this process is accurately identified.

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Book part
Publication date: 6 August 2014

Xiaowen Fu and Tae Hoon Oum

This chapter reviews the effects of air transport liberalization, and investigates the roles played by airport-airline vertical arrangements in liberalizing markets. Our…

Abstract

This chapter reviews the effects of air transport liberalization, and investigates the roles played by airport-airline vertical arrangements in liberalizing markets. Our investigation concludes that liberalization has led to substantial economic and traffic growth. Such positive outcomes are mainly due to increased competition and efficiency gains in the airline industry, and positive externalities to the overall economy. Liberalization allows airlines to optimize their networks, and thus may introduce substantial demand and financial uncertainty to airports. Vertical arrangements between airlines and airports may offer a wide range of benefits to the parties involved, yet such arrangements could also lead to airline entry barriers which reduce the effects of liberalization. Three approaches have been developed to model the effects of liberalization in complex market conditions, which include the analytical, econometric and computational network methods. These approaches should be selectively utilized in policy studies on liberalization.

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The Economics of International Airline Transport
Type: Book
ISBN: 978-1-78350-639-2

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Book part
Publication date: 1 January 2008

Lamina Ben Hamida and Philippe Gugler

This chapter examines intra-industry spillover effects from inward foreign direct investment (FDI) in Swiss manufacturing firms. It suggests that (a) the assessment of…

Abstract

This chapter examines intra-industry spillover effects from inward foreign direct investment (FDI) in Swiss manufacturing firms. It suggests that (a) the assessment of spillovers calls upon a detailed analysis of these effects according to the mechanisms by which they occur (viz. the increase of competition, demonstration effects, and worker mobility), and (b) spillovers depend on the interaction between their mechanisms and the levels of domestic absorptive capacity. Results are affirmative in that high-technology firms benefit from FDI heightening competition, while mid-technology firms benefit from demonstration effects. And low-technology firms, which are not able to benefit from foreign affiliates via demonstration effects alone, manage to reap the benefit via the recruitment of MNCs labor. In addition, only firms which largely invest in absorbing foreign technology benefit from spillovers.

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New Perspectives in International Business Research
Type: Book
ISBN: 978-1-84855-279-1

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Article
Publication date: 28 August 2007

Charlene K. Stokes, Debra Steele‐Johnson and Anupama Narayan

The purpose of this article is to address and gain a more complete understanding of the effects on performance attributable to the gender composition of teams.

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2183

Abstract

Purpose

The purpose of this article is to address and gain a more complete understanding of the effects on performance attributable to the gender composition of teams.

Design/methodology/approach

The authors examined gender as a team composition variable that influences performance on a computer‐based task, and we investigated task framing (masculine/feminine) and competition (isolated/dyad) as explanatory factors in the gender composition‐performance relationship. Whereas previous research combines matched gender dyads in analyses, we distinguished male/male from female/female dyads to isolate the effects on performance and examine competition effects.

Findings

Distinguishing between male/male and female/female dyads revealed only male/male dyads had superior performance. Task framing was not supported as an explanation for the observed performance differences, but competition was. Contrasting the gender effect in competitive conditions relative to isolated conditions revealed a gender difference in performance between competitive conditions only.

Research limitations/implications

Given competition's clear role in the gender composition‐performance relationship, a more rigorous examination and manipulation of competition is needed beyond the comparison of isolated and dyadic conditions.

Practical implications

Previous research suggests to organizations/practitioners that matching teams by gender will result in optimal performance. Based on our findings, such an implementation would be to the detriment of female teams in the organization, and associated legal issues could arise.

Originality/value

The authors found the superior performance of matched teams to be attributable to the matching of male/male teams and the associated competitive context, and not attributable to matched teams in general. The results should be considered as a caution for both the academic and applied domain alike.

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Team Performance Management: An International Journal, vol. 13 no. 5/6
Type: Research Article
ISSN: 1352-7592

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Article
Publication date: 26 January 2021

Yufeng Xia and Peisen Liu

Bank financing is an important external financing source for firm research and development (R&D) investment. This study aims to use an exponential quadratic specification…

Abstract

Purpose

Bank financing is an important external financing source for firm research and development (R&D) investment. This study aims to use an exponential quadratic specification to investigate the effect of bank competition on firm R&D investment and its underlying mechanisms. Moreover, this study checks bank competition’s heterogeneous effects on firm R&D investment.

Design/methodology/approach

Based on data of Chinese manufacturing firms and bank branches, this study uses the Tobit estimator, instrumental variable method and Heckman two-step approach to test the relationship between bank competition and firm R&D investment.

Findings

The results show robustness evidence of an inverted-U relationship between bank competition and firm R&D investment. Specifically, increases in bank competition promote firm R&D investment until bank competition reaches the turning point and reduce firm R&D investment after crossing the turning point. Financing costs and financial constraints can explain the inverted-U relationship between bank competition and firm R&D investment. Heterogeneity examinations reveal that R&D investment is more sensitive to bank competition in non-state-owned enterprises, small firms and high-tech firms.

Originality/value

This study contributes to the literature on the relationship between bank competition and firm innovation. The authors investigate the heterogeneity of R&D investment influenced by bank competition and depict the economic effects brought by bank competition. This study sheds light on the real effects of bank competition and the determinants of firm R&D investment in transition economies. The conclusions provide empirical evidence for reducing credit discrimination and improving capital allocation efficiency in developing countries.

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Chinese Management Studies, vol. 15 no. 3
Type: Research Article
ISSN: 1750-614X

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Book part
Publication date: 25 August 2006

Stephen Gibbons and Olmo Silva

Advocates of market-based reforms in the public sector argue that competition between providers drives up performance. But in the context of schooling, the concern is that…

Abstract

Advocates of market-based reforms in the public sector argue that competition between providers drives up performance. But in the context of schooling, the concern is that any improvements in efficiency may come at the cost of increased stratification of schools along lines of pupil ability and attainments. In this chapter, we discuss our empirical work on competition and parental choice in English primary schools and present a methodology for identifying competition effects that exploits discontinuities in market access close to education district boundaries.

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Improving School Accountability
Type: Book
ISBN: 978-1-84950-446-1

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Article
Publication date: 28 December 2020

Can-Zhong Yao and Yi-Na Mo

The purpose of this paper is to whether competition between platforms can be effective, thus leading to efficient allocations.

Abstract

Purpose

The purpose of this paper is to whether competition between platforms can be effective, thus leading to efficient allocations.

Design/methodology/approach

Based on the classic linear Hoteling model, this paper builds a two-period competition model for two competing platforms using two variants, namely, a discrimination pricing model and a unified pricing model.

Findings

In the case of the discrimination pricing model, the competition is moderate, and the two platforms split the market evenly in the first stage, while both platforms tended to offer preferential treatment to new users and set higher prices for regular customers in the second stage. Compared to the unified pricing model, in the first stage, the platform can provide a higher price that depends on the cross-network effect when it implements discrimination, and thus, obtains higher profits. However, in the second stage, fierce competition leads to the release of benefits, new and regular customers obtain lower prices and the platforms lose higher profits. In the long-run, discriminatory pricing is not the best option due to lower total profits. The two platforms will implement cooperative pricing or one platform becomes dominant.

Originality/value

Instead of focusing on the cross-network effects, this paper emphasizes the role of the same-side network effect on price discrimination regarding the platforms’ competition. The same-side network effects are investigated in relation to a discrimination pricing strategy and compared to a unified pricing strategy. Another innovative aspect is the study of these network effects in a dynamic setting based on a two-period competition model for two platforms.

Details

Kybernetes, vol. 50 no. 11
Type: Research Article
ISSN: 0368-492X

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