This chapter reviews the effects of air transport liberalization, and investigates the roles played by airport-airline vertical arrangements in liberalizing markets. Our…
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.
While the liberalization of economies within the transition paradigm is viewed to take place primarily on a macroeconomic (primary) level, this paper switches emphasis to…
While the liberalization of economies within the transition paradigm is viewed to take place primarily on a macroeconomic (primary) level, this paper switches emphasis to the secondary and tertiary level of post-transition. While macroeconomic reforms may provide the playing field, secondary reforms level the playing field and tertiary reforms develop the capabilities necessary for firms and individuals within firms to compete in the landscape of liberalized economies. It is necessary to examine the transformations on three levels. First, the development of public policy and institutions aimed at regulating certain industries or firms. Second, the explicit market strategies of firms operating in the industries that shape market structure and inform public policy. Third, the nonmarket strategies of firms aimed at influencing the form and substance of public policy. Drawing on research in three related areas: institutional voids (IVs), the role of market and nonmarket strategies of firms, respectively, this paper examines the current state of transition in CEE/FSU countries. The main conclusions of the paper are first, transition and post-transition has been and continues to be profoundly impacted by the liberalizing influences of multinational firms. Second, this causation from the strategies and tactics of multinational firms to the extent of transition also helps to explain the degree of modernization of economies in a given transition economy. Third, it is important to distinguish between local and foreign firms on the transition process. Foreign firms are more likely to pursue liberalization agendas when it strengthens their competitive advantage over local firms. Conversely, local firms – especially those who rely on the capacity to navigate institutional voids – may be opposed to liberalization, as liberalization would threaten their sources of competitive advantage.
This study sets out to examine the evolution of competitive conditions in the banking industries of 14 Central and Eastern European (CEE) transition economies for the…
This study sets out to examine the evolution of competitive conditions in the banking industries of 14 Central and Eastern European (CEE) transition economies for the period 1993‐2000.
The basis for the evaluation of competitive conditions is the extant oligopoly theory in the new industrial organization literature, specifically, the competition model developed by Panzar and Rosse.
The results of the competition analysis suggest that the banking markets of CEE countries cannot be characterized by the bipolar cases of either perfect competition or monopoly over 1993‐2000 except for FYR of Macedonia and Slovakia. That is, banks earned their revenues as if operating under conditions of monopolistic competition in that period. An analysis of changes in competitive structure shows a higher degree of competition in the later years of the sample period. Large banks in transition countries are found to be operating in a relatively more competitive environment compared with small banks or, in other words, competition is lower in local markets compared with national and international markets.
The period under investigation corresponds to early years of the ongoing transition from central planning when these countries were lacking many market‐supportive institutions essential for efficient financial markets. Therefore, the results of this study should be interpreted with the necessary scholarly scrutiny.
The paper measures the level of market contestability that may have been facilitated by the recent liberalization and deregulation progress.
The paper is highly original. Although research on the bank competition in the USA and other developed countries is voluminous, research that focuses on transition economies is relatively scant.
The economic realignment in Latin America has created two clusters, one stagnant in the north and the other growth-bound in the south. This study aims to focus on Brazil…
The economic realignment in Latin America has created two clusters, one stagnant in the north and the other growth-bound in the south. This study aims to focus on Brazil, the key player in the growth-bound southern cluster, and address three fundamental questions: how Brazilian executives in four B2B sectors (telecommunications, business equipment, steel, and transportation) viewed the internal competitive developments, how they strategically responded to these developments, and what were the marketing and financial outcomes of these strategies.
Data were obtained by interviewing top decision makers such as president, chief executive officer, and director of the companies.
Findings show that the intensity of competitive pressures due to globalization varied by sector and so did strategic responses of firms. Marketing and financial performance outcomes also varied by sectors.
The study adds to the growing literature on competitive market developments, strategic responses and performance outcomes of firms in Brazil, an important emerging economy and the key player in the southern Latin America cluster.
States that since the mid‐1980s, substantial deregulation and competitive liberalization of the South‐East Asian economies in their trade and investment regimes has…
States that since the mid‐1980s, substantial deregulation and competitive liberalization of the South‐East Asian economies in their trade and investment regimes has resulted in greater integration of their economies with the North‐East Asian economies. Proposes that, together with the rising purchasing power of the expanding middle class, massive infrastructural development, as well as the expansion in intra‐regional trade and investment, East Asia has emerged as an independent centre of growth in the global economy since the early 1990s. Presents empirical evidence on the rise of this autonomous growth momentum. Contends that, no longer a mere wagon hitched to the locomotive of the US and European economy, East Asia′s emerging independent engine of growth has tremendous implications for executives of multinationals keen to expand market share and form strategic alliances with companies in East Asia. Submits that it also has implications for fund managers in the OECD countries keen to look to the region for asset diversification and higher returns.
This paper analyses the stalling of the Doha Development Agenda (DDA) and its systemic and institutional consequences through a geopolitical economy approach that…
This paper analyses the stalling of the Doha Development Agenda (DDA) and its systemic and institutional consequences through a geopolitical economy approach that integrates the French school of international economic relations and Régulation Theory. These approaches put states and their economic roles at the fore, correcting dominant free trade approaches to world trade. The paper also avoids monocausal explanations for trade talk deadlocks and aims to provide a comprehensive approach on the co-evolution of world trade patterns and its institutions. In this approach, the DDA stalemate is traced to an institution-structure mismatch in how states articulate their accumulation strategies and institutions (competition, state regulation, adhesion to international regime) to the World Trade Organization (WTO) regime occasioned by the emergence of new trade powers. This has given rise to three distinct conflicts in how member states navigate between the main parameters of the multilateral trading system (non-discrimination, reciprocity and balance of power) and their national accumulation strategies: the erosion of non-discrimination and reciprocity; the failure to build an operational compromise between development and ‘globalization’, that is, between multilateral openness and new trade and power balances; and the difficulty in reaching a compromise between historical and emerging capitalisms. The outcome of these conflicts will determine the institutional configuration of the post-Doha WTO agenda.
The purposes of this paper are to provide a new framework for the (re)assessment of North-South relations, with a specific focus on North-South preferential trade…
The purposes of this paper are to provide a new framework for the (re)assessment of North-South relations, with a specific focus on North-South preferential trade agreements (PTAs); advance a new mechanism of how first-order, i.e. Southern countries’ first, North-South PTAs can affect the outcomes of second-order, i.e. Southern countries’ subsequent, North-South PTA negotiations; and re-examine the effects of North-South power asymmetries on the outcomes of North-South PTA negotiations.
The paper focuses on how North-South power asymmetries affect the outcomes of North-South PTA negotiations. It introduces the concept of “first-order” and “second-order” North-South PTAs to show that the “order” of an agreement can be a crucial factor in PTA negotiations. The claims of the paper are also supported by primary data obtained through the author’s personal interviews with European Union and USA trade officials and policy-makers (see Appendix).
The paper advances a new theoretical framework that takes a longer-term view on North-South trade relations, whereby, against the backdrop of the proliferating PTAs, first-order North-South agreements can raise the bargaining powers of Southern countries during subsequent North-South PTA negotiations, with strong implications for both developed and developing countries.
The paper is largely theoretical. A systematic empirical study of North-South PTAs will be required to validate or refute the theoretical framework advanced in this paper.
The paper introduces a new variable, namely the “order” of an agreement, which affects the logic of North-South PTA negotiations. Hence, the paper sets out a new theoretical framework that allows for a more accurate assessment of North-South power asymmetries and their effects on the outcomes of North-South PTA negotiations.
The case provides valuable insights on challenges faced by otherwise-protected organisations which are made to face the global onslaught. What happens to an organisation…
The case provides valuable insights on challenges faced by otherwise-protected organisations which are made to face the global onslaught. What happens to an organisation when its own collaborators become competitors overnight? What happens when market leaders refuse to share their technology or dictate their own terms? In addition, this case study looks at the strategy of diversification desired in the business portfolio and the cost of non-diversifications. The case evaluates the environment in which a capital-intensive industry has to operate. It evaluates the combination of all the variables required for undertaking a comprehensive analysis and aims at identifying the best possible level to which the business can be expanded to maximise profits under the known constraints in which the business has to operate.
Target audience is corporate executives, students of MBA/postgraduate programme in management in strategic management and/or workshops for understanding the concept of SWOT (strengths, weaknesses, opportunities and threats) analysis, competitor analysis, Porter's Five Forces Model, Boston Consulting Group (BCG) Matrix, business environment analysis and growth strategies for future.
A combination of global competition and open access in the domestic market is putting pressure on the margins, as new players are likely to move towards gaining market share by bidding aggressively. This is threatening the competitive intensity for Bharat Heavy Electricals Limited (BHEL) in the long-term. Raw materials, such as steel products, that are critical to production process are subject to substantial pricing cyclicality and periodic shortages of supply in India. The margins are thus continuously being impacted by movement in raw material prices, especially steel and copper. How BHEL hopes to sustain its growth story? Whether Chinese competition will kill BHEL? These are some of the pertinent questions the authors will try to answer in this case study.
Expected learning outcomes
Use of SWOT analysis to identify the strengths, weaknesses, opportunities and threats to a company and use it as a tool to strategic decision-making. Highlighting the importance of strategic tools such as Porter Model and BCG Matrix within an emerging economy backdrop; to illustrate the alternatives and difficulties/complexities involved in a strategic planning process of growth and cost cutting; and to analyse the financial statements of BHEL.
Analysing public sector undertakings (PSUs)/government companies involved in infrastructure build up/projects of strategic nature in the country, their performance, challenges and efficiency in pre-liberalisation era and post-liberalisation era, and identifying how many are visible today, including the reasons for their growth/decline in generating revenues and profits, has multiple social implications especially for an emerging economy like India. A look at the performance trends of such companies over the past years too would help them in their quest by assisting them to get an idea of business and the industry profile in which BHEL is operating.
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This paper aims to explore how firms from a Latin American market internationalise using the resource-based view of the firm as a theoretical foundation. Specifically, it…
This paper aims to explore how firms from a Latin American market internationalise using the resource-based view of the firm as a theoretical foundation. Specifically, it examines the internationalisation process of three Chilean companies that have become relevant international players.
Drawing on interviews with company managers, as well as industry data and corporate reports, this paper provides insights into the successful internationalisation process of emerging market firms.
The findings of this study suggest that specific capabilities and resources, such as belonging to a family conglomerate, domestic and foreign partnerships and networks, innovation and market orientation, and an experienced management team, are required for emerging market firms to internationalise and improve their performance in foreign markets.
This study is one of the few to address the internationalisation process of Chilean companies.