Competition Policy Research Articles

Understanding the role of regional cooperation in mitigating ecological footprint: An empirical analysis of the Guangdong-Hong Kong-Macao Greater Bay Area

Confronted with an escalating ecological crisis, regional cooperation has emerged as a recognized strategy for orchestrating collective actions among diverse stakeholders across territories. Nonetheless, the potential of regional cooperation in mitigating ecological footprints remains significantly underexplored. To address this gap, this study employs the case of the Guangdong-Hong Kong-Macao Greater Bay Area (GBA) to quantitatively scrutinize the impacts of regional cooperation on ecological footprints from 2010 to 2018, while also elucidating its underlying mechanisms. Our investigation into the GBA unveils four pivotal findings. First, the data paints an increasing ecological footprint picture across the GBA, with a discernible spatial pattern of decreasing intensity from coastal to hinterland cities over the past decade. Second, intergovernmental cooperation amplifies the ecological footprint, a phenomenon intricately tied to top-down interventions from upper-level governments. Such highly formalized spatial interventions often overlook local ecological repercussions, thereby intensifying discord. Third, the collaboration between government and market entities aids in reducing the ecological footprint, provided it is contingent on the symbiotic relationship between regional market competition policies provided by the upper-level government and the flexible, informal arrangements offered by local governments to support enterprises. Last, regional cooperation may intensify the ecological footprint in ordinary cities through the transfer of industries from core cities.

Common policies of the European Union

Common policies of the European Union

Is local competition effective in improving quality and efficiency of hospitals? Insights from an asymmetric spatial competition model

A critical aspect of healthcare reforms in various countries revolves around the relationship between efficiency, quality, and competition. Exploring the spatial dimension of competition is essential to understand this connection thoroughly. In this study, we develop a theoretical model that examines hospitals' choices regarding quality and cost-containment efforts across different competitive environments characterized by varying spatial distributions of hospitals. We derive and fully characterize hospitals' reaction functions and Nash equilibria concerning quality and cost-containment efforts. Our findings reveal that while localized competition tends to reduce hospitals' efforts in cost containment, its impact on treatment quality can vary. This variation depends on factors such as the cost of delivering quality care, its benefits to patients, and hospitals' objectives, including their level of altruism. Our findings contribute to the ongoing debate on the role of local competition in healthcare. They offer insights into the conditions that could yield divergent outcomes, often advocated by conflicting perspectives. These conditions serve as a foundation for refining competition policy models in healthcare.

Price Effects of Horizontal Mergers: A Retrospective on Retrospectives

Abstract This comprehensive review of ex post merger studies assesses the price effects of horizontal transactions to determine whether there are common post-merger price effects, both overall and in specific markets. The aim is to derive implications for policy makers and competition authorities in terms of effective merger enforcement and competition policy. By combining and further analysing the results of 52 retrospective studies on 82 mergers or horizontal transactions, it can be shown that the sector in which the respective transaction takes place alone is not a strong indicator of the direction of price-related merger effects. In contrast, the ‘size’ or ‘importance’ of a transaction as well as market concentration seem to be correlated with post-transaction price increases, especially in already highly concentrated markets. Overall, this meta-study shows the importance of ex post case studies for improving ex ante merger control: although generalizations can only be made with caution, the subsequent analysis of a case and its ex post observable outcome can provide useful information for future merger enforcement in general, either in the same industry and/or with similar case characteristics, as well as for competition policy regulators.

Sensitivity analysis of distributed photovoltaic system capacity estimation based on artificial neural network

Residential solar photovoltaic (PV) system installations are expected to continue increasing due to their growing cost competitiveness and supportive government policies. However, excessive installations of unknown behind-the-meter solar panels present a challenge for accurate load prediction and reliable operations of power networks. To address such growing concerns of distribution network operators (DNOs), this research proposes a novel model for distributed PV system capacity estimations. Innovative extracted features from 24-hour substation net load curves were fed into a deep neural network to estimate the PV capacity linked to the substation feeder. A comprehensive study into the sensitivity of the model’s accuracy to specific temporal scales of data collection, number of households served by a substation, and proportion of PV-equipped properties was conducted. This study revealed that a model developed to be used exclusively in summer achieved a 18.1% decrease in estimation root mean squared error (RMSE) compared to an all-year model, whilst using only a third of the training data amount. Similarly, compared to an all-year model, RMSE decreased by 26.9% when only data from Mondays to Thursdays were used to train and test the model. Also, for the all-year model, the most accurate estimations occur when 20% to 80% of households have PV systems installed and estimation percentage error tend to remain constant at around 10% when more than 20% of households have PV systems installed. A machine learning-ready dataset of substations with known PV capacity and experiment results are both useful to inform DNOs on the potential of the proposed method in reducing grid operation costs.

The 2023 Merger Guidelines and The Role of Economics

Relying heavily on legal analysis, the 2023 Merger Guidelines argue for a fundamental shift in antitrust enforcement that places more emphasis on protecting competitors and less on protecting the beneficiaries of competition. It is up to courts, not economists, to ascertain whether this interpretation of antitrust law is correct. But economists can and should analyze the likely economic effects. Evidence that antitrust enforcement has permitted some markets to be overly concentrated justifies the tightening of horizontal merger enforcement that is signaled by these guidelines. Evaluating the elimination of double marginalization from vertical mergers as a part of an efficiency defense rather than as a primary economic effect reflects a fundamental misunderstanding of the economics of vertical mergers. At a minimum, these guidelines will further damage the reputation of the DOJ and FTC among competition policy enforcers in other countries. A potentially more serious cost will be if foreign competition authorities use these guidelines to justify enforcing their own laws to protect inefficient domestic firms against foreign competition.

Loans and guarantees granted by the state in the context of competition policy in the Republic of Moldova and the European Union

The object of research of this article is the analysis of state loans and guarantees in terms of normative acts and practices in the field of competition in the Republic of Moldova and at European Community level. Despite the fact that state interventions with loans and state guarantees are known in practice as a way to encourage the economy, lending and state guarantees can also have negative effects on the normal competitive environment. That is why the current trends in the practice of granting loans and state guarantees in the Republic of Moldova, as well as at the community level, are to reduce the share of state aid in GDP.

OTT 서비스 확산 이후 유료방송 VOD 이용의 결정 요인 분석

In order to establish a reasonable competitive policy after the rapid growth of OTT services, discussions on the competition situation and substitution between OTT services and Pay TV are active. This study aims to give implications for the future evaluation and policy of competition in the media market by looking at the factors affecting the expenditure of TV VOD services which have been decreasing in market size in recent years. Considering the characteristics of the data, this study analyzes two distinct effects on TV VOD expenditure, which are whether to spend on TV VOD and how much you spend on TV VOD, and data from 2021 to 2022 of the Korean Media Panel Survey were employed. First, the results of estimating the impact on whether to spend on TV VOD suggest that it was confirmed that subscribers who spend on OTT services are more likely to spend on TV VOD than non-OTT subscribers. In addition, IPTV households were more likely to spend on TV VODs than non-subscribers and CATV subscribers. As a result of estimating the factors affecting the amount of TV VOD expenditure, it was found that the longer OTT usage time, the higher TV VOD expenditure, confirming that a complementary relationship rather than a substitution between the two media services is still maintained.

Market power, optimal scale and competition promotion in banking: Analysis in the GCC region

AbstractWe propose an approach to identify optimally scaled banks and analyse the competition levels among banks in different stages of production in six countries of the Gulf region. The empirical results show that the global financial crisis curbed the rise in the market power of banks, but the market power continued to increase straight after 2009. Also, we show that the existing methods fail to identify that a significant proportion of banks across different countries, up to 90%, are operating at an optimal scale. Finally, we discuss the misclassification of banks by the traditional approach to scale analysis and its implications for decision‐making by competition authorities and central banks that assess and promote competition in banking. We advocate a more nuanced approach to competition policy that recognizes the potential impact of various phases of banks' production process on the competition.

Antitrust Vigilance: Scrutinizing Anti-Competitive Impacts in Indian and International M&A for Equitable Economic Expansion

The field of mergers and acquisitions (M&A) has witnessed significant growth and evolution in recent decades, driven by globalization, technological advancements, and changing market dynamics. The increasing interconnectedness of economies, the rise of digital platforms, and the pursuit of strategic synergies have fuelled a surge in M&A activity across industries and regions. This has prompted policymakers, regulatory authorities, and industry stakeholders to scrutinize M&A transactions more closely to ensure they do not unduly harm competition, consumer welfare, or market stability. Moreover, the evolving landscape of competition policy, regulatory frameworks, and enforcement mechanisms has added complexity to the M&A process, requiring companies to navigate a myriad of legal, regulatory, and operational challenges when pursuing cross-border transactions. Against this backdrop, understanding the principles of antitrust vigilance, the regulatory frameworks governing M&A transactions, and the ethical considerations involved is essential for stakeholders involved in the deal-making process. Furthermore, the COVID-19 pandemic has reshaped the M&A landscape, with disruptions to supply chains, changes in consumer behavior, and economic uncertainties impacting deal activity and strategic priorities. As companies adapt to new market realities and navigate the challenges posed by the pandemic, there is a heightened need for vigilance in assessing the competitive implications of M&A transactions and promoting a competitive marketplace that fosters innovation, economic growth, and consumer welfare. In light of these developments, this dissertation aims to provide a comprehensive examination of anti-trust vigilance and regulatory frameworks in Indian and international mergers and acquisitions, exploring the complexities, challenges, and ethical considerations involved in managing M&A transactions for equitable economic expansion. By analyzing key concepts, principles, case studies, and future directions, this dissertation seeks to contribute to the advancement of knowledge and inform policy debates on competition policy, regulatory reform, and corporate governance in the context of M&A transactions.

Competitiveness without Competition: The Role of Antitrust Law in the Development of the Guangdong-Hong Kong-Macao Greater Bay Area

Abstract The economic integration of the constituent jurisdictions in the Guangdong–Hong Kong–Macao Greater Bay Area (GBA) involves an enhanced market connectivity and an asymmetric opening up for trade in goods and services. The development of the GBA presents a unique case study for understanding the role of the competition law and policy in the context of regional economic integration. In contrast to the regulatory experiences of other economic integration projects around the world, such as, for example, the European Union, where harmonization of competition laws and their coordinated enforcement became the norm, the GBA explicitly abandons this approach. The regulatory framework for the GBA development does not envisage common competition rules or policies. Equally, it does not seek to harmonize the existing divergences in competition laws. This article analyses the specifics of the GBA economic integration in the context of the ‘one country, two systems’ principle and explains the reasons behind the distinct role of the competition law and policy in this process.

БӘСЕКЕЛЕСТІК САЯСАТ ЖӘНЕ ЭКСПОРТҚА БАҒДАРЛАНҒАН ӨНІМДІ ДАМЫТУ

Abstract. Kazakhstan chose a competitive model of the economy and set a course for industrial and innovative development of the country, which will allow building an economically strong and prosperous state, because the country's competitiveness implies the competitiveness of the nation, state institutions and business. This is what the country's competitive policy is aimed at [1]. The Republic of Kazakhstan has great potential for the development of the manufacturing industry and the agro-industrial complex, a significant increase in the export of grain and its processing products, the production of a wide range of meat and dairy products, vegetable oil, vegetables, fruits and other products of animal husbandry and crop production, that is, support and development of export-oriented agricultural production. The agricultural industry is greatly influenced by economic factors. The state regulation of this area is based on the methods of foreign trade in raw materials and food products. The article considers measures of the state system of support for agricultural producers, increasing the efficiency of the system of state management of the agro-industrial complex, the modern state of agriculture of the Republic of Kazakhstan.

Measuring the impact of scheduling overlap and market structure on prices: Evidence from the airline industry

Measuring the degree of competition in markets is important for setting competition and regulatory policies as well as developing management strategies. Commonly used structural indices, such as the HHI, overlook the way in which firms compete and, hence, set their prices in markets. We propose a family of horizontal differentiation measures, which encapsulates firms’ portfolio of products as well as the degree of overlap and substitution between competing services. We term this family of measures Schedule Differentiation Metric or SDM. Applied to aviation markets, we illustrate one instance of SDM and demonstrate the significant importance of SDM in explaining price levels and structure. The information captured by SDM also explains fares across fare percentiles depending on the competing airlines’ business models.

Analysis of the relationship between financial policy-competitiveness capacity - economic growth: A study of economic transformation in Vietnam

This study aims to examine the relationship between fiscal policy, provincial competitiveness and Vietnam's economic growth. The study uses the VECM model for time series data including the factors Total tax revenue of the country, Growth of the expanded money supply represents fiscal policy; Provincial competitiveness and Vietnam's economic growth in the period 1990-2021. The study has provided additional empirical evidence on the relationship between financial policy, provincial competitiveness and economic growth in the context of selecting Vietnam. The research results show that financial policies have affected economic growth in localities in the third period with an impact of 3%. In comparison, provincial competitiveness has affected economic growth right in the 1st period with a large impact of 18%. The change of economic growth has an impact in the same direction with provincial-level financial and energy competitiveness policies. From this result, the authors propose implications to limit the lag in the implementation of financial policies.

Does Higher Institutional Quality Result in Environmental Sustainability? A Comparative Study of India and China

There is a lack of comprehensive research comparing India and China in terms of institutional quality and environmental degradation. This special issue aims to make threefold distinct contributions. By comparing India and China, we can learn from each other's experiences and gain insight into the shared difficulties both nations face when trying to achieve environmental sustainability in the face of high-quality institutional frameworks. The impact of corruption, economic development, ecological risk, and renewable energy sources on carbon dioxide emissions in China and India is investigated in this study. For this reason, we also employ the ARDL model and pairwise Granger causality to prove that something caused another. Applying the ARDL long-run bound test, the empirical results reveal a long-run connection between variables in both China and India. In the case of China and India, the estimated results also reveal a negative correlation between carbon emissions and the usage of renewable energy sources, but a positive correlation between carbon emissions and economic growth, corruption, and environmental risk. Improving institutional quality is the goal, and the present theoretical and applied discourse on comparative environmental sustainability is a good place to start. As a result, policymakers in China and India should oppose unfair practices that undermine competition laws and policies by instituting stringent anti-corruption measures and environmental rules. Energy efficiency measures that reduce carbon emissions without slowing economic growth should also be the government's primary focus.

Steering at a distance: research centre funding schemes as instruments for university change

Abstract In addition to promoting reforms, governments foster change in university systems through funding, competition, and new policy instruments. Little research has been conducted on how research centre funding schemes support organizational changes in universities and on their institutional and policy barriers. This article addresses the research centre funding schemes implemented by the regional government of Galicia (Spain) in 2016. The approach is observational and based on documentary analysis and semi-structured interviews with key actors. The regional government sought to encourage organizational differentiation by increasing the autonomy of centres inside the universities and to enhance strategic research agendas, reinforcing the scientific authority of the centres’ directors. We found that the design and operation of the instrument in the context of the existing university governance system, and the interaction with other funding instruments within the policy mix, may create barriers that hinder the effectiveness of the funding scheme.

PROCEDURAL CHALLENGES IN THE REGULATION OF ABUSE OF DOMINANT POSITION IN UZBEKISTAN

This article examines the evolution of competition policy in Uzbekistan, focusing on institutional reforms and regulatory challenges. It outlines the country's three-stage approach to developing competition laws and highlights recent efforts to strengthen the independence of the competition authority. Drawing comparisons with the European Union, the paper identifies areas for improvement, such as enhancing transparency and adopting economic tools for assessing abuse. By addressing these challenges, Uzbekistan can create a more competitive market environment conducive to economic growth.

Assessing media mergers and acquisitions: The power pyramids of regulatory cooperation

Due to the media goods’ dual economic and cultural role, merger and acquisition (M&A) assessments are complex and differ from M&As in other sectors. An additional layer of complexity is added to the assessment when various authorities are involved. An even more complicated matter is when the authorities have different remits. These authorities mostly comprise National Competition Authorities that enforce competition law, focused on economic considerations, and National Regulatory Authorities that enforce and oversee the application of media law, focused not only on setting rules and limitations on the media market but also on considering non-economic elements such as plurality. In certain countries, ministries and government authorities can intervene in these assessments. There have been discussions on the need for cooperation between authorities, however, mostly at the international level. Thus, little is known about the current cooperation procedures at the national level. The article proposes a typology of cooperation at the EU member states level and the United Kingdom and introduces the concept of the ‘power pyramid’ to represent the hierarchical relationships between authorities. Cooperation proves that competition policy and media-specific regulation are intertwined and are complementary. Furthermore, the article shows that having more than one authority assessing media M&As leads to media pluralism being more often explicitly one of the criteria used in the assessments, and thus providing a more holistic approach.

The Threat of Economic Deglobalization from Cold War 2.0: A Japanese Perspective

Abstract The intensified geopolitical tension in Northeast Asia and the U.S.–China confrontation have shifted policy debates in Japan toward national security while the economic discussion has become thin. To regain more balanced policy talks, this paper tries to quantitatively comprehend the effect of the United States and its allies’ export controls on the East Asian machinery production networks and Japan's trade performance. Major findings include the following four points: First, most of the supply chain decoupling policies by the Japanese government have been the ones to prepare for sudden interruptions of the supply of important items while decoupling policies for strategic competition are limited only in the context of the cooperation with the United States. Second, international trade statistics at the industry level do not show clear evidence of supply chain decoupling in East Asia due to the U.S. export controls, at least up to 2022. Third, however, the negative trade effect becomes visible at the product or individual firms’ level, and the recent strengthening of the United States and its allies’ export controls may augment the negative effect on machinery production networks. Fourth, although the scope of trade controls would expand further, the supply chain decoupling is likely to end up with a partial one. The paper claims that middle powers such as Japan must establish a well-balanced trade policy.

Trade Competitiveness and Sustainability Policies of Malaysian Palm Oil in the European Union: Strategic Responses by Stakeholders Agencies

The Malaysian palm oil industry is a significant contributor towards national development and economic growth. However, the industry has been facing rising tension to ensure sustainable development, as global demand for palm oil continue to grow in the coming years. The necessity for producing and trading sustainably produced palm oil is amplified with the European Union’s stringent requirement for importing responsibly sourced commodities into its market, with the aim to achieve climateneutral by 2050. The palm oil industry is also inundated with anti-palm oil campaigns and agendas, which emphasize allegations of unsustainable agricultural practices as large-scale plantations damage the natural ecosystem in producing countries. Collectively, these challenges could pose a formidable impact on the trade of palm oil between Malaysia and the European Union. Therefore, the article seeks to examine the strategic responses undertaken by Malaysian stakeholder agencies to address the regulations pertaining to sustainable production of palm oil. Using a qualitative approach, a total of ten sessions of in-depth interviews were held with expert informants in stakeholder agencies, both in Malaysia and the European Union. Among the key findings were the formulation and implementation of the National Agricommodity Policy, deployment of various missions to the European Union, implementation of Malaysian Sustainable Palm Oil (MSPO) certification as the national sustainability scheme, dissemination of accurate information on sustainable and certified palm oil, and continuous engagement through bilateral and multilateral platforms. Based on the findings, this study suggests that inclusive and transparent engagement must be conducted continuously. Constantly held dialogue sessions will help to promote better understanding and fruitful collaboration among stakeholder agencies in Malaysia and the European Union to balance environmental concerns with trade interests.