Effect Of Industry Concentration Research Articles

US foreign direct investment, technology transfer and the productivity of hydrocarbon-dependent economies: The case of Algeria

This article investigates the impact of US Direct Investments (foreign direct investments [FDI]) as channel of international technology transfer on total factor productivity (TFP) of Algeria from 1969 to 2019. We use export diversification distance as relative backwardness (GAP) and revealed comparative advantage (RCA) as trade concentration term. An autoregressive distributed lag (ARDL) approach is used to check for the long-run relationship. The results show that considering the sector of investment, the TFP is differently impacted. Indeed, the impact of FDI of hydrocarbon activities on TFP is negative and statistically significant. As for the out-hydrocarbons sector, the impact is positive with statistical significance. The negative impact of FDI in the scope of hydrocarbons sector can be mainly explained by the effect of industry concentration. This is supported empirically by the negative effect of RCA. We also find that large GAP has negative effect on TFP, contrasting the theory of the advantage of the relative backwardness.

Effects of competition in first-price auctions

This paper analyzes the effects of industrial concentration on bidding behavior and expected revenues. These effects are studied under the CIAPI model, an affiliated value set-up that nests a variety of valuation and information environments. We formally decompose the revenue effects coming from less competition into five types. The properties of these effects are discussed and conditions for (non)monotonicity of both the equilibrium bid and revenue are stated. Our results suggest that it is more likely that the seller benefits from less competition in markets with more complete valuation and information structures.

Global and non-global city locations: the effect of clusters on the performance of foreign firms

ABSTRACT This study examines the effects of subnational regional heterogeneity on the performance of foreign firms. Based on the global city concept, it identified regions with and without global connectivity and then compared the effects of within-country location advantages on foreign firm performance between the regions within a country. Given that present studies offer conflicting findings on how industrial concentration, that is, clusters, affect the performance of business firms, this study argues that they fail to address the global connectivity of subnational regions. Findings from Australia suggest that industrial concentration in regions with global connectivity as highlighted by global cities have a positive effect on the performance of foreign firms located there; however, that is not the case in other non-global city locations. This study thus offers an insight into better understanding this unresolved issue by arguing that the effect of industrial concentration upon a foreign firm’s performance is contingent upon the subnational regions’ global connectivity.

An empirical analysis of the effect of financial performance on environmental performance of companies in global supply chains

The relationship between companies’ financial performance (FP) and their environmental performance (EP) has generated a lot of interest among practicing managers and researchers over the years. This is largely because it simultaneously addresses two – economic and environmental – aspects of the three tripods of the triple bottom line phenomenon. In spite of the fact that both directions of the EP-FP link are important, a vast majority of studies have focused on one direction: how EP affects FP. There is a dearth of research on the reverse link and it is thus the focus of our study. Using EP and other archival data for 468 companies representing 10 industry sectors and 32 countries, with hierarchical regression as the main procedure, we examine specifically how FP as measured by return on assets (ROA) and revenue growth (RG) affects EP. We also study how firm size moderates the effect of ROA and RG on EP as well as the effect of industry concentration on EP. We find that RG affects EP, this effect being comparatively stronger for larger firms. Among other things, we also find that industry to which the firms belong by far more explain EP than FP does. Our findings have important implications for practicing managers and also contribute to advancing research on the relationship between FP and EP. Specifically, for example, the results suggest that managers should pay more attention to EP for companies in the industry to which they belong, rather than EP for companies in general.

Measuring industry co-location across county borders

ABSTRACTThe location quotient (LQ) measures regional industry concentration with the advantages of easy calculation and interpretation. However, it is a weak method for identifying industry clusters that consist of related industries geographically concentrated in contiguous counties. This paper proposes a new spatial input–output location quotient (SI-LQ) accounting for both the co-location of related industries and the spatial spillover of concentration into neighbouring counties. A bootstrap method is used to determine the cut-off values of the new measure. The practical advantages of the SI-LQ over the traditional LQ include attenuation of the extreme values of the LQ in less populous and remote counties and the identification of large substantive clusters. The SI-LQ outperforms the LQ in a regression analysis of the effect of industry concentration on total employment growth.

The Effect of Industry Homogeneity on the Magnitude of Post-Earnings Announcement Drift: Evidence from Korea

We examine the relationship between industry homogeneity and the magnitude of post-earnings announcement drift (hereafter, PEAD). Given that firms with more homogeneous operating cost structure are conducive to spillover of knowledge among investors, we expect that firms in highly homogenous industries have relatively low magnitude of PEAD. Using firms listed on the Korean Stock Exchange, we find that the magnitude of PEAD is negatively related to industry homogeneity, indicating that investors are more efficient for firms in a highly homogenous industry in which information is likely to be referred to peer firms. In addition, we find that the effect of industry homogeneity on the magnitude of PEAD is robust even after controlling to the effect of industry concentration. Our study contributes to the literature on exploring determinants of PEAD by linking information transfer effect in a homogenous industry to investorsA­ informational efficiency in capital markets.

산업집중도가 재무분석가 수와 정보비대칭의 관계에 미치는 영향

산업집중도가 재무분석가 수와 정보비대칭의 관계에 미치는 영향

Relative efficiency, industry concentration and average stock returns

PurposePrevious research has found that industry concentration and firm efficiency affect stock returns. However, it is not clear if concentration is a byproduct of efficiency and hence its effect on stock returns is driven by efficiency. This paper aims to examine the relationships between industry concentration, firm efficiency and average stock returns. Mainly, it aims to answer if the effects of industry concentration and firm efficiency on stock returns are independent and significant.Design/methodology/approachThe stochastic frontier approach is used to estimate firm efficiency. The Herfindahl index is used to measure industry concentration. Regression and vector autoregressive analyses are performed to examine cross-sectional and lagged relationships between concentration, efficiency, profitability and stock returns. The characteristics-based benchmark approach is also used to investigate performance of test portfolios.FindingsIndustry concentration and firm efficiency have independent and significant effects on average stock returns through profit margins and market shares, which are related to firms’ profitability. Industry concentration has a greater positive impact on market shares than on profit margins, whereas firm efficiency has a greater positive impact on profit margins than on market shares. In sum, highly efficient firms in highly concentrated markets have lower distress risks and hence provide lower average stock returns.Originality/valueThe paper shows the linkages between industry concentration, firm efficiency, profitability and stock returns that have not been documented together in prior studies. Businesses can better understand the impact of concentration and efficiency on market shares and profit margins. Researchers may consider incorporating concentration and efficiency, both of which are meaningful microeconomic variables, into an asset pricing model. Investors can enhance their returns by having a zero-cost portfolio with long and short positions in stocks of firms with different levels of concentration and efficiency.

Effects of Industrial Concentration and Diversity on Economic Growth in Local Industrial Cities: Asan, Ansan, Geoje, Gwangyang City

Effects of Industrial Concentration and Diversity on Economic Growth in Local Industrial Cities: Asan, Ansan, Geoje, Gwangyang City

Structure and profitability in the banking sector

The relationship between profit and bank market structure continues to raise questions amongst both policy makers and researchers. While some evidence supports a positive relationship between market structure, competition and profitability, other evidence seems to support the fact that profitability and related market share result from efficiency. Moreover, extant literature on South Africa is conflicting and seems to contradict anecdotal evidence. While some studies point to a competitive environment despite concentration, others suggest that concentration in the banking sector is harmful. Prosecution of banks for uncompetitive behavior also casts doubt on the conclusion that the South African banking sector is competitive. This paper examines the relationship between structure and conduct in the South African banking sector. Using the Berger (1995) discriminating tests, the effect of industry concentration, market share and efficiency on three measures of profitability is estimated on a panel of 11 South African banks for data between 1994 and 2016. The results show that concentration affects conduct. The profit-structure relationship is dominantly explained by the structure conduct hypothesis and partly by the efficient scale hypothesis. These results suggest that policy which discourages concentration and promotes competition in the banking sector is socially beneficial.

The Effects of Industrial Concentration and the CSR Activities on the Firm’s Value

The Effects of Industrial Concentration and the CSR Activities on the Firm’s Value

Internet-Based Compulsory Information Disclosure by Listed Companies in Tehran Stock Exchange

This study is aimed at investigating the effect of the industry concentration on the internet-based compulsory information disclosure with respect to the control variables of the firm size, industry, profitability and leverage and independent or non-executive independent board. Statistical population of the study is the firms accepted in Tehran Stock Market, 230 firms were selected omission during 2010-2011period as the statistical sample and their information was investigated. In this study, the data required to test research hypotheses were collected by a field method through financial statements and notes associated with stock firms and accepted firms web site, then they were created and processed in the form of databases in excel and finally the data and research variables were analyzed using EVIEWS Software. In this study, the researcher analyzed the effect of industry concentration on the information compulsory index. The results show that the industry concentration, the firm size, profitability, leverage and the other industries except the energy and service sector have a significant effect on the compulsory information index but there is no effect for the independent or non-executive independent board.

The Moderating Effect of Industry Concentration on the Relations Between External Attributes and the Properties of Analyst Earnings Forecast

Based on the work of earlier studies, the main objective of this study is to determine whether the properties of analyst earnings forecast are related to the interaction effects of external attributes and industry concentration that were not the focus of previous research. Specifically, this study examines the relations between external attributions and the properties of analyst earnings forecasts. Furthermore, we explore the moderating effect of industry concentration on the relations between external attributions and the properties of analyst earnings forecasts. Using data from Compustat and I/B/E/S, we provide evidence that analysts' earnings forecast accuracy is lower and the forecast dispersion is larger for firms with more earnings surprise. Firms with more analysts' forecasts covering are associated with higher forecast accuracy, but not necessarily higher forecast dispersion. The moderating effects of industry concentration on the relationships between earnings surprise, the number of estimates covering the company and forecast accuracy are particularly strong. In addition, the moderating effects of industry concentration on the relationship between earnings surprise, the number of estimates covering the company and the forecast dispersion are partially supported. Overall, the industrial concentration factor either magnifies or alleviates the effect of external attributions on analyst's forecast accuracy and forecast dispersion.

KONSENTRASI INDUSTRI DAN RETURN SAHAM: STUDI EMPIRIS DI BURSA EFEK INDONESIA

The purpose of this study is to examine the effect of industry concentration to future stock return. We analyze all industries listed in Indonesia Stock Exchange over 2007 - 2009 period. By using regression analysis, the result shows that companies operating in less concentrated or more competitive industries generate higher future stock return. In another word, firms in more concentrated or less competitive earn lower future stock return. In addition, this study reveals that size has negative effect on future stock return, while leverage show not such effect. This result indicates that there is difference in the size of companies. Indonesian concentrated industries are dominated by the large compenies. Keywords: industries concentration, industries stock return, competitive industries

Testing the Schumpeterian Hypotheses on an Open Innovation Framework

The purpose of this paper is to explore the unclear relationship between industry structure and Open Innovation. The focus of the study is on firms that received external help to develop their products or that helped third parties in developing their products. The hypotheses were tested on a large panel of more than 7,000 firms using Generalized Estimating Equations.The results show that Open Innovation adoption is positively related to technology complexity and market uncertainty while it is negatively related to market concentration. Larger firms are more likely to adopt Open Innovation strategies. The research makes an important contribution to the literature by examining on a large sample of firms the moderating effects of industry concentration, industry research and development intensity and the technology life cycle stage on the adoption of Open Innovation.

Paying for Banking Services: What Determines the Fees?

We analyze a unique dataset to test an empirical model of retail bank fee determinants in five Central European countries. Due to the data structure we can cope with heterogeneity and cross-subsidization by employing a representative fee index instead of using variables associated with individual fees. We find support for the Structure-Conduct-Performance hypothesis about the effect of industry concentration, the importance of differences in reliance on cashless payments, and differences in the labor intensity and technology level of bank operations. We also show that cross-country differences in retail bank fees can be explained by fundamental economic factors.

Effects of Industry Concentration on Quality Choices for Network Connectivity

I examine the effects of market concentration on connectivity in network industries. Using Cournot interactions for a duopoly, each network chooses quantity, quality for communications within the provider’s own network (internal quality), and quality for communications between the provider’s network and other networks (external quality). I find that large networks choose higher internal quality than do small networks and large networks choose higher internal quality than external quality. I also find that providers prefer flexible technologies that allow them to simultaneously choose outputs and qualities. Small networks prefer higher external quality than internal quality except when they make credible quality commitments before choosing output and have higher marginal operating costs than large networks. Networks choose identical external quality unless they have exogenously determined customer bases.

The UK air inclusive‐tour industry: a reassessment of the competitive positioning of the ‘independent’ sector

AbstractThis paper investigates the increasing concentration in the UK air inclusive‐tour (AIT) market and the behaviour of the dominant companies (Thomson, Airtours, First Choice and Thomas Cook) operating in the sector. Arguments relating to the theoretical organisational structure of the industry are explored and regulatory investigations that have taken place are discussed. Research evidence as to the competitive position of independent tour operators in the overall UK AIT market is provided. The research indicates that a key area of difficulty for the independent sector relates to the provision of charter airline capacity although access to distribution channels and the ability to contract accommodation are viewed as further concerns. The paper concludes that regulatory authorities are faced with trying to ensure that diversity is maintained while at the same time ensuring any economies of scale derived from consolidation of the sector are passed on to consumers. In order to properly understand the true effects of industrial concentration the assembled package must be dissembled into its component parts and an increasingly a pan‐European perspective is necessary. Copyright © 2001 John Wiley & Sons, Ltd.

The Effect of Industry Concentration on Free Riding

The conventional wisdom regarding industry concentration and cooperative behavior has not been fully supported by the empirical literature. This paper develops a game-theoretic model to explain these mixed results. In the context of an industry that lobbies the government for tariff protection, the model shows that the difficulty of enforcing a cooperative agreement is a function of not only the number of firms in the industry but also the rate of return to lobbying. Thus, when the rate of return to lobbying expenditures is high, the expected relationship may break down.

Collective Action and Protection

Empirically collusive industries are known to be highly effective lobbyists. The reasons for this unclear and poorly understood. This paper provides a new explanation for the formation of protectionistic lobby groups. The level of collusion is shown to be a crucial determinant of the ability of firms to sustain lobbying. It is demonstrated that a critical determinant of the degree of protection obtained depends upon the cross price elasticity of demand between the domestic good and the foreign import. We thus provide an explanation for the mixed empirical evidence on the effect of industry concentration on protection. Finally, the equilibrium tariff rate in imperfectly competitive sectors is determined, which yields new insights into the determination of tariffs.