Market Share Effect Research Articles

Impact of Leverage, Market Share, and Dividend Policy on Firm Value in the Technology Sector

This study investigates the effects of financial leverage, market share, and dividend policy on firm value within the global technology sector. Using data from 120 publicly listed technology companies over the period from 2010 to 2022, a multiple regression analysis is employed to examine how these independent variables influence firm value, as measured by market capitalization. The findings show that financial leverage negatively impacts firm value, as higher debt levels increase financial risk and reduce investor confidence. Market share demonstrates a strong positive effect, with companies holding larger market shares benefiting from economies of scale and competitive advantages, leading to higher valuations. Moreover, dividend policy is found to play a significant role in influencing firm value. Firms with stable and attractive dividend payouts are generally viewed more favorably by investors, which boosts market capitalization. The results suggest that while expanding market share contributes positively to firm value, excessive debt can undermine this advantage. Additionally, maintaining a consistent and attractive dividend policy can further enhance firm value by signaling financial health and stability to investors. This study provides critical insights for technology sector managers and investors, emphasizing the importance of balancing financial strategies, market positioning, and dividend distribution to maximize firm value.

Examining the relationship between trade credit payment terms and manufacturing firm performance: the moderating effect of market share

Examining the relationship between trade credit payment terms and manufacturing firm performance: the moderating effect of market share

Price Versus Market Share with Royalty Licensing: Incomplete Adoption of a Superior Technology with Heterogeneous Firms

This article shows that the usual result of full adoption of a superior technology induced by pure royalty licensing may not hold when firms have different production technologies. By modeling a Cournot licensing game with an external innovator that offers per-unit royalty contracts to downstream firms, this article shows that full adoption of the innovation occurs only if (1) the new technology is sufficiently more efficient than the best one that is available in the market; or (2) if the firms have similar efficiency levels. Moreover, I disentangle two distinct forces that influence the innovator’s choice: a price effect (PE) and a market share effect (MSE). The former highlights the asymmetry in willingness to pay for the latest technology. The inefficient firms, which benefit the most from the cost-reducing innovation, are willing to pay a higher price to become a licensee than are their efficient rivals. The latter illustrates the innovator’s aim to maximize the volume of royalties that are collected by licensing to many firms. When PE dominates MSE, the patent holder sets a higher royalty rate and attracts fewer, less efficient firms. Otherwise, if MSE dominates, the patent holder reduces the royalty rate and attracts more firms so as to reach as many consumers as possible. From a policy perspective, I show that royalty licensing improves consumer surplus and that the positive effect increases with the number of licensees.

Effects of BOPS implementation under market competition and decision timing in omnichannel retailing

One of the most significant fulfillment paradigms is the buy online and pick-up-in-store (BOPS) in omnichannel retailing. However, BOPS incurs many new operational challenges in the presence of competition, like competitive intensity and decision-making timing. To mitigate these problems, a multi-stage, non-cooperative duopoly game is constructed to investigate the competitive implications of introducing a BOPS strategy. First, we consider the situation when competing retailers simultaneously make BOPS decisions. Our results examine how heterogeneous customers choose optimal purchase decisions to maximize their utility and identify the mechanisms of three major effects (i.e., channel migration effect, price self-compensation effect, and limited market share effect). Meanwhile, we analyze when the intensity of competition is strong, intermediate, and weak respectively, the equilibrium strategy of different-type retailers is determined by which configuration. After that, with consideration of total consumer surplus, we shed light on how competing retailers obtain win–win configurations, i.e., both competing retailers and customers are better off, after deploying the BOPS. Subsequently, the investigation extends to broader cases with sequential decisions. Contrary to the common view that second-mover superiority, there exists first-mover superiority in deploying the BOPS. Finally, numerical examples are provided to analyze the impact of cross-selling benefits, fixed cost of BOPS, heterogeneous customer behavior, BOPS convenience, operation cost and competitive intensity on the optimal profit. Our finding was compared with previous studies to provide a novel way to design the BOPS for responding to competitors to maximize customer-oriented profits.

Relationship between market share and profitability: A study on Islamic banks of Bangladesh

This study is conducted to examine the effects of market share on profitability. A panel data covering 8 full-fledged Islamic banks of Bangladesh and the period 2011-2020 is used for the analysis. Based on Hausman test, random effects model is chosen to estimate the effects of market share. Market share is represented in terms of asset as well as deposit. To measure profitability, return on equity is used. Investment is used as control variable. Time dummies are also used to account for time effects. Findings suggest that one percentage point increase in market share in terms of asset leads to 3.73 percentage points increase in ROE. Besides, if market share in terms of deposit increases by one percentage point, ROE increases by 3.14 percentage points. Based on these findings, Islamic banks of Bangladesh should consider increase in market share as one of the effective ways to enhance profitability. IIUC Business Review Vol. 9, Dec. 2020 pp. 103-110

Pass-through of diesel taxes and the effect on carbon emissions: Evidence from China

As one of the most important instruments for reducing emissions from fossil fuels, taxes have been widely used in government battles against air pollution and climate change across the world. However, the pass-through of taxes and their effect on emissions are not evident in all situations. This study investigates the pass-through of diesel consumption taxes to retail prices and estimates the consequent effect on diesel consumption and carbon emissions in China. The results show that the pass-through rate of diesel taxes in China is around 0.49. Also, there is a significant effect of an oil company's market share on the pass-through rate. Based on the pass-through rate and estimated price elasticity, we conduct further estimations of the impact on diesel consumption and carbon emissions and find that the increase in the diesel consumption tax in 2014/2015 reduces 1.64% of annual diesel consumption and 0.096% of annual carbon emissions in China.

Pengaruh Market Share dan Intellectual Capital terhadap Kinerja Keuangan Perbankan Syariah di Indonesia

Financial performance is an activity of analyzing financial statements that is to see how far the company has carried out its duties in accordance with the established financial implementation rules. The purpose of this study is to determine the effect of market share and intellectual capital with the VAIC method, there are VACA, VAHU and STVA on the financial performance of Islamic banking. This study uses quantitative data using multiple linear regression data analysis. The population in this study were Islamic banks registered in Indonesian banking in 2014-2019. The results of this study indicate that the market share has no significant effect on the financial performance of Islamic banking. VACA, VAHU and STVA has no significant effect on the financial performance of Islamic banking.

India's Look East To Act East: Did It Make A Difference?

The purpose of this paper is to investigate the export performance of India with ASEAN countries using the Constant Market Share method for the period 2001-2019. India's trade with ASEAN and its members is analyzed by using HS-2 digit data. The evaluation of India's export performance is based on the “market share effectnnnn”, “commodity composition effect”, and “commodity adaptation effect”. The results reveal that the increase in India's export performance stemmed mostly from a positive “market share effect” and least from the “commodity composition effect”. The “commodity adaptation effect” has improved during the same period. These findings lead us to conclude that India has an opportunity to find new trading partners within ASEAN and enhance its exports to those nations. It is through taking the benefits of the FTA, India can reduce its trade deficit.

Analisis Kinerja Industri Kakao di Indonesia: Pendekatan Structure-Conduct-Performance (SCP)

This research employs the Structure-Conduct-Performance (SCP) paradigm to analyze the structure, conduct, and performance of cocoa industry in Indonesia during 2012-2014 period. Concentration ratio of the four largest companies (CR4) and minimum efficiency of scale (MES) is used as an indicator of market structure of the cocoa industry. The conduct of cocoa industry is explained by capital-labor ratio (CLR). While the performance of cocoa industry is seen from price-cost margin (PCM), internal efficiency (XEF) and output growth (Growth). This research uses panel data to see the effect of market share (MS), capital-labor ratio, internal efficiency, and output growth on price-cost margin. The results of this research shows that the structure of cocoa industry in Indonesia is very high tight oligopoly, with a high entry barrier. This is seen from the value of CR4 and MES which are bigger than 60 percent each year. Furthermore, cocoa industry can be classified as capital intensive industry. This is seen from the high value of CLR. Based of the regression results using random effect model (REM), market share has a negative significant effect on the price cost margin. While capital-labor ratio, internal efficiency, and output growth have a positive significant effect on the price-cost margin.

Analyzing the Sustainability of Micro, Small and Medium Enterprises during Covid-19 Pandemic in Bireuen Regency, Indonesia

This study aims to analyze the effect of product innovation, sales method, technology mastery, market share, and MSME compliance in muamalah on the sustainability of MSME food product during the Covid-19 pandemic in Bireuen Regency. The research method used multiple linear regression analysis method. Respondents in this study were 87 Micro, Small and Medium Enterprises (MSMEs) in food products. The results of the study partially found that the Product Innovation was the most dominant (significant) variable influencing the sustainability of MSMEs. The compliance in muamalah, reflected in sales zakat payment, honesty and transparency as well as product halalness, also had a significant effect on business sustainability. Meanwhile, the variables of sales method, technology mastery and market share expansion had no significant effect on business sustainability. Simultaneously, all independent variables had a significant effect on business sustainability and the ability to affect the independent variables on the dependent variable was 30.40%. The implication of this research is finding a solution to overcome the problem of the sustainability of MSMEs in Bireuen Regency. Whilst the limitation of the research is on collecting MSMEs data from the industry office, even though the conditions in the field are many Micro, Small and Medium Enterprises having not been registered and holding no a business license.

Transient and Persistent Cost Efficiency in Hotels in the Canary Islands

The aim of this study is to determine the presence or otherwise of transient and/or persistent cost inefficiency in the lodging industry. To do so, we applied the method proposed by Filippini and Greene, within a stochastic frontier panel data framework. Our empirical analysis is based on data for the hotel industry in the Canary Islands (Spain), an important destination for European tourists, for the period 2002-2015. Using a stochastic translog cost frontier model, we show that the industry’s real output during the study period could have been achieved at 17% less cost if persistent (systematic) inefficiency were eliminated, and at 24% less cost in the absence of transient (nonsystematic) inefficiency. We also present evidence of factors that strongly influence hotels’ transient cost efficiency, such as the positive effects of market share (in total revenue terms) and certain management characteristics, including the degree of independence with respect to shareholders, the experience in the industry (years in business) and the number of subsidiaries.

Assessing Impact of Liberalization on Financial Performance Sustainability of Indian Pharmaceutical Industry using Structure Conduct Performance Model

The Indian Pharmaceutical Industry is ranked third largest by volume and fourteenth by value. It thus accounts for 10% of world’s production by volume and 1.5% by value according to Department of Pharmaceuticals, Government of India. Recognizing the immense potential for growth of Indian pharmaceutical industry and its direct impact on Indian economy the present paper tries to analyze the market structure of the Indian pharmaceutical firms and assess how the sustainable profitability of firms is affected using structure conduct performance model. The study founds out the sustainable profitability is statistically related to firm size, export and import, raw material expenses, power use and wage intensity but there seems to be insignificant effect of market share and mergers and acquisition on firm’s performance in terms of sustainable profitability.

Market Structure and Determinants of Firm Profitability on General Insurance Industry in Indonesia

Abstract The purpose of this study is to analyze the market structure of the general insurance industry in Indonesia and the effect of market share, operating expenses to operating income (OEOI), and debt ratio(DR) on profitability measured by return on assets (ROA). This study uses panel data regression analysis with the Chow and Hausman test to determine the best model. This analysis uses a combination of cross-section data, which consists of 11 companies, and time-series data, which consists of five years. The results showed that the Indonesian general insurance industry in 2014-2018 took the form of a tight oligopoly with a high concentration level after being analyzed through the four-firm concentration ratio (CR4) and Herfindahl-Hirschman Index (HHI). The average CR4 ratio is 84.77%, while the value of HHI is 3,374.19. Meanwhile, the results showed that based on panel data analysis, the OEOI variable has a significant negative effect on firm profitability. Also, the debt ratio variable has a significant negative effect on the profitability of general insurance firms in Indonesia. The firm efficiency can be able to increase profits rather than mastery of market share.

Competition reduces profitability: the case of the Indian life microinsurance industry

We aim to understand the effect of market and firm-level concentration on return on equity in the Indian life microinsurance industry (LMI). This research is one of the first attempts to empirically test structure–performance issues in India. Using data on 14 companies that remained active in the LMI market during 2009–2019, we demonstrate that firms in the Indian LMI market scored better on profitability measures whenever competitive pressures were lower. We calculate Herfindahl–Hirschman concentration indexes (HHI), market share and entropy measures and use panel data techniques to find a positive effect of concentration and a negative effect of market share. We conclude that LMI-specialised insurers in India perform better than diversified insurers.

Do market share and demand uncertainty influence the relation between advertising expenditures and shareholder value?

Evidence from multivariate regression models suggests market share and demand uncertainty influence the value to shareholders of advertising expenditures. Shareholder returns to advertising are lower for firms with greater market share over the full sample period; however, this market share effect dissipates during non-recession years. Results also show higher returns to advertising for sellers with more volatile revenues. From these results we infer that low market share firms with less predictable customer demand may be better positioned to unlock the full strategic value of advertising.

Trade credit in emerging economies: an interorganizational power perspective

PurposeThe extant literature recognizes that trade credit is influenced by the power imbalance between buyers and suppliers but most studies focus on either buyer power or supplier power. The purpose of this study is to investigate how buyer power and supplier power interact and jointly influence trade credit. Moreover, this study examines the moderating effects of political ties in an emerging economy context.Design/methodology/approachA research framework was developed by combining resource dependence theory and institutional theory to investigate the interactive effects of market power (i.e. market share and supplier concentration) and non-market power (i.e. political ties) on trade credit. The proposed hypotheses were empirically tested by a fixed effects model using secondary data from 2,433 listed firms in China.FindingsThe results show that a buyer firm's market share promotes trade credit but this effect is weakened by supplier concentration. Moreover, the buyer's political ties enhance the impact of market share on trade credit and attenuate the negative moderating effect of supplier concentration.Originality/valueThis study contributes to the trade credit and supply chain power literature by identifying the interactive effects of market share, supplier concentration and political ties in trade credit. It advances our understanding of how trade credit is jointly determined by a variety of factors in emerging economies.

ANALISIS STRUKTUR PASAR, PERILAKU PERUSAHAAN, DAN KINERJA PERUSAHAAN DALAM INDUSTRI TELEKOMUNIKASI INDONESIA

The number of Indonesian telecommunications users has always increased from year to year. However, the performance of most telecommunications companies suffered losses. The market structure of Indonesian telecommunications industry that tends to be concentrated is thought to have an influence on the performance of companies in this industry. This study uses a structure, conduct, and performance (SCP) paradigm to analyze the Indonesian telecommunications industry for the period 2011Q1 to 2019Q2. The purpose of this study is to examine the SCP theory in explaining the relationship between market structure and performance of the Indonesian telecommunications industry for the period 2011Q1 to 2019Q2. Panel data is used in this study to see the effect of Market Share (MS), Advertising to Sales Ratio (ADV), and X-efficiency (XEFF) on Return on Asset (ROA). The results of panel data analysis using Fixed Effect Model (FEM) showed that the Advertising to Sales Ratio (ADV) variable had a significant negative effect on return on asset (ROA). While Market Share (MS) and X-efficiency (XEFF) do not have a significant effect on Return on Asset (ROA). SCP theory hypotesis is not proven in the Indonesian telecommunications industry.

Effect of Market Share and Firm Size on Efficiency and its Implications to Profitability of Sharia Insurance in Indonesia

Since Indonesia as a developing country which consists of 87.2% of Muslim citizens, sharia insurance plays an important role. However, this presence of sharia insurance does not show significant growth compared to Malaysia. This study aims to determine whether efficiency may serve as an intermediary variable in linking market share and company size to the profitability of Islamic insurance in Indonesia. It employs secondary data to collect data by involving 11 sharia insurance companies with 4 years ranging from the year 2014 to 2017. The collected data were analyzed through Path analysis and Sobel test with the DEA VRS as an indicator of efficiency. In analyzing the collected data, the Path equation has passed the classic assumption test. The findings reveal that the market share and company size have respectively significant positive and negative influences on efficiency. It indicates that market share is a variable that shows a significant positive effect on profitability compared to the other two variables. Whereas, the results of Sobel tests show that efficiency cannot serve as an intermediary in this research model

The Impact of Behavioral and Structural Remedies on Electricity Prices: The Case of the England and Wales Electricity Market

During the liberalization process the UK regulatory authority introduced a behavioral remedy (through price-cap regulation) and structural remedy (through divestment series) in order to mitigate an exercise of market power and lower the influence of incumbent producers on wholesale electricity prices. We study the impact of these remedies on the dynamics of the wholesale electricity price during the peak-demand period over trading days. An extended autoregressive and autoregressive conditional heteroscedasticity (AR–ARCH) model with a novel skew generalized error distribution is used. This distribution allows one to capture the features of asymmetry, excess kurtosis, and heavy tails. The model is extended to include individual incumbent producers’ market shares and other explanatory variables reflecting seasonal patterns and regulatory regimes. We find that the structural remedy was more successful than the behavioral remedy because the effect of market share of the previously larger incumbent producer on the wholesale price is statistically insignificant. Moreover, after the second series of divestments, price volatility reduced.

Effect of earnings management on earnings predictability in information signaling perspective

This research is aimed to examine (1) effect of discretionary and innate accrual on earnings predictability (2) effect of market share and financial health on relationship between real earnings management and earnings predictability. This research use manufacture firms listed in Indonesian Stock Exchange 2003-2015 as research sample, with 2013-2014 as research period. Accrual earnings management is measured by discretionary and innate abnormal accrual. Real earnings management is measured by aggregate of abnormal cash flow of operation, abnormal production, abnormal discretionary expenses. As expected, discretionary accrual as opportunist act does not support earnings predictability, while innate accrual as information signaling of business model improves earnings predictability. Real earnings management as information signaling of market share and financial health improves earnings predictability as well. In general, earnings management as information signaling is more likely to communicate condition of firm and leads to informativeness of earnings.