Existing Market Structure Research Articles

Market structure and resilience of food supply chains under extreme events

AbstractRecent extreme events and the disruptions they caused have made food supply chain resilience a key topic for researchers and policymakers. This paper provides input into these discussions by evaluating the efficiency and resilience properties of the leading policy proposals. We develop a conceptual model of a prototype agricultural supply chain, parameterize the model based on the empirical literature, and conduct simulations to assess the impacts on resilience and economic welfare of four key policy proposals: (i) intensified antitrust enforcement to improve market competition, (ii) subsidization of entry of additional processing capacity, (iii) prevention of price spikes through anti‐price‐gouging laws, and (iv) diversification of production and processing across multiple regions. Results show that some of the policies have potential to improve supply‐chain resilience, but their impacts depend on the existing market structure, and resilience gains often come at the cost of reduced efficiency.

Understanding Barriers-to-Hire in Corporate Renewal

I develop a theory to explain why talent acquisition for corporate renewal can be costly for firms. I argue that to attract people who can grow firms in new or different directions, firms may need to offer higher wages to (1) compensate for their industry affiliation as a categorical constraint and (2) overcome frictions associated with hiring across industries. Analyses of more than 14 million online job posts support my theory of talent acquisition for corporate sustainability: firms in environmentally sensitive (or “brown”) industries are found to offer higher wages for sustainability-related (or “green”) jobs than firms in other industries for almost identical jobs; this wage premium decreases with the rising demand for green jobs within a given brown industry over time, and when ideological conflicts or career-related risks are mitigated. Supplemental analyses using survey data, employee online reviews, and field-level placement records render further support for the mechanisms. These findings bring an intriguing paradox to light: despite firms in brown industries having the most urgent need to adopt sustainable practices, hiring people capable of delivering such changes is a real challenge. Although firm-specific efforts that alleviate jobseekers’ ideological and career-related concerns may lower the barriers-to-hire, firms do pay more to hire people for corporate renewal, especially when constrained by the way firms are perceived under the existing market structure.

Methodology for identifying homogeneous consumer groups based on qualitative data

In this article, the author proposes a method for identifying homogeneous consumer groups based on qualitative data. The problem is that when researching the end-user market, information is often presented not in quantitative but in qualitative form. The random variables with which mathematical statistics deal are usually assumed to be numeric. Therefore, among researchers there is an opinion that achieving at least an interval level of measurement is always desirable, since it expands the researcher capabilities, giving him grounds to use data mathematical and statistical analysis traditional methods. Sociologists, on the other hand, emphasize the qualitative data enormous role in the respondents’ study. The presented methodology is based on cluster analysis, differs from the applied market segmentation methods in that it uses cluster analysis algorithms developed concerning qualitative indicators, and involves a proximity measure use that allows one to determine the natural weights between clustering variables. Also, the technique provides for the optimal partition determination based on the changes’ graph in the average internal communication, depending on the selected clusters’ number. The optimal among the partitions set is considered to be a partition in which the average internal connection increases sharply in comparison with the previous partition. Provided that the clusters’ number in each subsequent partition in comparison with the previous one is greater by one. Thus, the methodology allows identifying the existing market structure.

Does the tea market require a futures contract? Evidence from the Sri Lankan tea market

Tea is one of the most popular beverages in the world. Its consumption exceeds the consumption of milk, coffee and orange juice. Despite its importance, tea has not been considered a commodity on financial markets and there is still no futures contract on tea. This study adds to the current literature by providing an overview of the development of the world’s oldest and largely unknown tea market. In addition, this study examines the issue of whether it is feasible to introduce a tea futures contract that would be advantageous for tea market participants. In conclusion, this analysis indicates that introducing a successful tea futures contract is viable but challenging under the existing market structure.

PARADIGMA STRUKTUR PERILAKU KINERJA PADA INDUSTRI SEPATU DI KABUPATEN MOJOKERTO

This study aims to analyze the structure, conduct, and industrial performance at the Shoe Industry Center, Mojokerto Regency. This research method uses descriptive quantitative and qualitative, the population in this study is 30 units of the shoe business.The study was conducted by analyzing primary data, which was obtained from interviews with leather shoe entrepreneurs in the Mojokerto district. Data analysis was performed by regression. The independent variables used include Market Share (MS) to represent the structure, Capital, and Labor Ratio (CLR) to represent behavior and Price-Cost Margin (PCM) for a measure of industry profits.The results showed that the Market Share (MS) and Capital and Labor Ratio (CLR) variables had a positive and significant effect on the shoe industry variable, while the X-efficiency variable had a positive and significant effect on the shoe industry variable. From the results of this analysis, it could be detected that The existing market structure in the shoe industry in Mojokerto Regency is a type of market with intense oligopoly competition. This can be seen from the high value of food which can be indicated by the number of producers relative to market size, the heterogeneous types of goods.

An Economic Analysis of the Pre-Deeming US Market for Nicotine Vaping Products.

Public health policies are often enacted without adequate consideration of the existing market structure or their impacts on that market structure. This paper provides context for the potential impact of regulations on nicotine vaping products (NVP) use by providing a structural analysis of competition in the US NVP market before FDA regulation. A literature review was conducted with the aim of providing a framework for analysis that: 1) defines the market; 2) evaluates market concentration; 3) identifies entry barriers; and 4) examines firm conduct. The NVP market includes retail, internet sellers and vape shops. Although conventional retail became more concentrated after the major cigarette companies entered the NVP market, the vape shop and internet sectors remain substantially less concentrated, producing an overall low market concentration, with few entry barriers and competitive behavior. The largely unregulated US NVP market has been highly competitive, with a high degree of innovation. However, new FDA deeming regulations as applied to NVPs could make it difficult for smaller companies to remain in the market and could discourage new companies and new product innovations from entering the market.

A Simulation-Based Analysis of Electricity Access in Uganda

Access to power is tied to a country's development. It facilitates improved social welfare, education, health and income generating opportunities. Uganda's economy is stifled by its low electrification rates - 16% nationally. This study builds a working theory on the internal setup of Uganda's power sector utilizing this theory to surface influential behavior modes as they pertain to power generation and supply and how these ultimately affect electricity access. Based on this working theory a System Dynamics simulation model is built. The model simulations show how Uganda's power sector is expected to evolve over 80 years in terms of power supply and demand given existing market structure and prevailing conditions. The study finds major problems in the nature of power accessed specifically an insufficient and unreliable power supply. The root cause is found in the nature of the existing capacity planning process in terms of how future capacity requirements are determined and the agreements made with generators as to how and when they fulfill their investment obligations.

Market innovation processes: Balancing stability and change

This introductory article on market innovation processes seeks to conceptualize market innovations and elaborate on the processes through which such innovations are achieved. Recent attention to the active production of markets suggests markets are ongoing processes rather than stable entities. This implies a broader definition of market innovation than the opening up of new markets, including changing existing market structure, introducing new market devices, altering market behavior, and reconstituting market agents. In general, market innovation means altering the way in which business is done. Conceiving of markets as on-going processes further suggests that stabilizing efforts (preventing and/or directing market change) are central to market innovation. Such stabilizing efforts include establishing and maintaining a bounded network of buyers, sellers, goods, etc. and configuring this network so as to channel interactions between entities. Drawing on the individual contributions to the special issue we identify and exemplify four interrelated ways of stabilizing markets: institutionalizing norms and rules; building devices and technical infrastructures; generating and disseminating images, models, and representations; and enacting practices, routines and habits. We conclude by bringing attention to the central challenge of balancing efforts to stabilize and change markets.

The NGO's Dilemma: How to Influence Firms to Replace a Potentially Hazardous Substance

We study a nongovernmental organization's (NGO's) decisions when it attempts to remove a potentially hazardous substance from commercial use in a market with competing firms. Specifically, we determine under what market and regulatory conditions an NGO should target the industry versus the regulatory body to influence firms to replace the substance. We examine how the NGO's strategy changes as the NGO's pragmatism (i.e., the extent to which the NGO incorporates firms' profits into its decision making) increases. Our results demonstrate that when the NGO is less pragmatic, it should examine the existing market structure to determine whether to target the industry or the regulatory body. However, as the pragmatism of the NGO increases, the NGO should increasingly leverage the competition between firms to ensure that a replacement is available to consumers. We examine multiple extensions including varying the competition dynamics, the NGO targeting both the industry and the regulatory body, the time discounting of replacement costs, and a firm potentially lobbying to counteract an NGO's activism. We show that the potential for a firm to lobby can benefit consumers by motivating the NGO to exert more effort and increase the market sensitivity to a substance, thereby forcing the firm to replace.

The Impact of Competition and Regulation on Small Business Finance in a Banking Market with Heterogeneous Lending Technologies

Empirical findings document a number of facts on small business finance and relationship lending, that lack hitherto a theoretical explanation. First, the impact of competition on relationship lending may be nonmonotonic and depends on the organizational structure of the banking market. Second, large banks seem to be more involved in small business finance than used to be hypothesized formerly. The following paper offers a theoretical explanation for these findings. Allowing heterogeneous banks to compete in markets for good and bad borrowers, competition has a different impact on the lending behavior, depending on the shape of the existing market structure. This is due to a constraining risk bearing capacity, that limits the scale of lending to small business as a function of riskless lending. In markets dominated by large banks, competition is inimical to small business finance. As the market share of small banks increases, competition is beneficial to SMEs loan access.

La liberalización en la industria de equipo de telecomunicación en España, 1963-1973

In studies of economic history, the telecommunications equipment industry has never managed to occupy the place of a branch whose powerful impact on strategic infrastructure makes it so essential for economic development. To remedy this grievance to some extent, this article explores and explains the substantial changes that took place in the telecommunications industry in Spain during the decade 1963-1973. Such changes are seen in the context of the existing market structure and the transformations which have occurred in the country's macroeconomic framework, characterized by the Francoist development policy. A brief review of the literature leads to the discussion of the problem of national bases of an industry dominated by multinationals. The article adopts the dual perspective of supply and demand with a strong interdisciplinary approach essentially based on primary sources, whether private or public businesses, and general public sources and various newspaper and periodical libraries.

Organic Growth Strategies of the Audit and Accounting Firms in Germany

Organic growth is one of the fundamental strategic options of Professional Services Firms (PSF). Due to the high degree of concentration at the audit market and the existing market structure consisting of four major players, the Big Four audit and accounting firms, there is little room for inorganic growth through mergers and acquisitions among these companies. In contrast, the current audit market conditions require the Big Four global accountancies to sustain organic growth through higher margin. Larger and long-term audit assignments contribute to professional services firms' growth based upon economies of scale and client relationships. In this study, the author examines tactical approaches of PSF to sustain organic growth through sales of audit products and associated services in Germany for their major target market, the listed companies - the DAX 30. Some of these companies were recently involved in the eminent audit tenders. In contrast to previous field research, which primarily takes demand into consideration (investigating audit market demand by getting clients involved in the research), the author focused on the statuary audit industry (investigating audit market supply by involving auditors in the research field). According to the model that we introduce later in this paper, gaining organic growth for audit firms through revenue and market share requires increasing sales of audit products and the related services: tendering, selecting and appointing auditor respectively. Organising and participating in tenders, selecting a new and changing the current auditor are costly processes for both audit firms and companies. Data elicit that auditor change does not take place on a regular basis within DAX 30 community. Practitioners (clients and policy makers) also claim that there is a lasting inertia in the German audit market. By applying factor analysis, this paper isolates the determining factors for the dynamic of the audit market to change incumbents and appoint new or reappoint existing auditors for DAX listed firms. The author introduces a novel approach explaining the process of auditor change and investigates empirically the related determining factors without providing evidence for the causality among the determining variables. The paper has been revised in March 2009. The recent auditor change in DAX (Siemens), switching KPMG by E&Y, has been addressed. However, data reveals the overall issues associated with selecting and appointing an auditor.

Incentive regulation and performance measurement of the Portuguese solid waste management services

Measuring the performance of solid waste management services usually uncovers very high potential for gains in efficiency and productivity. This circumstance occurs, naturally, due to the fact that these services are outside the market and because they are subjected to various market failures in their organizational framework. The aim of this study was to examine the Portuguese regulatory model and to measure the performance of the Portuguese solid waste management services in order to identify the major reforms carried out and their outcomes. As a first objective, the sunshine regulatory approach adopted in Portugal, in which performance comparison and its public discussion are the main tools, was investigated. The second objective was to compute the efficiency of the Portuguese solid waste management services by means of the non-parametric technique of data envelopment analysis (DEA), evaluating the Portuguese regulatory model and the existing market structure, as well as the influence of the operational environment on efficiency. The benchmarking frontier technique of DEA is particularly useful in the efficiency measurement of public utilities, in which knowledge of the production function is relatively scarce. Several DEA models were used and they all depicted significant inefficiency. The study also proved that efficiency did not depend on ownership (public or private) and that there was no difference in efficiency between the players, irrespective of whether they were regulated or not.

Future trends in the structured credit market

In recent years, credit markets have been characterised by the strong growth of credit derivatives and structured credit, not only in terms of the volume of derivatives traded, but also the number of underlying reference entities and the complexity of the payoffs involved. The subprime turmoil, however, might be the turning point for the structured credit market. While there are apparent consequences for the future of credit derivatives, in the long run the crisis will also highlight the more subtle deficiencies in the existing market structure. The obvious conclusions are: (1) in the medium term, investors will avoid complex structures, and (2) trade in plain-vanilla credit default swaps will increase, as these have been the only instruments to remain fairly liquid during the crisis and provide a hedging tool for investors. In addition, there is a structural change in the credit market which is largely independent of cyclical aspects. The trend towards imposing credit derivatives technology on other asset classes continues, with collateralised debt obligations on equity default swaps, commodity swaps and foreign exchange markets having already been established. In the long term, the so-called collateralised asset obligations regime is expected to replace old-fashioned risk-return optimisation.

The Effects of Current Market Forces on the Impact of a TV Commercial in Creating Persuasion

The present study investigates the extent to which extenuating factors (excluding those produced by the commercial) affect the extent to which an advertisement is both persuasive and eventually engenders persuasion. The authors collected data from over 5,000 television commercials in the United States, and identified the existing market structure (e.g., brand share, number of competing brands, brand loyalty) surrounding each item at the time the product was advertised, in an effort to separate the effects of the advertisement from the effects of pre-existing market forces on persuasiveness. The results demonstrate that the combined pre-existing market forces have a greater impact on a commercial's ability to persuade than does the message or creativity in the advertisement itself. However, when pre-existing market forces between two products were similar, a creative advertising campaign was still identified as important in producing persuasion. Marketing strategy implications are discussed.

On the welfare analysis of a cross-border merger

We provide a comparative welfare analysis of domestic and cross-national mergers. We focus, in particular, on the importance of possible synergies in mergers, the existing market structure and the bargaining power of the merging firms (in the case of a cross-border merger).

The equalization price: A measure of consumer-perceived brand equity

Building upon the ideas of information economics and market signalling theory, a formal conceptual framework for explaining the creation, management, transfer and measurement of brand equity has been proposed by Erdem and Louviere. The research presented in this paper is a first step in the operationalization of that framework by developing a method for the measurement of brand equity that is built upon a theory of consumer behavior. Specifically, designed choice experiments that account for brand name, product attributes, brand image and consumer heterogeneity effects are proposed as the method for quantifying a brand equity measure called the Equalization Price (EP). Given an existing market structure, brand images built over time by advertising and product experiences, consumer brand perceptions and preferences, EP is a measure of the implicit value to the individual consumer of the brand in a market in which some degree of differentiation exists vis-à-vis its implicit value in a market characterized by no brand differentiation. The proposed measure can be used for both existing products and proposed brand name extensions, so it can double as a product-concept screening tool. We illustrate the application of the method for measuring brand equity using a convenience sample of Canadian consumers. In each of three product classes (deodorants, jeans and athletic shoes) we defined five existing products and two brand name extensions; these were presented to the respondents in designed choice sets which systematically varied prices over a range actually found in the local market. Concurrently, information related to brand image, previous brand usage and consumer sociodemographic characteristics was collected. The consumer choice data were used to calibrate Multinominal Logit choice models, from which we derive EP estimates for our sample. We discuss the interpretation of the modelling results for our data, illustrating the types of managerially relevant information about brand equity and its transfer that can be obtained from the method.

Organizational modes of inter-firm co-operation and technology transfer

In economic analyses co-operative agreements are occasionally discussed with reference to their dissimilarity in organizational and economic ‘solidity’ and the impact of separate modes of co-operation on economic performance. However, many studies still refer only to joint ventures and apparently assume that other forms of co-operation share identical features. Nevertheless, it should be clear that co-operative agreements differ with respect to both organizational and economic effects. For example, a joint venture is a new company established by two or more partners and, as such, it introduces a change in an existing market structure; a licensing agreement, which regulates technology transfer in return for a fee, definitely has less far-reaching consequences for the companies involved. In other words, it is important to note that the organizational design of co-operation can be expected to be related to the strategies and economic performance of companies, reflecting their ability to model their inter-firm relationships. The major objective of this paper is to present a detailed overview of different modes of inter-firm co-operation. This study shows the variety of inter-firm agreements, reflecting the complexity and dynamics of private governing structures in capitalist economies which are attempting to cope with the present far-reaching consequences of technological development.

National cost of television in India in the year 2000. Socio-economic and political implications and issues.

The recent expansion of television coverage in India opens new possibilities for this medium to be used as a development communication vehicle. However, although 63% of the country's population is within the reach of television transmissions, only 12% of these people can watch television at the present time due to a lack of availability of television sets. The annualized cost of owning and viewing a color set is about Rs 1488. Most sets are thus concentrated within the upper income brackets in urban and metropolitan areas. Projections of increases in the number of new television sets purchased in the years ahead indicate that, by the year 2000, only 39% of the total population covered by national transmitters will actually have access to television. By 2000, the annualized private cost of owning and viewing television will increase to Rs 20,991, despite the fact that the public cost of production and transmission will show rapid decreases in the years ahead. A multipronged policy approach is demanded to correct the skewed access to television in India. The government is urged to use the existing market structure to bridge the gap between rural and urban access to television and to make sets available to rural communities and schools at public cost.

Core and equilibrium in incomplete markets

The classical foundation of general equilibrium analysis by the cooperative concept of the core has been extended to an economy with incomplete trading possibilities. This has been accomplished by restricting the exchange possibilities of coalitions of traders in accordance with the available market structure. However, compared with the classical result, the present foundation of rational expectations equilibria may appear much weaker. The reason is that in reality consumers may sign contracts which are more complex than the existing market structure. Therefore, it may happen that prices cannot decentralize all cooperative transactions by markets, in spite of perfect competition. With an incomplete set of markets, therefore, a cooperative exchange of commodities by individual contracts may coexist with trading in non-cooperative, competitive markets.