Market Fragmentation Research Articles

Lessons From EU-Projects for Energy Renovation

There is an urgent need for energy renovation of the existing building stock, in order to reach the climate goals, set in Paris in 2016. To reach climate targets, it is important to considerably lower energy demand as well as switch to fossil-free heating systems. Unfortunately, renovation rates across the EU remain at a low level of 1% per year. Deep renovation, which lowers energy use with 60% or more, accounts only for 0,2% of renovations. The heating transition thus progresses much more slowly than the electricity transition. We draw on the framework of technological innovation systems, which allows comparison of different transitions. In the literature, it is argued that the configurational nature of the renovation system is one of the main reasons for the slow heating transition. The renovation system is context-bound and consists of many actors both on the demand-side and the supply-side, which leads to a fragmented market. For increasing the speed of the heating transition, it is deemed important to counter this fragmentation. We carried out a review of reports and publications of EU-funded projects on energy renovation. In many projects fragmentation in the building sector was identified as one of the main obstacles. We analyzed the deliverables of these energy renovation projects to find tried and tested solutions. One of these is the so-called one-stop-shop, which promises to improve the organization of the supply side, while also providing an appropriate and affordable solution to the customer. In the discussion we argue that the energy renovation system could be improved by increasing collaboration on the supply side and at the same time simplifying the renovation process for customers. A promising tool to make this happen is the one-stop-shop.

Profitabilitas dampak dari likuiditas, leverage dan aktivitas

The pharmaceutical and pharmaceutical ingredients industry is one of the mainstay manufacturing sectors that is prioritized for development because it plays a major role as the main driver of the national economy. The pharmaceutical industry is a sector that is characterized by capital intensive, high technology, intensive R&D, heavily regulated, and fragmented market. Like other companies, profitability is important for the sustainability of manufacturing in the pharmaceutical industry. Profitability is a description of the company's ability to earn profits through all existing capabilities and sources such as sales activities, cash, capital, number of employees, number of branches and so on. This study aims to determine the impact of Current Ratio, Debt to Equity Ratio, and Inventory Turnover on Return On Assets in pharmaceutical sub-sector manufacturing companies listed on the Indonesia Stock Exchange for the 2016-2020 period. The method of this research is quantitative method with time series data. The sampling technique used is purposive sampling technique and obtained a sample of 6 pharmaceutical companies listed on the Indonesia Stock Exchange for the period 2016-2020. The analysis technique used is multiple linear regression analysis. The results showed that the variables Current Ratio, Debt to Equity Ratio, and Inventory Turnover had an effect on Return On Assets.

Customer Satisfaction, Advertising Competition, and Platform Performance

We study how customer satisfaction affects platforms’ advertising competition and their equilibrium market shares and profits. Consider a market with multiple competing (online) platforms, all of which decide advertising outlay to maximize their own average profit. A customer chooses which platform to visit depending on her experience of the last purchase and on the platforms’ advertising outlays. After purchasing from a platform, with certain probability (satisfaction probability), the customer would be satisfied. A satisfied customer is more likely to repurchase from the platform than if she is dissatisfied. There are two types of customers in the market: loyal and switcher. Conditional on either satisfaction outcome, the loyal is more likely to repurchase from the last‐visited platform than the switcher. In the duopoly, we show that lower a platform's customer satisfaction or a higher proportion of switcher may alleviate the advertising competition. Consequently, a platform does not necessarily get a higher profit when its customer satisfaction is higher; and the platform with higher (lower) customer satisfaction benefits from a larger proportion of loyal (switcher). We then study the case with more than two competing platforms. Under the symmetric market, the equilibrium advertising outlay first increases and then decreases as the number of platforms increases. Every platform spends more on advertising and gets a lower profit when customer satisfaction improves. The equilibrium profit of platform is always increasing in the proportion of switcher. Under the fragmented market, we find that similar to the duopoly, the platforms with higher (lower) customer satisfaction benefit more when facing the loyal (switcher) than when facing the switcher (loyal). Several extensions are considered: two‐period impact of purchasing experience, an outside option for customers, endogenous satisfaction probabilities, and asymmetric information between platforms.

Transparency in fragmented markets: Experimental evidence

We experimentally examine pre-trade transparency in fragmented limit order markets. Allowing traders to hide their orders encourages limit order usage. This improves measures of liquidity by increasing depth and narrowing spreads. However, because some of this depth is not displayed, market fragmentation may limit traders’ ability to capitalize on the improved liquidity. This happens when traders execute against orders at worse prices than orders in another market, often referred to as “trade-throughs.” In our laboratory setting, increased trade-throughs in a dark market impose costs of similar magnitude to the benefits of increases in depth leaving effective liquidity unchanged.

ADVANCED SOLUTIONS IN THE TECHNOLOGY OF ANTIBACTERIAL CERAMIC TILES

The growing demand for competitive high-quality ceramic tiles in the world is analyzed, due to the growth in the construction industry for 2021-2026, with the dominance of leading companies in the Asia-Pacific region. The main trends in the development of the ceramic tile market in Ukraine have been determined. The priority is given to the fragmentation of the global ceramic tile market due to technological progress and product innovations, which will allow domestic manufacturers to compete with well-known global brands. It was determined that an urgent global problem in the context of the spread of the COVID-19 pandemic is to ensure the quality of life of people and preserve a unique ecosystem by developing antibacterial materials that are non-toxic, durable and have a significant bactericidal effect. It has been found that the most well-known way to ensure the antibacterial effect of glass materials, is to use the properties of silver ions in their composition, is not effective, given its cost and toxicity. The aim of the work is to develop ecological bactericidal glass composite coatings on ceramics with prolonged action against a wide range of pathogenic microorganisms. To study the antibacterial properties of the sclopcoats, a culture of Escherichia Coli bacteria was selected. To determine the bactericidal effect of the glass coating, a method for assessing the toxicity of substances by the dehydrogenase activity of bacteria was chosen. The antibacterial glaze developed at private joint stock company "Kharkov Tile Plant" is characterized by a high ability to inhibit the enzymatic activity of pathogenic microorganisms and has a prolonged effect, which determines the effectiveness of its application in a pandemic. The implementation of the results of the work will allow solving an important socio-economic task of Ukraine in the direction of increasing the competitiveness of domestic ceramic tiles and implementing state policy to prevent a pandemic and overcome its consequences.

Behavioural antecedents to blockchain implementation in agrifood supply chain management: A thematic analysis

Despite its perceived utility, several companies and managers continue to hold reservations about blockchain implementation in supply chain management. To elucidate the causes, we examine the behavioural and organisational antecedents that influence the adoption of blockchain technology in supply chain management. To do this, we undertake thematic analysis on blockchain-related agri-food business news and expert opinions from the Ovid database's Agricola section. Four themes are central to our model: organisational adoption strategies, technical advantages, environmental obstacles, and implementation intention. Using these themes, we build a thematic map and derive three propositions about the role of behavioural antecedents to blockchain implementation intention in supply chains, thus substantiating Behavioural Reasoning Theory (BRT) and Technology Organisation and Environment (TOE) theory's core arguments. Our findings elucidate novel factors influencing blockchain adoption in supply chains. More specifically, we show that managers who consider the technological benefits associated with blockchain capacity are able to provide stakeholders with new opportunities and embrace adoption strategies such as product launch and partnership formation while also considering environmental and contextual barriers such as market fragmentation, scarcity of research, and regulatory restrictions.

Market fragmentation of energy resource prices and green total factor energy efficiency in China

This paper studies the market fragmentation condition of energy resource (such as coal, gasoline, diesel and electricity) prices by using the relative price method and analyzes its impact on China's green total factor energy efficiency. Results shows that: (1) Market fragmentation of China's energy resource prices presents an inverted U-shaped curve in 2004–2009, and then tend to be stable in 2010–2018 with a peak in 2007. The market fragmentation of China's energy resource prices of energy transfers out provinces is more serious than that of energy transfer in provinces. (2) The trend of China's green total factor energy efficiency presents N-shape curve in 2004–2014, and then it tends to be stable around 0.850 in 2015–2018. The green total factor energy efficiency of energy transfers out provinces is lower. Phenomenon of “energy efficiency curse” is significant in China. (3) Impact of market fragmentation of energy resource prices on green total factor energy efficiency also presents an inverted U-shaped curve. And at current stage, reducing the degree of market fragmentation of China's energy resource prices is conducive to the improvement of green total factor energy efficiency. According to the study results, we believe that reduce the market fragmentation of energy resource prices and promote the internal opening of the energy market, promote demand side management measures such as energy performance contracting, reduce the proportion of coal consumption in total energy consumption and improving energy efficiency, increase green total factor energy efficiency of energy transfer out provinces are all effective ways to improve China's green total factor energy efficiency.

Embedding artificial intelligence in society: looking beyond the EU AI master plan using the culture cycle

The European Union (EU) Commission’s whitepaper on Artificial Intelligence (AI) proposes shaping the emerging AI market so that it better reflects common European values. It is a master plan that builds upon the EU AI High-Level Expert Group guidelines. This article reviews the masterplan, from a culture cycle perspective, to reflect on its potential clashes with current societal, technical, and methodological constraints. We identify two main obstacles in the implementation of this plan: (i) the lack of a coherent EU vision to drive future decision-making processes at state and local levels and (ii) the lack of methods to support a sustainable diffusion of AI in our society. The lack of a coherent vision stems from not considering societal differences across the EU member states. We suggest that these differences may lead to a fractured market and an AI crisis in which different members of the EU will adopt nation-centric strategies to exploit AI, thus preventing the development of a frictionless market as envisaged by the EU. Moreover, the Commission aims at changing the AI development culture proposing a human-centred and safety-first perspective that is not supported by methodological advancements, thus taking the risks of unforeseen social and societal impacts of AI. We discuss potential societal, technical, and methodological gaps that should be filled to avoid the risks of developing AI systems at the expense of society. Our analysis results in the recommendation that the EU regulators and policymakers consider how to complement the EC programme with rules and compensatory mechanisms to avoid market fragmentation due to local and global ambitions. Moreover, regulators should go beyond the human-centred approach establishing a research agenda seeking answers to the technical and methodological open questions regarding the development and assessment of human-AI co-action aiming for a sustainable AI diffusion in the society.

The ins and outs of Central European unemployment

ABSTRACT We examine the role of unemployment inflows and outflows in contributing to unemployment cyclicality in Czechia and Poland, using data from the European Union Statistics on Income and Living Conditions, and a three-state model of unemployment variance decomposition. We find that the labour market fluidity is higher in Poland than in Czechia, with Polish workers moving in and out of unemployment more frequently than their Czech counterparts. For both countries, the upward unemployment dynamics was during 2008–2011 driven by counter-cyclical increases in the job-separation rate, rather than by pro-cyclical declines in the job-finding rate. The inflow-outflow split was nonetheless more balanced in Czechia. The two economies further diverged across 2015–2018: Czech unemployment declined prevailingly due to diminishing job separations, while in Poland it was mostly due to improving job-finding prospects. This signals a deeper insider-outsider fragmentation of the Czech labour market, even during the period of economic expansion.

Market Fragmentation in Europe

Market Fragmentation in Europe

The Information Content of Retail Order Flow: Evidence from Fragmented Markets

The Information Content of Retail Order Flow: Evidence from Fragmented Markets

Мировая экономика: идеальный шторм

The article shows that economic sanctions that have been tested for a long period of time as an instrument to demonstrate the dominance of the dollar-centered world economic system, with the beginning of the Ukrainian crisis finally took shape as a new regulatory institution of global political and economic rules. The reasons led to negative shocks in global economic and financial system have been analyzed. It is demonstrated that underestimation of influence on short-term and long-term conditions of global equilibrium of the isolation of a large national economy (Russia), which has an oligopoly in a number of world commodity markets, causes a chain reaction of distortion of commodity stocks balance and fragmentation of the world commodity market itself. It is suggested that an abstract concern over defragmentation of the seemingly unshakable global monetary financial architecture started generating not yet very clear, but getting increasingly more specific and spatially diverse block frameworks, leading in the medium term to regionalization of global monetary financial system as far as settlement of payments and debt financial market are concerned, and to reformatting of the entire system of global finance and money, including the function of measure of value, in the long term. The article discusses the impact of the forced restrictions in global rules and guarantees for functioning of global market and global money as the institution to serve it, blocked access to this system for individual national economies on short-term and long-term modifications of conditions and mechanisms of performance of global economic financial system

COVID-19 and the Fragmentation of the European Interbank Market

COVID-19 and the Fragmentation of the European Interbank Market

POSA218 Hospital Exemptions for Atmps: Friend or Foe for Pharma?

Hospital exemption (HE), under EU Regulation (EC) No 1394/2007 Article 28(2), allows for production of unlicensed advanced therapy medicinal products (ATMPs) custom-made for individual patients for use in a hospital setting on a non-routine basis. For patients with unmet clinical needs, HEs grant access to unlicensed, potentially life-saving therapies. Although HE’s increase access to innovative treatments, open interpretation of legislation by national authorities could foster different motives and capacity for ATMP production, encroaching on the traditional pharma model. In conducting a targeted literature review, national differences in HE interpretation, motivation, and scale of use were investigated. Case studies examining past product market withdrawals, successful collaborations between academia and industry, and disruptive innovation were analysed to discern the risks and opportunities faced by industry. There are variations in how countries interpret HE regulations, with some imposing additional requirements for use. This results in inconsistencies across countries in the application of HE, especially in relation to large scale production. Additionally, HE use is increasingly encouraged through policy, with national payers viewing this as a means to drive innovation and reduce treatment costs. From an industry perspective, HEs could potentially be exploited by institutions to circumvent the centralised market authorisation process and produce therapies at lower costs, leading to unfair competition and the creation of a fragmented market. As such, industry is pushing for greater transparency and restrictions on ATMP production under HE. A paradigm shift is already occurring, regardless of objections from industry. With governments and healthcare authorities believing that tighter regulation may harm innovation and lead to decreased patient access, alternative solutions have become imperative. Accordingly, industry must find approaches to collaborate with academia and key centres to leverage rapid innovation, and get treatments to patients earlier whilst ensuring budget sustainability for healthcare systems.

Knowledge management and modern digital transformation of the property management industry in China

PurposeIn the current urban and increasingly digital/information era, the service of property management towards residents is of key importance to the well-being of society, which is especially well reflected in its role during the COVID-19 pandemic in China. However, professional knowledge management (KM) has yet to be applied to the daily operation of the property management companies in this sector. The authors posit that introduction of KM concepts to property management at this time would significantly help facilitate the transition of traditional property management towards a higher and more effective value-added service model. From the perspective of KM, this study aims to offer both a theoretical and practical analysis of such a novel business model for companies in the property management industry.Design/methodology/approachGiven the current status quo of property management, the authors integrate theories from both KM and information-digital management to qualitatively analyse the challenges and difficulties companies are facing and importantly offer practical suggestions for the centralization, digital-information platform establishment and service innovation.FindingsFollowing the analysis of KM and digital-information modeling, the authors identify three main challenges facing property management services offered in the current digital society including market fragmentation, lack of digital platforms and the absence of a unitary service model. Therefore, the authors propose strategic solutions to resolve these aforementioned problems. Specifically, the authors suggest centralizing property management service, the establishment of a KM-based digital platform and the upgrading of the service model, towards offering a new impetus for the development of companies in property management.Research limitations/implicationsThe authors offer essential guidelines derived from knowledge and information management and explore their implications both from a theoretical, as well as pragmatic/practical perspective that overall would support property management companies’ crucial transition from the traditional service model to a more digital-based foundation, and hence, provide a higher value-added service for the residents.Originality/valueThe current study is one of the first attempts to analyse property management services from the perspective of KM with digital transformation enabling its transition to an information-based internet of things infrastructure. The study not only offers practical guidance to the business of property management but importantly, also contributes to the theoretical underpinnings of KM especially as related to secure serviceability, well-being, security and efficiency of the residential environment by integrating people, place, process and technology.

Competition and third-party platform-integration in ride-sourcing markets

Recently, some third-party integrators attempt to integrate the ride services offered by multiple independent ride-sourcing platforms. Accordingly, passengers can request ride through the integrators and receive ride service from any one of the ride-sourcing platforms. This novel business model, termed as third-party platform-integration in this work, has potentials to alleviate market fragmentation cost resulting from demand splitting among multiple platforms. Although most existing studies focus on operation strategies for one single monopolist platform, much less is known about the competition and platform-integration and their implications on operation strategy and system efficiency. In this work, we propose mathematical models to describe the ride-sourcing market with multiple competing platforms and compare system performance measures between two market scenarios (i.e., with and without platform-integration) at Nash equilibrium and social optimum. We find that platform-integration can increase the total realized demand and social welfare at Nash equilibrium and social optimum, but may not necessarily generate a greater profit when the vehicle supply is sufficiently large, and/or the market is considerably fragmented. We show that the market with platform-integration generally achieves greater social welfare due to two reasons. First, platform-integration can generate a thicker market and reduce matching frictions; second, multiple ride-sourcing platforms are competing for passengers by setting lower trip fares independently.

COVID-19 and market structure dynamics

We examine the impact of COVID-19 on market structure in the U.S. Specifically, we analyze the impact of both the COVID-19-induced market uncertainty period as well as the suspension of the NYSE floor on trading dynamics such as market fragmentation, algorithmic trading, and hidden liquidity in the market. During both the heightened market uncertainty and NYSE floor suspension periods, we find a significant increase in hidden liquidity yet significant decreases in both algorithmic trading and market fragmentation. However, despite withdrawing from the market during this period, remaining algorithmic traders appear to improve market quality. Our results indicate that COVID-19 had a significant impact on order routing, pre-trade transparency, and automated trading.

Order Routing Decisions for a Fragmented Market: A Review

This paper reviews the up-to-date theoretical, empirical, and experimental literature related to the trading venue choice in the context of the fragmented equity markets. We provide a brief background on the history of trading fragmentation in the equity market and its determinants. We discuss the direct and indirect impacts of the market fragmentation on market quality in various dimensions, including liquidity, volatility, and price efficiency. Next, we identify possible determinants and channels from theoretical and empirical studies that could explain order routing decisions and present the possible directions for future research. Finally, we discuss the major regulatory reforms in the U.S. equity market on routing venue decisions. This topic is relevant in current times when phenomena such as “GameStop Frenzy” have drawn significant attention to commission-free trading venues.

Fragmentation in the European Monetary Union: Is it really over?

Sovereign bond market fragmentation represents one of the major challenges European authorities have had to tackle since the outburst of the euro area debt crisis in 2010. By investigating the inter-country shock transmission through a new methodology that reconciles Factor and Global Vector Autoregressive models, we first show that fragmentation risk well preceded the sovereign debt crisis outburst. Most importantly, by analyzing the recent period, we document a rise in fragmentation risk in the euro area during the COVID pandemic. This rise, connected to the pressure on public debts and deficits due to the pandemic period, questions the European integration process and calls for early measures to avoid a new sovereign debt crisis.

The Joint Impact of Fragmentation into the Dark and Algorithmic Trading on Implicit Trading Costs and Market Manipulation

The authors investigate the effects of algorithmic trading and lit/dark fragmentation on US equity market quality. Market quality refers to the efficiency of lower implicit trading costs as well as market integrity, which are addressed here as reduced end-of-day (EOD) trade-based manipulation. A simultaneous equations model of effective spreads, a proxy for algorithmic trading, and EOD manipulation is carefully specified, and the instrumental variables are pretested to confirm exogeneity and strength. They estimate how fragmentation of the lit and dark order flow in NYSE-listed firms pre- and post-Regulation National Market System (Reg NMS) along with high-frequency algorithmic trading (HFT/AT) jointly determine round-trip implicit transaction costs and EOD manipulation. The authors find that lit (dark) market fragmentation lowers (raises) effective spreads, reduces (increases) EOD manipulation, and increases (decreases) HFT/AT once Reg NMS establishes quote discipline.