Market Power Research Articles

Optimal distribution grid allocation of reactive power with a focus on the particle swarm optimization technique and voltage stability

A structured approach to managing reactive power is imperative within the context of power systems. Among the restructuring initiatives in the electrical sector, power systems have undergone delineation into three principal categories: generation, transmission, and distribution entities, each of which is overseen by an independent system operator. Notably, active power emerges as the predominant commodity transacted within the electrical market, with the autonomous grid operator assuming the responsibility of ensuring conducive conditions for the execution of energy contracts across the transmission infrastructure. Ancillary services, comprising essential frameworks for energy generation and delivery to end-users, encompass reactive power services pivotal in the regulation of bus voltage. Of particular significance among the array of ancillary services requisite in a competitive market milieu is the provision of adequate reactive power to uphold grid safety and voltage stability. A salient impediment to the realization of energy contracts lies in the inadequacy of reactive power within the grid, which poses potential risks to its operational safety and voltage equilibrium. The optimal allocation of the reactive power load is predicated upon presumptions of consistent outcomes within the active power market. Under this conceptual framework, generators are afforded continual compensation for the provision of reactive power indispensable for sustaining their active energy production endeavors.

Competitiveness of companies in the design, engineering and construction of nuclear power plants

Increasing electricity consumption in the modern world makes the unique nuclear power market. It provides growing secured demand, specific external development factors. However, only four companies involved in the design, engineering, and construction of nuclear power plants (NPPs). The competitiveness of those companies included into M. Porter’s theory framework, but has its own characteristics. The purpose of the study is to determine the specifics of companies competitiveness engaged in the design, engineering, and construction of nuclear power plants, and assess the factors and prospects for their development. Besides, we define the theoretical base of international competitiveness with regard to the specific features of this economic sector, characterise the companies operating on the market, and build a model of the competitiveness formation of four representatives under the domestic factors of development. In conclusion, we will present the prospects for ROSATOM development in an internationally competitive environment. The models of competitiveness formation show the positive impact of investments in human capital, ESG agenda implementation, and long-term prospects of R&D projects. The research provides information for developing the theory of competitiveness and improving the company’s activities in this economic sector.

Crowding in Private Quality: The Equilibrium Effects of Public Spending in Education

Abstract We estimate the equilibrium effects of a public school grant program administered through school councils in Pakistani villages with multiple public and private schools and clearly defined catchment boundaries. The program was randomized at the village-level, allowing us to estimate its causal impact on the market. Four years after the start of the program, test scores were 0.2 sd higher in public schools. We find evidence of an education multiplier: test scores in private schools were also 0.2 sd higher in treated markets. Consistent with standard models of product differentiation, the education multiplier is greater for those private schools that faced a greater threat to their market power. Accounting for private sector responses increases the program’s cost-effectiveness by 85% and affects how a policymaker would target spending. Given that markets with several public and private schools are now pervasive in low- and middle-income countries, prudent policy requires us to account for private sector responses to public policy, both in policies’ design and evaluation.

Correction: Pourdaryaei et al. Recent Development in Electricity Price Forecasting Based on Computational Intelligence Techniques in Deregulated Power Market. Energies 2021, 14, 6104

There was an error in the original publication [...]

Banks’ Market Power, Access to Finance, and Leverage

Abstract How does lending-market competitiveness shape new firms’ financing? Using a unique U.S. representative panel of new firms, we document that in more concentrated local lending markets: (a) new firms are less likely to access credit; (b) new firms have lower leverage; and (c) the best-performing firms are more severely affected by reduced debt financing. We develop a contingent-claims model with monopolistically competitive banks that rationalizes these facts and shows how credit-market conditions determine loan fees and concentration. Our findings highlight banks’ market power as a channel through which the financial sector influences firms’ development and, hence, economic growth. (JEL D82, G21, G32, G34, L26.)

The impact of environmental regulation on firms’ markups: evidence from China

ABSTRACT A comprehensive evaluation of the costs and benefits of environmental regulations provides empirical evidence for policymakers to formulate and introduce environmental policies. Firms’ profitability and competitiveness manifest their market power and provide the micro foundation for economic development and social stability. Therefore, this paper focus on investigating the impact of air pollution environmental regulation on manufacturing firms’ market power, measured by markups, with a difference-in-differences (DID) method. Using air pollution control policy, requiring China’s Key Cities for Air Pollution Control (KCAPC) to meet air quality standards within a specified time limit as a natural experiment, our DID estimations show that air pollution regulation significantly leads to an increase in firms’ markup rate by 0.002 in key cities that did not meet air quality standards. Heterogeneous effects show that this impact is larger for polluting firms, private-owned and foreign-owned firms, and firms located in western and central cities and cities with high marketization. Productivity and market share may be two main influencing channels to explain the positive impact of air pollution environmental regulation on firms’ markups. Our findings suggest that strengthening environmental regulation is conducive to improving the competitiveness and market power of manufacturing firms, lending support to the enforcement of environmental regulations.

Terms of trade or market power? Further evidence from dynamic spillovers in return and volatility between Malaysian crude palm oil and foreign exchange markets

This study examines whether the Malaysian ringgit (MYR) provides terms of trade or market power for crude palm oil (CPO). We consider MYR exchange rates against three currencies of major CPO-importing countries, including the Indian rupee (INR), euro (EUR) and Chinese yuan (CNY). Using daily data on Malaysian CPO prices (spot and futures) and foreign exchange rates (INRMYR, EURMYR and CNYMYR) from 2000 to 2018, our results provide three notable findings. First, volatility spillovers from EURMYR to CPO spot and futures are more significant during the global financial crisis of 2008–2009. Second, the return spillovers from CPO spot and futures to INRMYR and EURMYR exchange rates experience significant bursts after the crisis. Third, the volatility of CPO spot price changes shows the predictive ability of the volatility of INRMYR exchange rate changes at the end of 2018. Overall, our findings support that the terms of trade are a driver of the CPO market after the crisis.

Post-Globalisation Development Of Competition Law: Challenges & Opportunities

Competition law is an essential aspect of modern regulatory frameworks that aim to promote fair competition, prevent monopolistic practices, and safeguard consumer interests within markets. Globalisation has brought forth new challenges and opportunities in the post-globalisation era, necessitating a recalibration of competition enforcement mechanisms to address transnational anti-competitive practices. The liberalisation of trade and investment regimes under globalisation has also raised concerns about cross-border conspiracy and abuse of dominance. In response, competition authorities have adopted more collaborative approaches to enforcement and grappled with intricate jurisdictional issues. The rise of digitalisation and e-commerce, integral components of globalisation, has presented new competition challenges, such as platform monopolies and data-driven market manipulation. Regions have reassessed traditional competition paradigms to safeguard consumer welfare and promote innovation in the digital age. Moreover, globalisation has fostered a convergence of competition norms and principles, exemplified by the proliferation of international competition networks and the harmonisation of competition laws across jurisdictions. This underscores the imperative for greater cooperation and coordination among competition authorities to address cross-border competition concerns effectively. The evolution of competition law in the post-globalisation era embodies a compelling narrative of adaptation and recalibration in response to the transformative forces unleashed by globalisation. This evolution unfolds against the backdrop of a burgeoning recognition of the interconnectedness of markets and the imperative for harmonised regulatory responses to address cross-border competition challenges effectively. However, several challenges persist in the post-globalisation landscape, including navigating jurisdictional conflicts, addressing enforcement gaps in digital markets, combating transnational anti-competition ve practices, and balancing competition objectives with broader policy goals. These challenges require nuanced and innovative regulatory solutions that prioritise consumer welfare and promote fair competition. Despite the challenges, the post-globalisation era offers significant opportunities for competition law frameworks worldwide. By embracing collaborative approaches, leveraging technological innovation, and fostering international cooperation, we can enhance the effectiveness of competition law frameworks. This will promote competitive markets that foster innovation and safeguard consumer welfare. In conclusion, competition law regimes worldwide must adapt to post-globalisation reality and adopt policies that promote fair competition and innovation. By prioritising consumer welfare, embracing collaboration, leveraging technology, and fostering international cooperation, we can create a regulatory framework that fosters competitive markets and benefits consumers worldwide. Abstract Globalisation has transformed the world economy by promoting the integration of economies and societies worldwide. This has led to the emergence of multinational corporations that wield significant market power across borders, necessitating a recalibration of competition enforcement mechanisms to address transnational anti-competitive practices. The liberalisation of trade and investment regimes under globalisation has also raised concerns about cross-border collusion and abuse of dominance. Competition authorities have responded by adopting more collaborative approaches to enforcement and grappling with intricate jurisdictional issues. The rise of digitalisation and e-commerce, integral components of globalisation, has presented new competition challenges, such as platform monopolies and data-driven market manipulation. This has prompted regulators to reassess traditional competition paradigms to safeguard consumer welfare and promote innovation in the digital age. Furthermore, globalisation has fostered a convergence of competition norms and principles, exemplified by the proliferation of international competition networks and the harmonisation of competition laws across jurisdictions. This underscores the imperative for greater cooperation and coordination among competition authorities to address cross-border competition concerns effectively. The evolution of competition law in the post-globalisation era embodies a compelling narrative of adaptation and recalibration in response to the transformative forces unleashed by globalisation. This evolution unfolds against the backdrop of a burgeoning recognition of the interconnectedness of markets and the imperative for harmonised regulatory responses to address cross-border competition challenges effectively. The post-globalisation landscape presents many challenges and opportunities for competition law regimes worldwide. Challenges include navigating jurisdictional conflicts, addressing enforcement gaps in digital markets, combating transnational anti-competitive practices, and balancing competition objectives with broader policy goals. However, amidst these challenges lie significant opportunities. By embracing collaborative approaches, leveraging technological innovation, and fostering international cooperation, we can enhance the effectiveness of competition law frameworks. This will promote competitive markets that foster innovation and safeguard consumer welfare.

Research letter: the role of customer fear of missing out on purchase intention

ABSTRACT Despite the recent popularity of social media as a powerful marketing channel, limited studies have examined how customer personalities influence their reactions toward social media content. Thus, this study examines the role of a customer psychological characteristic known as fear of missing out (FOMO) in the formation of anticipated emotion (i.e. elation, envy, comfort, and expense regret) and purchase intention toward a restaurant based on social media marketing. Using surveys, the study collected information on 345 social media users. A SmartPLS estimation shows that customer anxiety over missing out is a strong indicator of anticipated emotions toward the restaurant experience. Specifically, positive impacts of anticipated envy and comfort on customer purchase intentions are found. However, customer anticipated expense regret toward future experiences negatively influences behavioural intentions. Finally, this study examines differences in relationships between FOMO, anticipated emotions, and purchase intentions across demographic profiles (i.e. gender, age, income, and education).

Metaphor-less Rao-3 and artificial neural network with parallel computing-based wheeling pricing in competitive power market

Metaphor-less Rao-3 and artificial neural network with parallel computing-based wheeling pricing in competitive power market

Beyond Borders: A Review of Food Market Integration and Sustaiable Develomnet Goals

This paper presents a comprehensive review of food market integration research spanning 1990–2023, provides a thorough bibliography, and emphasizes its growth between developed and emerging economies.  It evaluates 140 papers with the aim of highlighting the importance of price transmission, market stability and market integration in the food sector. The study provides an overview of econometric methodologies, review global assessment methods, and identifies the major elements that influence market integration, such as commerce, social capital, government interference, export policies, institutions, information, competition, and market power. The finding reveals a rise in research activities between 2000 and 2015, with a growing focus on developing countries. This work is to offer a synopsis to researchers, academicians, and policy makers on the extent of the food market both internationally and domestically. This paper will be helpful for the researchers interested in understanding and investigating the dynamics of food market integration with a useful resource by classifying previous works and identifying current developments. The review also offers commentary on current research and prospects and their implication in line with SDG 1 (No Poverty) and SDG 10 (Reduced Inequalities) as it promotes fair access to resources and economic opportunities.

Market power, human capital efficiency and bank performance in Kenya

PurposeThe study evaluates the influence of human capital efficiency (HCE) and market power on bank performance.Design/methodology/approachThe study employs two measures of bank performance: profitability and stability. Unbalanced panel data of 35 banks operating in Kenya for 2005–2020 collected from published financial statements is utilized. The study employs the feasible generalized least squares (FGLS) method in the analysis and the two-step system generalized method of moments (GMM) for robustness check.FindingsThe study affirms an inverted U-shaped relationship between market power and bank performance. The effect of market power on bank profitability is enhanced when a bank has highly efficient human capital. Further, HCE significantly impacts bank stability for banks with low HCE. Interestingly, a further increase in HCE narrows the net interest margins for banks with high HCE, conferring welfare benefits to customers as interest rate spreads shrink.Practical implicationsThis study provides important insights into the role of human capital in bank performance. First, banks ought to invest in promoting HCE through training and development. As regulators root for bank consolidation, attention to HCE is imperative for fostering profitability and stability.Originality/valueThe study fills an essential gap in the literature by evaluating the effect of firm-level market power on bank performance in an emerging market. We adopt a novel stochastic frontier estimator to generate the Lerner index. Further, this is the first study known to the authors to evaluate the effect of market power on bank performance in the context of human capital efficiency variations.

The role of imperfect market structure in the employment effect of emissions trading scheme in China: A theoretical extension and empirical investigation

The Chinese government aims to balance employment stabilization and emissions reduction when it initiates an emissions trading scheme (ETS) to control carbon emissions. However, the policymakers should not neglect the role of imperfectly competitive market structure and market power from incumbent firms. In view of this, classical framework of Berman and Bui's (2001) is extended in this paper to clarify the theoretical mechanism of employment effect of the ETS considering firm-level market power. In addition, based on the firm-level panel data from 2008 to 2019 of China, the employment effect of each pilot ETS is measured with the method of difference-in-difference-in-differences. Then a moderating effect model is established to verify the role of firm-level market power on the heterogeneous employment effect among the pilot ETSs. Moreover, the employment effect is further decomposed to evaluate the influential mechanism from the perspective of firms’ strategic behavior. It is found that there is negative employment effect of China's ETS policy, due to the significant moderating role of firm-level market power. This decrease in labor demand is mainly dominated by a negative output effect rather than a positive substitution effect because strategic allowance sellers with stronger market power tend to hire fewer employees to reduce carbon emissions by controlling production scale. However, the heterogeneity of policy effects resulted by market structure is also identified in different pilot regions. Employment dividend has been found in Beijing and Tianjin where strategic allowance buyers manipulate the carbon market and hire more employees to consolidate their market power. Therefore, policymakers should improve the design of the ETS to overcome the adverse employment effect duo to the region-specific market structure.

Transmission planning in an imperfectly competitive power sector with environmental externalities

Policymakers face the challenge of integrating intermittent output from variable renewable energy (VRE). Even in a well-functioning power sector with flexible generation, producers’ incentives may not align with society’s welfare-maximisation objective. At the same time, political pressure can obstruct policymakers from pricing damage from CO2 emissions according to its social costs. In facilitating decarbonisation, transmission planning will have to adapt to such economic and environmental distortions. Using a Stackelberg model of the Nordic power sector, we find that a first-best transmission-expansion plan involves better resource sharing between zones, which actually reduces the need for some VRE adoption. Next, we allow for departures from perfect competition and identify an extended transmission-expansion plan under market power by nuclear plants. By contrast, temporal arbitrage by hydro reservoirs does not necessitate transmission expansion beyond that of perfect competition because it incentivises sufficient VRE adoption using existing lines. Meanwhile, incomplete CO2 pricing under perfect competition requires a transmission plan that matches hydro-rich zones with sites for VRE adoption. However, since incomplete CO2 pricing leaves fossil-fuelled generation economically viable, it reduces the leverage of strategic producers, thereby catalysing less (more) extensive transmission expansion under market power by nuclear (hydro) plants.

Monetary policy shock and corporate innovation: Evidence from China

This paper investigates whether and how monetary policy shock (MPS) affects corporate innovation using a large sample of 3,082 Chinese listed firms over the period 2007–2019. We provide robust evidence that firms increase their innovative activities when faced with MPS. Further analyses show that firms in competitive industries or with less market power are more inclined to increase innovation in the event of MPS, and that the influence of MPS on corporate innovation is more pronounced for firms with more growth opportunities or better financial conditions. We also find that firms tend to increase innovation to a larger extent in expansionary periods than in contractionary ones.

Linking farmers to markets: Barriers, solutions, and policy options

The 15 studies highlighted in this special issue collectively underscore the significant impacts of market participation on farmers’ well-being, income, poverty reduction, dietary diversity, and rural economic growth. They also delve into the importance of marketing channel choice and the role of e-commerce in enhancing farmers’ market linkages. In addition, they address farmers’ preferences for market access interventions and the examination of market power within the agricultural industry, especially in low-income countries. The key findings include: (1) Market participation is critical for improving farmers’ subjective and objective well-being, with studies demonstrating positive impacts on income, poverty reduction, and dietary diversity; (2) The choice of marketing channels significantly influences income, with evidence suggesting online sales can substantially increase farmers’ earnings; (3) E-commerce plays a pivotal role in connecting farmers to broader markets, leading to income growth and enhanced market visibility; (4) Understanding and addressing farmers’ preferences for market access through interventions like systematization policies and joint ventures can facilitate better market integration and support inclusive business models; (5) Analysis of market power within the primary foods industry reveals rising markups, particularly affecting low-income countries. These findings suggest that policies and interventions aiming to improve market access, promote e-commerce, and consider farmers’ preferences and market power dynamics can significantly impact farmers’ incomes, poverty levels, and overall rural economic development.

Market Power, Inequality, and Financial Instability

Over the last four decades, the U.S. economy has experienced a few secular trends: declining labor share, increasing profit share, widening income and wealth inequalities, rising household sector leverage and associated financial instability, manifested in an increase in the probability of financial crises. This paper provides a unifying framework for explaining these trends based on a rise in firm market power in both product and labor markets. We develop a general equilibrium model and show that the rise in firm market power over the last few decades can generate all of these secular trends.

Control rights and cash dividends: A moderating effect of product market competition

This study aims to investigate the impact of control rights held by actual controller on dividends in China, and further explores whether this impact is affected by product market competition from both industry competition (IC) and corporate market power (MP) perspectives. The results show a positive relationship between control rights and dividends in both state-owned and non-state-owned enterprises, and the mechanism is dividend tunneling rather than governance. Moreover, IC has a disciplinary effect on dividend tunneling by the controllers, and MP weakens the positive relationship, which is associated with the promotion of stock liquidity, information disclosure quality and financial risk.

Analyzing The Role of Digital Marketing in Growth of E-Commerce in India: A Multiple Holistic Approach

Analyzing The Role of Digital Marketing in Growth of E-Commerce in India: A Multiple Holistic Approach

Protecting Patients And Society In An Era Of Private Equity Provider Ownership: Challenges And Opportunities For Policy.

Private equity (PE) acquisitions in health care delivery nearly tripled from 2010 to 2020. Despite concerns around clinical and economic implications, policy responses have remained limited. We discuss the US policy landscape around PE ownership, using policies in the European Union for comparison. We present four domains in which policy can be strengthened. First, to improve oversight of acquisitions, policy makers should lower reporting thresholds, review sequential acquisitions that together affect market power, automate reviews with potential denials based on market concentration effects, consider new regulatory mechanisms such as attorney general veto, and increase funding for this work. Second, policy makers should increase the longer-run transparency of PE ownership, including the health care prices garnered by acquired entities. Third, policy makers should protect patients and providers by establishing minimum staffing ratios, spending floors for direct patient care, and limits on layoffs and the sale of real estate after acquisition (forms of "asset stripping"). Finally, policy makers should mitigate risky financial behavior by limiting the amount or proportion of debt used to finance PE acquisitions in health care.