Monopoly Research Articles

Income Inequality: A Journey of 200 Years of Economic Thought

The phrase "the rich get richer, and the poor get poorer" encapsulates a phenomenon that has long plagued societies worldwide. Most recently, Riddell et al. (2024) showed that, since 2020, the five richest men in the world have doubled their fortunes. At the same time, almost five billion people have seen their wealth fall. It further argued that corporations and its monopoly power are responsible for driving this unrelenting income inequality. This trend is confirmed by Chen et al. (2019) through an investigation into nearly 1 million firms covering 27 countries. Between 2000 - 2015, there has been a notable increase in corporate market power, especially in advanced economies. However, there is no easy solution because inequality is deeply rooted in numerous historical, political, and socioeconomic factors. Therefore, it is imperative to look beyond numbers to understand inequality better. In "Visions of Inequality: From the French Revolution to the End of the Cold War," veteran economist Branko Milanovic takes readers on a journey through the 200-year evolution of economic thought on income inequality. He achieved it by drawing from a diverse source, including original writings, correspondence, and biographical accounts of luminaries in the economics discipline.

Monopoly Power upon the World of Work: A Workplace Analysis in the Logistics Segment Under Automation

ABSTRACT This paper aims to investigate the impact of monopoly power on the world of work within the logistics segment, particularly in the context of automation processes. We conduct a fieldwork analysis of three workplaces situated in Italy, each owned by distinct types of monopolies: a corporate monopoly, Philip Morris, the global leader in tobacco and cigarette production; a state-owned monopoly, Poste Italiane, the exclusive public provider of mail services within the national borders; and a novel form of digital monopoly that holds control over intangibles and exhibits monopsonistic control over labour — Amazon. Through a comparative examination of these three diverse forms of monopolies, utilising corporate-level metrics and patent data, we scrutinise the restructuring of labour processes following the introduction of Automated Guided Vehicles. Employing a qualitative analysis that includes semi-structured interviews with HR professionals, IT specialists, and workers, we underscore that powerful monopolies play a crucial role in shaping the trajectory of technological development, adoption, and utilisation. Despite notable distinctions observed among the three cases, we document a common trend of standardisation and codification of human activities when interfacing with automated machines.

Short-selling and corporate ESG performance: evidence from China

PurposeSustainable development requires companies to achieve a long-term balance between the economic, environmental and social spheres in their development process, and is not limited to long-term commercial success. Enhancing corporate environmental, social and governance (ESG) performance plays a critical role in achieving sustainable economic and social development. The purpose of this study is to empirically examine the influence of short-selling on corporate ESG performance and unravel the mechanisms involved.Design/methodology/approachThe authors use the data from Chinese A-share listed companies spanning from 2010 to 2021 as the research sample and conduct empirical research using mediating effect model, instrumental variables and difference-in-differences methods.FindingsThe findings suggest that short-selling has a positive impact on ESG performance, thus, contributing to the realization of sustainable development goals (SDGs) and achieving a balanced development of economy, environment and society, rather than only promoting corporate longevity. This can be attributed to short-selling’s ability to strengthen supervision constraints on firms, improve firms’ intrinsic capabilities and promote firms’ green technological innovation. Furthermore, the ESG-enhancing effects of short-selling are contingent upon the internal and external governance levels of the firms. That is, short-selling has a more significant effect on ESG performance enhancement for firms with weaker internal and external governance. The extended analysis finds that concerning firms’ market advantage, the positive impact of short-selling on ESG is more pronounced for firms with weak monopoly power and those facing intense industry competition. In addition, when examining firms’ individual characteristics, the ESG-enhancing effect of short-selling is more potent for nonstate-owned firms, those with a shorter listing history and those facing a heightened risk of resource mismatch.Practical implicationsThis study provides theoretical support and empirical evidence from the perspective of short-selling to help boost corporate ESG development and improve corporate contributions to sustainable development. ESG is the concrete projection of sustainable development concept at the firm level. Good ESG performance contributes to the realization of the SDGs by influencing the strategy, operation and management of the enterprise, and promoting the enterprise to more actively create the comprehensive value of the economy, society and environment.Social implicationsThe results of this study show that short-selling can significantly enhance corporate ESG performance and strengthen corporate sustainability initiatives, thereby promoting the realization of SDGs at the firm level. These findings carry substantial implications, not only foster the improvement of China’s capital market system but also provide empirical evidence from China for capital market policy-making and sustainable development practices in other emerging markets.Originality/valueThis study not only addresses the gap in studying ESG performance from the perspective of short-selling behavior but also enriches the research on the economic consequences of short-selling and enriches the literature on the determinants of ESG performance.

Analisis Pasar Monopoli Dalam Perspektif Ekonomi ISlam Dan Etika Bisnis Islam

Monopoly market share, namely: the composition of market share indicates that one seller orproducer dominates the market, so that it has is a market structure characterized by oneseller or producer dominating the market so that it has the power to determine prices andsupply. In an Islamic economic perspective, monopoly practices are often consideredunethical because they have the potential to harm consumers and create injustice due to thedistribution of resources. This article aims to analyze monopolized markets from theperspective of Islamic economics and Islamic business ethics by highlighting relevant Islamicbusiness ethics doctrines, such as justice, balance (mizan), and the prohibition of exploitation(gharar, and ikhtiar). Analyzing monopoly markets from the perspective of Islamic economicsand Islamic business ethics, taking into account the basic doctrines in fiqh muamalah,justice, and social responsibility. This article also discusses the implications of thesedoctrines for regulation and business practices in monopoly markets. How reviewingmonopolistic practices is contrary to the doctrine of Islamic business ethics, whichemphasizes honesty, transparency, and mutual prosperity. Research with a qualitativeapproach by analyzing literature and theories of Islamic economics and business ethics. Thisresearch concludes that monopoly markets conflict with the basic guidelines of Islamiceconomics that focus on the balanced welfare of the people. In Islamic business ethics, monopoly is considered a practice that inconsistent with the teachings of beliefs thatencourage healthy competitions and honnest trade.

Antitrust laws, market competition and corporate green innovation

Utilizing a dataset from 2003 to 2016 encompassing Chinese firms listed on the A-share market, the current study conducts a robust analysis through a quasi-experimental approach, focusing on the enforcement of the Anti-Monopoly Law in 2008. By employing the Difference-in-Differences (DID) technique, it delves into the profound connections between anti-monopoly laws, market competition, and corporate green innovation. The rigorous enforcement of anti-monopoly laws has inhibited green innovation in enterprises with stronger original monopoly power, reducing the green innovation performance gap between them and enterprises with weaker monopoly power. Moreover, the study reveals that anti-monopoly regulations bolster the occurrence of green innovation by intensifying market competition, driving companies to pursue distinct competitive edges. The analysis further suggests that the negative impact of anti-monopoly laws on eco-innovation is more significant in state-controlled enterprises and in sectors with pronounced monopolistic traits that are not technology-intensive. This scholarly work not only contributes to the academic discourse on the nexus between anti-monopoly legislation and corporate inventive endeavors but also equips policymakers with tangible insights into leveraging legal frameworks to foster environmentally sustainable corporate innovation.

Optimal pricing policy for green products under supply disruption

In recent years, the frequency and extent of supply disruptions have caused serious challenges for supply chains worldwide. To address the resulting supply–demand mismatches, supply chain partners regularly have employed various pricing strategies. First, this study focuses on presenting an optimal pricing model and analysis for a retailer in a monopoly market under supply disruption, which impacts the offerings of two substitutable products with different degrees of greenness. Next, the study presents and analyzes optimal pricing decisions for a retailer in a duopoly market, where two competing retailers have similar product offerings. Results for the monopoly market indicate that as the disruption duration increases, to compensate for the increased waiting time, the price of the greener product should decrease, while the price of the less green product may either increase or decrease depending on the consumer’s sensitivity to price and wait times. In addition, the price difference between the products grows with the disparity in their degrees of greenness. In a duopoly market, the non-disrupted retailer can capitalize on their competitors’ supply issues by adjusting their pricing strategies accordingly. Sensitivity analyses conducted under both monopoly and duopoly markets reveal the impacts of critical factors individually and in combinations. These findings provide actionable insights for retailers to strategically manage product pricing and demand in the face of green supply chain disruptions.

Horizon problem and capital expenditures: evidence from the public sector in Indonesia

PurposeThis study investigates whether horizon problems affect the allocation of capital budgets and their implementation in a government setting.Design/methodology/approachWe use data from 2005 to 2020 for local governments in Indonesia, which apply a limit of two five-year terms for mayors. We use regression analyses for panel data with total observations of 4,541 local government years from 448 unique local governments. We also use graphical analyses and t-tests to provide robustness to our results.FindingsMayors allocated lower capital expenditures in the second term than in the first. Capital budget allocation is lower for local governments whose mayors are older than 60. Our additional analysis shows that incumbents seeking re-election allocate more capital expenditure than those not seeking re-election.Research limitations/implicationsThis study contributes to the literature on the behavioral effect of term limits on local government's allocation and implementation of capital budgets. Limiting elected government officials to a certain number of terms will prevent the monopoly of power. However, it may negatively affect budget allocation on capital programs in their last term. Our findings should interest public policymakers in discerning the costs and benefits of term limits for elected offices.Originality/valueMost studies on horizon problems have focused on the corporate setting. This study provides evidence of the effects of horizon problems in the government setting, especially in Asia.

Confronting the Problems of Professional Sports: A Public Policy Response to Franchise Relocation and Stadium Subsidization

During the past decade, forty-six professional sports venues were constructed in the United States, while only 16 expansion teams were created by the major sports leagues. Nearly two thirds of these newly built stadiums and arenas were funded with public tax revenues, despite substantial evidence showing no positive economic impact of new sports stadium construction on local communities. In reviewing the economic literature, this article investigates the role of professional sports organizations in the construction and public subsidization of new sports venues. Franchise relocation and public stadium subsidization is a direct result of the monopoly power of professional sports leagues, whose franchise owners extract large subsidies from their host communities by threatening to relocate to viable alternative locations. After explaining how the most common methods of stadium subsidization project a disproportionate allocation of the benefits and costs of hosting a professional team to local community interests, this article outlines several considerations for local policymakers who seek to reinvigorate public discussion of equity concerns in professional sports finance.

Formulas for Autocratic Stability: A Review Article

Abstract Drawing on the analytical framework of Johannes Gerschewski's The Two Logics of Autocratic Rule, we explore the complexities of autocratic stability by examining the mechanisms through which autocrats preserve their regimes. We review Gerschewski's data set and arguments and provide our assessment regarding the empirical validity of Gerschewski's theory and tests. While Gerschewski's two logics of autocratic rule offer insightful understandings, the role of situational dynamics, international intervention, and political succession in influencing autocratic stability are underrated or neglected. The survival of an autocratic regime is not solely based on the prevention and preemption of challenges from political opponents, but also depends on the performance of regular governance functions along with a monopoly of political power and the resolution of leadership issues. The path-dependent nature of autocratic stability requires analysis of autocratic regime subtypes to effectively contextualize and generalize the patterns of political succession under different logics of autocratic rule. Lacking a comprehensive characterization of autocratic subtypes, the main contribution of Gerschewski's book is more theoretical than empirical.

COVID-19 Pandemic and Vaccine Imperialism

The COVID-19 pandemic revealed and exacerbated the global inequalities regarding the availability and access to vaccines. Many terms have appeared in the academic literature (“vaccine colonialism,” “vaccine nationalism,” “vaccine apartheid”) trying to capture and interpret these inequalities, failing in most cases to realistically explain the upstream causes of the observed injustices. A Marxist perspective on the contrary emphasizes the structural causes of inequalities in capitalism and attributes them to the existence of economic exploitation. “Vaccine imperialism,” which refers to the control that advanced industrialized countries exert on the development, production, and distribution of vaccines at the expense of less-developed economies, can describe and explain in a more realistic way the observed inequalities during the pandemic. Our study proposes a circuit of vaccine imperialism that explains how economic imperialist exploitation takes place via transfers of value from less-developed economies (vaccine recipient countries) to imperialist economies (vaccine producing and patent holder countries) using four different channels: (a) protection of intellectual property (IP) rights (patents), (b) earnings from royalty payments for the use of vaccines (monopolistic prices and profits), (c) exercise of monopoly power on the production and distribution of vaccines (control over the quantity of vaccines supplied, exclusion of competitors through vaccine licensing), and (d) public debt servicing. JEL Classification: I14, I18, D43, F54, F55, H51

The Effects of Market Monopolies on Consumer Welfare and Economic Efficiency

Using both theoretical and empirical analysis, this study offers a thorough examination of how market monopolies affect consumer welfare and economic efficiency. The study sheds light on the ways in which monopolistic enterprises sustain their market dominance by analyzing how monopolies function. These tactics include taking advantage of entry hurdles, exercising control over crucial resources, and implementing strategies such as price discrimination. According to the research, because there is no competition, monopolies not only drive up costs but also limit consumer choice, lower the quality of their products, and stifle innovation. Due to these monopolistic actions, there are inefficiencies in the market, especially when it comes to the distribution of resources, which makes businesses less inventive and productive and ultimately contributes to a general stagnation in the economy. The role of legal frameworks like antitrust laws, which are intended to prevent monopolistic behavior, is also evaluated in this research. It criticizes current laws, pointing out that they frequently fail to keep up with changing market circumstances, especially in sectors like technology and telecommunications. In order to remedy these deficiencies, the paper suggests a number of policy measures, such as stepping up antitrust enforcement, lowering obstacles to new businesses entering the market, and liberalizing the market to create an atmosphere that is more competitive. It also promotes updating regulatory frameworks to deal with digital monopolies and quickly evolving global markets in a way that prioritizes consumer welfare and restores economic efficiency. By taking these steps, the study highlights how crucial it is to reduce monopolistic power in order to foster innovation, long-term economic growth, and consumer safety.

Heterogeneous effects of information and communication technology development on digital financial consumer protection: Evidence from the global sample

ABSTRACT This study primarily examines the influence of Information and Communication Technology (ICT) on Digital Financial Consumer Protection (DFCP), utilizing a dataset spanning 88 countries globally from 2014 to 2018, within the context of consumer welfare under diverse socioeconomic conditions. The research confirms a positive relationship between information and communication technology (ICT) evolution and digital finance consumer protection (DFCP) in OECD countries with inclusive institutions, competitive markets, and solid educational foundations. Conversely, a negative correlation is observed between ICT growth and DFCP in countries with moderate gender inequality. The study further confirms that ICT development positively influences DFCP due to contextual conditions (i.e. cybersecurity index, political stability, higher educational level, and market quality). Policy implications emphasize the need to address information inequality and protect consumer rights in the digital era. Measures to curb market monopolies of major tech companies and combat unauthorized data usage are recommended. Additionally, enhancing digital literacy is crucial for harnessing the benefits of ICT and promoting financial consumer welfare. Establishing a practical code of conduct aligned with market needs is also essential for ensuring consumer protection.

Market Failure, Information Asymmetries, and Monopoly Profits: The Barranquilla Railway and Pier Company in Colombia, 1888–1933

Market Failure, Information Asymmetries, and Monopoly Profits: The Barranquilla Railway and Pier Company in Colombia, 1888–1933

Elite Governance, Development, and Public Safety in Nigeria

Governance defines how political actors use ethical or corrupt practices to influence mass participation in political decision-making in public affairs. This article interrogates the implications of the elite monopoly of power for development and public safety in Nigeria. We anchored the study on Pareto’s circulation of elite theory. It adopts a qualitative method to collect secondary data which are content and thematically analyzed. Results indicated that the gap between the elite and the citizenry threatens the development and public safety in Nigeria. This article concludes that elitism should not only socially engage with the citizenry, but it should also reproduce egalitarian political values and actors for inclusion in Nigeria’s democratic destiny. Drawing on the values of the conceptual lions (oselu) of Pareto to scare his conceptual foxes (ojelu) vices out of political domination through electoral re-socialization could neutralize elite conspiracy against the majority and boost the capacity of vulnerable Nigerians to initiate and implement development and public safety defenses. It suggests that a true fiscal federalism predicated on ethical reorientation in politics could reinvent Nigeria, and relieve her of the burden of underdevelopment and insecurity into which elite avarice has plunged the country.

E-money, risk-sharing, and welfare

We develop a micro-founded monetary model to inquire the role of a privately provided e-money instrument for household consumption smoothing and welfare. Different from fiat money, e-money users pay electronic transaction fees, but in turn e-money reduces their spatial separation frictions and enables risk-sharing through remittance transfers. We characterize the profit maximizing e-money transaction fees charged by a monopolist technology provider and the optimality of price regulation. Calibrating the model for the context of Kenya’s e-money product M-Pesa shows that the introduction of M-Pesa through a monopolist increases aggregate welfare by 1.0%, while regulating e-money prices and fully eliminating the monopoly power of the technology provider raises the aggregate welfare only by 0.1% beyond what is achieved through the monopolist.

Impacts of China's Stock Market Registration System and Future Insights

This study will explore the impact of the registration system on the stock market after China changed from the approval system to the registration system. Under the approval system, the government monopolizes the right to review stock listings in the approval system. Therefore, this situation not only easily creates the government's monopoly power but may also lead to companies over-packaging IPO application materials to increase the possibility of passing the review. This will cause the government to spend too much time and energy conducting substantive studies of corporate application materials, reducing work efficiency. Therefore, the registration system will be officially implemented in March 2023. The proposed research will investigate the issuance and distribution of new shares, changes in the price-earnings ratio, and changes in the latest lottery rate and yield, as well as the changes in the hairstyle system and how it performed after listing (industry, valuation, and average growth rate) to conduct a comprehensive analysis. Thus, the existing research results are used to propose the impact of the registration system on the Chinese stock market.

When Monopsony Power Wanes

Abstract In this Part 2, Subjective Agency, I delve into the evolving power and agency of workers as structural conditions undergo transformation. Part 1 described how the law of competition propels firms towards centralisation, gradually diminishing the monopsony power wielded by global buyers in labour-intensive sectors. While manufacturers gain more power and significance, capable of undermining workers’ power, they also become susceptible to disruption. This section introduces the concept of Degree of Spatial Inflexibility (dsi). It posits that as a manufacturer’s monopoly power increases, the monopsony power in the supply chain decreases. However, this elevated monopoly power simultaneously establishes a higher dsi, amplifying the potential for worker disruption. It is essential to recognise that structural power shifts do not guarantee automatic benefits for workers; instead, they necessitate workers to capitalise on these vulnerabilities. This establishes a dialectical relationship between the evolving conditions of capital outlined in Part 1 and the subjective agency of workers, as detailed in Part 2 below.

The Impact of Fintech Development on Commercial Banks' Profitability

Fintech is the creative application of technology in developing and delivering financial products and services. Studying its impact on the banking sector, mainly commercial banks, is interesting. Using panel data of 210 Chinese commercial banks from 2011-2018, fixed effects estimation was used to examine the impact of Fintech development on banks' profitability. The findings indicate that Fintech development is significantly and negatively related to bank performance, i.e., Fintech development significantly weakens bank performance. The results are robust to using different Fintech and bank profitability indicators based on endogeneity analysis. On this basis, the heterogeneity factor of the above relationship is also investigated, and it is found that loose monetary policy weakens the negative effect of Fintech on bank profitability. Moreover, for commercial banks with solid monopoly power, the negative impact of Fintech on their performance is mitigated accordingly.

Relationship Between Exchange Rate and Inflation in Afghanistan

Afghanistan is an import dependent country and has been facing perpetual trade balance deficit for decades. In case of imperfect competition in the market or existence of market monopoly, there is a higher chance of reflecting the exchange rate changes on the prices of the goods. In Addition, countries with low level of domestic production and higher amounts of imports usually experience higher degree of the exchange rate pass-through effect on inflation. Countries with high import volumes and low export levels often face a deficit in foreign currency inflows and an excess in outflows. These countries need substantial foreign currency to purchase and import goods from both neighboring and international markets, increasing domestic demand for foreign currencies and consequently leading to domestic currency depreciation. This study investigated the relationship between exchange rates and inflation in Afghanistan, examining how exchange rates impact inflation and the benefits associated with exchange rate mechanisms. The primary research questions include: What is the relationship between exchange rates and inflation in Afghanistan? How does the exchange rate influence inflation in the country? What are the benefits of exchange rate systems? The hypothesis posits that higher inflation typically depresses a country's currency value and that exchange rates directly affect inflation. Additionally, exchange rates determine the value of currency exchanges between different nations. This research aims to elucidate the relationship between exchange rates and inflation in Afghanistan, assess the impact of exchange rates on inflation, and explore the benefits of exchange rate systems. The methodology involves a binary system and utilizes secondary data collected from books, websites, and research papers. Findings indicate that Afghanistan's reliance on imports results in a persistent trade balance deficit, with a significant portion of goods, especially non-food items, being imported due to insufficient domestic production. To import goods, Afghanistan requires foreign currencies, which are typically earned through exports of goods and services as of a result, Afghanistan will experience stability in the exchange rate and in the domestic prices.

Exploring the horizon of AI development: Navigating constraints of chips and power in the technological landscape

With the proliferation of AI technology, machine learning has emerged as a cornerstone of AI systems, facilitating pattern recognition and decision-making through robust data analysis. This encompasses various learning paradigms such as supervised, unsupervised, and reinforcement learning, all of which are indispensable for the advancement of artificial intelligence. Nevertheless, the development of AI necessitates substantial computational resources, with specialized chips serving as the linchpin, particularly in demanding tasks such as deep learning. Dedicated chip development, exemplified by GPUs and TPUs, plays a pivotal role in enhancing the performance of AI systems, notwithstanding challenges related to costs and market monopolies. Moreover, AI systems require significant power support, especially during the training of large-scale models. To address these challenges, this paper reviews the existing literature on modeling techniques aimed at enhancing the efficiency of machine learning and reducing energy consumption. This review encompasses optimal algorithm design, hardware optimization, and spatial modeling. Through the implementation of these approaches, the challenges posed by resource constraints in machine learning scenarios can be effectively mitigated, thereby fostering the continued development and application of AI technology.