Negative Effects Of Competition Research Articles

Water as an Investment and the Impact of Regulatory Risk

ABSTRACT Water is a fundamental commodity. However, China is ranked as one of the top countries in terms of water scarcity. Hence, the country urgently needs large investment in its water sector. In this paper, we investigate the impact of regulatory risk on water investments guided by the ‘buffering effect theory’ and with the application of the Kalman filter and panel regression within the context ofthe Capital Asset Pricing Model. The question of utmost importance here is whether regulatory decisions affect systematic risk of water companies traded on the Chinese stock market. In other words, the effect of regulatory intervention measures may be moderated by investors’ perception of the overall political environment. We find a significantly negative effect of competition which suggests that when a regulator takes steps to reduce market competition, water companies are likely to gain greater power on the market resulting, in turn, in higher price levels and profit margins. The findings of this study contribute to the understanding of how investors can be attracted to participate in the water industry, not just in China, but also worldwide.

The coopetition effect of learning-by-doing in outsourcing

Learning-by-doing is a prevailing phenomenon in which a firm's production cost decreases in its production quantity. We build a two-period model to investigate the coopetition effect of learning-by-doing in a supply chain with two competing original equipment manufacturers (OEMs) outsourcing to a common contract manufacturer (CM) whose production exhibits the learning-by-doing effect. Excluding the learning cooperation between OEMs, the learning-by-doing intensifies the price competition to such an extent that OEMs' two-period overall profits could be lower than the case of no learning. Outsourcing to a common CM brings OEMs higher learning benefits which dominate the negative effect of intensified competition. OEMs' two-period overall profits are always higher in this case. Interestingly, increasing the product substitution rate has two opposite effects on the OEMs' overall profits. Under certain condition, OEMs' profits might be increasing in the substitution rate since the positive cooperation effect dominates the negative competition effect. With coopetition effect of learning-by-doing, we show that OEMs' other simpler pricing strategies, such as myopic pricing and uniform pricing, may outperform the strategic differential pricing strategy. Moreover, when the two OEMs are significantly differentiated in market base, the larger OEM may prefer not outsourcing to a common CM due to the coopetition concern. Finally, we find that asymmetric production learning and CM's pricing power have important impacts on OEMs' decisions and profits.

Nutrient-demanding species face less negative competition and plant-soil feedback effects in a nutrient-rich environment.

Plant-soil feedbacks (PSFs) and plant-plant competition influence performance and abundance of plants. To what extent the two biotic interactions are interrelated and thus affect plant performance in combination rather than in isolation remains poorly explored. It is also unclear how the abiotic context, such as resource availability, modifies individual and joint effects of PSFs and of plant-plant competition. Using a garden experiment, we assessed the strengths of PSFs, competition, and their combined effects explored under low and high nutrient levels, and related them to abundance of 46 plant species and their ecological optima with respect to soil nutrients. We found that PSFs reduced but did not eliminate differences in competitive ability of plant species. Isolated and combined effects of the biotic interactions poorly predicted local or regional abundance of species. They were rather related to species' ecological optima, as nutrient-demanding plants experienced less negative biotic effects but only in a nutrient-rich environment. Our study demonstrates that soil biota can mitigate differences in competitive ability among species. It remains to be tested whether such an equalizing effect can maintain coexistence under high nutrient availability, in which nutrient-demanding species may disproportionately benefit from less negative competition and PSF effects.

Bank Competition and Information Production

We show that competition adversely affects the ''specialness'' of bank lending. In particular, we observe that the positive abnormal return on the borrowing firm's stock after the announcement of a bank loan is reduced in US states that deregulate interstate branching. The negative effect of competition on the value of bank loans is present only for ex-ante opaque firms (i.e., firms with few tangible assets and bank-dependent borrowers) and for banks that presumably rely more on ''soft'' information (i.e., small banks). Moreover, we find that the probability of a covenant violation in a syndicated deal and charge-off rates on small business loans are higher in deregulated states. Our results suggest that competition decreases loan quality because it reduces banks' incentives to invest in information.

Integrative models explain the relationships between species richness and productivity in plant communities

The relationship between plant productivity and species richness is one of the most debated and important issues in ecology. Ecologists have found numerous forms of this relationship and its underlying processes. However, theories and proposed drivers have been insufficient to completely explain the observed variation in the forms of this relationship. Here, we developed and validated integration models capable of combining twenty positive or negative processes affecting the relationship. The integration models generated the classic humped, asymptotic, positive, negative and irregular forms and other intermediate forms of the relationship between plant richness and productivity. These forms were linked to one another and varied according to which was considered the dependent variable. The total strengths of the different positive and negative processes are the determinants of the forms of the relationship. Positive processes, such as resource availability and species pool effects, can offset the negative effects of disturbance and competition and change the relationship. This combination method clarifies the reasons for the diverse forms of the relationship and deepens our understanding of the interactions among processes.

Trait hierarchies and intraspecific variability drive competitive interactions in Mediterranean annual plants

Abstract Both intra‐ and interspecific differences in traits may modulate interactions between plants. Two mechanisms are hypothesized to regulate these effects: competitive hierarchies and trait dissimilarities, but it is unclear how the prevalence of each might depend on environmental conditions and on intra and interspecific differences. We sowed six replicates of all possible pairwise combinations across eight annual species (including conspecific competition and individuals without competitors), in pots under two levels of fertilization. We measured above‐ and below‐ground traits and total biomass of the focal individuals. We expressed competition as the decrease in biomass of focal individuals relative to biomass without competition, and modelled competition using directional (hierarchy) or non‐directional (dissimilarity) trait differences, with or without intraspecific variability (ITV). We found evidence of different trait hierarchies operating under different fertilization conditions but little support for trait dissimilarities. The negative effect of competition on focal plants increased with the height of the competitors in both of fertilization levels. Further, in unfertilized conditions, plants with lower specific leaf area (SLA) and larger root systems experienced less competition. Including ITV in trait hierarchies substantially improved our ability to predict the intensity of competition. This was partly due to ITV reducing competitive hierarchies. Synthesis. Our results underscore the importance of traits in driving interactions among plants. Competitive relationships between species depend on complex interactions between trait intra and interspecific differences and resource availability. ITV appears to be a mechanism capable of reducing trait hierarchies, and hence the intensity of competition between coexisting plants.

Home Competition Escapism View of Emerging Market Multinationals

Literature on emerging market firms’ strategic asset seeking FDI emphasizes on home country government support. In this research, we argue that emerging market firm strategic asset seeking outward FDI could be an escapism response to the foreign competition at home. By integrating both the spillover and competition mechanisms of foreign entrants, we develop an inward FDI – performance – outward FDI framework to test the effect of inward FDI from different industries and entry modes. Employing data on 1423 Chinese outward FDI projects and inward FDI statistics from 29 Chinese provinces between 2000 and 2010, we find that inward FDI in the same industry of the emerging market firm is more likely to have a negative competition effect on the emerging market firm’s financial performance, pushing the emerging market firm to seek knowledge abroad; nevertheless, inward FDI in knowledge-intensive industry and using international joint venture entry mode tends to introduce a positive spillover effect on the local firms’ financial performance but demotivates subsequent strategic asset seeking outward FDI.

Spillover effects when IKEA enters: Do incumbent retailers win or lose?

AbstractWe investigate the effects of IKEA entry in three Swedish municipalities, finding that revenues for incumbent retailers located 1 km from the new IKEA store experienced a 7% increase due to positive spillover. The effect was insignificant for retailers located in city centres or more than 1 km from IKEA. Moreover, the positive agglomeration effects only dominate the negative competition effects for stores that sell complementary products, while same‐market retailers located between 2 and 5 km from the new IKEA store experienced revenue loss due to IKEA entry. In contrast to retail revenues, the effects on employment were statistically insignificant.

International joint ventures and technology diffusion: Evidence from China

AbstractThis paper investigates international technology diffusion through FDI by explicitly considering the ownership structure of FDI projects with detailed Chinese data. We find that international joint ventures (JVs) generate significantly positive technology diffusion effects, while wholly foreign‐owned firms (WFOs) generate significantly negative competition effects. The differentiated impacts of JVs and WFOs are robust, heterogeneous and causal as shown by our instrumental variable estimation. As for the mechanisms, evidence suggests that JVs bring better technology to the host country, invest more in R&D and employee training, and also provide easier technology access to local firms than WFOs.

The Compromise of Intercropping: Biological Pest Control Versus Competition by Crop Species

Leek, Allium ampeloprasum L., is susceptible to attack by onion thrips, Thrips tabaci Lindeman, that reduce yield and quality. Intercropping has been proposed as a strategy for reducing negative effects of pests on one or all crops in a system. The objective of the study was to assess the effect of intercropping maize, Zea mays L., and leek on abundance of thrips and production and morphology of both crops, but emphasizing effects on leek. The experiment was done during spring 2016 in northwestern Mexico, under extreme climatic conditions characteristic of desert environments and high soil salinity. Two maize varieties (sweet and field) at zero, three, five, and 10 plants per square meter were intercropped with a fixed number of 10 leek plants per square meter. The response variables were thrips abundance and plant yields and morphology characteristics. Maize reduced abundance of thrips on leek, with 5.6, 2.6, 2.2, and 1.5 thrips for 0, 3, 5, and 10 maize plants m-2, respectively; i.e., the closer together the maize plants, the less abundant were thrips on leek, but leek yields were less with more maize plants (plant competition) per meter, with 12,075, 4,875, 4,581, and 4,159 kg ha-1, respectively. Leeks intercropped showed morphological adjustments compared with a leek monoculture, indicating negative effects of competition with maize, instead of benefiting from the microenvironment (cooler leek canopy temperatures) created by maize. Maize was effective at reducing abundance of thrips but severely out-competed leeks. Further testing is needed on less competitive secondary crop species in main crops in a region to reduce pest abundance naturally without decreasing yield potential of associated crops.

Transient local adaptation and source-sink dynamics in experimental populations experiencing spatially heterogeneous environments.

Local adaptation is determined by the strength of selection and the level of gene flow within heterogeneous landscapes. The presence of benign habitat can act as an evolutionary stepping stone for local adaptation to challenging environments by providing the necessary genetic variation. At the same time, migration load from benign habitats will hinder adaptation. In a community context, interspecific competition is expected to select against maladapted migrants, hence reducing migration load and facilitating adaptation. As the interplay between competition and spatial heterogeneity on the joint ecological and evolutionary dynamics of populations is poorly understood, we performed an evolutionary experiment using the herbivore spider mite Tetranychus urticae as a model. We studied the species's demography and local adaptation in a challenging environment that consisted of an initial sink (pepper plants) and/or a more benign environment (cucumber plants). Half of the experimental populations were exposed to a competitor, the congeneric T. ludeni. We show that while spider mites only adapted to the challenging pepper environment when it was spatially interspersed with benign cucumber habitat, this adaptation was only temporary and disappeared when the populations in the benign cucumber environment were expanding and spilling-over to the challenging pepper environment. Although the focal species outcompeted the competitor after about two months, a negative effect of competition on the focal species’s performance persisted in the benign environment. Adaptation to challenging habitat in heterogeneous landscapes thus highly depends on demography and source–sink dynamics, but also on competitive interactions with other species, even if they are only present for a short time span.

How does competition affect innovation behaviour in french firms?

This paper investigates the relationship between competition and innovation at the firm level. Recent papers (Aghion et al., 2005; Askenazy et al., 2013; Rafique Hashmi, 2013) advocate a non-linear relationship, conciliating the Schumpeterian and Arrowian views. In this paper, the effect of competition on innovation is studied at the firm level using a large dataset for France coming from the annual surveys on R&D, covering the period 2000–2013, where a dummy variable is available for product or process innovation.The econometric results do not confirm the inverted-U shape relationship between the Lerner index and innovation, found by Aghion et al. (2005). This may be due to the use of firm-level data rather than industry-level data. However, for most firms, there is a negative effect of competition on innovation, meaning that more competition in the industry or a small market share has a negative effect on the propensity to innovate, either in products or processes, and the effect seems to be slightly stronger for product than for process innovation.

Firm productivity and agglomeration economies: evidence from Egyptian data

ABSTRACTThis paper attempts to shed the light on the nexus between firms’ productivity and economies of agglomeration in Egypt. Using a large dataset of firms in 342 firms’ four-digit activities in 27 regions (62,108 firms), we introduce three measures of agglomeration which are urbanization or firm diversification measured by the number of firms by governorate, localization and specialization measured by the average productivity by governorate and sector (generating externalities and knowledge spillovers) and finally competition measured by the number of firm operating in the same governorate and the same sector. We find strong evidence for the existence of agglomeration in Egypt after controlling for firm age, location, economic activity and legal status. In the Egyptian context, productivity spillovers gained from agglomeration measures outweighed the negative effects of competition implied by congestion. The latter is chiefly due to the lack of good infrastructure. When regressions are run by firm size, location and activity, our main findings show first that micro and small firms are more likely to benefit from localization and diversification compared to medium and large firms. Service firms benefit more from high level of diversification while manufacturing firms gain more benefits from knowledge spillovers and specialization in Egypt.

Competing Conversations: An Examination of Competition as Intrateam Interactions.

Intrateam competition is an inherently social and interactional process, yet it is not often studied as such. Research on competition is mostly limited to studying it as an individual state and assumes that the resulting team outcomes are equivalent across different competition types. Often overlooked in competition research are the means through which competition can lead to constructive outcomes for the team. Constructive competition occurs when the primary motivation is not to win at the expense of others, but rather to make social comparisons and gain knowledge of relative competence. This study furthers insight into constructive competition by studying its interpersonal characteristics as it develops within a team, and its impact on task conflict, perceived performance, and team satisfaction. The conversations of 24 student project teams were recorded over 4 weeks and analyzed, operationalizing competition as an attempt to exert control and influence on the team. Each individual then provided sociometric ratings of perceived performance of each team member, and rated the level of task conflict and satisfaction of the team. The effects of competition on perceived performance and team satisfaction, both directly and indirectly through task conflict, were examined. Findings demonstrated a negative direct effect of competition on the range of perceived performance ratings, and a positive indirect effect of competition on team satisfaction as mediated through task conflict. The study broadens understanding on the construct of competition and underscores the positive implications competition can bring to the teams.

Assessment of the Korean-Chinese Exports Competition in Sophisticated Markets

Purpose - This paper empirically investigates the competition effect of exports between Korea and China in their common-export markets considering market sophistication. Modern market sophistication includes an importing country’s aggregate demand for products of high quality, design, novelty, eco-friendliness, and even IPR protection. Using an empirical analysis to identify the demand for product quality across countries, this paper estimates the effects of market sophistication on the competition between Korean exports and Chinese products. Design/Methodology - Our empirical model considers the relationship between an importing country’s consumer sophistication and the export competition between Korea and China. This study employs the existing theoretical framework to identify the aggregate demand for product quality across countries. Using a quite direct measurement (the consumer sophistication index, our analysis investigates the differential effects of Korea’s export market sophistication, particularly in markets where Korean exports are in competition with similar Chinese products. Findings - Our main findings can be summarized as follows: the negative effects of the export competition between Korea and China on Korea’s exports are stronger in third markets where consumers are less sophisticated while the effects are not as pronounced in markets where consumers are more sophisticated. This result, however, best applies to differentiated goods which significantly vary in product quality. Originality/value - Existing studies focus on the supply side of production and make the assumption that the market preference for export quality is identical across countries. This paper attempts to evaluate the export competition between Korea and China from the demand-side perspective. This area of trade studies is underexplored both empirically and in theory, although the issue has long been important to Korean and world trade.

Micronutrients may influence the efficacy of ectomycorrhizas to support tree seedlings in a lowland African rain forest

AbstractIn the lowland rain forest of SW Cameroon, a field experiment tested whether ectomycorrhizal hyphal connections might affect the growth and survival of seedlings of a principal tree species, Microberlinia bisulcata, close to its adults. Nursery‐raised seedlings were planted into fine‐, medium‐, and coarse‐mesh root bags, and as no‐bag controls, in replicate subplots. The bags prevented fungal hyphae, and fine‐ and medium‐sized roots, respectively, entering from the outside forest floor root mat. Harvests were taken after 1 and 2 yr, with non‐destructive recording in between. Seedlings grew in typically low‐light locations. Survivorship did not differ between treatments (33%), but seedlings grew significantly better in terms of stem dry mass by harvest 2 in the medium‐mesh compared with other treatments. Treatment 1 to 3 seedlings had stem masses 25, 44, and 5% higher than controls, respectively. Using a method of differences across treatments, the positive effect of ectomycorrhizas on growth was 13.6%, while the negative effect of root competition (RCM) was 31.2% (net outcome = 17.6%). Adjustment was made to account for root penetration damaging some mesh bags. Differences in growth in replicate subplots were, however, much larger than those for treatments. Elemental analysis of seedling plant parts showed few differences between treatments, but phosphorus was high in stems, aluminum and iron were very high in roots, and copper was deficiently low in leaves. Soil analyses revealed very low copper levels, suggesting with the seedling results that this element was critically limiting for seedlings. Ectomycorrhizas are probably important for copper uptake (as for phosphorus), so roots may have been competing for this element. Because seedlings were growing in the shade and the soil was inhibitory to roots, they could not form network connections enough to positively out‐balance root competition. The efficacy of ectomycorrhizal networks for at least seedling establishment in this forest is low.

Does the response to competition depend on perceived ability? Evidence from a classroom experiment

We examine the effect of relative evaluation on test performance by implementing a classroom-level experiment in which students are financially incentivized either individually or in a tournament. Linking the experimental data with student-level administrative data allows us to study two aspects of competitive environments: tournament structure and one’s perceived position in the ability distribution. At least in our setting, we find only limited evidence that effort responses to competition are sensitive to tournament size or prize structure. However, in contrast to previous studies that examine effort responses to exogenously assigned competition, we find a large negative competition effect for students who believe they are relatively low in the ability distribution, and no competition effect for those who believe they are relatively high ability. Using additional treatments, we further show that the divergence between our results and past results is likely driven by task type and not by differences in selection into participation between lab and classroom environments.

Public Administration in EU: Harmonization of Income Taxes

In the European communities, the need for tax harmonization has begun to commence since the beginning of integration efforts in the 1960s. The first attitudes to tax harmonization were very ambitious. The plan was not only structural harmonization but also harmonization of tax rates. The paper examines the nature and course of the direct tax harmonization process, describes its advantages and disadvantages as well as the positive and negative effects of tax competition. The paper aims to examine the development and volume of selected income taxes collected in the Member States of the European Union. It tells whether the harmonization of income taxes is still a stagnant process. Cluster analysis deals with looking for similarities of multidimensional objects. Two clustering methods were used – hierarchical agglomeration clustering and non-hierarchical clustering. Cluster analysis aimed to achieve groups of states that would have some homogeneity. Cluster analysis sorted the data into sets with the highest possible similarity within the group and the most significant difference between the groups. Analysis of tax burden and income tax rates confirmed significant differences in these indicators across the EU. On the other hand, cluster analysis revealed similar developments in tax systems in terms of their geographical location in Europe. Cluster analysis can be used to suggest possible steps to co-operate in harmonizing Member State taxes in the future. The authors of this article propose the possibility of harmonizing taxes and cooperating gradually within clusters rather than trying to apply uniform rules in all EU Member States at the same time. The conclusion of the article raises problems in the field of harmonization of direct taxes in the EU. The possibility of preserving autonomy in deciding on tax burden in the country is left to the many Member States because they see that autonomy as a competitive advantage, particularly in the field of investment. Keywords: tax, harmonization, income, European Union, cluster analysis.

How Does Competition Affect Reputation Concerns? Theory and Evidence from Airbnb

I show how changes in competition affect the power of reputation to induce sellers to exert effort. The impact of competition on sellers’ incentives is theoretically ambiguous. More com-petition disciplines sellers, but, at the same time, it erodes reputational premia. This paper identifies empirically whether one effect dominates the other using data from Airbnb. To guide the empirical analysis, I develop a model of reputation where the relative number of hosts and guests affects the value of building a reputation through effort. In this framework, more competition depresses hosts’ profits and leads hosts to reduce effort. I test the model’s predic-tion exploiting a change in regulation for Airbnb listings effective in San Francisco in 2017. I identify a negative causal effect of competition on effort. As the number of competitors sur-rounding each listing increases by 10 percent, ratings about hosts’ effort decrease by more than one standard deviation. These findings suggest that more competition may erode incentives for high-quality services in markets where sellers’ performances depend on reputation.

Modeling light availability for crop strips planted within apple orchard

Rational design and management of the crop strips structure within fruit orchards are essential to make use of the economic and ecological advantages of intercropping but avoid the negative effects of resource competition on the fruit production. A better understanding of the light transmission processes could provide basis for quantifying resource competition and growth dynamics in the agroforestry system. Modeling work was combined with field experiment in this study to investigate light transmission in an apple tree (Malus pumila M.) and cocksfoot (Dactylis glomerata L.) intercropping system. The experiment was conducted in 2016 and 2017 in a plantation of apple at a spacing of 4 m × 4 m on the Loess Plateau of China. Three floor managing patterns were applied: clean tillage (CT), 2.4-meter-wide cocksfoot strips set up between tree rows that harvested more frequently to maintain a low coverage (LC), and cocksfoot strips with a greater coverage (GC). The light model simulates light transmission in the tree crown with a geometrical model that considering the canopy spatial heterogeneity, and describes light extinction in the crop strips with a strip-path radiation transmission model which is suitable for strip-path canopy structures. Results showed that the model well predicted fraction of incident light over and transmitted through the cocksfoot strips with determination coefficient of 0.707 and 0.892 respectively and root mean square error of 0.096 and 0.037. Averaged over the two seasons, light interception by cocksfoot were 439.1 and 504.7 MJ m−2 in LC and GC respectively, accounted for 23.1% and 26.5% of the total incoming light. Light use efficiency of cocksfoot in LC was far greater than that in the GC in both seasons. Planting cocksfoot showed no significant adverse effects on apple production, 6.32 and 5.67 t ha−1 additional dry forage were produced in the LC and GC plots respectively in 2016, the production were only 3.02 and 2.07 t ha−1 in 2017 as limited by water availability. Simulations with information on apple tree orchards of different age showed that seasonal mean fraction of light interception by cocksfoot under 3–10 years old apple trees varied from 0.41 to 0.29 for GC and from 0.36 to 0.25 for LC treatments, but the fraction became <0.15 for 15 years and older orchards. This study provides basics for quantifying light and other resource competition in tree and crop intercropping systems and gives insights into floor management for rain-fed apple orchards on the Loess Plateau area of China.