Specific Market Structure Research Articles

Research on the Development of China's Media Industry from the Perspective of Communication Psychology

The main difference between the media industry and other industries is that its products have strong cultural value and can have a significant social impact. Therefore, social benefits should be prioritized, and their economic and social benefits have a high correlation, which will be subject to the utilization, constraints, and distortion of various social forces. Therefore, this article attempts to conduct research on the development of China's media industry from the perspective of communication psychology. From the perspective of the research scope of communication psychology, research on psychological issues in specific communication business fields such as news psychology and advertising psychology should also fall within the scope of communication psychology. In theory, any psychological theory or principle can find its own unique manifestation in communication activities, and this is also the focus of communication psychology research. For the media industry that is gradually entering market-oriented operation, this article believes that currently measuring the market performance of the media industry, profit margin cannot be the most important indicator, but should mainly consider the scale structure efficiency, resource allocation efficiency, technological progress, and other aspects of the market under specific media market structure and market behavior conditions.

Kernel Market Impact Analysis in China A-Share Markets

With transaction-level market data for stocks in China A-share markets, the authors construct individual stocks’ kernel functions of market impact and analyze their statistical properties. Attribution analysis of such kernel functions is also performed to understand how market microstructure variables such as bid–ask spread and liquidity distribution in order books can be used to classify different groups of kernel functions. The authors’ analysis shows that stocks in China A-share markets exhibit clear patterns of market impact curves, which is likely due to specific market structure regulations such as constant tick size across different stocks and stock-specific order book dynamics resulting from market participants’ behaviors. The authors also explore the application of kernel functions in forecasting price movement in close-to-reality trading simulators that consider market impact costs at individual trade level.

ВЗАИМОСВЯЗЬ ВНУТРЕННИХ И ЭКСПОРТНЫХ ЦЕН НА ТОВАРНЫХ РЫНКАХ РОССИЙСКОЙ ФЕДЕРАЦИИ

This paper examines the theoretical and practical features of the formation of parity of domestic and export prices on Russian commodity markets involved in international trade. The study shows that the hypothesis about the absence of parity between domestic and export prices due to the presence of market power in markets with significant economic concentration is not empirically confirmed. On the contrary, the most monopolized markets demonstrate formal signs of compliance with the law of one price, and therefore price parity for the external market and the domestic consumer. The nature of the price relationship and, as a consequence, the possibility of establishing parity of domestic and export prices in practice are determined by a wide range of institutional factors, including the specifics of state regulation of each specific market, its organizational and economic features and structure, etc. Thus, the solution to the problem of ensuring price parity requires taking into account a large number of quantitative and qualitative factors.

Demand response, market design and risk: A literature review

Different market designs may create distortions on spot pricing equilibrium, thus providing different signals for market agents and investment decisions on new generation assets. Also, demand flexibility market value may differ according to market characteristics. This paper aims to study the demand response (DR) – market design – risk nexus. According to our findings, despite the design differences among MIBEL, EEX and Nord Pool, some variables are common to all while those associated with risk premia might differ. This is due to the mismatch between the specific market structure characteristics and premises, particularly in what concerns the supply generation portfolio composition in the day-ahead markets.

Real Estate Knowledge and the Development of a Real Estate Curricula for African Universities

Real estate education across the globe has, at its core, certain universal and value-neutral skills and knowledge. This knowledge has developed over decades to reflect the functions of specific market structures which characterise real estate markets. Moreover, it is reflective of the maturity of real estate markets, and as such, the tools developed reflect specific market structures. Real estate analysts are becoming increasingly interested in real estate markets in emerging economies. The challenge facing these analysts is that the dominant real estate theory is based on mature markets within an industrialised context and therefore do not accurately reflect real estate markets in emerging economies. The generic context of real estate markets in emerging economies tends to be characterised by a dual economy, a lack of transparency in the markets, high levels of uncertainty and the existence of communal/customary and informal rights in the ownership of real estate. Hence, this study examines the real estate academic syllabus taught by universities in Sub-Saharan Africa. In doing so this ongoing research aims to assess and understand the differences that exist between the real estate programmes and examine the direction that these programmes could take in an emerging country context.

On the Dilution of Market Power

We show that a market involving a handful of large-scale firms and a myriad of small-scale businesses may give rise to different types of market structure, ranging from monopoly or oligopoly to monopolistic competition through new types of market structure. In particular, we find conditions under which the free entry and exit of small firms incentivizes the big firms to sell their varieties at the monopolistically competitive prices, as if they were to behave like in monopolistic competition. We call this result dilution of market power. The structure of preferences is the main driver for a specific market structure to emerge as an equilibrium outcome.

DRIVERS OF CUSTOMER SATISFACTION AND LOYALTY IN SERVICE INDUSTRIES

The relationship between customer satisfaction, customer loyalty and their antecedents, service output quality, quality of staff, corporate image, and price perception, is examined in the context of three service industries: use of the highway infrastructure, mobile telephone services, and hairdressing services. The research model was empirically evaluated for a large sample of respondents from a Central European country, using structural equation modelling. The results indicate that the four antecedents affect customer loyalty, and customer satisfaction acts as a mediator in all three service industries. However, the strength of the relationship between the constructs varies markedly across the industries, implying that competitive environment importantly determines the elements of service offering that lead to satisfaction and loyalty in a particular industry. The research findings contribute to a better understanding of which behavioural mechanisms and factors are a viable basis for increasing customer retention in a specific market structure. Managerial implications are discussed, and policy recommendations are offered.

R&D, MARKET STRUCTURE AND ADVERTISING IN BRAZILIAN MANUFACTURING

ABSTRACT The aim of this paper is analyse empirically R&D, market structure and advertising in Brazilian manufacturing. According to recent literature advertising is part of firms R&D appropriability efforts in a specific market structure. We use Brazilian innovation and Brazilian industrial surveys 2003 and 2005 editions to build a panel data with information at firm level to 9000 companies. Among the main results, the average firm market share (SIC 3 digit) is 0.9%, with standard deviation 3.9% and 75th percentile 1.4% and the average firm advertisement/net revenue ratio is 0.3%, standard deviation 1.2% and 75th percentile also 0.3%. From regression results we conclude that advertising is an efficient appropriability mechanism within R&D initiatives in Brazilian industrial firms and market share affects a firm's R&D decision-making, i.e., market concentration and R&D expenditure are positively correlated in low appropriability conditions sectors. Keywords R&D, market structure, advertising, Brazilian manufacturing, microeconometrics

Competition and Innovation in Option-Market Models

The equity options market has shown rapid growth and the competition among different options exchanges and trading platforms has intensified in recent years. As growth and competition in the U.S. options market continues, it becomes increasingly important for market participants to evaluate market quality in different options trading venues. A sound comparison of market quality among the competing trading markets requires a clear understanding of their specific market structures, since each venue attempts to differentiate itself with a unique value proposition. This article provides a review of the market microstructures of the major options exchanges and trading platforms in the United States. Using a sample period around the entry of the NASDAQ Options Market and the BATS Options Exchange, it analyzes the competition for trading volume in the options industry, investigates the characteristics of trades and execution costs in the major options exchanges and trading platforms, and examines the determinants of execution location for trades. It shows that during the first three months of their operations, the NASDAQ Options Market and BATS Options Exchange do not make a big impact on the trading volumes of the other options exchanges. It also finds that the NASDAQ Options Market has the smallest quoted spread and effective spread values for equity options among the seven exchanges during the first three months of its market entry. The BATS Options Exchange shows lower average trade size and average dollar trade size, and does not demonstrate competitive execution quality indicators or competitive execution costs in the earlier months of its operation. A probit analysis confirms that in spite of the increasingly complex and nuanced nature of options exchange competition, the main factors determining execution location for new market entrants are: i) posting quotes at the NBBO; and ii) being alone at the NBBO.

Closing Call Auction Prices as Settlement Prices for Derivatives Contracts and Price Manipulation

Previous literature emphasizes the importance of a closing call auction system because it can not only improve the price discovery effect, but also mitigate the possibility of price manipulation. However, Korea Exchange, which has adopted a closing call auction system, has still suffered from the price manipulation, most cases of which are likely to be related to the derivatives contracts. Based on this environment, this paper investigates why KRX experiences the closing price manipulations so much, even though it adopted the closing call auction system. Generally, a price manipulation occurs when the legal/administrative penalty is less than the expected economic gain or when a specific market structure increases an incentive to manipulate the price. In this paper, we find that the adoption of a closing call auction price as a settlement price for KOSPI derivatives contracts strengthens the incentive for closing price manipulation, which is supported by Kyle (2007). Kyle (2007) shows that if a closing price is used as a settlement price and investors can execute the ‘market-on-expiration orders’ surely, the derivatives with cash settlement are susceptible to the price manipulation such as squeezing or cornering, equally as the derivatives with physical settlement. As such, KRX is the only financial market that satisfies the above conditions. This paper tries to verify this argument by introducing the Hong Kong Exchange case, the Korean ELS-related manipulation case and the Deutsche Bank case. Therefore, we strongly recommend changing the settlement price of KRX derivatives contracts into an average price, which is similar with the well-developed financial markets.

Risk assessment and stock market volatility in the Eurozone: 1986-2014

This paper studies the stock market return's volatility in the Eurozone as an input for evaluating the market risk. Stock market returns are endogenously determined by long-term interest rate changes and so is the return's conditional variance. The conditional variance is the time-dependent variance of the underlying variable. In other words, it is the variance of the returns measured at each moment t, so it changes through time depending on the specific market structure at each time observation. Thus, a multivariate EGARCH model is proposed to capture the complex nature of this network. By network, in this context, we mean the chain of stock exchanges that co-move and interact in such a way that a shock in one of them propagates up to the other ones (contagion). Previous studies provide evidence that the Eurozone stock exchanges are deeply integrated. The results indicate that asymmetry and leverage effects exist along with fat tails and endogeneity. In-sample and out-of-sample forecasting tests provide clear evidence that the multivariate EGARCH model performs better than the univariate counterpart to predict the behavior of returns both before and after the 2008 crisis.

Remittances for Financial Access: Lessons from Latin American Microfinance

The potential of migrant remittances to foster access to financial services for low‐income households has been largely unexplored. Comparing three Latin American countries – the Dominican Republic, El Salvador and Mexico – this inter‐disciplinary study links research on remittances and microfinance with multi‐actor governance approaches. While the context of high remittance‐dependence provides similar challenges in all cases, it finds remarkable variety both in the structure of the remittances market and the actors involved in microfinance and in the role governments play. It explains the diverging success of MFIs in remittance markets by pointing to the interplay of for‐profit, non‐profit and state actors embedded within the specific market structures of each country.

Testing the central market hypothesis: a multivariate analysis of Tanzanian sorghum markets

AbstractThe central market hypothesis is important in the analysis of market integration because it implies a specific market structure while avoiding a simultaneity problem. However, despite its importance, the central market hypothesis is difficult to test and is therefore often assumed. This article shows that the hypothesis can be tested in a Johansen cointegration test provided that prices are nonstationary. This approach is applied to reveal the existence of central markets for sorghum in Tanzania. The results indicate that the Tanzanian sorghum market can be grouped into two market regions, with prices being determined in a central market in each region.

Market power in water markets

We model market power in water markets as multi-market Cournot competition with a river structure. Suppliers are connected through water balances, which imposes resource constraints, and they are connected to heterogeneous water users via a water delivery infrastructure. Our model captures a wide range of specific water market structures. We establish conditions for existence of an equilibrium and we assess the effects of market power on water extraction, delivery, and water prices. Although the monopoly case is similar to standard economic theory, three other specific water market structures illustrate that standard intuition has to be revisited.

The liberalisation and diversification of the European electricity industry

European Commission directives for the liberalisation and deregulation of the European electricity industry were adopted almost at the same time in several nations. But each country had specific market structures and internal conditions. The aim of this paper is to analyse descriptively if and how differences between the home countries of European electricity firms affected, quantitatively and/or qualitatively, their diversification strategies after liberalisation. Research consisted of collecting and analysing data on the strategic actions of the main European electricity firms. The analysis covers a period often years (1998–2007), i.e. the first ten years after the first European directive. This paper sheds light on the link between pre-liberalisation specificities and attributes of a national electricity market and the post-liberalisation diversification strategy of its national electricity companies.

Méthode d'analyse des effets différentiels des réformes sur les filières cotonnières en Afrique

This paper is based on a detailed assessment of cotton sector performance in nine countries of West-Central Africa (WCA) and East and Southern Africa (ESA): Benin, Burkina Faso, Cameroon, Mali, Mozambique, Tanzania, Uganda, Zambia, and Zimbabwe. The paper builds on earlier work in ESA by Poulton et al. (2004), asking whether the findings in that research stand up to the passage of five years time, to the inclusion of WCA with its vastly differing history and institutional setup, and to the richer set of performance indicators used in this paper. We find that the fundamental contentions in that earlier work, that increased competition will not necessarily improve performance, and that the appropriate role of government depends on the specific market structure and regulatory regime of the sector, are strongly supported. Additional new insights are generated that provide useful guidance to policy makers and stakeholders as they work to improve productivity and ensure an equitable division of benefits within the sector.

Economic Impact of a Potential Free Trade Agreement (FTA) between the European Union and the Commonwealth of the Independent States

We evaluate the effects of potential measures to liberalize trade between the EU and the CIS using a computable general equilibrium (CGE) model. We look at the CIS as an aggregate and we also present results for individual CIS countries. Our CGE model takes different underlying industry specific market structures and elasticities into account. Furthermore, the model incorporates estimated non-tariff trade barriers to trade in services. The results are compared to a baseline which incorporates recent developments in the trade policy environment, i.e. the phase out of ATC, enlargement of the EU and CIS accessions to the WTO. The analysis takes agricultural liberalization, liberalization in industrial tariffs, and liberalization in services trade as well as trade facilitation measures into account. While there is important heterogeneity in the impact of FTAs on individual countries, the results indicate that the CIS as a whole would experience a negative income effect if the FTA would be limited only to trade in goods. This implies that the CIS would most likely to benefit from an FTA with the EU if it would incorporate deeper form of integration not being limited to liberalization of tariffs in goods.

Designing property rights for water: mediating market, government, and corporation failures

Recent decades have seen an acceleration in public concern about the allocation of increasingly scarce water supplies. There are many reasons for this concern, such as growth in urban populations. In this article, we focus on how surface water’s special qualities (the combination of spillovers, rent-seeking behavior, and common pool resources) complicate the assignment of property rights in any legal framework. These characteristics make specific market structures necessary in order to efficiently allocate rights. The state usually designs those structures. Yet, just like markets can fail, so can governments fail to effectively allocate those rights. So designers often turn to quasi-judicial conservancy boards as a second-best solution. We argue that those boards may themselves fail through a form of “corporation failure.” We address these three types of failures, and offer an analysis of two cases that suggests that the likelihood conservancy boards will suffer from corporate failure depends on the actions of the boards and outside stakeholders (like governments).

Regulator performance, regulatory environment and outcomes: An examination of insurance regulator career incentives on state insurance markets

In this paper we test whether the past or future labor market choices of insurance commissioners provide incentives for regulators in states with price regulation to either favor or oppose the industry by allowing prices that differ significantly from what would otherwise be the competitive market outcome. Using biographical data on insurance regulators, economic and state specific market structure and regulatory variables, and state premium and loss data on the personal automobile insurance market, we find no evidence consumers in prior approval states paid significantly different “unit prices” for insurance than consumers in states that allow competitive market forces to determine equilibrium prices during the time period 1985–2002. We do, however, find evidence regulators who obtained the position of insurance commissioner by popular election and those who seek higher elective office following their tenure as insurance commissioner allow higher overall “unit prices” relative to competitive market states. The “unit price” of insurance in regulated states is not statistically different from the competitive market outcome for regulators that make lateral moves back into state government and it is mildly higher for regulators who enter the insurance industry following their tenure. Finally, we find some evidence regulators who describe themselves as consumer advocates are successful reducing the price of insurance in favor of consumers in regulated markets. Overall the results are consistent with the existence of asymmetric information in the regulatory process that agents use to enhance their career aspirations.

Regulator Performance, Regulatory Environment and Outcomes: An Examination of Insurance Regulator Career Incentives on State Insurance Markets

In this paper we test whether the past or future labor market choices of insurance commissioners provides incentives for regulators in states with regulation to either favor or oppose the industry by allowing that differ significantly from what would otherwise be the competitive market outcome. Using biographical data on insurance regulators, economic and state specific market structure and regulatory variables, and state premium and loss data on the personal automobile insurance market, we find no evidence consumers in prior approval states paid significantly different unit prices for insurance than consumers in states that allow competitive market forces to determine equilibrium during the time period 1985-2002. We do, however, find evidence regulators who seek higher elective office following their tenure as insurance commissioner allow higher overall unit prices relative to competitive market states. The unit price of insurance in regulated states is not statistically different from the competitive market outcome for regulators that make lateral moves back into state government and it is mildly higher for regulators who enter the insurance industry following their tenure. Overall the results are consistent with the existence of asymmetric information in the regulatory process that agents use to enhance their career aspirations.