Subsidies, Market Closure, Cross-Border Investment, and Effects on Competition: The Case of FDI in the Telecommunications Sector

Telecommunications long was a sector where sellers of services operated in protected local markets, where law and government regulation created and enforced barriers to entry, especially by foreign firms. In many nations, in fact, the provision of telecommunications services was reserved for state-owned monopoly suppliers. During the late 1980s and through the 1990s, however, many of these barriers have been removed while formerly state-owned firms have been partially or wholly privatized. This has in turn engendered some cross entry by telecom service providers; firms that once were purely domestic in the scope of their operations thus have become multinational. During the summer of 2000, however, US Senator Ernest Hollings, with co-sponsorship of 29 other US Senators, introduced a bill (S.2793) in the US Congress that would have effectively blocked non-US telecommunications service providers from acquiring US telecom firms if the former were state-owned, or even only partly state-owned. The bill was aimed specifically at the proposed acquisition of US mobile telecommunications service provider Voice Stream by the German firm Deutsche Telekom (DT), but the language of the bill would have served to block virtually any non-US state-owned firm in the telecom sector from buying a US firm. While the bill did not become law, it reflected a long history of efforts in Congress to prevent US firms from being acquired by state-owned non-US firms (e.g., a legislative bill to do this had been introduced by Senator Frank Murkowski during the late 1980s, and while this bill also failed to be passed into law, some provisions from the bill were incorporated into the Exon-Florio legislation that was first enacted as a temporary measure in 1988 but subsequently made part of US permanent law in 1992). The Hollings bill was doubtlessly motivated in part by xenophobia (Senator Hollings is himself of the American generation that fought Germany during World War II). But it was also motivated, as was the Murkowski bill a decade earlier, by fears that subsidies and/or monopoly profits accruing to state-owned firms in their home markets might be used to affect operations in the US market to the detriment of locally-owned competitors. The extreme case of such behavior would be predatory pricing by the state-owned firm aimed at bankrupting its competitors, where temporary losses created by below-cost pricing in the US market would be offset by subsidies or monopoly profits in the home market. The ultimate goal of the predatory firm would be to establish a monopoly in the United States. In fact, the Hollings bill was shelved in part because DT was able to establish that it was neither a recipient of significant subsidies in Germany nor a monopoly service provider in the German market (although the firm once held a statutory monopoly there, the market has been opened to competition and some new entry has occurred). Also figuring in the shelving of the bill was argumentation that competition in the US market for wireless telecom services would be enhanced by the entry of DT. However, fears have persisted about the possibly deleterious effects of subsidies or monopoly profits garnered by a firm in its home market on competition in a geographically separate market in which that firm (or a subsidiary of that firm) is a seller. Indeed, the issues raised by the Hollings bill pertain to numerous sectors in which multinational firms compete. Accordingly, the US Council of Economic Advisors was ordered by the US President following the introduction of the Hollings bill to advise on what might be the effects of such competition.

Interchange fees in card payments

The present paper explores issues surrounding multilateral interchange fees (MIFs) in payment card markets from various angles. The Eurosystem’s public stance on interchange fees is neutral. However, the Eurosystem takes a keen interest in facilitating a constructive dialogue among the stakeholders involved in this debate. Transparency and clarity with respect to the real costs and benefi ts of different payment instruments are indispensable for a modern and harmonised European retail payments market. Interchange fees (if any) should be set at a reasonable level so as to promote overall economic effi ciency in compliance with competition rules. JEL Classification: C43, E31interchange fees, retail payment systems, Trade credit and debit cards, two-sided markets

Business alignment in the procurement domain: a study of antecedents and determinants of supply chain performance

With organizations now placing an increasing amount on attention on the management of their supply chain activities, the role of Information Technology (IT) in supporting these operations has been put in the spotlight. In spite of extensive research examining how IT can be employed in various activities of supply chain management, the majority of studies are limited in identifying enablers and inhibitors of adoption. Empirical studies examining post-adoption conditions that facilitate performance improvement still remain scarce. In this study we focus on procurement as part of the supply chain management activities. We apply the business-IT alignment perspective to the domain of procurement, and examine how certain organizational factors impact the attainment of this state. Additionally, we research the effect that procurement alignment has on supply chain management performance. In order to do so, we apply Partial Least Squares (PLS) analysis on a sample of 172 European companies. We find that firms that opt for a centralized governance structure, as well as larger firms, are more likely to attain a state of procurement alignment. Furthermore, our results empirically support the statement that procurement alignment is positively correlated with operational efficiency and competitive performance of the supply chain

The General Data Protection Regulation: Requirements, Architectures, and Constraints

The General Data Protection Regulation (GDPR) in the European Union is the most famous recently enacted privacy regulation. Despite of the regulation's legal, political, and technological ramifications, relatively little research has been carried out for better understanding the GDPR's practical implications for requirements engineering and software architectures. Building on a grounded theory approach with close ties to the Finnish software industry, this paper contributes to the sealing of this gap in previous research. Three questions are asked and answered in the context of software development organizations. First, the paper elaborates nine practical constraints under which many small and medium-sized enterprises (SMEs) often operate when implementing solutions that address the new regulatory demands. Second, the paper elicits nine regulatory requirements from the GDPR for software architectures. Third, the paper presents an implementation for a software architecture that complies both with the requirements elicited and the constraints elaborated.Comment: Forthcoming in the 27th IEEE International Requirements Engineering Conference (RE'19), Jeju Island, IEE

A Heuristic Approach to Proposal-Based Negotiation: with Applications in Fashion Supply Chain Management

In this paper, we extend and improve the formal, executable framework for automated multi-issue negotiation between two autonomous competitive software agents proposed by Cadoli. This model is based on the view of negotiation spaces (or "areas"), representing the admissible values of the goods involved in the process as convex regions. However, in order to speed up the negotiation process and guarantee convergence, there was the restriction of potential agreements to vertices included in the intersection of the two areas. We present and assess experimentally an extension to Cadoli's approach where, for both participating agents, interaction is no longer vertex based, or at least not necessarily so. This eliminates the asymmetry among parties and the limitation to polyhedral negotiation areas. The extension can be usefully integrated to Cadoli's framework, thus obtaining an enhanced algorithm that can be effective in many practical cases. We present and discuss a number of experiments, aimed at assessing how parameters influence the performance of the algorithm and how they relate to each other. We discuss the usefulness of the approach in relevant application fields, such as, for instance, supply chain management in the fashion industry, which is a field of growing importance in economy and e-commerce