Industry structure and regulation

As private firms become increasingly involved in the development of key infrastructure, redefining the role of government from that of serviceprovider to regulator presents both challenges and opportunities. The factors that give rise to sector reforms color how much policymakers invest in regulatory design during the reform process. Nevertheless, two factors are essential to sustainable sector and regulatory reform. First, the right structure must be established for the industry concerned, a structure that allows competition appropriate for that industry. Second, the objectives of regulation must be well defined, with a clear distinction between policymaking, policy implementation, and operations. The extent to which competition can be harnessed to help make regulation efficient, effective, and sustainable depends on the intrinsic technical characteristics of the sector. Each decision affects the sustainability of the regulatory regime in the face of the threat of regulatory capture (both political and commercial). Careful regulatory design is crucial not only for successful sectoral reform but also to balance the interests of various actors (government, consumers, developers, investors, and financiers). One model that has been relatively successful combines new entry, unbundled services, and the unambiguous spelling out of the legal rights and duties for both public and private service providers, administered by an autonomous regulatory authority. Problems with regulation often result as much from inadequate attention to sector structure and fostering competition as from weaknesses in the regulatory authority's institutional capacity. As for the tools of regulation, despite differences in some details between licenses and concessions (and their many contractual variations), these are basically instruments that establish the rights and obligations of contracting parties. Choices about where these rights and obligations are located in the legal hierarchy are shaped by a country's institutional capacity and legal traditions. But the existence of instruments to establish those rights and obligations does not eliminate the need for institutionsto administer them, and thus carry out the regulatory function. Establishing effective sectorwide regulation can be difficult in a developing country, but it is necessary. Policymakers will be able to create effective regulatory regimes where adequate attention is given to sector structure, competition, and institution-building.Environmental Economics&Policies,Trade Finance and Investment,Knowledge Economy,ICT Policy and Strategies,Decentralization,Environmental Economics&Policies,Administrative&Regulatory Law,ICT Policy and Strategies,Water and Industry,Knowledge Economy

Intra & Inter-Regional Industry Shocks: A New Metric with an Application to Australasian Currency Union

We place regional industry structures at centre stage in currency union analysis, decomposing differences between regional and aggregate cycles into 'industry structure' and 'industry cycle' effects. The industry structure effect indicates whether a region's industry structure causes its cycle to deviate from the aggregate; the industry cycle effect indicates the importance of region-specific shocks in causing a deviation between cycles. We apply the methodology to Australasia. One region, ACT, has a material industry structure effect arising from its heavy central government concentration. No other region has a material industry structure effect; their cycles differ from the aggregate due to region-specific shocks.

Patentability, industry structure, and innovation.

To qualify for a patent, an invention must be new, useful, and nonobvious. This paper presents a model of sequential innovation in which industry structure is endogenous and a standard of patentability determines the proportion of all inventions that qualify for protection. There is a unique patentability standard, or inventive step, that maximizes the rate of innovation by maximizing the number of firms engaged in R&D. Surprisingly, this standard is more stringent for industries disposed to innovate rapidly. If a single standard is applied to heterogeneous industries, it will encourage entry, and therefore innovation, in some industries while discouraging it in others. The model suggest a number of important implications for patent policy.Patents ; Industries

Industrial structure and concentration in Malaysian manufacturing industry

The study uses econometric analysis; the least square method is used to determine factors that influence changes in the level of concentration of the 103 Malaysian manufacturing industries. The result shows that the concentration ratio of the Malaysian industries are rather high when compared with those in most other countries. At the same time our analysis reveals that competition in certain sectors of the Malaysian manufacturing industry have increased over time. Most importantly, the analysis supports the hypothesis that economies of scale are the major source of concentration. Other variables use in determining the industrial concentration is barriers to entry, the size of industry and foreign ownership

Changing financial industry structure and regulation

Banking structure ; Bank management

Asian Pacific Marine Minerals and Industry Structure

Eventual development of marine minerals potential in the Asian Pacific would likely draw on the technology, skills, and experience of the emerging international seabed mining industry. As a result of strategic behavior by its firms, this small-numbers industrial "strategic group" has created a level of capacity for seabed mining exploration and research and development (R&D) that far exceeds the near-term level of activity expected in seabed mining. The paper reports on the nature of preproduction industrial structure (or "protostructure") in seabed mining and draws implications for efforts to develop the resource potential of Asian Pacific marine minerals. Seabed minerals exploration and R&D services might be offered to Asian Pacific nations at bargain prices (below unit cost) by firms with first-starter advantages in the emerging industry. However, cautionary notes are included about constraints on the economic potential of the region's deep-sea minerals such as manganese nodules, polymetallie sulfides, and cobalt crusts.Environmental Economics and Policy, International Relations/Trade, Resource /Energy Economics and Policy,

VERTICAL AND HORIZONTAL COORDINATION IN THE AGRO-BIOTECHNOLOGY INDUSTRY: EVIDENCE AND IMPLICATIONS

Agro-biotechnology is evolving from a pre-commercial phase dominated by basic research science to a commercial phase oriented around marketing products. In pursuing innovation rents in the commercial phase, firms are reorienting their strategies around complementary marketing and distribution assets. This is impacting vertical and horizontal industry structure. Conversely, industry structure is also impacting firm strategies. Horizontal alliances and consolidation continue from the pre-commercial phase into the commercial phase, while vertical coordination and integration strategies are accelerating rapidly. Interplay between firm strategy and industry structure is too complex for firms to anticipate early in the pre-commercial phase for long-term strategy formulation.Acquisitions, Agricultural biotechnology, Firm strategy, Industry consolidation, Industry structure, Mergers, Industrial Organization, Research and Development/Tech Change/Emerging Technologies,

THE NIGERIAN SUGAR INDUSTRY(1960 - 1987)

THE CONCEPT OF AN INDUSTRY IS IMPORTANT FOR ECONOMIC ANALYSIS. HERE, WE DEFINE SUGAR INDUSTRY AS GROUP OF FIRMS PRODUCING SUGAR THAT ARE CLOSE SUBSTITUTES BY THE USE OF IDENTICAL PRODUCTION PROCESSES AND RAW MATERIALS. HOWEVER, SUGAR INDUSTRY IN NIGERIA WAS STILL IN ITS PIONEERING STAGE. THIS PAPER THEREFORE ARGUES THAT THE STRUCTURE AND ORIENTATION OF NIGERIAN SUGAR INDUSTRY HAVE NOT INDUCED GROWTH AND DEVELOPMENT AND THUS A MORE URGENT ATTENTION WAS NEEDED FROM THE POLICY MAKERS AND GOVERNMENT TO CHECK THE OBSERVED UGLY SITUATION.NIGERIA, SUGAR, INDUSTRY, PRODUCTION, PRICING POLICY, DISTRIBUTION, TECHNIQUES, MARKET STRUCTURE, GOVERNMENT, INCENTIVES

Dynamic Explanations of Industry Structure and Performance

Industrial Organization,

Network effects, market structure and industry performance

This paper provides a thorough analysis of oligopolistic markets with positive demand-side network externalities and perfect compatibility. The minimal structure imposed on the model primitives is such that industry output increases in a firm's rivals' total output as well as in the expected network size. This leads to a generalized equilibrium existence treatment that includes guarantees for a nontrivial equilibrium, and some insight into possible multiplicity of equilibria. We formalize the concept of industry viability and show that is it always enhanced by having more firms in the market and/or by technological improvements. We also characterize the effects of market structure on industry performance, with an emphasis on departures from standard markets. The approach relies on latticetheoretic methods, which allow for a unified treatment of various general results in the literature on network goods. Several illustrative examples with closed-form solutions are also provided. --Network effects,demand-side externalities,monotone comparative statics,Cournot oligopoly,supermodularity