Bank competition and outreach: evidence from Turkey

In light of the importance of banking sector outreach and given concerns that competition may adversely affect it, this study explores the empirical linkage between banking structure and outreach in Turkey for the period 1988-2010. Bank-, province-, and bank-province-level estimation results indicate that competition is in general conducive to the outreach of banks. We do not find evidence for collusive behavior among banks when they have multimarket contact. At the province level, the presence of foreign-owned banks is associated with higher outreach, while at the bank-province level, we observe that outreach of domestic banks exceeds that of foreign banks. Together, these results suggest that there are procompetitive spillover effects from foreign banks to their domestic counterparts

Leniency Programs for Multimarket Firms: The Effect of Amnesty Plus on Cartel Formation

We examine the effect of the Amnesty Plus policy on firms' incentives to engage in cartel activities. Amnesty Plus is a proactive antitrust enforcement strategy aimed at attracting amnesty applications by encouraging firms already convicted in one market to report collusive agreements in other markets. It has been heavily advertised that Amnesty Plus weakens cartel stability. We show to the contrary that Amnesty Plus does not always have this desirable effect. Only under specific conditions, Amnesty Plus deters a cartel which would have been sustainable under an antitrust policy without Amnesty Plus. Otherwise, Amnesty Plus is either neutral or even stabilizes a cartel. We also show that firms can exploit their multimarket contact to reduce the effectiveness of the Amnesty Plus policy.Amnesty Plus; Leniency Program; Multimarket Contact; Antitrust Policy

Sustainable business models: integrating employees, customers and technology

This Special Issue of the Journal of Business & Industrial Marketing has the same title as the 23rd International Conference CBIM 2018 (June 18-20, 2018, Madrid, Spain) “Sustainable Business Models: Integrating Employees, Customers and Technology”. In this edition of International Conference, following a competitive blind review process, papers from 126 authors and 25 countries were ultimately accepted. The best papers of the Conference were invited to submit to this Special Issue and we were also open to direct submissions from other authors. We present here the 17 accepted papers for publication in this Special Issue

Technology transfer within MNEs: An investigation of inter-subsidiary competition and cooperation

Much theory and research that seeks to explain why and how technology transfers occur within multinational enterprises (MNEs) actually addresses the question of how these transfers occur among cooperative subsidiaries, and relies on the assumption of inter-subsidiary cooperation. However, subsidiaries do not always cooperate. We suggest that the success of technology transfer among subsidiaries depends on the extent to which the relationships among an MNE's subsidiaries (i.e. inter-subsidiary) are competitive or cooperative. Inter-subsidiary cooperation is determined by the MNE's international strategy, organizational structure, and the social relationships among subsidiaries. Both hierarchical and social relational factors drive the potential for inter-subsidiary multimarket competition that originates from the overlap on the subsidiaries' products, technologies, and market portfolios.technology transfer, subsidiaries, competition and cooperation, international strategy

Geographical and Multi-product Linkages of Markets: Impact on Firm Equilibrium Interactions (Some Evidence from the European Car Market)

This paper aims to study geographical and multi-product linkages of markets (multiple market presence) and firm behaviour interdependence as a result of such linkages existence. In particular, it attempts to answer whether the multimarket linkages lead to more cooperative behaviour among the firms, which results in higher prices and profits, and whether the degree of collusive/cooperative behaviour varies across markets. These issues are investigated within a structural oligopoly model for differentiated products for the European automobile market on the basis of the aggregate product-level data for 1970-1999. The results of the study reveal weak (quantitative) effect of multimarket contact on market conduct/pricing in the European car market as well as provide some evidence on the redistribution of the market power from the more collusive to the more competitive markets due to multimarket contact. --multimarket contact,collusion,automobile industry,test for non-nested hypothesis,menu test,structural oligopoly models

Multimarket contact in pharmaceutical markets

We analyze the effect of multimarket contact on the pricing behavior of pharmaceutical firms controlling for different levels of regulatory constraints using the IMS MIDAS database for the industry. Theoretically, under product differentiation, firms may find it profitable to allocate their market power among markets where they are operating, specifically from more collusive to more competitive ones. We present evidence for nine OECD countries suggesting the existence of a multimarket effect for more market friendly countries (U.S. and Canada) and less regulated ones (U.K., Germany, Netherlands), while the results are more unstable for highly regulated countries with some countries being consistent with the theory (France) while others contradicting it (Japan, Italy and Spain). A key result indicates that in the latter countries, price constraints are so intense, that there is little room for allocating market power. Thus equilibrium prices are expected in general to be lower in regulated countries.Pharmaceutical prices, Multimarket Contact, Regulation

Market Power, Multimarket Contact and Pricing: Some Evidence from the US Automobile Market

Multimarket contact is perceived to be one of those factors, which can facilitate and sustain implicit collusive (cooperative) arrangements. This paper attempts to develop new approaches to study the interdependence of firm behaviour across markets, especially in the context of differentiated products industries. I analyse the principle of conducting a test of the mutual forbearance hypothesis, and its application using particular data. The multimarket contact effects are studied within a structural oligopoly model for differentiated products for the US automobile market on the basis of the aggregate product-level data for 2001-2003. Some support has been found that multimarket contact may influence competition in the automobile market and increase the firms' strategic interdependence. This effect is, however, difficult to disentangle from the effect of the market concentration in the US automobile market (dominance of the market by the American Big Three) on the firm behaviour, which could also facilitate collusion. In other words, it is difficult to argue whether coordination is due to market concentration, or due to multimarket contact, or both. Concentration is argued to foster the slack, which is transferred through the multimarket contact. --multimarket contact,collusion,automobile industry,test for non-nested hypothesis,menu test,structural oligopoly models

Multimarket Contact in Pharmaceutical Markets

The purpose of this paper is to analyze the effect of multimarket contact on the behavior of pharmaceutical firms controlling for different levels of regulatory constraints using IMS MIDAS database. Theoretically, firms that meet in several markets are expected to be capable of sustaining implicitly more profitable out- comes, even if perfect monitoring is not possible. Firms may find it profitable to redistribute their market power among markets where they are operating. We present evidence for nine OECD countries with different degrees of regulation and show that regulation affects the importance of economic forces on firms' price setting behavior. Furthermore, our results confirms the presence of the predictions of the multimarket theory for more market friendly countries (U.S. and Canada) and less regulated ones (U.K., Germany, Netherlands), in contrast, for highly regulated countries (Japan, France, Italy and Spain) the results are less clear with some countries beingPharmaceutical prices, Multimarket Contact, Regulation

Strategic online-banking adoption

In this paper we study the determinants of banks’ decision to adopt a transactional website for their customers. Using a panel of commercial banks in the United States for the period 2003-2005, we show that although bank-specific characteristics are important determinants of banks’ adoption decision, competition plays a prominent role. The extent of competition is related to the geographical overlap of banks in different markets and their relative market share in terms of deposits. In more competitive markets banks are more likely to adopt earlier. Even more importantly, banks adopt earlier in markets where their competitors have already adopted.Internet banking

Globalization and the definition of the relevant geographic market in antitrust practices.

This paper starts from the antitrust practices in the European Community and the US with respect to the delineation of the relevant geographic market in dealing with concentrations and shows that relugations and guidelines at this moment focus almost exclusively on demand substitution. However, the process of globalization involves essentially global supply conditions and competition. A methodology is presented for delineating the relevant geographic market, that better takes this globalization trend into account and brings both demand and supply substitution better in balance. The practical use of the methodology is illustrated for the Volvo-Scandia merger case that was blocked by the European Commission in 1999.Antitrust; Globalization; Demand; Substitution; Processes; Competition; Working;