Vertical Integration and Market Structure

Contractual theories of vertical integration derive firm boundaries as an efficient response to market transaction costs. These theories predict a relationship between underlying features of transactions and observed integration decisions. There has been some progress in testing these predictions, but less progress in quantifying their importance. One difficulty is that empirical applications often must consider firm structure together with industry structure. Research in industrial organization frequently has adopted this perspective, emphasizing how scale and scope economies, and strategic considerations, influence patterns of industry integration. But this research has paid less attention to contractual or organizational details, so that these two major lines of research on vertical integration have proceeded in parallel with only rare intersection. We discuss the value of combining different viewpoints from organizational economics and industrial organization.

Exchange reform, parallel markets, and inflation in Africa : the case of Ghana

This paper presents a theoretical framework to analyze the issue of exchange rate reform in the presence of parallel markets. In Ghana, which has carried out one of the most thorough structural adjustment programs in Africa, an increasingly high inflation rate has been attributed to major devaluations of the official exchange rate. The authors dispute this conclusion based on careful testing and simulations using a macroeconomic model estimated with Ghanaian data. This model also shows that there is no direct relationship between the official exchange rate and inflation. The results also show that official devaluation had a postive effect on Ghana's budget. Revenue improvements came from three channels: the higher grant aid disbursed at a more depreciated exchange rate, a reduction in the subsidies that had accrued to importers through an overvalued exchange rate, and an increase in export taxes as cocoa farmers increasingly marketed their output through official channels. The official devaluation therefore did not produce higher budget deficits, demand pressure did not spill onto the parallel market, and the exchange premium narrowed considerably. The key to the success of the program was the adequate level of foreign financing, combined with a coherent set of fiscal policies.Access to Markets,Economic Theory&Research,Environmental Economics&Policies,Economic Stabilization,Markets and Market Access

The Economic Activity in Lisbon. Structural axis and squares

The simplifying assumption that the Central Business District is a point or featureless plain, is often made in urban economics. The main goal of this paper is to promote the relaxation of this hypothesis, with the support of empirical evidence, sustaining that the subsequent analysis can be supported on the agglomeration economies theoretical framework. For this purpose we?ve analysed the distribution of economic activity inside the city of Lisbon, using the employment data of ?Quadros de Pessoal do Ministério do Trabalho e Solidariedade? (Employment Datasheet of the Ministry for Social Security and Labour), for 1998. Proceeding with the address matching of this information to the street level in order to allow the use of GIS tools. From the analysis we emphasize the evidence of agglomeration economies inside the Central Business District, using as evidence the different levels of employment agglomeration that occur on different streets and testing the hypothesis that to streets with higher employment concentration correspond higher salary levels. Therefore we sustain that the CBD cannot be seen as a point or a featureless plain and furthermore we?ve verified the existence of an hierarchy inside the urban structure, which can be seen as a parallel of the rank-size rule. After this analysis we argue that the streets with larger employment volume display a structural role in the spatial distribution of economic activity. The final conclusion leads us to consider Lisbon as a squares network-city, where the axis are structural streets and the nodes are structural squares. This paper explores some of the results of the thesis presented for the master degree in Economics and Management of the Territory of The Technical University of Lisbon, made with the orientation of professor M. Brandão Alves. Keywords: Agglomeration Economies; CBD; Lisbon; Urban Economics JEL CLASSIFICATION: R12 e R14.

Towards a Semantic Data Quality Management - Using Ontologies to Assess Master Data Quality in Retailing

Since its inception Information Systems has relied heavily on older, more established, reference disciplines for much of its theory development and practical application. The relationship between the economic sciences and information quality has been the subject of much of the work recognized through the Nobel Prize in Economic Sciences. Beginning with Simon’s decision-making model published before a discipline known as Information Systems existed, this paper reviews this relationship and the parallel development of information quality and computing capability from an Information System perspective and changing paradigms in economics as recognized in the works of the Nobel laureates. From economic theories based on assumed knowledge, the paradigm is shifting to methods of empirical testing and experimentation. Organizations continue to make operational and strategic decisions. Additionally, now information is being aggregated, warehoused, mined, and analyzed to make a host of societal decisions and to understand economic behaviors through experimentation and empirical analysis

The Economic Sciences and the Information Age: Lessons from the Nobel Laureates

Since its inception Information Systems has relied heavily on older, more established, reference disciplines for much of its theory development and practical application. The relationship between the economic sciences and information quality has been the subject of much of the work recognized through the Nobel Prize in Economic Sciences. Beginning with Simon’s decision-making model published before a discipline known as Information Systems existed, this paper reviews this relationship and the parallel development of information quality and computing capability from an Information System perspective and changing paradigms in economics as recognized in the works of the Nobel laureates. From economic theories based on assumed knowledge, the paradigm is shifting to methods of empirical testing and experimentation. Organizations continue to make operational and strategic decisions. Additionally, now information is being aggregated, warehoused, mined, and analyzed to make a host of societal decisions and to understand economic behaviors through experimentation and empirical analysis

Arbitrage, market definition and monitoring a time series approach

This article considers the application to regional price data of time series methods to test stationarity, multivariate cointegration and exogeneity. The discovery of stationary price differentials in a bivariate setting implies that the series are rendered stationary by capturing a common trend and we observe through this mechanism long-run arbitrage. This is indicative of a broader market definition and efficiency. The problem is considered in relation to more than 700 weekly data points on gasoline prices for three regions of the US and similarly calibrated simulated series. The discovery of a single common trend is consistent with competitive pricing and a broad market definition, but the finding of a single weakly exogenous variable affects this conclusion

Parametric Immunization in Bond Portfolio Management

In this paper, we evaluate the relative immunization performance of the multifactor parametric interest rate risk model based on the Nelson-Siegel-Svensson specification of the yield curve with that of standard benchmark investment strategies, using European Central Bank yield curve data in the period between January 3, 2005 and December 31, 2011. In addition, we examine the role of portfolio design in the success of immunization strategies, particularly the role of the maturity bond. Considering multiperiod tests, the goal is to assess, in a highly volatile interest rate period, whether the use of the multifactor parametric immunization model contributes to improve immunization performance when compared to traditional single-factor duration strategies and whether durationmatching portfolios constrained to include a bond maturing near the end of the holding period prove to be an appropriate immunization strategy. Empirical results show that: (i) immunization models (single- and multi-factor) remove most of the interest rate risk underlying a naïve or maturity strategy; (ii) duration-matching portfolios constrained to include the maturity bond and formed using a single-factor model outperform the traditional duration-matching portfolio set up using a ladder portfolio and provide appropriate protection against interest rate risk; (iii) the multifactor parametric model outperforms all the other non-duration and duration-matching strategies, behaving almost like a perfect immunization asset; (iv) these results are consistent to changes in the rebalancing frequency of bond portfolios

R&D, Within and Between Patent Competition in the Pharmaceutical Industry

We analyse the consequences of the increasing complexity of R&D on within- and between-patent competition in the pharmaceutical industry. The intensity of competition is measured by jointly considering the timing from market launch to patent expiry, the strength of between-patent competition as well as competition introduced by generic producers. A simple model is proposed that predicts the shrinking of product lifetimes in the presence of correlated parallel R&D projects and market portfolios. The model is tested using data on pharmaceutical products sold in Europe and in the US. Based on our model we are able to estimate the impact of R&D complexity and relatedness among R&D portfolios on the value of innovative drugs