Strategic responses to global challenges: The case of European banking, 1973–2000

In applying a strategy, structure, ownership and performance (SSOP) framework to three major clearing banks (ABN AMRO, UBS, Barclays), this article debates whether the conclusions generated by Whittington and Mayer about European manufacturing industry can be applied to the financial services sector. While European integration plays a key role in determining strategy, it is clear that global factors were far more important in determining management actions, leading to significant differences in structural adaptation. The article also debates whether this has led to improved performance, given the problems experienced with both geographical dispersion and diversification, bringing into question the quality of decision-making over the long term

From Negative to Positive Integration. European State Aid Control through Soft and Hard Law

European state aid control, a part of competition policy, typically follows the logic of negative integration. It constrains the potential for Member States to distort competition by reducing their ability to subsidize industry. In addition, this paper argues, ambiguous Treaty rules and heterogeneous Member States' preferences have enabled the European Commission to act as a supranational entrepreneur, not only enforcing the prohibition of distortive state aid, but also developing its own vision of “good” state aid policy. In order to prevent or to settle political conflict about individual decisions, the Commission has sought to establish more general criteria for the state aid which it still deems admissible. These criteria have been codified into a complex system of soft law and, more recently, hard state aid law. The Commission has thus created positive integration “from above” and increasingly influences the objectives of national state aid policies

Discussion on Principles involved in computing the depreciation of plant

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The effect of large audit firm mergers on audit pricing in the UK

This paper examines the effects on UK audit market concentration and pricing of mergers between the large audit firms and the demise of Andersen. Based on data over the period 1985–2002, it appears that mergers contributed to a rise in concentration ratios to levels that suggest concern about the potential for monopoly pricing. The high concentration ratios have not improved the level of price competition in the UK audit market. Our pooled models suggest that concentration ratios are associated with higher audit fees. The evidence suggests that the effects of mergers between big firms on brand name fee premium and on price competition vary depending on the particular circumstances. The brand name premium is strongest for the largest quartile of companies prior to the mergers. After the Big Six mergers, the premium increases for average‐sized companies but falls for the smallest and largest companies. Following the PricewaterhouseCoopers merger, the premium increases for below median‐sized clients but decreases for above‐median sized clients. For the Deloitte‐Andersen transaction, the premium falls for the smallest and largest companies but increases for those in the second quartile. Our results provide evidence that auditees are likely to pay higher fees if their auditor merges with a larger counterpart. We attribute merger‐related fee hikes to product differentiation, rather than anti‐competitive pricing