Domestic Rivalry and Export Performances: Theory and Evidence from International Airline Markets

The much-studied relationship between domestic rivalry and export performance consists of those supporting a national-champion rationale, and those supporting a rivalry rationale. While the empirical literature generally supports the positive effects of domestic rivalry, the national-champion rationale actually rests on firmer theoretical ground. We address this inconsistency by providing a theoretical framework that illustrates three paths via which domestic rivalry translates into enhanced international exports. Furthermore, empirical tests on the world airline industry elicit the existence of one particular path - an enhanced firm performance effect - that connects domestic rivalry with improved international exports. ZUSAMMENFASSUNG - Der Zusammenhang zwischen Wettbewerb auf dem heimischen Markt und der Exportleistung spaltet die Wissenschaft: Die eine Argumentationslinie bevorzugt nationale Marktvorherrschaft als Determinante eines guten Exportergebnisses, während andere auf nationalen Wettbewerb als vorteilhafte Grundlage verweisen. Obwohl in der empirischen Literatur positive Wirkungen von Wettbewerb auf heimischen Märkten gezeigt werden konnten, stützt sich der Ansatz der nationalen Marktvorherrschaft auf stabileren theoretischen Hintergrund. Zur Klärung dieser Unstimmigkeit bieten wir einen theoretischen Rahmen an, der drei Möglichkeiten der Übertragung von heimischem Wettbewerb zu gesteigerten Exporterfolgen aufzeigt. Empirische Untersuchungen an international agierenden Luftfahrtunternehmen legen insbesondere einen Übertragungsmechanismus nahe: Ein Leistungsfähigkeitseffekt ist dafür verantwortlich, dass wettbewerbsgeprüfte Unternehmen eine verbesserte Exportleistung aufweisen.National champion, rivalry, hypothesis, exports, airlines

Airline Emission Charges: Effects on Airfares, Service Quality, and Aircraft Design

This paper explores the effect of airline emissions charges on airfares, airline service quality, aircraft design features, and network structure, using a detailed and realistic theoretical model of competing duopoly airlines. These impacts are derived by analyzing the effects of an increase in the effective price of fuel, which is the path by which emissions charges will alter airline choices. The results show that emission charges will raise fares, reduce flight frequency, increase load factors, and raise aircraft fuel efficiency, while having no effect on aircraft size. Given that these adjustments occur in response to the treatment of an emissions externality that is currently unaddressed, they represent efficient changes that move society closer to a social optimum.emissions, airlines

Domestic Rivalry and Export Performance: Theory and Evidence from International Airline Markets

The much-studied relationship between domestic rivalry and export performance consists of those supporting a national-champion rationale, and those supporting a rivalry rationale. While the empirical literature generally supports the positive effects of domestic rivalry, the national-champion rationale actually rests on firmer theoretical ground. We address this inconsistency by providing a theoretical framework that illustrates three paths via which domestic rivalry translates into enhanced international exports. Furthermore, empirical tests on the world airline industry elicit the existence of one particular path - an enhanced firm performance effect - that connects domestic rivalry with improved international exports.

Export Orientation and Domestic Merger Policy: Theory and Some Empirical Evidence

The recent 'open-economy industrial organization' literature generally finds export-orientation to enhance the weight of post-merger international competitive gains; thereby, favoring lenient domestic merger policy. We observe, however, that mergers seldom generate the ‘significant synergies’ that are supportive of international competitive gains. Further, we explore a joint-economies of production effect which suggests that domestic mergers tend to generate international competitive losses (not gains). Accordingly, we contend that export-orientation favors strict (not lenient) domestic merger policy. In order to support this contention, we develop a model illustrative of how non-synergistic domestic mergers in the presence of international sales might reduce national welfare and incur stringent merger-reviews. Further, using a panel data set composed of U.S. merger policy by manufacturing sector over the 1990-2001 period, we empirically support export-orientation leading to strict merger policy. ZUSAMMENFASSUNG - (Exportorientierung und nationale Fusionspolitik: Theorie und empirische Belege) In der neueren Literatur zur Industrieökonomie in offenen Volkswirtschaften wird allgemein herausgestellt, dass die Zunahme internationaler Wettbewerbs-vorteile durch eine Fusion umso stärker ins Gewicht fällt, je höher die Exportorientierung der Volkswirtschaft ist. Mithin wird eine nachsichtige nationale Fusionskontrolle befürwortet. Im Gegensatz dazu stellen wir fest, dass Unternehmenszusammenschlüsse oft nicht die beabsichtigten signifi-kanten Synergieeffekte haben, die die internationale Wettbewerbsfähigkeit des Unternehmens tatsächlich stärken würden. Stattdessen führen Fusionen eher zu internationalen Wettbewerbsnachteilen. Eine Ursache dafür finden wir im "joint economies of production - Effekt", den wir hier näher untersuchen. Entsprechend kommen wir zu der Auffassung, dass die Exportorientierung einer Volkswirtschaft statt für eine nachsichtige eher für eine strenge Fusions-kontrolle spricht. Das von uns entwickelte Modell veranschaulicht, wie Fusionen von Unter-nehmen, bei denen der Synergieeffekt ausbleibt, in einer offenen Volkswirt-schaft die Wohlfahrt des Landes reduzieren, und lässt erkennen, dass diese Auswirkungen strengere Fusionsprüfungen nahe legen. Auch empirisch belegen wir unsere These über den Zusammenhang von Exportorientierung und strengerer Fusionspolitik anhand von Paneldaten der Jahre 1990-2001, in denen die US-amerikanischen Fusionsentscheidungen nach den Sektoren des produzierenden Gewerbes geordnet zusammengefasst sind.open-economy, merger-policy, export-orientation, antitrust

Airline Emission Charges: Effects on Airfares, Service Quality, and Aircraft Design

This paper explores the effect of airline emissions charges on airfares, airline service quality, aircraft design features, and network structure, using a detailed and realistic theoretical model of competing duopoly airlines. These impacts are derived by analyzing the effects of an increase in the effective price of fuel, which is the path by which emissions charges will alter airline choices. The results show that emission charges will raise fares, reduce flight frequency, increase load factors, and raise aircraft fuel efficiency, while having no effect on aircraft size. Given that these adjustments occur in response to the treatment of an emissions externality that is currently unaddressed, they represent efficient changes that move society closer to a social optimum.Emissions; Global warming; Airlines

Transceiver Design for Wireless Power Transfer for Multiuser MIMO Communication Systems

This chapter describes transceiver design methods for simultaneous wireless power transmission (WPT) and information transmission in two typical multiuser MIMO networks, that is, the MIMO broadcasting channel (BC) and interference channel (IC) networks. The design problems are formulated to minimize the transmit power consumption at the transmitter(s) while satisfying the quality of service (QoS) requirements of both the information decoding (ID) and WPT of all users. The mean-square error (MSE) and the signal-to-interference-noise ratio (SINR) criteria are adopted to characterize the ID performance of the BC network and the IC network, respectively. The designs are cast as nonconvex optimization problems due to the coupling of multiple variables with respect to transmit precoders, ID receivers, and power splitting factors, which are difficult to solve directly. The feasibility conditions of these deign problems are discussed, and effective solving algorithms are developed through alternative optimization (AO) framework and semidefinite programming relaxation (SDR) techniques. Low-complexity algorithms are also developed to alleviate the computation burden in solving the semidefinite programming (SDP) problems. Finally, simulation results validating those proposed algorithms are included

An Inventory Model for Perishable Products with Stock-Dependent Demand and Trade Credit under Inflation

We consider an inventory model for perishable products with stock-dependent demand under inflation. It is assumed that the supplier offers a credit period to the retailer, and the length of credit period is dependent on the order quantity. The retailer does not need to pay the purchasing cost until the end of credit period. If the revenue earned by the end of credit period is enough to pay the purchasing cost or there is budget, the balance is settled and the supplier does not charge any interest. Otherwise, the supplier charges interest for unpaid balance after credit period, and the interest and the remaining payments are made at the end of the replenishment cycle. The objective is to minimize the retailer’s (net) present value of cost. We show that there is an optimal cycle length to minimize the present value of cost; furthermore, a solution procedure is given to find the optimal solution. Numerical experiments are provided to illustrate the proposed model

Export orientation and domestic merger policy: theory and some empirical evidence

"In der neueren Literatur zur Industrieökonomie in offenen Volkswirtschaften wird allgemein herausgestellt, dass die Zunahme internationaler Wettbewerbsvorteile durch eine Fusion umso stärker ins Gewicht fällt, je höher die Exportorientierung der Volkswirtschaft ist. Mithin wird eine nachsichtige nationale Fusionskontrolle befürwortet. Im Gegensatz dazu stellen wir fest, dass Unternehmenszusammenschlüsse oft nicht die beabsichtigten signifikanten Synergieeffekte haben, die die internationale Wettbewerbsfähigkeit des Unternehmens tatsächlich stärken würden. Stattdessen führen Fusionen eher zu internationalen Wettbewerbsnachteilen. Eine Ursache dafür finden wir im 'joint economies of production - Effekt', den wir hier näher untersuchen. Entsprechend kommen wir zu der Auffassung, dass die Exportorientierung einer Volkswirtschaft statt für eine nachsichtige eher für eine strenge Fusionskontrolle spricht. Das von uns entwickelte Modell veranschaulicht, wie Fusionen von Unternehmen, bei denen der Synergieeffekt ausbleibt, in einer offenen Volkswirtschaft die Wohlfahrt des Landes reduzieren, und lässt erkennen, dass diese Auswirkungen strengere Fusionsprüfungen nahe legen. Auch empirisch belegen wir unsere These über den Zusammenhang von Exportorientierung und strengerer Fusionspolitik anhand von Paneldaten der Jahre 1990-2001, in denen die US-amerikanischen Fusionsentscheidungen nach den Sektoren des produzierenden Gewerbes geordnet zusammengefasst sind." (Autorenreferat)"The recent 'open-economy industrial organization' literature generally finds export-orientation to enhance the weight of post-merger international competitive gains; thereby, favoring lenient domestic merger policy. We observe, however, that mergers seldom generate the 'significant synergies' that are supportive of international competitive gains. Further, we explore a joint-economies of production effect which suggests that domestic mergers tend to generate international competitive losses (not gains). Accordingly, we contend that export-orientation favors strict (not lenient) domestic merger policy. In order to support this contention, we develop a model illustrative of how non-synergistic domestic mergers in the presence of international sales might reduce national welfare and incur stringent merger-reviews. Further, using a panel data set composed of U.S. merger policy by manufacturing sector over the 1990-2001 period, we empirically support export-orientation leading to strict merger policy." (author's abstract

Airport capacity choice under airport-airline vertical arrangements

This study investigates the effects of airport-airline vertical arrangements on airport capacity choices under demand uncertainty. A multi-stage game is analyzed, in which competing airlines contribute to capacity investments and at the same time share airport revenues. Our analytical results suggest that for a profit-maximizing airport, such a vertical arrangement leads to higher capacity although its profit may not be higher. For a welfare-maximizing airport, such an arrangement has no effect on capacity or welfare. Capital cost savings brought by airport-airline cooperation, if any, always leads to higher capacity, higher profit for a profit-maximizing airport, and higher welfare in the case of a welfare-maximizing airport. Numerical simulations reveal that win-win outcomes may be achieved for an airport and its airlines without government intervention