Topic Competition and Regulation

Empiricism Meets Theory: Is the Boone-Indicator Applicable?

Boone (2008a) proposes a new competition measure based on Relative Profit Differences (RPD) with superior theoretical properties. However, the empirical applicability and robust-ness of the Boone-Indicator is still unknown. This paper aims to address that question. Using a rich, newly built, data set for German manufacturing enterprises, we test the empirical valid-ity of the Boone-Indicator using ...

What's Banking Sector Concentration Got to Do with Private Equity Market?

The paper investigates the link between bank concentration and a country's buyout market. We perform a macro level analysis for 15 European countries during 1997-2007. We estimate the elasticity of the country i's buyout market to country i's concentration in the banking sector. Our major finding suggests that the more concentrated the banking sector is, the better it is for the size of the buyout ...

Agenda for Building a New Financial Market Architecture

Since the summer of 2007, participants in financial markets have been confronted by a crisis of their own making. In order to prevent the recurrence of a similar crisis in the future, the G-20 nations, at their finance summit in Washington on 15 November 2008, resolved to "ensure that all financial markets, products and participants are regulated or subject to oversight, as appropriate to their circumstances." ...

Overcoming Data Limitations in Nonparametric Benchmarking: Applying PCA-DEA to Natural Gas Transmission

This paper provides an empirical demonstration for a practical approach of efficiency evaluation against the background of limited data availability in some regulated industries. Here, traditional DEA may result in a lack of discriminatory power when high numbers of variables but only limited observations are available. We apply PCA-DEA for radial efficiency measurement to US natural gas transmission ...

Financial Constraints and Continental Business Groups: Evidence from German Konzerns

Using a unique large panel of German firms, we examine whether participation in business groups (Konzerns) reduces the sensitivity of investment to cash flow. The main finding is that the investment sensitivity is significantly reduced for small firms. On the other hand, we do not find clear evidence that medium-sized and large firms participating in Konzerns have different sensitivity compared to ...

The Effects of Uncertainty on the Leverage of Non-Financial Firms

This paper investigates the link between the optimal level of nonfinancial firms' short-term leverage and macroeconomic and idiosyncratic sources of uncertainty. We develop a structural model of a firm's value maximization problem that predicts a negative relationship between uncertainty and optimal levels of borrowing. This proposition is tested using a panel of nonfinancial U.S. firms drawn from ...

Benchmarking and Firm Heterogeneity in Electricity Distribution: A Latent Class Analysis of Germany

In January 2009 Germany introduced incentive regulation for the electricity distribution sector based on results obtained from econometric and nonparametric benchmarking analysis. One main problem for the regulator in assigning the relative efficiency scores are unobserved firm-specific factors such as network and technological differences. Comparing the efficiency of different firms usually assumes ...

Divestitures in the Electricity Sector: Conceptual Issues and Lessons from International Experiences

The Promotion of Regional Innovative Networks: Lessons from the German InnoRegio-Programme

Long-Term Contracts and Asset Specificity Revisited: An Empirical Analysis of Producer-Importer Relations in the Natural Gas Industry

This paper discusses long-term contracts as a particular organizational form situated somewhere between full vertical integration and short-term, market-based trading in the natural gas industry. We focus on the determinants of the duration of contracts under changing technical, economic, and institutional conditions. Using 311 long-term contracts we find that duration decreases as international market ...