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Most of the literature addressing multiple banking assumes equal financing shares. However, unequal, concentrated or asymmetric bank borrowing is widespread. This paper investigates the determinants of creditor concentration for German firms using a comprehensive bank-firm level dataset for the time period between 1993 and 2003. We document that lending is very often concentrated and, consequently, that relationship lending is important, not only for the small firms but also for the larger firms in our sample. However, we also find that risky, illiquid, large and leveraged firms spread their borrowing more evenly between multiple lenders. On the other hand, the degree of concentration increases with the profitability of the relationship lender. Relationship lending may spur financing provided by other banks, especially if the relationship lender is a public sector bank and if the other banks are large or do not have to tie up additional funds in capital.

Retailers may enjoy stable cartel rents in their output market through the formation of a buyer group in their input market. A buyer group allows retailers to credibly commit to increased input prices, which serve to reduce combined final output to the monopoly level; increased input costs are then refunded from suppliers to retailers through slotting allowances or rebates. The stability of such an implied cartel depends on the retailers' incentives to secretly source from a supplier outside of the buyer group arrangement at lower input prices. Cheating is limited if retailers sign exclusive dealing or minimum purchase provisions. We discuss the relevancy of our findings for antitrust policy.

Three general implications for chain management can be derived from my results: 1. Network-level and firm-level goals must be considered simultaneously within a collective strategy. The collective strategy should address not only the alignment of interests of individual network members but also the alignment of network-level and firm-level goals. Moreover, a collective strategy has to be seen as a plan of actions to achieve network-level and firm-level goals simultaneously. 2. The alignment and the achievement of network-level and firm-level goals must be addressed simultaneously because the acceptable degree of goal consensus by itself does not guarantee goal achievement while the concerted action alone may fail due to goal conflict. 3. The resolution of infrastructural problems in the Ukrainian agri-food business must be set as a network-level goal and pursued by all members of the supply chain network together. Furthermore, the way the chain management concepts can be modified in Ukraine is to make a distinction between a) parity and b) advantage chain management. In the case of parity chain management, the aim of the collective strategy is to gain parity with the competing supply chain networks, e.g. a certain level of quality can be regarded as a competitive necessity. Advantage chain management aims to create longterm enduring competitive advantages by adding strategic elements that are higher than the parity standards. It should be much easier to formulate an integrated and consistent management system with this division. Letztendlich können aus den Ergebnissen drei allgemeine Schlussfolgerungen gezogen werden: 1. Für eine kollektive Strategie sollten sowohl die Ziele auf Netzwerk- wie auch auf Firmenebene betrachtet werden. Die kollektive Strategie sollte jedoch nicht nur die gleichzeitige Anpassung der Interessen der einzelnen Netzwerkmitglieder berücksichtigen, sondern auch die Anpassung der Ziele auf Firmen- und Netzwerkebene. Desweiteren sollte die kollektive Strategie als Maßnamenbündel für das gleichzeitige Erreichen von Zielen auf Netzwerk- und Firmenebene angesehen werden. 2. Die Anpassung und die Erreichung von Zielen auf Netzwerk- und Firmenebene muss gleichzeitig angesprochen werden, da Zielkonsens allein nicht ausreicht, um das Erreichen von Zielen zu garantieren, und miteinander abgestimmte Aktionen für sich genommen fehlschlagen können, wenn es Zielkonflikte gibt. 3. Die Lösung der infrastrukturellen Probleme in der ukrainischen Lebensmittelindustrie muss als Ziel der Netzwerkebene verstanden werden und gemeinsam von allen Teilnemern des Supply Chain Netzwerkes verfolgt werden. Darüber hinaus sollten die in die Ukraine importierten Managementkonzepte so modifiziert werden, dass zwischen einem auf a) Parität und b) Wettbewerbsvorteile fokussierten Chain Management unterschieden wird. Im Falle des Ersteren ist es das Ziel der kollektiven Strategie, eine gewisse Parität, z.B. ein bestimmtes Qualitätsniveau, zwischen den konkurrierenden Netzwerken zu schaffen. Zweiteres hingegen zielt darauf ab, langfristige Wettbewerbsvorteile zu erlangen, indem zur Strategie Elemente hinzugefügt werden, die über den allgemeinen Standards liegen. Unter Berücksichtigung dieser Unterteilung sollte es wesentlich einfacher sein, ein integriertes und beständiges Managementsystem zu schaffen.

The possibility to outsource over the internet should revolutionize foreign outsourcing, especially for services (UNCTAD, 2004). Our model describes materials and services input allocation from domestic vs. foreign suppliers. Allocations change when firms outsource online due to access and competition effects. Using data for 99 firms who started outsourcing online in 2003 together with a control group (never outsourcing online) of over 682 Irish firms, we apply OLS and Propensity Score Matching with Difference-in-Differences to find that 42-48 percent of foreign services inputs growth arises from online outsourcing.

This research examines supplier's internal communication when a company is changing to being a solution provider. The focus lies on the internal communication challenges during the change. The qualitative case study comprises two cases of the change process to solution business. The results indicate that there are eight main internal communication challenges when a company is changing to being a solution supplier. In addition, the study offers a categorization to manage these challenges and conduct further research thereon.

Employing a unique dataset that covers almost 6000 informal enterprises from six West African urban centers, this paper examines the backward and forward linkages of these enterprises to the formal sector. Authors first provide a descriptive analysis of the existing formal-informal linkages. It turns out that formal backward linkages are much more prevalent than formal forward linkages, and that linkages vary with the degree of informality, occurring less frequently if firms have no ties to the formal sector at all or low capital stocks. In the second step, authors employ a Probit approach to identify major factors associated with the observed backward linkages. The Probit analysis corroborates the importance of the degree of informality for the existence of linkages and shows various enterprise characteristics to be significant determinants as well. Finally, authors analyze whether backward linkages matter for enterprise performance using both Ordinary Least Squares (OLS) and four estimations. Authors find a positive and robust impact of backward linkages, whereas the degree of informality of the enterprises in our sample seems to affect firm performance only indirectly through their linkages to the formal sector.

We analyze the effects of downstream firms’ acquisition of pure cash flow rights in an efficient upstream supplier when all firms compete in prices. With an acquisition, downstream firms internalize the effects of their actions on their rivals’ sales. Double marginalization is enhanced. Whereas full vertical integration would lead to decreasing, passive backwards ownership leads to increasing downstream prices and is more profitable, as long as competition is sufficiently intensive. Downstream acquirers strategically abstain from vertical control, inducing the efficient supplier to commit to high prices. All results are sustained when upstream suppliers are allowed to charge two part tariffs.

The Journal of Law, Economics, and Organization, 27 (1), ISSN:8756-6222, ISSN:1465-7341

This paper develops an elementary theory of global supply chains. We consider a world economy with an arbitrary number of countries, one factor of production, a continuum of intermediate goods, and one final good. Production of the final good is sequential and subject to mistakes. In the unique free trade equilibrium, countries with lower probabilities of making mistakes at all stages specialize in later stages of production. Because of the sequential nature of production, absolute productivity differences are a source of comparative advantage among nations. Using this simple theoretical framework, we offer a first look at how vertical specialization shapes the interdependence of nations.

An influential strand of literature starting with the Nobel Prize winning work of Oliver Williamson (1971, 1975) argues that a rational agent underinvests in relationship-specific assets due to the possibility of an opportunistic behaviour on the part of her contractual partner. We first combine the insights from this literature with the theoretical work on financial intermediaries and argue that a strong banking sector can alleviate this well-known holdup problem and stimulate relationship-specific investment. Then we empirically confirm this prediction by showing that industries dependent on relationship-specific investment from their suppliers grow disproportionately faster in countries with a high level of financial development and in US states which deregulated their banking sector. Our work establishes a novel channel through which finance a¤ects the real economy. It also complements the literature that has stressed legally binding contracts as a standard solution to the holdup problem.

Information economics has emerged as the primary theoretical lens for framing financing decisions in firm R&D investment. Successful outcomes of R&D projects are either ex-ante impossible to predict or the information is asymmetrically distributed between inventors and investors. As a result, bank lending for firm R&D has been rare. However, firms can signal the value of their R&D activities and as a result reduce the information deficits that block the availability of external funding. In this study we focus on three types of signals: Firm’s existing patent stock, the presences of a joint venture investor and whether the firm has received a government R&D subsidy. We argue theoretically that all of these signals have the potential to alter the risk assessment of the firm’s main bank. Additionally, we explore heterogeneities in these risk assessments arising from the industry level and the main bank’s portfolio. We test our theoretical predictions for a sample of more than 7,000 firm observations in Germany over a multi-year period. Our theoretical predictions are only supported for firms’ past patent activity while other signals fail to alter the risk assessment of a firm’s main bank. Besides, we confirm that the risk evaluation is not randomly distributed across bank-firm dyads but depends on industry and bank characteristics.

We develop a theory of a firm in an environment with incomplete contracts. The firm's headquarter decides on the complexity, the organization, and the global scale of its production process. Specifically, it decides: i) on the mass of symmetric intermediate inputs that are part of the value chain, ii) if the supplier of each component is an external contractor or an integrated affiliate, and iii) if the supplier is offshored to a foreign low-wage country. Afterwards we consider a related scenario where the headquarter contracts with a given number of two asymmetric suppliers. Our model is consistent with several stylized facts from the recent literature that existing theories of multinational firms cannot account for.

Cartel detection is usually viewed as a key task of either competition authorities or compliance officials in firms with an elevated risk of cartelization. We argue that customers of hard core cartels can have both incentives and possibilities to detect such agreements on their own initiative through the use of market-specific data sets. We apply a unique data set of about 340,000 market transactions from 36 smaller and larger customers of German cement producers and show that a price screen would have allowed particularly larger customers to detect the upstream cement cartel before the competition authority. The results not only suggest that monitoring procurement markets through screening tools has the potential of substantial cost reductions - thereby improving the competitive position of the respective user firms - but also allow the conclusion that competition authorities should view customers of potentially cartelized industries as important allies in their endeavour to fight hard core cartels.

We model non-binding retail-price recommendations (RPRs) as a communication device facilitating coordination in vertical supply relations. Assuming both repeated vertical trade and asymmetric information about production costs, we show that RPRs may be part of a relational contract, communicating private information from manufacturer to retailer that is indispensable for maximizing joint surplus. We show that this contract is self-enforcing if the retailer’s profit is independent of production costs and punishment strategies are chosen appropriately. We also extend our analysis to settings where consumer demand is variable or depends directly on the manufacturer’s RPRs. Keywords: vertical relationships, relational contracts, asymmetric information, price recommendations. JEL Classification: D23; D43; L14; L15.

We develop a general-equilibrium model to capture key features of the retailing and of the manufacturing industry in order to understand how these two industries interact and how labor is allocated between them. We show that the observed shift in employment from manufacturing to retailing, the rise in retailer product assortment and the emergence of slotting allowances in many retail markets are consistent with the global integration of product markets, while higher retail market concentration is best explained by technological change in retailing. We also identify a novel benefit from market integration consisting of efficiency gains in the vertical distribution chain.

Informal long-term relationships and mutual confidence play a crucial role in modern economies in at least two dimensions. First, the performance of firms is strongly affected by their capacity to solve organizational questions effectively and this capacity is apparently strongly related to their ability to maintain informal long-term relationships. Second, countries that are better at maintaining unwritten agreements and where interactions are more strongly guided by a sense of trust fare better in terms of economic welfare than others. This paper provides a simple general equilibrium model which reconciles these two findings: we offer a micro-founded explanation of how the trust that prevails in an economy gets transmitted into higher economic well-being and we thereby highlight the role of managers with low time preference. Our analysis builds on the model of Antràs and Helpman (2004) and a formalization of the notion of relational contracting developed in Baker, Gibbons and Murphy (2002).

This paper analyzes the welfare implications of buyer mergers, which are mergers between downstream firms from different markets. We focus on the interaction between the merger's effects on downstream efficiency and on buyer power in a setup where one manufacturer with a non-linear cost function sells to two locally competitive retail markets. We show that size discounts for the merged entity has no impact on consumer prices or on smaller retailers, unless the merger affects the downstream efficiency of the merging parties. When the upstream cost function is convex, we find that there are “waterbed effects,” that is, each small retailer pays a higher average tariff if a buyer merger improves downstream efficiency. We obtain the opposite results, “anti-waterbed effects,” if the merger is inefficient. When the cost function is concave, there are only anti-waterbed effects. In each retail market, the merger decreases the final price if and only if it improves the efficiency of the merging parties, regardless of its impact on the average tariff of small retailers.

Although the pricing dynamics of hardcore cartels have been studied intensively from a theoretical perspective, empirical evidence is still rare. We combine publicly available data with a unique private data set of about 340,000 market transactions from 36 smaller and larger customers of German cement producers to study the pricing dynamics during and after the breakdown of a German cement cartel. We find that, first, after the breakdown of the cartel, cartel members reduce net prices to a far larger extent than gross prices and that, second, noncartel members slip under the price umbrella of the cartel to increase profits. Our results have important implications for both the design of screening tools to detect cartels as part of public enforcement and the calculation of damages as part of private enforcement of competition law.

This paper highlights the strategic role that private quality standards play in food supply chains. Considering two symmetric retailers that are exclusively supplied by a finite number of producers and endogenizing the producers' delivery choice, we show that there exist two asymmetric equilibria in the retailers' quality requirements. The asymmetry is driven by both the retailers.incentive to raise their buyer power and the retailers' competition for suppliers. We find that the use of private quality standards is detrimental to social welfare. A public minimum quality standard can remedy this unfavorable welfare outcome.

An economic lot size problem is studied in which a single vendor supplies a single purchaser with a homogeneous product and takes a certain fraction of the used items back for remanufacturing, in exchange for a deposit transferred to the purchaser. For the given demand, productivity, fixed ordering and setup costs, amount of the deposit, unit disposal, production and remanufacturing costs, and unit holding costs at the vendor and the purchaser, the cost-minimal order/lot sizes and remanufacturing rates are determined for the purchaser, the vendor, the whole system assuming partners’ cooperation, and for a bargaining scheme in which the vendor offers an amount of the deposit and a remanufacturing rate, and the purchaser responds by setting an order size.

In this paper we aim to analyze the productivity spillovers of foreign affiliated and domestic firms in Turkish manufacturing industries. As a novelty inter-sectoral linkages are modeled through the use of spatial models. Our results indicate the existence of positive and significant productivity spillovers among the neighborhood firms. We also find that an increase in the share of foreign affiliated firms in a given industry has positive impact on the productivity level of vertically related industries. However, our results do not provide any clear evidence that domestic firms benefit from the foreign affiliated firms either operating in the same industry or in the neighborhood industries. The findings suggest that unlike the effects of foreign affiliated firms, research and development expenditures significantly contribute to the productivity levels of domestic firms.

This paper analyses the incentives to upgrade input quality in vertically related (network) industries. Upstream investments have a biased effect on the downstream companies and lead to vertical product differentiation. Different vertical structures such as vertical integration, ownership and legal unbundling lead to different investments. We find that, without regulation, vertical integration and legal unbundling regimes provide highest investment incentives and lead to highest welfare. However, we also find foreclosure in the downstream market if the potential degree of horizontal product differentiation of the entrant is low. Under ownership unbundling, investment incentives are lower but there is never foreclosure of the entrant since this would worsen double marginalisation. When the network operator is subject to a break-even regulation, the investment incentives are crowded out under legal and ownership unbundling whereas they remain nearly unchanged under vertical integration. Welfare and consumer surplus decrease under legal unbundling, but increase under the two other regimes.

We explore the determinants and effects of trust relationships between upstream suppliers and downstream producers. Using unique survey data on individual supplier-buyer relationships in the German automotive industry, we show, by means of different measures of supplier-buyer trust, that higher levels of trust mitigate relationship-specific underinvestment in a classical hold-up situation. Moreover, contrary to the extant literature, we show that higher levels of supplier's trust are reflected in the buyer's choice of a more competitive procurement strategy among potential suppliers.

This paper studies the impact of buyer power on dynamic efficiency. We consider a bargaining model in which buyer power arises endogenously from size and may impact on a supplier's incentives to invest in lower marginal cost. We challenge the view frequently expressed in policy circles that the exercise of buyer power stifles suppliers' incentives. Instead, we find that the presence of larger buyers keeps a supplier 'more on his toes' and induces him to improve the competitiveness of his offering, in terms of both price and quality, relative to buyers' alternative options.

This paper analyzes loan pricing when there is multiple banking and borrower distress. Using a unique data set on SME lending collected from major German banks, we can instrument for effective coordination between lenders, carrying out a panel estimation. The analysis allows to distinguish between rents that accrue due to single bank lending, rents that accrue due to relationship lending, and rents that accrue due to the elimination of competition among multiple lenders. We find the relationship lending to have no discernible impact on loan spreads, while both single lending and coordinated multiple lending significantly increase the spread. Thus, contrary to predictions in the literature, multiple lending does not insure the borrower against hold-up. JEL Classification: D74, G21, G33, G34

Recently, integrating Transaction Cost Economic (TCE) and Resource Based View (RBV) arguments has become one of the most prominent theoretical approaches in research on business relationships. We question this dominance and strengthen an exclusive TCE perspective by recalling two of the core TCE constructs in order to achieve full exploitation of TCE reasoning. We discuss the transaction attributes “asset specificity” and “uncertainty” and identify conceptual gaps that lead to ambiguous results regarding the test of TCE guided hypotheses in prior relationship marketing and management research. To overcome these problems, we redefine both concepts and show that they are interconnected in more complex ways than past empirical research has accounted for. Hypotheses are derived and tested empirically in a cross-sectional online-survey setting by using means of structural equation modelling.

The extant theory on price discrimination in input markets takes the structure of the intermediate industry as exogenously given. This paper endogenizes the structure of the intermediate industry and examines the effects of banning third-degree price discrimination on market structure and welfare. We identify situations where banning price discrimination leads to either higher or lower prices for all downstream firms. These findings are driven by the fact that upstream profits are discontinuous due to entry being costly. Moreover, permitting price discrimination fosters entry which in many cases improves welfare. Nevertheless, entry can also reduce welfare because it may lead to a severe inefficiency in production.

Recent empirical findings by Elsas (2005) and Degryse and Ongena (2007) document a U-shaped effect of market concentration on relationship lending which cannot be easily accommodated by the investment and strategic theories of relationship lending. In this paper, we suggest that this non-monotonicity can be explained by looking at the organizational structure of local credit markets. We provide evidence that marginal increases in interbank competition are detrimental to relationship lending in markets where large and out-of-market banks are predominant. On the contrary, where relational-based lending technologies are al-ready widely in use in the market by a large group of small mutual banks, an increase in competition may drive banks to further cultivate their extensive ties with customers.

Der vorliegende Bericht analysiert die mittelfristigen Veränderungen der Lieferantenstruktur am Beispiel einer Molkerei mit drei unterschiedlich strukturierten Standorten in Bayern, Niedersachsen und Sachsen-Anhalt. Für die Analyse wurde zwischen Januar und März 2010 eine schriftliche Befragung unter den Milchlieferanten durchgeführt. Eine gewichtete Analyse der Befragungsergebnisse ergibt, dass im Zeitraum von 2010 bis 2015 die Liefermenge am niedersächsischen Standort ansteigt, während es am Standort in Sachsen-Anhalt zu keinen signifikanten Änderungen der Liefermenge kommt. Am bayerischen Standort ist hingegen den Befragungsdaten zufolge bis 2015 mit einer leichten Abnahme der Liefermenge zu rechnen. Die Analysen zeigen, dass die Biogasproduktion in allen Einzugsgebieten der Molkerei an Bedeutung zunimmt. In 2010 planen vor allem Betriebe aus dem Molkereieinzugsgebiet in Sachsen-Anhalt, in die Biogasproduktion zu investieren. Ein Zusammenhang zwischen der Investition in Biogas und einem Ausstieg aus der Milchproduktion konnte jedoch nicht nachgewiesen werden. Die Befragung zeigt zudem, dass Milchquotenkäufe offenbar eher an Bedeutung verlieren. Ein Großteil der Teilnehmer, die ihre Milchproduktion um mehr als 1 % jährlich erweitern wollen, plant, zumindest in 2010 keine zusätzliche Milchquote zu kaufen. This report analyzes the mid-term changes in the structure of milk deliveries. It uses the example of a dairy company with three production locations in different German regions (Bavaria, Lower Saxony and Saxony-Anhalt). The analysis was conducted as a written survey amongst the dairy company's farmers between January and March 2010. A weighted analysis of the survey results shows that until 2015 milk deliveries to the dairy company increase in the production location in Lower Saxony. In Saxony-Anhalt they remain stable, while the survey data suggest that in the Bavarian location a slight decrease in milk deliveries will occur until 2015. The survey shows that biogas production gains importance in all of the three production locations. In 2010, especially the farms from Saxony-Anhalt plan to invest in biogas. However, no link was found between investing into biogas and quitting milk production. Results of the survey further suggest that milk quota purchases are of decreasing importance. The majority of the farmers that plan to increase their milk production by more than one percent annually do not intend to buy additional milk quota in the year 2010.

In the recent New Keynesian literature a standard assumption is that the price for which an intermediate good is sold to the final good firm is equal to the marginal costs of the intermediate good firm. However, there is empirical evidence that this need not to hold. This paper introduces price bargaining into an otherwise standard New Keynesian DSGE model and show that this model performs reasonably well in replicating the observed persistence values. We further discuss the role of those product market imperfections for monetary policy and find a trade-off between stabilizing intermediate or final good inflation. In addition, the Ramsey optimal monetary policy can be approximated reasonably well with a Taylor-type interest rate rule with weights on both inflation rates and output.

This paper presents a theory of vertically interrelated markets of identical fixed size under implementation of positive indirect network effects. By introducing two Salop circles, a two-sided market model is provided, where intermediaries of differentiated copyrights for intellectual property, like performing rights organizations or publishers, compete as oligopsonists for owners of the intellectual property and as oligopolists for the users of their blanket licenses. We demonstrate, that an increase in competition benefits either license users or copyright owners or harms both groups. Moreover, if license users gain from an increased market entry, the owners of the intellectual property have to incur losses and vice versa.

Recent empirical studies have been searching for evidence on and driving forces for offshoring. Typically, this search has been conducted by analysing gross trade flows related to offshored activities using gravity equations augmented by ad hoc measures of supply-side country differences. This paper suggests that gravity formulations of this sort are potentially mis-specified, due to theoretically unmotivated attempts of allowing for both complete and incomplete specialisation influences on gross trade flows within the same gravity framework. The paper suggests an alternative specification rooted in incomplete specialisation with complete specialisation as a natural limiting case. Results support evidence for offshoring activities across Europe, driven by supply-side country differences compatible with models of incomplete specialisation and trade. Further interpretation of the results in the spirit of Grossman and Rossi-Hansberg (2008) suggests the conjecture that the latest waves of offshoring activities from old to new EU members may have been more likely to hurt (low-skill) workers in the old EU than offshoring to east Asia.

Using six years of firm-level data covering 224 regions of the enlarged European Union, we evaluate the importance to a firm of locating its activities (production, headquarters, R&D, logistics and sales) close together. We find that, after controlling for regional characteristics, being closely located to a previous investment positively affects firm location choice. However, the impact of distance is dependent on the type of investment (production or service). While within-firm co-location is important for both service and production activities, only production plants are likely to be located close to prior production investments. In this latter case, national borders have a surprisingly positive effect, increasing the probability of choosing a nearby location, but on the other side of the border.

A puzzling but consistent result in the empirical literature on banking is that firms with close bank ties do not grow faster than bank-independent firms. In this paper, we reconsider the link between relationship lending and firms' growth, distinguishing firms by size and 'health'. The idea is that the beneficial effects of relationship lending on information asymmetries can be compensated by other negative capture, risk and externality effects which make relational banks reluctant to support long-term growth projects of client firms, and that the strength of these compensating effects varies with firm size and health status. We explore the influence of long-lasting bank relationships on employment and asset growth of a large sample of Italian firms. The main finding is that relationship lending hampers the efforts of small firms to increase their size, while it mitigates the negative growth of troubled, medium-large enterprises.

During the last decades, international trade flows especially of the industrialized countries allegedly became more and more intra-industry. At the same time, employment perspectives particularly of the low-skilled by tendency deteriorated in these countries. This phenomenon is often traced back to the fact that intra-industry trade, which should theoretically involve low labor market adjustment, became increasingly vertical in nature and might thus entail labor market disruptions. Against this background, the present paper investigates the relationship between international trade patterns and selected labor market indicators in European countries, with a focus on vertical intra-industry trade. As the results show, neither inter- nor vertical intra-industry trade do have a verifiable effect on wage spread in EU member states. As far as structural unemployment is concerned, the latter increases only with the degree of countries' specialization on capital intensively manufactured products in inter-industry trade relations. Only for unemployment of the less-skilled, a significant impact of superior vertical intra-industry trade seems to exist. However, the link between unemployment of the lower qualified and inter-industry specialization on labor intensive goods as well as parts and components imports is considerably higher. In den zurückliegenden Jahrzehnten waren die internationalen Handelsmuster grundlegenden Veränderungen unterworfen. Insbesondere in den Industrieländern gewann der intra-industrielle Handel zusehends an Bedeutung. Gleichzeitig verschlechterten sich in diesen Ländern die Beschäftigungsaussichten gering qualifizierter Arbeitskräfte. Diese Entwicklung wird häufig der Tatsache zugeschrieben, dass der intra-industrielle Handel zunehmend vertikaler Natur ist und damit, ähnlich wie der inter-industrielle Handel, mit Rückwirkungen auf die Faktormärkte verbunden sein kann. Vor diesem Hintergrund untersucht die vorliegende Studie die Wechselwirkungen zwischen internationalen Handelsmustern und ausgewählten Arbeitsmarktindikatoren europäischer Länder. Der Fokus liegt dabei auf dem vertikalen intra-industriellen Handel. Im Ergebnis zeigt sich, dass weder vom inter- noch vom vertikalen intra-industriellen Handel Rückwirkungen auf die Lohnspreizung in den EU-Mitgliedstaaten ausgehen. Die strukturelle Arbeitslosigkeit wird zwar über die Spezialisierungsmuster der Länder im inter-industriellen, nicht aber im vertikalen intra-industriellen Handel erklärt. Lediglich zwischen der Arbeitslosigkeit gering Qualifizierter und dem vertikalen intra-industriellen Handel besteht ein signifikanter Zusammenhang.

We use unique plant-level data to study the link between the local availability of services and the decision of manufacturing firms to source materials from abroad. To guide our empirical analysis we develop a monopolistic-competition model of the materials sourcing decisions of heterogeneous firms. The model generates predictions about how the intensity of international sourcing of materials depends on a firm’s productivity and the availability of local services. These predictions are supported by the data. We find evidence that more productive manufacturing firms tend to have a higher ratio of imported materials to sales. In addition, we find evidence that services grease the wheels of international commerce: A greater availability of services across regions, industries and time increases a firm’s foreign sourcing of materials relative to sales. Interestingly, this positive impact of local service availability on imports especially applies to stand-alone firms that, unlike multinationals, are less likely to rely on imported or internally provided services.

We consider a vertically related market characterized by downstream imperfect competition and by the monopolistic provision of an essential facility-based input, whose price is set by a social-welfare maximizing regulator. Our model shows that the regulatory knowledge about the cost for providing the monopolistic input crucially affects the design of the optimal industry structure. In particular, we compare ownership separation, which prevents a single company from having the control of both upstream and downstream operations, and legal separation, under which these activities are legally unbundled but common ownership is allowed. As long as the regulator has full information, the two industry patterns yield the same social welfare level. However, under asymmetric information about the input costs legal separation can make the whole society better off.

The paper presents a new sectoral taxonomy that focuses on the existence of non negligible external effects, deriving from user-producer knowledge interactions, the latter in turn coupled with intermediate goods transactions, in a system of vertically integrated manufacturing and services sectors. These externalities, the so called pecuniary knowledge externalities, are the main source of changing technological conditions experienced by downstream producers. A distinguishing feature of the taxonomy consists, thus, in being derived from a particularly dynamic contexts of changing production functions. The taxonomy is obtained from an empirical exercise, examining effects generated by idiosyncratic knowledge in a system of input-output intermediate transactions between sectors in the European economy. The results permit to classify sectors in five groups, confirming the previous evidence of relevant differences in technological characteristics among sectors.

Analyzing a sequential bargaining framework with one retailer and two suppliers of substitutable goods, we show that slotting fees may emerge as a result of a rent-shifting mechanism when consumer shopping costs are taken into account. If consumers economize on their shopping costs by bundling their purchases, their buying decision depends rather on the price for the whole shopping basket than on individual product prices. This induces complementarities between the goods offered at a retail outlet. If the complementarity effect resulting from shopping costs dominates the original substitution effect, the wholesale price negotiated with the first supplier is upward distorted in order to shift rent from the second supplier. As long as the first supplier has only little bargaining power, she compensates the retailer for the upward distorted wholesale price by paying a slotting fee. We also show that banning slotting fees causes per- unit price to fall and welfare to increase.

Certifiers contribute to the sound functioning of markets by reducing a symmetric information. They, however, have been heavily criticized during the 2008-09 financial crisis. This paper investigates on which side of the market a monopolistic profit-maximizing certifier offers his service. If the seller demands a rating, the certifier announces the product quality publicly, whereas if the buyer requests a rating it remains his private information. The model shows that the certifier offers his service to sellers and buyers to maximize his own profit with a higher share from the sellers. Overall, certifiers increase welfare in specific markets. Revenue shifts due to the financial crisis are also explained.

Services form an increasing proportion of the inputs used in manufacturing. We explore empirically whether competition in the service sector affects downstream manufacturing firms' efficiency, via the inputs used. Using French micro-data for services, we calculate proxies for competition in services, and then use Input-Output matrices to link services to manufacturing sectors. we find that there is a positive and significant relation between the extent of competition and firms' productivity.

This paper investigates empirically the occurrence of pecuniary knowledge externalities at the sectoral level across European economies. The main results suggest that, although some sectors can be considered as playing a particularly important role as a source of pecuniary knowledge externalities in the majority of examined countries, there exist significant national differences in the occurrence of these effects. Moreover, such external effects influence the dynamics of total factor productivity in downstream sectors and appear as a relevant source of growth in modern economies. As such, the concept of pecuniary knowledge externalities, as opposed to pure knowledge externalities postulated in the new growth theory, provides a new clue to understanding of the growth process.

This paper examines how delivery tariffs and private quality standards are determined in vertical relations that are subject to asymmetric information. We consider an infinitely repeated game where an upstream firm sells a product to a downstream firm. In each period, the firms negotiate a delivery contract comprising the quality of the good as well as a nonlinear tariff. Assuming asymmetric information about the actual quality of the product and focusing on incentive compatible contracts, we show that from the firms' perspective delivery contracts lead to more efficient contracts and thus higher overall profits the lower the firms' outside options, i.e. the higher their mutual dependency. Buyer power driven by a reduced outside option of the upstream firm enhances the efficiency of vertical relations, while buyer power due to an improved outside option of the downstream firm implies less effcient outcomes.

The aim of the paper is to discuss and to provide evidence for the existence of pecuniary knowledge externalities, considered here as the main cause of positive disequilibrium experience by downstream producers. This last effect, confirmed by the empirical analysis here performed, contrasts the postulates of the model of growth through creative destruction due to Aghion & Howitt (1992), where downstream producers remain very much passive in front of new technological knowledge externally generated.

Many countries strive to attract foreign direct investment (FDI) hoping that knowledge brought by multinationals will spill over to domestic industries and increase their productivity. While the empirical studies have cast doubt on the existence of horizontal spillovers from FDI in developing countries, several recent papers have confirmed the presence of vertical spillovers, which take place through contacts between foreign affiliates and their local suppliers. However, the existing studies rely on industry-level proxies for vertical spillovers rather than infirmation on actual relationships between local companies and multinationals. This study goes one step further by employing a unique dataset from the Czech Republic, which allows us to identify local firms supplying multinationals operating in the country. The data suggest that suppliers are different from other firms. They are larger, have a higher capital-labor ratio, pay higher wages and exhibit a higher productivity level. The evidence is suggestive of both high productivity firms having a higher probability of supplying multinationals as well as suppliers learning from their relationships with multinationals.

We analyze fundamental characteristics of the inter-firm transaction network through the data of 800,000 Japanese firms. We find that there exists a hierarchical structure and a negative degree correlation in this transaction network. We also find that this undirected network is a scale-free network. We bring to light these characteristics of the network and discuss why there is an important need to conduct research work on the actual network structure.

Empirical evidence suggests that people dislike ads in media products like TV programs. In such situations standard economic theory prescribes that the advertising volume can be optimally reduced by levying a tax on ads. However, making use of recent advances in the theory of Industrial Organization and two-sided markets we show that taxing ads may be counterproductive. In particular, we identify a number of situations in which ad-adverse consumers are negatively affected by the tax, and we even show that the tax may lead to higher ad volumes. This unorthodox reaction to a tax may arise when consumers significantly dislike ads, i.e. in situations where traditional arguments for corrective taxes are strongest.