Search results for "Market size"
showing 10 items of 10 documents
The Border Effect in Spain
2005
This paper analyses the border effect in Spain using a unique dataset on intranational trade flows over the period 1995–98. The results indicate that, after controlling for market size and distance, Spanish regions trade around 22 times more with the rest of Spain than they do with OECD countries. Moreover, the size of the Spanish bias is lower in the case of the Spanish regions’ exports than in the case of imports, although the difference is not statistically significant in most cases. Finally, the border effect is not uniform across Spanish regions.
The border effect in Spain: The Basque Country case
2006
Gil-Pareja S., Llorca-Vivero R. and Martinez-Serrano J. A. (2006) The border effect in Spain: the Basque Country case, Regional Studies 40, 335–345. This paper investigates the border effect on the Basque Country's trade, using a sample of 28 Organization for Economic Co-operation and Development (OECD) countries between 1995 and 2001. The results indicate that after controlling for market size and distance, the Basque Country trades between 12 and 16 times more with the rest of Spain than it does with any other country. The Spanish bias is lower in the case of the Basque Country's exports than in the case of imports. With respect to the time evolution, the results show a downward trend. Th…
Competition with targeted product design: Price, variety, and welfare
2018
Abstract We consider the price and welfare effects of competition in targeted product design, in the context of the Salop circle model. Changes in product design lead to demand rotations that set the stage for our analysis. With an exogenous number of firms, we show that the degree of targeted product design tends to increase with the number of firms. Moreover, under reasonable conditions, price-increasing competition takes place, for intermediate levels of the number of firms. This effect is associated with the possibility of lower consumer welfare. With endogenous firm entry, an interesting insight from our analysis is that in some situations an increase in market size or a technological …
Competitive Pressure and Innovation at the Firm Level
2015
This paper provides empirical evidence on the relationship between market competitive pressure and firms' innovation using panel data of Spanish manufacturing firms for 1990–2006. We depart from standard measures of competition, and construct variables capturing the fundamentals of competitive pressure (product substitutability, market size and entry costs) to test the theoretical predictions of Vives [2008, The Journal of Industrial Economics] for free entry. Our results line up favourably with these predictions. We obtain that greater product substitutability and higher costs of entry lead to more process innovation but less product innovation, whereas market enlargement spurs both produc…
Entry in a psychically distant market:
2008
Summary This paper investigates the market entry and entry mode choice of eight small and medium-sized Finnish software firms in the Japanese market. The findings in this study reveal that, despite of the psychic distance between Finland and Japan, most of the firms entered Japan at a very early stage of their internationalization process by using direct entry modes. This was mainly due to the market size, sophisticated industry structure, and requirements for intensive cooperation with the customers during the sales process. The firms were able to overcome psychic distance by hiring local employees and western managers who already had working experience in the Japanese market. This finding…
Reconciling the Evidence on the Knowledge-capital Model
2005
The Knowledge Capital Model (KC-model), described in Markusen (2002), encompasses both market size (horizontal) as well as factor endowment (vertical) explanations to why multinational production occurs. Although the KC-model seems intuitively appealing, the empirical support has, so far, been weak and even confused. In this study, we find strong, robust and consistent support for the KC-model. In contrast to previous studies, our skill measures follow directly from the model. We also use an enlarged dataset, where the data coverage is significantly improved. Our results also give estimated surfaces remarkably similar to theoretical simulations of the KC-model. In addition, the results give…
Market Entry and Priority of Small and Medium-Sized Enterprises in the Software Industry: An Empirical Analysis of Cultural Distance, Geographic Dist…
2007
This article investigates the influence of cultural distance, geographic distance, and three market size variables in the target country preference of small and medium-sized enterprises (SMEs) in the software industry. In addition, the authors examine the shift of SMEs’ priorities in country selection by analyzing how these factors affect the selection of the first, second, and third target countries. The empirical findings suggest that approximately 70% of country choices can be explained by software market size and geographic distance alone. The findings also show that SMEs’ entry priorities shift quickly from countries within a short geographic distance to countries with high purchasing …
Excessive vs. insufficient entry in spatial models: When product design and market size matter
2020
Abstract Under spatial product differentiation and product design, we identify conditions for either excessive or insufficient firm entry. We extend previous settings, based on the Salop circular model, to analyze the combined role of positive demand elasticity and endogenous targeted product design. First, we show that, given the number of firms, the equilibrium level of targeted design is either excessive or insufficient, depending on demand elasticity. Second, with free entry, we show that the degree of targeted product design increases with the relative market size and decreases with demand elasticity. Based on these effects, the interplay between demand elasticity and market size yield…
Impact of psychic distance to the internationalization behavior of knowledge‐intensive SMEs
2009
PurposeThe purpose of this paper is to investigate the internationalization behavior of knowledge‐intensive small‐ to medium‐sized enterprises (SMEs) by using macro‐level psychic distance indicators and managers' perceptions of psychic distance.Design/methodology/approachThis study uses both quantitative and qualitative approaches. In the quantitative approach, the impact of psychic distance to the internationalization behavior is analyzed by using bivariate correlation analysis. The qualitative case study approach is employed to investigate managers' perceptions of psychic distance as regards market entries.FindingsFindings of this study indicate that psychic distance has an impact on the …
Union structure and incentives for innovation
2002
Abstract In this paper, we consider the effect of union structure on the adoption of innovation in the context of Cournot duopoly. With a market size large enough, we show that the incentive to innovate is higher under a decentralized union structure (with each firm facing its own independent union) than under an industry-wide union. However, for a small market size (or, equivalently, for sufficiently drastic potential innovation), the new technology is more likely to be adopted in the presence of a centralized union. This result goes against the conventional view that unionization harms the incentive to innovate.