Search results for "Market Power"
showing 10 items of 38 documents
Market empowerment of the patient: the French experience.
2011
Through analysis of the French experience, this article explores the way economic policy has sought to encourage active, well-informed patients by giving them market power. The new status of the patient as consumer is based on two foundations: the endeavour to build a healthcare market and the activation of demand-based policies. The keystone of this new system is a conception of the market as a process constructed by economic policy. Recent measures such as the standardization of care and the introduction of incentives to respect a treatment pathway then constitute effective levers to establish a free-market rationale.
The dark side of the sun: How solar power production affects the market value of solar and gas sources
2015
Abstract Using daily data for the Italian wholesale day-ahead power market over the period 2008–2013, we assess the impact of solar production on the market value of solar and gas sources, defined using the concepts of value factor and unit revenues. We find that, on average, solar generation negatively affects the solar source market value, causing a departure from the grid parity condition and mining their competitiveness once public incentives are removed. This negative relation is not constant over time and becomes stronger for increasing solar penetration in the energy mix. Interestingly, the opposite is found when looking at gas. While the relation between solar production and the gas…
Changes in determinants of the interest margin in today’s economy
2019
This study examined the interest margin following the significant drop in its contribution to credit institutions’ total income. Balance sheet variables, income statement and annual report variables, and external variables were studied separately. Variables that had not previously been studied in the literature were considered, and determinants that had already been studied were revisited after the reduction in the interest margin. The diversification of investment in associated companies and investment in fixed and variable income are causes of this decrease in the interest margin. Higher fees and commissions offset this decrease. Greater size and market power have reduced the interest mar…
Quality pricing-to-market
2014
We examine firm's pricing-to-market decisions in vertically differentiated industries featuring a large number of firms that compete monopolistically in the quality space. Firms sell goods of heterogeneous quality to consumers with non-homothetic preferences that differ in their income and thus their marginal willingness to pay for quality increments. We derive closed-form solutions for the pricing game under costly international trade, thus establishing existence and uniqueness. We then examine how the interaction of good quality and market demand for quality affects firms' pricing-to-market decisions. The relative price of high quality goods compared to that of low quality goods is an inc…
The evolution of market power in European banking
2017
This paper analyses the effect that European financial market integration has had on the evolution of the banks' market power disparities. The results show that market power disparity has narrowed among eurozone banks. The reduction is attributable to the convergence in the average levels of market power of the European banking sectors. In contrast, the disparities observed within each country have remained stable. As a result, the measures adopted to advance towards a single banking market should be complemented by measures at the national level designed to intensify competition among the banks within a given country.
Income structure, profitability and risk in the European banking sector: The impact of the crisis
2017
This study sets out to analyse whether the effect of the income structure on the risk and profitability of European banks has changed as a result of the crisis and if it varies according to banks’ specialisation in a particular type of banking business. To do so, it estimates the income structure over the period 2002–2012 using data for a panel of European banks. The study also examines if there are differences between investment-oriented banks and banks specialising in financial intermediation in terms of the effect of income structure on risk and profitability. Our findings show that an increase in the share of non-interest income has a negative impact on profitability, although the effec…
Revamping Research on Unrelated Diversification Strategy: Perspectives, Opportunities and Challenges for Future Inquiry
2015
With the aim of achieving an advanced understanding of current research on unrelated diversification and providing fruitful groundwork to foster active interchange between disciplinary traditions, this paper detects articles from two relevant research streams; i.e., strategic management and financial economics. We first provide a brief overview of management thinking on unrelated diversification strategy. Then, we present a conceptual map that offers a comprehensive appreciation of unrelated diversification strategy antecedents (i.e., environmental and institutional, organizational value-enhancing, and managerial drivers), implementation process (i.e., managerial complexity, misallocation o…
Monitoring and Market Power in Loan Markets
2000
Whether or not banks are engaged in ex ante monitoring of customers may have important consequences for the whole economy. We approach this question via a model in which banks can invest in either information acquisition or market power (product differentiation). The two alternatives generate different predictions, which are tested using panel data on Finnish local banks. We find evidence that banks’ investments in branch networks and human capital (personnel) contribute to information acquisition but not to market power. We also find that managing customers’ money transactions enhances banks ability to control their lending risks.
Revisiting the quiet life hypothesis in banking using nonparametric techniques
2014
Early studies testing the quiet life hypothesis in banking found strong evidence that banks in more concentrated markets exhibit lower cost efficiency levels. More recent studies have reexamined the issue in different contexts, with mixed results. These approaches are based on stipulating a linear re- lationship between market power and efficiency in banking, which might be problematic, as suggested by the literature on efficiency analysis. We explore how bank cost efficiency measures are related to market power using flexible techniques, which are more consistent with those employed to measure efficiency in the first stage of the analysis. Our study focuses on the Spanish banking industry,…
Strictly convex variable cost does not imply U-shaped average cost
2016
Abstract We show that strictly convex variable costs do not imply U-shaped average costs and provide a sufficient condition for U-shaped average costs. As an application we study endogenous entry when firms have market power and they have decreasing average cost but increasing marginal cost.