City sizes and industry concentration

In a general equilibrium model of trade under transportation costs between two cities we show how the relative population sizes are simultaneously detemined with the degree of geographic concentration of industries characterized by different elasticities of scale of production. The effect on city size of the presence of nontraded goods is also analyzed.

From legal commons to social commons: Brazil and the cultural industry in the 21st century

This article describes some of the current transformations regarding the processes by which information and culture are generated, from the point of view of developing countries. In this brief analysis, the article discusses the role of projects such as Creative Commons for developing countries. It also discusses the idea of legal commons and social commons. While the idea of legal commons can be understood as the voluntary use of licenses such as Creative Commons in order to create a “commons”, the idea of social commons has to do with the tensions between legality and illegality in developing countries. These tensions appear prominently in the so-called global “peripheries”, and in many instances make the legal structure of intellectual property irrelevant, unfamiliar, or unenforceable, for various reasons. With the emergence of digital technology and the Internet, in many places and regions in developing countries (especially in the “peripheries”), technology ended up arriving earlier than the idea of intellectual property. Such a de facto situation propitiated the emergence of cultural industries that were not driven by intellectual property incentives. In these cultural businesses, the idea of “sharing” and of free dissemination of the content is intrinsic to the social circumstances taking place in these peripheries. Also, the appropriation of technology on the part of the “peripheries” ends up promoting autonomous forms of bridging the digital divide, such as the “LAN house” phenomenon discussed below. This paper proposes that many lessons can be learned from the business models emerging from social commons practices in developing countries. The tension between legality and illegality in “peripheral” areas in developing countries is not new. The work of Boaventura de Sousa Santos and others in the 1970s was paradigmatic for the discussion of legal pluralism regarding the occupation of land in Brazil. This paper aims to follow in that same pioneer tradition of studies about legal pluralism, and to apply those principles to the discussion of “intellectual property” rather than the ownership of land.

The effect of guia exame's ratings on the brazilian fund industry: an analysis of net-worth flows

This paper infers the impact the publication Guia Exame (the guide) has on the Brazilian fund industry, more specifically on the ability the concerned funds develop on attracting new investment. The impact is measured using the event-study analysis based on the variation of net worth subsequently to the event of being rated, according to the methodology applied by the guide to rank the funds. We used five years of fund ratings according to Guia Exame (2000-2004) and analyzed the changes of these funds net worth. We also compared the event amongst different categories of funds. The results found confirm the expected effects according to star rankings and asset manager size in all years.

Analysis of the restructuring of the Russian defence industry (by the example of aviation industry and knaapo) and the creation of United Aviation Construction Corporation

The present study is focused on the analysis of the three main governmental measures occurred in 2000-2006 in Russian defense industry: the creation of the holding structures, the establishing of the state monopoly in arms export, and creation of the United Aviation Construction Corporation (Ob¿edinennaya Aviastroitel¿naya Corporatziya), which was initiated by the President and Government of Russian Federation in 2006. The last project assumes the consolidation and joining of all producers of civil and military aviation into one united corporation in order to save the technological and productive potential of the sector after serious crisis in 1990-s. On the other hand, this project can be considered as one of the measures to establish state control and hierarchy in the defense industry. The current project tries to analyze the necessity and the possible impacts of restructuring processes. In order to perform such analysis, I need to observe the evolution of the sector, which involves the description of the restructuring and reforming of the industry since the disintegration of the Soviet Union. The current situation in aviation sector was shaped by number of reforms performed by Government of Russian Federation, which I describe in phases: conversion, privatization, decentralization, followed by evident desire of the state to establish control over some companies. Later on, I am trying to understand the reasons lying behind all reforms of 2000-2006 and the integration of the industry. I also try to predict which impacts on the companies it will have. The last part presents the main conclusions of the paper.

Monopoly power, trade protection and growth: cross industry evidence

This paper investigates the impact of monopoly power on trade policy. Annual panel-databases of Brazilian industries for the years 1988 through 1994 were used. The regressions reported here are robust to openness indicator, concentration index, control variables and sample size, and suggest that industries with higher monopoly power are more protected than competitive sectors. In the period of study the country experienced a major trade liberalization, but the results in the paper show that the reduction in protection was smaller in sectors with higher monopoly power. We thus have evidence favoring recent growth literature which stresses that interest groups with control over creasing productivity. The results here confirm the first part of this argument and show that organized groups in fact are able to obtain policy advantages that reduce competition.

Trade barriers and productivity growth: cross-industry evidence

This article investigates the impact of trade protection on the evolution of labor productivity and total factor productivity (TFP) of the Brazilian manufacturing sector. An annual panel-dataset of 16 industries for the years 1985 through 1997, a period that includes a major trade liberalization, was used. The regressions reported here are robust to openness indicator (nominal tari®s and e®ective protection rate were used), control variables and time period and suggest that barriers to trade negatively a®ects productivity growth at industry level: those sectors with lower barriers experienced higher growth. We were also able to link the observed increase of industry productivity growth after 1991 to the widespread reduction on exective protection experienced in the country in the nineties.

Duplication of R&D and industry concentration

The purpose of the literature on Research Joint Ventures (RJV), pioneered by DíAspremont and Jacquemin (1988) and Kamien, Muller, and Zang (1992), has been to combine the best of two worlds: to appropriately deal with R&D spillovers while preserving competition in the product market. Moreover, RJVs eliminate duplication of R&D. Thus, at least in theory, RJVs dominate other solutions such as subsidies. If, however, we are concerned about risks of cartelization, then Spenceís (1984) subsidy-based solution for independently acting firms, is a viable alternative that cannot be dismissed. Indeed, in contrast to the previous literature, we find that in the presence of R&D subsidies, market performance may unambiguously improve with the number of firms in the market.

Assessing competition in banking industry: a multiproduct approach

This paper aims to investigate the competition aspects of banking multiproduct operation. Based on an extension of Panzar and Rosse (1987)’s test to the case of a multiproduct banking firm, we take advantage of a new dataset constructed to Brazilian banking conglomerates to infer the impact of conglomeration on market power. We find that banks offering classic (i.e., loans and credit cards) and other bank products (i.e., brokerage services, insurance and capitalization bonds) have substantially higher market power than the ones which offer only classic products. Results suggest a positive bias on the traditional estimates of competition in which the multioutput actions are not taken into account.

Assessing competition in the banking industry: a multi-product approach

This paper investigates the competitive aspects of multi-product banking operations. Extending Panzar and Rosse (1987)’s model to the case of a multi-product banking firm, we show that the higher the economies of scope in multi-product banking are, the lower Panzar-Rosse’s measure of competition in the banking sector is. To test this empirical implication and determine the impact of multi-production/conglomeration on market power, we use a new dataset on Brazilian banking conglomerates. Consistent with our theoretical prediction, we find that banks offering classic banking products (i.e., loans and credit cards) and other banking products (i.e., brokerage services, insurance and capitalization bonds) have substantially higher market power than banks that offer only classic products. These results suggest a positive bias in the traditional estimates of competition in which multi-output actions are not considered.

Endogenous normative indices for the industry concentration

This paper presents new indices for measuring the industry concentration. The indices proposed (C n ) are of a normative type because they embody (endogenous) weights matching the market shares of the individual firms to their Marshallian welfare shares. These indices belong to an enlarged class of the Performance Gradient Indexes introduced by Dansby&Willig(I979). The definition of Cn for the consumers allows a new interpretation for the Hirschman-Herfindahl index (H), which can be viewed as a normative index according to particular values of the demand parameters. For homogeneous product industries, Cn equates H for every market distribution if (and only if) the market demand is linear. Whenever the inverse demand curve is convex (concave), H underestimates( overestimates) the industry concentration measured by the normative indexo For these industries, H overestimates (underestimates) the concentration changes caused by market transfers among small firms if the inverse demand curve is convex(concave) and underestimates( overestimates) it when such tranfers benefit a large firm, according to the convexity (or the concavity) of the demand curve. For heterogeneous product industries, an explicit normative index is obtained with a market demand derived from a quasi-linear utilility function. Under symmetric preferences among the goods, the index Cn is always greater than or equal the H-index. Under asymmetric assumptions, discrepancies between the firms' market distribution and the differentiationj substitution distributions among the goods, increase the concentration but make room for some horizontal mergers do reduce it. In particular, a mean preserving spread of the differentiation(substitution) increases(decreases) the concentration only if the smaller firms' goods become more(less) differentiated(substitute) w.r.t. the other goods. One important consequence of these results is that the consumers are benefitted when the smaller firms are producing weak substitute goods, and the larger firms produce strong substitute goods or face demand curves weakly sensitive to their own prices.

Monopoly power and trade protection: cross- industry evidence

This paper investigates the impact of industry concentration on trade policy. Annual panel-databases of Brazilian industries for the years 1988 through 1994 were used. The regressions reported here are robust to openness indicator. concentration index, control variables and sample size, and suggest that the higher the concentration of a given industry the higher its leveI of trade protection. In the period of study the country experienced a major trade liberalization, but the results in the paper show that the reduction in protection was smaller in more concentrated sectors. Assuming that concentration is ;1 gCl()d proX\' for mOllopoh' po\\'er as it reduces the free-rider problem in coordinating a lobby the results in this paper indicates that interest groups with control over specific markets in fact are able to obtain policy advantages that reduce (international) competition.

City sizes and industry concentration

In a general equilibrium model of trade under transportation costs between two cities we show how the relative population sizes are simultaneously determined with the degree of geographic concentration of industries characterized by different elasticities of scale of production. The effect on city size of the presence of nontraded goods is also analyzed .

Inferring conduct under the threat of entry : the case of Brazilian cement industry

This paper demonstrates that when an industry faces potential entry and this threat of entry constrains pre-entry prices, cost and conduct are not identified from the comparative statics of equilibrium. In such a setting, the identifying assumption behind the well-established technique of relying on exogenous demand perturbations to empirically distinguish between alternative hypotheses of conduct is shown to fail. The Brazilian cement industry, where the threat of imports restrains market outcomes, provides an empirical illustration. In particular, pricecost margins estimated using this established technique are considerably biased downward, underestimating the degree of market power. A test of conduct is proposed, adapted to this constrained setting, which suggests that outcomes in the industry are collusive and characterised by market division.