This paper analyses the employment effects of mergers and acquisitions by using matched establishment-level data from Finland over the period of 1989-2003. The data covers all sectors. We compare the employment effects of cross-border M&As with the effects arising from two different types of domestic M&As and internal restructurings. The results reveal that cross-border M&As lead to downsizing in manufacturing employment. The effects of cross-border M&As on employment in non-manufacturing are much weaker. Changes in ownership associated with domestic M&As and internal restructurings also typically cause employment losses, but these is interesting sectoral variation.
{"title":"Enemy of Labour? Analysing the Employment Effects of Mergers and Acquisitions","authors":"Petri Bockerman, E. Lehto","doi":"10.2139/ssrn.929066","DOIUrl":"https://doi.org/10.2139/ssrn.929066","url":null,"abstract":"This paper analyses the employment effects of mergers and acquisitions by using matched establishment-level data from Finland over the period of 1989-2003. The data covers all sectors. We compare the employment effects of cross-border M&As with the effects arising from two different types of domestic M&As and internal restructurings. The results reveal that cross-border M&As lead to downsizing in manufacturing employment. The effects of cross-border M&As on employment in non-manufacturing are much weaker. Changes in ownership associated with domestic M&As and internal restructurings also typically cause employment losses, but these is interesting sectoral variation.","PeriodicalId":230377,"journal":{"name":"ERN: Integration (Topic)","volume":"10 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2006-08-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"123833485","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This paper analyzes tying and bundling as an entry deterrence tool. It shows that a multi-product firm can defend its monopoly position in one market via tying even when it does not have market power in another market. This is shown on a model with two complementary goods, each of which is vertically differentiated and in which consumers’ preferences for the goods are positively correlated. Some possible ways of defending against entry deterrence, and implications for competition policy, are discussed.
{"title":"Tying and Entry Deterrence in Vertically Differentiated Markets","authors":"E. Kovác","doi":"10.2139/ssrn.870249","DOIUrl":"https://doi.org/10.2139/ssrn.870249","url":null,"abstract":"This paper analyzes tying and bundling as an entry deterrence tool. It shows that a multi-product firm can defend its monopoly position in one market via tying even when it does not have market power in another market. This is shown on a model with two complementary goods, each of which is vertically differentiated and in which consumers’ preferences for the goods are positively correlated. Some possible ways of defending against entry deterrence, and implications for competition policy, are discussed.","PeriodicalId":230377,"journal":{"name":"ERN: Integration (Topic)","volume":"10 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2005-08-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"116897489","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2004-03-01DOI: 10.5089/9781451845488.001
T. Rumbaugh, Nicolas R Blancher
China's increasing integration with the global economy has contributed to sustained growth in international trade. Its exports have become more diversified, and greater penetration of industrial country markets has been accompanied by a surge in China's imports from all regions--especially Asia, where China plays an increasingly central role in regional specialization. Tariff reforms have been implemented in China since the 1980s; and, with its recent WTO accession, China has committed itself to additional reforms that are far-reaching and challenging. Sustained implementation of these commitments would further deepen China's international integration and generate benefits for most partner countries.
{"title":"China: International Trade and WTO Accession","authors":"T. Rumbaugh, Nicolas R Blancher","doi":"10.5089/9781451845488.001","DOIUrl":"https://doi.org/10.5089/9781451845488.001","url":null,"abstract":"China's increasing integration with the global economy has contributed to sustained growth in international trade. Its exports have become more diversified, and greater penetration of industrial country markets has been accompanied by a surge in China's imports from all regions--especially Asia, where China plays an increasingly central role in regional specialization. Tariff reforms have been implemented in China since the 1980s; and, with its recent WTO accession, China has committed itself to additional reforms that are far-reaching and challenging. Sustained implementation of these commitments would further deepen China's international integration and generate benefits for most partner countries.","PeriodicalId":230377,"journal":{"name":"ERN: Integration (Topic)","volume":"05 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2004-03-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"130054111","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
We consider a supply chain with one manufacturer who assembles an end-product using multiple outsourced parts. The end-product exhibits the “weakest-link” property, such that if any of its component parts fails, the end-product fails. The supplier of each component part can improve the (uncertain) quality of her parts by exerting costly effort that is unobservable to the manufacturer and is non-contractible. We analyze three possible contractual agreements between the manufacturer and suppliers: Acceptable Quality Level (AQL), Quality–Based Incentive Pricing (Q–Pricing) and Group Warranty. Under AQL, the manufacturer inspects all incoming parts, but establishes different quality thresholds and pays the suppliers different amounts for achieving the different thresholds. Under Q-Pricing, the manufacturer also inspects all incoming parts but pays each supplier a constant amount for each good part. Under Group Warranty there is no testing of the individual parts; instead all suppliers are responsible for any failed end-product. We compare the efficiency of these three contractual arrangements as a function of the exogenous variables.
{"title":"Procurement in Supply Chains When the End-Product Exhibits the 'Weakest Link' Property","authors":"Stanley Baiman, Serguei Netessine, H. Kunreuther","doi":"10.2139/ssrn.2077640","DOIUrl":"https://doi.org/10.2139/ssrn.2077640","url":null,"abstract":"We consider a supply chain with one manufacturer who assembles an end-product using multiple outsourced parts. The end-product exhibits the “weakest-link” property, such that if any of its component parts fails, the end-product fails. The supplier of each component part can improve the (uncertain) quality of her parts by exerting costly effort that is unobservable to the manufacturer and is non-contractible. We analyze three possible contractual agreements between the manufacturer and suppliers: Acceptable Quality Level (AQL), Quality–Based Incentive Pricing (Q–Pricing) and Group Warranty. Under AQL, the manufacturer inspects all incoming parts, but establishes different quality thresholds and pays the suppliers different amounts for achieving the different thresholds. Under Q-Pricing, the manufacturer also inspects all incoming parts but pays each supplier a constant amount for each good part. Under Group Warranty there is no testing of the individual parts; instead all suppliers are responsible for any failed end-product. We compare the efficiency of these three contractual arrangements as a function of the exogenous variables.","PeriodicalId":230377,"journal":{"name":"ERN: Integration (Topic)","volume":"10 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2004-02-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"124231563","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
In this paper we investigate the impact of vertical mergers on upstream firms' ability to sustain collusion. We show in a number of models that the net effect of vertical integration is to facilitate collusion. Several effects arise. When upstream offers are secret, vertical mergers facilitate collusion through the operation of an outlets effect: Cheating unintegrated firms can no longer profitably sell to the downstream affiliates of their integrated rivals. Vertical integration also facilitates collusion through a reaction effect: the vertically integrated firm's `contract' with its downstream affiliate can be more flexible and thus allows a swifter reaction in punishing defectors. Offsetting these two effects is a possible punishment effect which arises if the integrated structure is able to make more profits in the punishment phase than a disintegrated structure
{"title":"Do Vertical Mergers Facilitate Upstream Collusion?","authors":"Volker Nocke, L. White","doi":"10.2139/ssrn.691341","DOIUrl":"https://doi.org/10.2139/ssrn.691341","url":null,"abstract":"In this paper we investigate the impact of vertical mergers on upstream firms' ability to sustain collusion. We show in a number of models that the net effect of vertical integration is to facilitate collusion. Several effects arise. When upstream offers are secret, vertical mergers facilitate collusion through the operation of an outlets effect: Cheating unintegrated firms can no longer profitably sell to the downstream affiliates of their integrated rivals. Vertical integration also facilitates collusion through a reaction effect: the vertically integrated firm's `contract' with its downstream affiliate can be more flexible and thus allows a swifter reaction in punishing defectors. Offsetting these two effects is a possible punishment effect which arises if the integrated structure is able to make more profits in the punishment phase than a disintegrated structure","PeriodicalId":230377,"journal":{"name":"ERN: Integration (Topic)","volume":"21 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2003-11-17","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"130614802","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
We show that an unprofitable firm in an oligopoly product market may motivate a favorable merger by committing to continue production, thereby dissipating industry profits. A sufficiently high level of debt financing makes the firm's production decision optimal for its equityholders. We show conditions for this production decision to be renegotiation-proof. Our analysis also applies to firms that are under bankruptcy protection, which enables them to finance continued operations with new debt. The empirical implications of our analysis relate takeovers of distressed firms to the nature of product market competition, the firms' debt policy, and the regulatory environment.
{"title":"Imperfect Competition, Debt, and Exit","authors":"G. Kanatas, Jianping Qi","doi":"10.2139/ssrn.315676","DOIUrl":"https://doi.org/10.2139/ssrn.315676","url":null,"abstract":"We show that an unprofitable firm in an oligopoly product market may motivate a favorable merger by committing to continue production, thereby dissipating industry profits. A sufficiently high level of debt financing makes the firm's production decision optimal for its equityholders. We show conditions for this production decision to be renegotiation-proof. Our analysis also applies to firms that are under bankruptcy protection, which enables them to finance continued operations with new debt. The empirical implications of our analysis relate takeovers of distressed firms to the nature of product market competition, the firms' debt policy, and the regulatory environment.","PeriodicalId":230377,"journal":{"name":"ERN: Integration (Topic)","volume":"36 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2002-08-05","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"123183752","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This paper employs newly developed techniques of nonlinear cointegration analysis to study international stock market integration. The stock price indexes of Australia, Japan, New Zealand, the United Kingdom and the United States are used in both linear and nonlinear cointegration tests on bivariate and various multivariate models. Much more evidence of market integration emerges from nonlinear cointegration analysis than linear analysis. It appears, therefore, that many of the conclusions reached in prior work that used traditional methodologies need to be reconsidered.
{"title":"International Stock Market Integration: Evidence from Nonlinear Cointegration Analysis","authors":"Xiaoming Li","doi":"10.2139/ssrn.961099","DOIUrl":"https://doi.org/10.2139/ssrn.961099","url":null,"abstract":"This paper employs newly developed techniques of nonlinear cointegration analysis to study international stock market integration. The stock price indexes of Australia, Japan, New Zealand, the United Kingdom and the United States are used in both linear and nonlinear cointegration tests on bivariate and various multivariate models. Much more evidence of market integration emerges from nonlinear cointegration analysis than linear analysis. It appears, therefore, that many of the conclusions reached in prior work that used traditional methodologies need to be reconsidered.","PeriodicalId":230377,"journal":{"name":"ERN: Integration (Topic)","volume":"41 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2002-07-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"115911423","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2002-06-01DOI: 10.1257/000282804322970698
Boyan Jovanovic, Serguey Braguinsky
When a takeover is announced, the sum of the stock-market values of the firms involved often falls, and the value of the acquirer almost always does. Does this mean that takeovers do not raise the values of the firms involved? Not necessarily. We set up a model in which the equilibrium number of takeovers is constrained efficient. Yet, upon news of a takeover, a target's price rises, the bidder's price falls, and, most of the time the joint value of the target and acquirer also falls.
{"title":"Bidder Discounts and Target Premia in Takeovers","authors":"Boyan Jovanovic, Serguey Braguinsky","doi":"10.1257/000282804322970698","DOIUrl":"https://doi.org/10.1257/000282804322970698","url":null,"abstract":"When a takeover is announced, the sum of the stock-market values of the firms involved often falls, and the value of the acquirer almost always does. Does this mean that takeovers do not raise the values of the firms involved? Not necessarily. We set up a model in which the equilibrium number of takeovers is constrained efficient. Yet, upon news of a takeover, a target's price rises, the bidder's price falls, and, most of the time the joint value of the target and acquirer also falls.","PeriodicalId":230377,"journal":{"name":"ERN: Integration (Topic)","volume":"93 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2002-06-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"132865538","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2002-05-05DOI: 10.1111/J.1937-5956.2002.TB00185.X
Geoffrey G. Parker, E. Anderson
Using case study data, we describe how a large personal computer manufacturer changed its supply-chain management strategy after outsourcing the majority of its design and manufacturing activities to a network of focused suppliers. To cope with this new structure, the firm created highly skilled generalists, "supply-chain integrators," who coordinate product development, marketing, production, and logistics from product concept to delivery across firm boundaries. We particularly focus on the skill-set that characterizes these integrators. Finally, we use the case evidence, combined with previous theory, to suggest a specific program of research into coordinating product development across disaggregated supply chains.
{"title":"From Buyer to Integrator: The Transformation of the Supply-Chain Manager in the Vertically Disintegrating Firm","authors":"Geoffrey G. Parker, E. Anderson","doi":"10.1111/J.1937-5956.2002.TB00185.X","DOIUrl":"https://doi.org/10.1111/J.1937-5956.2002.TB00185.X","url":null,"abstract":"Using case study data, we describe how a large personal computer manufacturer changed its supply-chain management strategy after outsourcing the majority of its design and manufacturing activities to a network of focused suppliers. To cope with this new structure, the firm created highly skilled generalists, \"supply-chain integrators,\" who coordinate product development, marketing, production, and logistics from product concept to delivery across firm boundaries. We particularly focus on the skill-set that characterizes these integrators. Finally, we use the case evidence, combined with previous theory, to suggest a specific program of research into coordinating product development across disaggregated supply chains.","PeriodicalId":230377,"journal":{"name":"ERN: Integration (Topic)","volume":"88 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2002-05-05","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"126761188","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Using a panel data set for 18 stock countries, this paper finds fairly strong integration among national equity markets. A country's stock index price can be decomposed into a common trend component and a stationary country-specific component. Results show that the 18 country indexes reverse to the world trend with a speed of 18% per year, and that the Hong Kong market converges to other markets with a speed of 22% per year or a half life of around three years. The two components can be separately estimated using maximum likelihood. The country-specific component displays substantial variability and is found to have both mean reversion over the long horizon and momentum over the short horizon. A simple parametric trading strategy exploiting simultaneously mean reversion and momentum effects produces an excess return of 16.7% per year, which exceeds those of strategies based on momentum or mean reversion separately. The excess return is statistically significant, and cannot be explained by systematic risk factors or by transaction costs. The results seem to support the behavioralist overreaction view vis-ˆj-vis an efficient markets view.
{"title":"Stock Market Integration, Return Forecastability and Implications for Market Efficiency: A Panel Study","authors":"Ronald J. Balvers, Yangru Wu","doi":"10.2139/SSRN.1009355","DOIUrl":"https://doi.org/10.2139/SSRN.1009355","url":null,"abstract":"Using a panel data set for 18 stock countries, this paper finds fairly strong integration among national equity markets. A country's stock index price can be decomposed into a common trend component and a stationary country-specific component. Results show that the 18 country indexes reverse to the world trend with a speed of 18% per year, and that the Hong Kong market converges to other markets with a speed of 22% per year or a half life of around three years. The two components can be separately estimated using maximum likelihood. The country-specific component displays substantial variability and is found to have both mean reversion over the long horizon and momentum over the short horizon. A simple parametric trading strategy exploiting simultaneously mean reversion and momentum effects produces an excess return of 16.7% per year, which exceeds those of strategies based on momentum or mean reversion separately. The excess return is statistically significant, and cannot be explained by systematic risk factors or by transaction costs. The results seem to support the behavioralist overreaction view vis-ˆj-vis an efficient markets view.","PeriodicalId":230377,"journal":{"name":"ERN: Integration (Topic)","volume":"1 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2002-05-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"129394061","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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