Vertical Integration due to Small Market Size and High Product Development and Integration Costs

Author(s):  
Oleksiy Mazhelis ◽  
Pasi Tyrväinen
Author(s):  
Pham Dinh Long ◽  
Nguyen Van Duc

This study investigates the effects of remittances on attracting foreign direct investment flows to South East Asia. Using a balanced panel data set for seven countries in the 2000-2013 period, we find that remittances have a direct positive impact on attracting FDI. Significantly, the result also shows a negative correlation between remittances and FDI attraction in countries with low per capita income and small market size.


2020 ◽  
Vol 4 (2) ◽  
pp. 25-33
Author(s):  
Milica Jovanović ◽  
Aleksandar Đorđević

Market size in many ways determines the national competitiveness of an economy. If there is a large national market, it is a source of demand for manufacturing companies. There are cases where the national economy has a large market and a weak industry, e.g. Russia, while on the other hand, Switzerland, which has a small market size, compensates that with productivity and exports to other markets. Market size and foreign trade complement each other in influencing the sustainability of national competitiveness. If there is a large market and insufficient industry to meet the demand in that market, it is necessary to import the products and satisfy the needs of the domestic market. However, the small national market and the production of a large quantity of products that it cannot absorb requires export to other markets. The paper presents a comparative analysis of the competitiveness of Serbia and countries in the region, and their indices of market sizes, which include, but are not limited to, foreign market percentages and exports. Certainly, both determinants significantly affect national competitiveness and its sustainability.


2014 ◽  
Vol 13 (2) ◽  
Author(s):  
Luca Correani ◽  
Giuseppe Garofalo ◽  
Silvia Pugliesi

AbstractIn this paper we analyze how firms’ R&D investment decisions, firms’ profits and social welfare are affected by absorptive capacity; that is, the ability of a firm to learn from other collaborating firms. The model developed is a strategic regular network where firms have the opportunity to form pair-wise collaborative links with other firms and then compete à la Cournot. Different to the existing literature, we find that firms’ R&D efforts could increase or decrease with the degree of the network, depending on the level of absorptive capacity, the market size and the network dimension. In particular, in the case of small market size and low learning effect, the connection between firms drives up research investments. Moreover, if absorptive capacity is sufficiently low, the research collaboration between firms turns out not to be desirable from a private point of view while, in line with the existing literature, social efficiency requires a complete or intermediate level of collaborative activity. We also show that the complete network is pair-wise stable and socially optimal for an intermediate level of spillover intensity, while the empty network maximizes firms’ profits when absorptive capacity is small, yet it is not pair-wise stable.


1998 ◽  
Vol 2 (1) ◽  
pp. 45-51
Author(s):  
Shobha Ahuja

The Paper deals essentially with the potential of promoting industrial cooperation in the SAARC countries by establishing joint ventures. Such an initiative is based on economic logic which, at the unit level, signifies higher returns on investment in the host country. Of the six SAARC nations, Indian corporates have invested only in two countries namely Nepal and Sri Lanka. Though the size and scale of operation in these countries is small, most Indian corporates hold a majority stake in their ventures. Indian companies consider investing in SAARC an attractive business proposition mainly for factors such as captive domestic market, exports to third countries, geographical proximity, positive legislation, developing raw material supplies and higher profits. Nevertheless, constraints in the form of small market size, inadequate infrastructure, paucity of information and cumbersome government procedures hinder realising of the full potential of the venture.


2021 ◽  
pp. 152700252110071
Author(s):  
Aigbe Akhigbe ◽  
Melinda Newman ◽  
Ann Marie Whyte

We consider three professional sports and examine if there is a disparate return response to free agent signings with small versus big market franchises. After controlling for player ability, contract characteristics, and negotiation conditions, we find evidence of a more pronounced negative small market effect in response to both basketball and baseball signings, and a more pronounced negative big market effect in response to football signings. Our results suggest that differential market size sensitivities are complex, reflecting the influence of factors such as player ability and compensation in ways that are highly nuanced and unique to each league.


Marketing ◽  
2020 ◽  
Vol 51 (4) ◽  
pp. 271-282
Author(s):  
Mirjana Gligorijević ◽  
Jovan Rusić

Modern companies are facing much tougher competition than before. In the past, companies were competing, mostly with other companies locally. Now companies can offer their products to customers beyond the local market. Globalization presents a huge chance for companies to grow by an increase in the market size, but as the market size grows, the same happens with the competition. If a company wants to endure, a company is under pressure to innovate, and including customers can affect new product development. The goal of this paper is to determine if including consumers in new product development can affect faster and better quality new product development processes and increase new product value for the company. This analysis should provide us with an answer to the question, should we include consumers, and if we should, when? The results of this paper could act as a guide for managers in developing new products.


2012 ◽  
Vol 3 (3) ◽  
pp. 13-21 ◽  
Author(s):  
Marwan Rajeh Hussain ◽  
Abduljalil Zainal ◽  
Wael Mohamed Elmedany ◽  
Mohamed Waleed Fakhr

The aim of this paper is to present and demonstrate the main challenges and obstacles facing Telematics companies entering the market in Bahrain. Telematics is part of Information and communication technologies (ICT) which plays a major role in the economic development of countries. However, there are many obstacles and challenges facing new businesses that venture into the small market of Bahrain; e.g. the small market size, competition and lack of financing channels (e.g. venture capital).


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