Product Boundaries of the Software Market Within the Context of Competition Policy

2016 ◽  
Vol 2016 (6) ◽  
pp. 39-56
Author(s):  
Andrey Shastitko ◽  
Alexandr Kurdin ◽  
Anastasiya Morosanova
Keyword(s):  
Competition Policy ◽  
Network Effects ◽  
Legal Status ◽  
Market Competition ◽  
Product Market ◽  
Intellectual Activity ◽  
Legal Cases ◽  
Competition Analysis ◽  
Software Market ◽  
The Difference

The article analyses the main features of the intellectual activity results market through the lens of the product boundaries definition. Frequently the pirated copy is not considered as a substitute for original products in legal cases. However, unlicensed computer programs should be included in the product market boundaries regardless of its legal status if the consumer considers them as substitutes. The difference between these types of products (original and pirated) are hidden not in transformation but in transaction characteristics. It is also important to take into consideration the possible complementarity between pirated and original products expressed in the information and network effects. In order to assess the buyers’ choice it is necessary to adjust the methods evaluating product market boundaries prescribed by «The Procedure of market competition analysis» of the Russia’s Federal Antimonopoly Service.

Product market competition, cash flow and corporate investments

2018 ◽  
Vol 44 (2) ◽  
pp. 207-221 ◽  
Author(s):  
Hussein Ali Ahmad Abdoh ◽  
Oscar Varela
Keyword(s):  
Cash Flow ◽  
Market Competition ◽  
Product Market ◽  
Product Market Competition ◽  
Content Type ◽  
Growth Firms ◽  
Capital Spending ◽  
The Difference ◽  
The Impact

Purpose The purpose of this paper is to examine the effects of product market competition on capital spending (investments) financed by cash flow (CF), and the role of financial constraints (FC) on these effects. Design/methodology/approach The Herfindahl-Hirschman index of concentration measures competition. Earnings retention, working capital, the Kaplan and Zingales (1997) index and CF shortfalls measure FC. Regressions relating capital spending to competition are performed for the full sample, as well as financially constrained and unconstrained, and growth and value firms’ sub-samples. For robustness, large reductions in import tariffs are examined to exogenously measure competition, with the impact of these on capital spending tested via the difference-in-difference method. Findings The results show that competition fosters valuable investments when firms are financially unconstrained, especially for growth firms, and reduces these investments when they are financially constrained, especially for value firms. Practical implications The role of policy makers in alleviating FC should be focused toward growth firms that operate in competitive industries. As well, increasing financial pressure on value firms in competitive industries can have desirable effects, as it forces these firms to reduce investment inefficiency. Originality/value Many firm-specific and environmental factors drive the relation between competition and investment. Khanna and Tice (2000) find profitable firms increasing and highly levered firms decreasing investments in response to Wal-Mart’s entry into their markets. Jiang et al. (2015) suggest that environments with predictable growth drive a positive relation between competition and investments. This study claims that another factor that affects this relation is the firm’s level of FC.

scholarly journals Application of Huff model in analysing market competition – example of shopping centres in the settlement of Zadar

Geoadria ◽  
2017 ◽  
Vol 22 (1) ◽  
pp. 41
Author(s):  
Ivan Marić ◽  
Ante Šiljeg
Keyword(s):  
Spatial Data ◽  
Market Competition ◽  
Market Area ◽  
Competition Analysis ◽  
Shopping Centre ◽  
Trade Area ◽  
Shopping Centres ◽  
Potential Market ◽  
The Difference ◽  
Definition Of

The object of the research is market competition between the shopping centres in the settlement of Zadar. The research is based on the spatial data collected by using various methods and techniques, which were analysed by applying the tools of geographic information system (GIS) with respect to specific laws of market economy. A categorization of shopping centres was made in order to define a broad trade area where the competition between the centres was analysed. A demographic raster was used to define the density of potential consumers within a broad market area. The competition analysis included the determination of the centres’ market zones, the occurrence of potential market cannibalism and the definition of the dominant shopping centre according to a variable of choice probability. The market zones were determined based on the attribute of duration of drive (min). On-site research, calculation of non-linear distance and the analysis of shopping centres’ density, led to a conclusion that market cannibalism occurs between the centres. For the purpose of predicting market dominance, Huff model was used to calculate average values of preference of centres within the zones of overlapping and the broad trade area. The results of Huff model confirm the market reality that a larger number of consumers within the zones of overlapping and the broad trade area prefer a more attractive shopping centre. The difference in number of people that visit a more attractive shopping centre was quantified by overlapping the demographic raster and the Huff model.

scholarly journals Competition Policy and Exit Rates: Evidence from Switzerland

2005 ◽  
Vol 4 (1) ◽  
Author(s):  
Stefan Buehler ◽  
Christian Kaiser ◽  
Franz Jaeger
Keyword(s):  
Competition Policy ◽  
Natural Experiment ◽  
Market Competition ◽  
Product Market ◽  
Product Market Competition ◽  
Exporting Firms ◽  
Antitrust Legislation ◽  
Exit Probability ◽  
Exit Probabilities ◽  
The Impact

Abstract This paper provides evidence on the relation between the intensity of product-market competition and the probability of exit. We adopt a natural experiment approach to analyze the impact of a tightening of Swiss antitrust legislation on exit probabilities. Based on a sample of more than 68,000 firms from all major sectors of the Swiss economy, we find that the exit probability of non-exporting firms increased significantly, whereas the exit probability of exporting firms remained largely unaffected. Our results support the notion that there is a positive relationship between the intensity of product-market competition and the probability of exit.

IPOs versus Acquisitions and the Valuation Premium Puzzle: A Theory of Exit Choice by Entrepreneurs and Venture Capitalists

2011 ◽  
Vol 46 (6) ◽  
pp. 1755-1793 ◽  
Author(s):  
Onur Bayar ◽  
Thomas J. Chemmanur
Keyword(s):  
Initial Public Offerings ◽  
Market Competition ◽  
Product Market ◽  
Venture Capitalists ◽  
Public Offerings ◽  
Exit Mechanism ◽  
The Difference ◽  
Exit Choice ◽  
Premium Puzzle ◽  
Considerable Support

AbstractWe analyze a private firm’s choice of exit mechanism between initial public offerings (IPOs) and acquisitions, and we provide a resolution to the “IPO valuation premium puzzle.” The private firm is run by an entrepreneur and a venture capitalist (VC) (insiders) who desire to exit partially from the firm. A crucial factor driving their exit choice is competition in the product market: While a stand-alone firm has to fend for itself after going public, an acquirer is able to provide considerable support to the firm in product market competition. A second factor is the difference in information asymmetry characterizing the two exit mechanisms. Finally, the private benefits of control accruing to the entrepreneur post-exit and the bargaining power of outside investors versus firm insiders are also different across the two mechanisms. We analyze two situations: the first, where the entrepreneur can make the exit choice alone (independent of the VC), and the second, where the entrepreneur can make the exit choice only with the concurrence of the VC. We derive a number of testable implications regarding insiders’ exit choice between IPOs and acquisitions and about the IPO valuation premium puzzle.

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