Schmalensee (1974) considers the optimal advertising expenditure of the Stackelberg leader incumbent who may induce the potential entrant not to enter. He shows that the incumbent needs a strong advantage for the advertising’s e¤ectiveness to be of deterrence entry. Furthermore, the equilibrium achieved does not depend on the size of the market. In this paper, by considering the advertising measured in units of ads, we allow the advertising cost functions to be nonlinear. We showed that the type of equilibrium depends on the relative e¤ectiveness of advertising, as stated by Schmalensee, and also of the size of the market. In contrast to what stated by Schmalensee, an incumbent …rm with a relatively small e¤ectiveness of advertising may resist any intrusion into its market if the size of the market is su¢ciently small. Ellison and Ellison (2000) re- ports evidence that drugs with higher revenues are most likely to attract generic entry. Scott Morton (2000) analyzes the U.S. pharmaceutical industry and question whether pre-expiration brand advertising deters generic entry. She shows that the market attractiveness, measured by pre-expiration brand revenue, is the most important factor determining the number of entrants.
Hence, the result of Proposition 4 shows that a larger size of the market implies a higher probability of the entry accommodating equilibrium. The intuition is the follows. When the size of the market is high, strong incentives exist for the potential entrant to advertise to gain market share. It follows that the incumbent needs to spend heavily on advertising to deter the entry of its competitor. But in this situation, since the advertising exhibits increasing marginal cost, the marginal revenue will be smaller than the marginal cost. Consequently, the incumbent prefers to moderate his spending in advertising and then enter occurs.
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While this paper is primarily theoretical, in this section, we make a modest attempt to bring the theory to the data. One of our theoretical prediction is that the price level is lower for the larger market. Another result is that if the quality-adjusted unit variable cost is higher for the high quality product, then an increase in the size of the market will increase the market share of the high quality product. Using data covering China’s exporting firms for the two years 2001 and 2006 13 , we test these predictions by exploring: (i) the relationship between the average quality offered to an export market and the size of that market, and (ii) the relati- onship between the price of a product offered by a single firm and the size of the market. The data sets contains a wide range of variables that are suitable for testing our hypotheses. These include the price of the products supplied by each firm in each export market, the volume of transaction, and the category of the products by the HS6 code. In addition, we assemble the data that describe the macro characteristics of the destination countries using the databases of the World Bank and the CEPII. These characteristics include GDP, per capita GDP, CPI,
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This paper is related to the literature on hierarchies. In a seminal paper, Williamson (1967) has studied the wage structure in a corporate hierarchy. Calvo and Wellisz (1978) have shown that the hierarchical loss of control limitation of the firm size depends on the nature of the supervision process. Qian (1994) has studied a model of hierarchy in which the number of tiers, the span of control, and the wage structure are all optimally determined. Like the case when the effort of a person is either zero or one in Qian, individuals in the hierarchy receive the same wage rate in this model. Garicano (2000) have used a team production approach to study hierarchies. Those models provide very detailed studies of hierarchies. One significant difference between this paper and the above ones is that this paper studies how market structure affects the hierarchy of a firm and the choice of technology in a general equilibrium model while the above papers studies hierarchies in isolation. As shown later after Proposition 3, this general equilibrium approach is useful to address how coordination efficiency affects a firm’s choice of the degree of specialization when we need to determine whether the direct effect of a decrease in marginal benefit or the indirect effect of an increase in output dominates. When a firm produces a higher level of output, it needs more labor. If we used a partial equilibrium approach without labor market, we would not be able to address whether a firm’s output expansion would be consistent with the clearance of the labor market. With a general equilibrium approach used here, the labor market also clears.
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We offer two problems which we regard as worthy of further research. First, how is it that some large metropolitan areas have football teams with systematically weak performance? Birmingham, Bristol and Sheffield are possible areas to consider as these appear to have underperforming clubs. 15 Second, how do changes in population over time, through births, deaths and migration, impact upon disparities in market size between clubs. Our analysis has used 2001 census data. It would be interesting to compare our results from similar models constructed using the 1991 and earlier censuses to see how the dynamics of market size have impacted upon team
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country. In this setting, international policy competition can result in a more eﬃcient location choice by the firm. With a similar structure, except that the incumbent is a public, welfare-maximizing (as opposed to a private) firm, Amerighi and De Feo (2017) find that this eﬃciency-enhancing feature of policy competition does not hold. Thus the eﬀects of policy competition depend crucially on the nature of the domestic incumbent. Ferrett and Wooton (2010b) build on the Haufler and Wooton framework by asking how the equilibrium outcome is changed when the countries are competing for FDI from two firms producing a homogeneous good, as opposed to a single firm. If both firms invest in the same country, they experience more competition than if the firms were to spatially separate their FDI. In this latter case, the firm investing in the smaller country is at a disadvantage. If the size diﬀerence between the two countries is suﬃciently great, the firms will accept the more competitive market environment arising from both investing
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There are significant institutional differences between the UK and the US in terms of the delisting decision. In the US companies that intend to delist have two options; fist, they need to delist from the exchange (NYSE, AMEX, or NASDAQ), which may take about 21 days depending on the exchange. In this situation, firms continue to trade over the counter or on the Pink Sheets. Then they may need to file a form 15 in order to deregister from SEC and this step takes about 60 days. Once they deregistered, they are not required to provide public information (e.g., Macey et al., 2008, and Marosi and Massoud, 2007). In contrast, in the UK, a firm decides to delist voluntarily either to transfer to another market, or, more importantly, to become a private company. In this situation, investors have two choices; either sell their shares before the delisting date, or remain shareholders in the privately owned company. The delisting process goes through one step. In accordance with Rule 41 of AIM, a firm should notify the London Stock Exchange to cancel its trading at least 20 days prior to such date. This should be conditional upon the approval of not less than 75% of votes cast by shareholders in the general meetings (see AIM publications in London Stock Exchange). 4 Very recently, Espenlaub et al. (Forthcoming in JBFA) investigate the impact of the regulation on the survival AIM IPOs. They find that if AIM increases the minimum requirements on the size and the age of the company, IPOs have greater chance for long-term survival. They compare survivors to companies that delist due to merger and acquisition and other negative reasons, but they do not distinguish between voluntary delisting and other forms of delisting, such
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When considering OMR announcements, the size of the repurchase is often described in terms of a target ratio that indicates the proportion of a firm’s outstanding stock that will potentially be repurchased through open -market transactions. Stephens and Weisbach (1998) argue that the market’s positive response to an OMR announcement is related to the announced target ratio because it proxies for the strength of management’s inside information. Comment and Jarrell (1991) suggest that the target ratio of an OMR serves as a particularly strong signal because the target ratio serves as management’s only choice variable with an OMR as compared with other repurchase methods, and they show that post-announcement returns monotonically increase in OMR target ratios. Chan, et al., (2010) argue against OMR program size as a reliable and credible signal. They question the strength of the target ratio as a positive signal because managers who do not intend to repurchase stock may use OMRs to effectively mislead investors about the quality of the firm.
Abstract. This paper considers the size of the large fluctuations of a sto- chastic differential equation with Markovian switching. We concentrate on processes which obey the Law of the Iterated Logarithm, or obey upper and lower iterated logarithm growth bounds on their almost sure partial maxima. The results are applied to financial market models which are subject to random regime shifts. We prove that the security exhibits the same long–run growth properties and deviations from the trend rate of growth as conventional geo- metric Brownian motion, and also that the returns, which are non–Gaussian, still exhibit the same growth rate in their almost sure large deviations as sta- tionary continuous–time Gaussian processes.
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We examine the factors influencing the firm’s choice and, in particular, how fiscal com- petition between the two nations to attract this second new FDI aﬀects the outcome in equilibrium. In this setting, we define these factors to be: a market-size eﬀect, a product-diﬀerentiation eﬀect, and an import-substitution eﬀect. Given the existence of intra-regional trade costs, all else equal, the firm has an incentive to invest in the larger country in order to save on these trade costs, reflecting the market-size eﬀect. The product-diﬀerentiation eﬀect concerns the firm’s increasing incentive to co-locate the production of its existing and new varieties as the two varieties become more diﬀerenti- ated. Finally, the import-substitution eﬀect arises from a country’s preference for locally produced goods over imported goods, since the price of the former is cheaper than that of the latter. Our results show that the firm’s location choice is determined exclusively by the interaction between the market-size eﬀect and the product-diﬀerentiation eﬀect, both of which (as defined) work to attract the FDI to the larger market. Given the existence of intra-regional trade costs, the firm seeks to establish its new production facility in the location that minimizes these expenses across both varieties of its prod- uct. Thus one or both of these eﬀects must be weak if the smaller country is to have the opportunity of attracting the FDI. If, for instance, the product-diﬀerentiation eﬀect is very weak and the varieties are therefore close substitutes for one another, then the firm will have an incentive to spatially separate its two plants. If, instead, the varieties are strongly diﬀerentiated from each other, the firm will locate the production of both varieties in the country that provides the larger domestic market.
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How resource abundance and market size affect the choice of increasing returns technologies is studied in an overlapping-generations general equilibrium model in which manufacturing firms engage in oligopolistic competition. The model is surprisingly tractable. First, for the steady state, the wage rate, the level of technology, and capital stock are not affected by the amount of natural resources. An increase in the share of agricultural revenue going to natural resources leads to a lower wage rate and firms choose less advanced technologies. Second, an increase in market size increases the equilibrium wage rate, level of technology, and capital stock. Finally, other things equal, a country with a lower endowment of natural resources or a higher market size has a comparative advantage in producing the manufactured good.
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Under the Kyoto Protocol, each of the Articles defining the three flexibility mechanisms carries wording to the effect that the use of the mechanism must be supplemental to domestic actions. Article 6 states that emission reduction units from joint implementation projects should be “supplemental to domestic actions” for the purpose of meeting quantified emission limitation or reduction commitments. Article 12 states that Annex I Parties may use the certified emission reductions from CDM projects to contribute to compliance with “part of their quantified emission limitation and reduction commitments”, while Article 17 states that emissions trading shall be “supplemental to domestic actions” for the purpose of meeting quantified emission limitation or reduction commitments. The absence of a precise definition of the meaning of supplementarity within the text of the Protocol has lead to the existing differing interpretations of these provisions. At one extreme, the supplementarity clause could be interpreted simply to mean that domestic actions should provide the main means of meeting Annex 1 countries’ commitments, so that any action abroad would be additional to domestic actions. At the other extreme, the clause could be interpreted to mean that any action abroad will be supplemental to whatever domestic actions are taken. This implies that any one Annex 1 country could use the flexibility mechanisms as much as it wished in order to meet its Kyoto commitments. Whether the supplementarity clauses will be translated into a concrete ceiling, and if so, how should a concrete ceiling on the use of the three flexible mechanisms be defined remain to be determined. In my view, the supplementarity clause is of significant policy relevance to the ongoing negotiations on the overall issue of flexibility mechanisms. While Morozova and Stuart paper does cite results from Zhang (1999), the paper does not pay sufficient attention to this topic, As the topic is important in that different interpretations of clauses may affect the size of the carbon market considerably, it will be useful to elaborate on the subject further.
velops a model of directed technical change and shows that the market-size e¤ect exists even without the scale e¤ect on growth; however, his formulation maintains the scale e¤ect on level. Our study complements Acemoglu (2002) by showing the di¤erent determinants of the scale and market-size e¤ects and the importance of the relative intensity of two conventional R&D speci…cations.
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In year 2050, the number of Muslims in the world will reach at 2.76 billion, which makes up 29.7% of the population in the world . Halal industry becomes one of the fastest growing businesses in the global market. It is estimated that in year 2015, Muslims in the world spent US$ 1.17 trillion on food and beverage, and the revenues from halal certified food and beverage products were US$ 415 billion . This huge halal food market has attracted Japanese enterprises to export halal food products to foreign halal markets. On the other hand, halal food market in Japan is still considered small. Estimating the market size may help us see whether it is an interesting market or not.
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Two teams sign contracts with talents. There is a fixed amount of talents in the market, available for any demand. The number of talents each firm employs does not change during the tournament. One team pays only a fixed salary, while the other team pays both a fixed salary and a win bonus. Contracts are signed at the start of the season, before the effort of the talents was measured and the results of the tournament are known. It is assumed that team managers have a good knowledge of all relevant parameters, like effort of talents, revenues and costs. Teams maximize their win percentage or profits.
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The impact of institutional quality on FDI has been investigated on limited extent in South Asian countries. Globerman & Shapiro (1999) identified the importance of institutions quality for MNCs. They developed governance quality index using six governance indicators that include rule of law, corruption, etc of Kaufman et al. (1999). A good Governance effect positively FDI inflows. They used principal components methodology for this index development. Quéré (2005) found that good institutions are main source of attractiveness for FDI inflows. For empirical analysis they used data set of 52 countries. They also controlled the issue between institutions and market size. They evaluated good institutional quality raise bilateral FDI inflows. Hyun (2006) analyzed the short run and long run relationship between institution quality and FDI inflows by analyzing the data of 62 developing countries over the period of 1984 to 2003 .There is no short run causality between these two variables. Institutional quality effect positively FDI in long run and short run.
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Today, nanotechnology has been imported in various fields of agriculture, pharmacy, medicine, electronics and food industries. Due to existence of the increasing need to develop safe, non-toxic and environmentally friendly methods (green nanotechnology), the wide range of nanostructures are made todays with the purpose of increasing the amount of healthy, non- toxicity and being environmentally friendly.Nanotechnology science and its products have found a good position in the pharmaceutical area, so that the global pharmaceutical market witnesses numerous pharmaceutical products using nanotechnology and many drugs such as drug deliveringnanostructures are designed for less concentrated and more effective transferring of the drug and to reduce side effects as well as to enhance efficiency of treatment, that the chemotherapy drugs are some of them. So, the aim of this study was to provide formulation of nanoarchaeosomal paclitaxel and to evaluate parameters such as encapsulation, particle sizeand size distribution. To prepare archaeosome, the first phase was cultivation of Halobacterium salinarum and extraction of archaeosome from it. Then, it has been combined a certain proportion of cholesterol, archaeosome and paclitaxel with each other and the average diameter of the nanoarchaeosomal paclitaxel was measured with the aid of Zeta Sizer that was equal to 425 nm. The encapsulation efficiency of nanoarchaeosomal paclitaxel was obtained %96.32. Cell viability was examined by MTT assay on MCF-7 cell lines. Analysis on Cell viability percentage showed that dead effect of tumor cells in formulation of nanoarchaeosomal paclitaxel was more than free formulation. It means that the nanoarchaeosomal paclitaxel was more effective than paclitaxel in a freeform.
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This policy brief provided research results indicating that a lack of competitive selection contributes to the productivity stagnation in European business services. Competition between small firms and large firms in business services is found to be weak. Inefficiencies also persist within size classes, which indicate a lack of competitive pressure. Markets for business services appear to work best in countries with flexible regulation on employment changes, and with low regulatory costs for firms that start-up or close down a business. Countries with more openness to foreign competition perform better in terms of competitive selection and productivity. Policy simulations show that many countries can do better than they do now – but the potential gains from policy reform are largest in the EU Mediterranean countries and Austria. A strengthening of the single market for services will contribute to more competitive selection and better productivity performance in European business services. Because of its large weight in the inputs of other industries, the business services industry should be a key industry in the Europe2020 strategy of the Commission.
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Analysis from the perspective of diffusion of innovation (DOI) theory showed that while there have been heavy investments in eHealth innovations, adoption process is still in its early stages (Figure 4). While effective eHealth innovations certainly exist, they are generally run by local champions and are mostly state funded. Presently, almost no eHealth applications (innovations) have been successful in reaching enterprise-wide and large scale adoption. Various barriers to adoption of eHealth innovations were investigated in this paper and suggested solutions were prescribed. Examples of identified market barriers of eHealth innovations include: technophobic nature of most elderly users; elderly with disabilities; security issues; small market size; inadequate planning, integration or coordination among the providers and policy makers; technological and interoperability problems; poor user cantered design, and cost effectiveness.
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not have any explanatory power beyond beta, that is, y2 = 0, with alternative hypothesis 7 2 * 0, (the asset pricing model does not capture all relevant risk factors). Banz finds that from 1931 to 1975, the average return to stocks of small firms (those with low values of market equity) was substantially higher than the average return to stocks of large firms after adjusting for risk using the CAPM. He reported that the t- statistic for 7 2 in (2.5.) is large in absolute value (-2.92), and concluded that the size effect is large and statistically significant. From these results, relative size seems to be able to explain a larger fraction of the cross-sectional variation in average return than beta can. Thus, the CAPM seems to be missing a significant factor firm size. After Banz (1981), a plethora of papers that examine the relation between firm size and return for the U.S. market9 were published, with one remarkable example being Fama and French’s (1992) paper. The researchers’ interest not only concentrated on the relation between firm size and return, but also on the explanations of the size effect. Explanations for the size effect will be described in the next subsection. The size effect is not confined to the U.S. market. Numerous studies, in most stock markets around the world, have examined the size effect. They include studies10 in Australia, Belgium, Canada, Finland, France, Ireland, Japan, Mexico, New Zealand,
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