Industrial Organization Commons^™

Rising Costs, Stagnant Prices: How Video Game Companies Truly Earn Profit, Lucas Mcculloch

Senior Honors Projects

Despite being one of the youngest forms of entertainment, video games have grown from a relatively niche market into an economic juggernaut, easily eclipsing both film and music in market value. In particular, the global video games industry has doubled in value in under a decade, from an estimated global revenue of approximately $80 billion in 2012 to approximately $160 billion in 2020. In order to better understand the economic principles underlying the rise of the gaming industry over the past decade, this project includes an interview of game developer and industry insider Rami Ismail and an in-depth literature review. …

Modeling The Us Beef Industry’S Response To Covid-19, Owen Michael Fleming

Undergraduate Economic Review

To understand the beef industry’s response to the COVID-19 pandemic, I proposed a three-sector model of the beef supply-chain and estimated it econometrically. Based on their definitions, it is found that panic, stay-at-home procedures, and expectations are not significant explanatory variables. However, there is strong evidence that COVID-19 spread in a set of counties with large meatpacking plants has the effect of increasing wholesale beef prices, while country-wide spread has the effect of reducing wholesale prices. The results further imply differences in competition across the market levels, with wholesalers responding as if they face less competition than retailers and farmers.

Hemp Production Network Effects: Are Producers Tipped Toward Suboptimal Varietal Selection By Their Neighbors?, Tanner Mccarty, Jeffrey Young

Journal of Applied Farm Economics

The 2018 farm bill removed industrial hemp from the Schedule 1 Controlled Substance List. In response, states scrambled to enact hemp legislation. Some hemp flower producers report their hemp fields were cross- pollinated by a neighbor growing a different hemp cultivar. For hemp flower crops, cross- pollination reduces cannabinoid concentration levels within the flower; these concentration levels dictate flower price. We show that in a repeated game, once a sufficiently large percentage of growers decide to plant hemp fiber/seed crops, cross-pollination forces flower growers to convert to fiber/seed to avoid the negative network externality. Over time, a stable, suboptimal Nash …

Learning By Supplying And Competition Threat, Yi-Fan Chen, Alireza Naghavi, Shin-Kun Peng

Research Collection School Of Economics

This study proposes a model of learning by supplying in an international outsourcing framework, where the supplier of a relationship-specific input can reverse engineer and become a competitor to its partner in the final goods market. Transmitting knowledge to a more capable supplier therefore creates competitive threat despite the benefits it brings within an outsourcing relationship. In particular, in markets with less differentiated products and for standard inputs that require less knowledge to be shared, choosing an intermediate capability level supplier prompts a strategic expansion of output to deter supplier entry in the final goods market, resulting in higher profits …

Income Inequality And Workplace Mobility During The Covid-19 Pandemic, John Washburn

Honors Theses and Capstones

With the pandemic being a once in a lifetime event (hopefully), there are many areas of research with purpose that were impossible to research beforehand. This paper looks at how income inequality created a separation between the rich and the poor regarding work and residential movement during the pandemic in the United States. By taking work and residential movement data from the Google Mobility report, which measures movement during the pandemic as a percent change benchmarked against pre pandemic movement and correlating it to the logarithm of Gross domestic product per capita, the effects of income can be seen. By …

Board Of Director Composition: An Examination Of How Director Age And Board Innovation Committees Impact Corporate Social And Financial Performance, Sami Ghaddar

2021

This dissertation explores how director age affects a firm’s social domain, and how board-level oversight of firms’ innovation activities affects financial performance. Specifically, the dissertation points to board configurations that can potentially improve social and financial performance. The first chapter reviews the literature by examining two research streams linking board composition to corporate social performance (CSP) and innovation. The chapter presents the theoretical and empirical underpinnings of these two streams. It details the descriptive and thematic findings and offers an understanding of the different contexts in which board composition relates to both CSP and innovation. This chapter also discusses inconsistencies …

Pola Perdagangan Global Pada Perusahaan-Perusahaan Berteknologi Tinggi, Dyah Wulan Sari, Wenny Restikasari

Jurnal Ekonomi dan Pembangunan Indonesia

This study deals with firm level data of Indonesian high-tech manufacturing industries to determine firm’s production, especially among global trade variables, such as export intensity, vertical trade integration, and two-way trade. This study employs a generalized method of moments (GMM) approach to examine the most important factors of a global trade phenomenon. In the full-sample, the result demonstrates that vertical trade integration and two-way trade are significant determinants on firm’s production while export intensity is not. In ordinary trader sub-sample, export intensity is a significant determinant of firm’s production, whereas in vertical trader sub-sample export intensity is not.

The Effects Of Racial Capitalism On Poor White Laborers, Amy Whittaker

Liberal Studies (MA) Final Essays

While always remembering that racial capitalism’s very nature ensures that non-white Americans suffer incomparable racial oppression, this paper will endeavor to expose the devastation caused to American society as a whole by explaining the ways in which racial capitalism destroyed poor white labors ability to participate fully in the economic system and strangled its chances of living the American dream. It is my hope that by discussing the missing piece of the poor white laborers’ experience under racial capitalism will unite poor white laborers and poor black laborers to work together to end racial capitalism, policing, and the carceral system. …

Public Health Insurance And Pharmaceutical Innovation: Evidence From China, Xuan Zhang, Huihua Nie

Research Collection School Of Economics

Developing countries are characterized by low levels of pharmaceutical innovation. A likely reason is their small market size, which is not because of the population size but because of low levels of income and lack of health insurance coverage. This study exploits a natural experiment from the implementation of a public health insurance program for rural residents in China (New Cooperative Medical Scheme [NCMS]) to examine whether the pharmaceutical industry increases innovation regarding diseases covered by the NCMS that are prevalent in rural areas. We examine the 1993–2009 patent data to gauge pharmaceutical innovation in China. Diseases with a 10% …

Sustainability In The Fashion Industry: Two Case Studies Highlighting Consumer Purchasing Actions Related To Brand Sustainability, Allison Zhang

Environmental Studies Senior Seminar Projects

The rise of competition in the fashion industry has called for companies to differentiate themselves. One way of differentiation that has been seen in recent years is an increase in sustainable and environmentally friendly practices. This paper explores the use of press releases by fashion companies to see if the releases impact the companies’ bottom line. The purpose of this study was to evaluate if sustainability related press releases impact consumers in the United States decision making in purchasing products or supporting certain brands or companies. To conduct this study, yearly and quarterly financial data was collected to find trends …

The Chow Test With Time Series-Cross Section Data, James K. Binkley, Jeffrey Young

Faculty & Staff Research and Creative Activity

The Chow test is a standard method to test for differences in regression response across groups. In some cases, the groups being tested are composed of a time series of cross sections. If the individual units within the groups have systematic differences, the Chow test is compromised: individual and group effects become confounded. This can cause rejections in the absence of the group effect of interest. We illustrate the problem with Monte Carlo analyses, and propose an alternative bootstrap-like testing procedure that helps eliminate excessive Type I errors.

The Political Economy Of Small Medium Enterprise Development: Characteristics, Productive Value, And Market Constraints In Industrial Manufacturing, Christine Ngo, Miao Chi

Faculty Journal Articles

This paper highlights the importance of small and medium-sized enterprise (SME) development and introduces the theoretical concept of productive value for qualitative analysis of firms. Vietnam’s industrial development experience is used as a case study. Although the Vietnamese government has channelled rents and business opportunities towards the state sector, the domestic private sector has been crucial to the country’s industrial development. Given this context, this study analyses how Vietnamese SMEs in the private sector generate productive value and overcome market failures that constrain their growth. Research findings demonstrate that most local SMEs in the industrial sectors rely on low pricing …

Firm Productivity And The Variety Of Inputs And Outputs: Evidence From Chinese Trade Data, Ken Onishi, Jianhuan Xu, Guang Yang

Research Collection School Of Economics

This paper studies how the trade liberalization in China changes the firm productivity. We develop a framework to estimate revenue productivity (TFPR) and real productivity (TFPQ) with multi-product firms. We find that the aggregate TFPR increases 30\% from 2002-2007 and TFPQ increases 22\%, suggesting that the observed TFPR increase is mainly driven by real productivity change rather than the markup change. We further decompose the change of productivity into three channels: (1) access to foreign inputs; (2) technology upgrade; (3) resource re-allocation within the firm. We find the most significant channel is the last one, which explains half of the …

Density Of Demand And The Consumer Benefit From Uber, Matthew H. Shapiro

Research Collection School Of Economics

Uber has attracted the attention of economists and policy makers for its innovations in the taxicab market and its potential for significant consumer welfare gains. The size of this gain depends in part on whether these innovations permit transactions previously costly or infeasible. Using New York City — the largest taxi market in the country — as its context, this paper estimates the level of any technological advantage Uber has over hail taxis in matching to consumers. I combine publicly available transportation data with data scraped from Uber and traffic cameras to estimate a model of the demand for transportation …

The Convergence Of Water, Electricity And Gas Industries: Implications For Ppp Design And Regulation, Sock Yong Phang

Research Collection School Of Economics

In several countries that have privatised their utilities, power and water are separate industries regulated by sector-specific regulators. In a parallel development, desalination has become an important source of water supply in countries where there is a shortage of cheap and clean freshwater. Where the energy source is gas, the use of gas-fired power plants to supply electricity for desalination links the water, electricity and gas industries. We use the case of the financial collapse of an integrated water and power project to illustrate the problems that can arise from such convergence, and to draw lessons for firms, Public-Private Partnerships …

Managerial Incentives To Repeatedly Collude: Frequency, Partners And Governance Rules, Catarina Marvao Dr., Chloé Le Coq

Articles

Cartel recidivism has been discovered among many convicted firms and is often perceived as a result of the limited efficiency of competition policy. The incentives for managers to collude have been linked to the firm’s organizational structure, the corporate culture, and the type of executive compensation packages in place.

To the extent that undetected cartels differ from detected ones in relevant dimensions, the current empirical results on illegal cartels are biased. To tackle this issue, we use a novel dataset of a population of cartels, which were legal in Sweden up until 1993. We contribute to the current debate on …

The Optimal Degree Of Reciprocity In Tariff Reduction, Pao-Li Chang

Research Collection School Of Economics

This paper characterizes the optimal reciprocal trade policy in the environment of Melitz (2003) with firm productivity heterogeneity. With all the conflicting effects of import tariffs on welfare considered, the optimal degree of reciprocity in multilateral tariff reduction is shown to be free trade.

The Optimal Degree Of Reciprocity In Tariff Reduction, Pao-Li Chang

Research Collection School Of Economics

This paper characterizes the optimal reciprocal trade policy in the environment of Melitz (2003) with firm productivity heterogeneity. In particular, without making parametric assumptions on firm productivity distribution, this paper derives the optimal degree of reciprocal tariff reductions that maximize the world welfare. A reciprocal import subsidy raises the industry productivity, lowering aggregate price; a reciprocal import tariff helps correct the markup distortion, increasing nominal income. With all the conflicting effects of import tariffs on welfare considered, the optimal degree of reciprocity in multilateral tariff reduction is shown to be free trade.

Individuals Responses To Economic Cycles: Organizational Relevance And A Multilevel Theoretical Integration, Nina Sirola

Research Collection Lee Kong Chian School Of Business

The state of the economy represents a concern for individuals and shapes their behavior in profound ways. The current review of studies on how individuals respond to economic cycles reveals that organizational relevance of such responses has often not been considered, and the literature is characterized by a variety of seemingly disconnected explanations for how and why individuals respond to the perceived state of the economy. I develop a theoretical framework that systematizes the literature and accounts for the seemingly disparate findings, highlighting the underlying functionality of such responses for individuals. I then integrate the literature on individual responses to …

Made In The Usa: Technological Corporatism, Infrastructure Regulation, And Dupont 1902-1917, Roman Y. Shemakov

Swarthmore Undergraduate History Journal

The turn of the twentieth century radically renewed industrial organization across the United States. Early American corporations -- centralized manufacturing hubs with journeymen and apprentices laboring under one roof -- were seldom prepared for the transformations that scientific management and structural reorganization would bring to social relations. At the helm of World War 1, DuPont became the epitome of broader national restructuring. Through a close relationship with American military industries and legislatures, the DuPont brothers came to represent Business as an inseparable component of the State. While labor historiography has primarily focused on organizers’ relationship with regulators, important segments of …

Leniency And Damages: Where Is The Conflict?, Catarina Marvao Dr., Paolo Buccirossi, Giancarlo Spagnolo

Articles

Damage actions may reduce leniency programs’ attractiveness for cartel participants if their cooperation with the competition authority increases the chance that the cartel’s victims will sue them. This apparent conflict between public and private antitrust enforcement led to calls for a legal compromise. We show that the conflict is due to the legislation and a compromise is not required: limiting the victims’ ability to recover their loss is not necessary to preserve the effectiveness of leniency programs and may be counterproductive. We show that damage actions will actually improve its effectiveness, if the civil liability of the immunity recipient is …

Estimating The Benefits And Costs Of Forming Business Partnerships, Jungho Lee

Research Collection School Of Economics

I estimate a matching model of business‐partnership formation to quantify the relative importance of productivity gains, financing gains, and the coordination failure of effort provision (moral hazard) among partners. Productivity gains account for 61% of the gain from the observed partnerships. For partners in the first quartile of the wealth distribution, however, financing accounts for 93% of the gain. The cost of moral hazard corresponds to 42% of the entire gain from partnerships. A loan policy specifically targeting partnerships is less effective in improving welfare than a conventional loan policy that provides loans to individual entrepreneurs.

Agglomeration Economies: How “Y’Allywood” Became The New Hollywood, Joseph Dugan Walker

Honors Theses

Agglomeration economies have gained special attention in recent decades. With the increasing connectivity of our world, specialized regional economies are stronger now than ever before. A specific agglomeration economy that has developed in recent years is the Georgia Film Industry. This region surpassed Hollywood as the premier filming location for the first time since the early 1900s when New York was number one. This thesis analyzes the reasons why Georgia was so successful in attracting the film industry and encouraging its development by comparing infrastructure, film tax incentives, population, and labor development to that of competing states like New York, …

Simulation Modeling Of Cross-Dock And Distribution Center Based Supply Chains, Ghewa Al Chall

Graduate Theses and Dissertations

Companies are implementing new strategies to meet the customer requirements in terms of quality, timing, and cost. One of these strategies is cross-docking, which can be defined as the process of consolidating the products coming from different suppliers, but having the same destination, with minimal handling and almost no storage between loading and unloading of the goods. The purpose of this research is to investigate the benefits of having a cross-docking facility in a supply chain. In this research, we focus on developing discrete event simulation models using the opensource Java Simulation Library (JSL). Also, we work on augmenting an …

Firm Characteristics, Capabilities And Productivities: A Study Of Malaysian Food Manufacturing Sector, Tien Hong Lim

Student Works (2020-2029)

This research establishes and examines a set of firm productivity measures for the Malaysian food manufacturing industry. The research further examines the differences in productivity based on the firm’s characteristics and consequently examines the empirical relationship between firm capabilities namely marketing, ICT, R&D and human capital on labour productivity. The research uses cross sectional data comprising 1020 firms. Various methods were used in the research. Non-parametric analysis was undertaken to compare the productivity levels across firm characteristics while in examining the impact of capabilities on labour productivity the research uses quantile regression analysis. The finding shows that productivity differs based …

The Impact Of American Economic Aid On Post-World War Ii Germany, Gabriella Barber, Emily T. Carlstrom

Senior Theses

This paper examines the state of Germany immediately after World War II, describing how the American government intervened in West German reconstruction. It analyzes three specific German companies that overcame hardship in the 1940s and 50s and have become powerhouses today. Additionally, an overview of the current German economy shows how the country is positioned as a world leader.

Research was conducted using literary print sources, scholarly internet databases, and a formal interview with Klaus Becker, Honorary Consul to Germany. He is a German-American businessman who has held roles in several non-political associations, including President of the Charlotte World Trade …

Foreign Direct Investment And Industrial Agglomeration: Evidence From China, Wen-Tai Hsu, Yi Lu, Xuan Luo, Lianming Zhu

Research Collection School Of Economics

This paper studies the effect of foreign direct investment (FDI) on industrial ag-glomeration. Using the differential effects of FDI deregulation in 2002 in China on different industries, we find that FDI actually affects industrial agglomeration neg-atively. As FDI brings technological spillovers and various agglomeration benefits, other forces must be at work to drive our empirical finding. We propose a simple theory that FDI may discourage industrial agglomeration due to fiercer competition pressure. We find various evidence on this competition mechanism. We also examine an alternative theory based on spatial political competition, but find no evidence sup-porting it. On industrial growth, …

Governance, Institutional Quality, Growth And Inequality In Africa. A Study Of Central Bank Of Nigeria, Ann Ogbo, Arachie Augustine Ebuka, Ezema Ikechukwu Humphrey

Bullion

This paper examined the role of institutional quality on economic growth and reduction of inequality in Nigeria. Survey research design was adopted and data were collected through primary and secondary sources. Population of the study was 600 businesses across Nigeria. Descriptive and inferential statistics were used for data analysis. Findings revealed that the bottlenecks facing businesses in accessing loans have significant effects on business creation in Nigeria. The study concluded that lack of policies and interventions are not the problems for small businesses to obtaining funds from government, but effectiveness and efficiency of these interventions and policies.

Common Power Laws For Cities And Spatial Fractal Structures, Tomoya Mori, Tony E. Smith, Wen-Tai Hsu

Research Collection School Of Economics

City-size distributions are known to be well approximated by power laws across a wide range of countries. But such distributions are also meaningful at other spatial scales, such as within certain regions of a country. Using data from China, France, Germany, India, Japan, and the United States, we first document that large cities are significantly more spaced out than would be expected by chance alone. We next construct spatial hierarchies for countries by first partitioning geographic space using a given number of their largest cities as cell centers and then continuing this partitioning procedure within each cell recursively. We find …

Why Do Businesses Grow Faster In Urban Areas Than In Rural Areas?, Lee, Jungho, Jianhuan Xu

Research Collection School Of Economics

We document that growth of business earnings is mostly observed among young firmsin metro areas. Three explanations are considered: metro areas attract more-productiveentrepreneurs, and reaching the optimal size takes time due to borrowing constraints;metro areas provide better learning opportunities; and high operating costs in metroareas allow only the productive firms to survive. We use a firm-dynamics model with alocation choice to quantify the extent to which the three theories explain the data. Wefind the first two theories largely explain the high growth among metro, young firms. Ourmodel also suggests the distortion in entrepreneurs’ location choice can induce substantialwelfare loss.