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We uncover a new channel for spillovers of funding dry-ups. The 2016 US money market fund (MMF) reform exogenously reduced unsecured MMF funding for some banks. We use novel data to trace those banks to a platform for corporate deposit funding. We show that intensified competition for corporate deposits spilled the funding squeeze over to other banks with no MMF exposure. These banks paid more for deposits, and their pool of funding providers deteriorated. Moreover, their lending volumes and margins declined, and their stocks underperformed. Our results suggest that banks' competitiveness in funding markets affect their competitiveness in lending markets.
We consider the advantages and disadvantages of stakeholder-oriented firms that are concerned with employees and suppliers as well as shareholders compared to shareholder-oriented firms. Societies with stakeholder-oriented firms have higher prices, lower output, and can have greater firm value than shareholder-oriented societies. In some circumstances, firms may voluntarily choose to be stakeholder-oriented because this increases their value. Consumers that prefer to buy from stakeholder firms can also enforce a stakeholder society. With globalization entry by stakeholder firms is relatively more attractive than entry by shareholder firms for all societies. JEL Classification: D02, D21, G34, L13, L21
We use detailed data on exporters from Costa Rica, Ecuador and Uruguay as well as on their buyers to show that: aggregate exports are disproportionally driven by few multi-buyers exporters; and each multi-buyer exporter's foreign sales of any product are in turn accounted for by few dominant buyers. We propose an analytically solvable multi-country model of endogenous selection in which dominant exporters, dominant products and dominant buyers emerge in parallel as multi-product sellers with heterogeneous technologies compete for buyers with heterogeneous needs. The model not only provides an explanation of the existence of dominant buyers but also makes specific predictions on how the relative importance of dominant buyers should vary across export destinations depending on their market size and accessibility. We show that these predictions are borne out by our data and discuss their welfare implications in terms of gains from trade.
Factors that cause differential establishment among naturalized, invasive, and native species are inadequately documented, much less often quantified among different communities. We evaluated the effects of seed addition and disturbance (i.e., understory canopy removal) on the establishment and seedling biomass among two naturalized, two invasive, and two native species (1 forb, 1 grass in each group) within steppe and low elevation forest communities in eastern Washington, USA. Establishment within each plant immigrant class was enhanced by seed addition: naturalized species showed the greatest difference in establishment between seed addition and no seed addition plots, native and invasive species establishment also increased following seed addition but not to the same magnitude as naturalized species. Within seed addition plots, understory canopy disturbance resulted in significant increases in plant establishment (regardless of plant immigration class) relative to undisturbed plots and the magnitude of this effect was comparable between steppe and adjacent forest. However, regardless of disturbance treatment fewer invasive plants established in the forest than in the steppe, whereas native and naturalized plant establishment did not differ between the habitats. Individual biomass of naturalized species were consistently greater in disturbed (canopy removed) versus undisturbed control plots and naturalized species were also larger in the steppe than in the forest at the time of harvest. Similar trends in plant size were observed for the native and invasive species, but the differences in biomass for these two immigration classes between disturbance treatments and between habitats were not significant. We found that strong limitations of non-native species is correlated with intact canopy cover within the forest understory, likely driven by the direct or indirect consequences of low light transmittance through the arboreal and understory canopy. Considered collectively, our results demonstrate how seed limitation and intact plant ground cover can limit the abundance and performance of naturalized species in Pacific Northwest steppe and low elevation forest, suggesting that local disturbance in both habitats creates microsites for these species to establish and survive. Future studies evaluating interactions between multiple barriers to establishment using more representatives from each immigration class will further reveal how biotic interactions ultimately influence the demography and distribution of non-native plants within these communities.
We investigate the role of competition on the outcome of Austrian Treasury auctions. Austria's EU accession led to an increase in the number of banks participating in treasury auctions. We use structural estimates of bidders' private values to examine the effect of increased competition on auction performance: We find that increased competition reduced bidder surplus substantially, but less than reduced form estimates would suggest. A significant component of the surplus reduction is due to more aggressive bidding. Counterfactuals establish that as competition increases, concerns regarding auction format play a smaller role.
Many successful invasions involve long initial periods in which the invader exists at low densities followed by sudden population increases. The reasons for such time-lags remain poorly understood. Here we document a sudden increase in density of the introduced Japanese white-eye (Zosterops japonicus) in a restoration area contiguous with old-growth forest at Hakalau Forest National Wildlife Refuge on the Island of Hawaii. The refuge, with very high density of native birds, existed in a pocket of low whiteeye density that persisted for at least 20 years since the late 1970s. The refuge began an extensive native trees restoration project in 1989 within a 1314 ha abandoned pasture above old-growth forest. This area was soon colonized by white-eyes and their population grew exponentially once the trees had grown tall enough to develop a canopy. This increase was in turn followed by significantly more white-eyes in the open and closed forests adjacent to the restoration area. Competition between white-eyes and native species was documented on study sites within these forests. Density data indicate that competition was more widespread, with loss of tens of thousands of native birds in the 5371 ha area surveyed. Our results are consistent with the view that ecological barriers may delay the population increase of invaders and that human-derived activities may help invaders cross these barriers by creating new ecological opportunities. Control of white-eye numbers may be essential for recovery of native species.
This paper empirically examines the role of soft information in the competitive interaction between relationship and transaction banks. Soft information can be interpreted as a private signal about the quality of a firm that is observable to a relationship bank, but not to a transaction bank. We show that borrowers self-select to relationship banks depending on whether their privately observed soft information is positive or negative. Competition affects the investment in learning the private signal from firms by relationship banks and transaction banks asymmetrically. Relationship banks invest more; transaction banks invest less in soft information, exacerbating the selection effect. Finally, we show that firms where soft information was important in the lending decision were no more likely to default compared to firms where only financial information was used.
This publication gives new records for all bumblebee species living in Iceland: B. hortorum, B. hypnorum, B. jonellus, B. lucorum, B. pascuorum, B. pratorum and B. terrestris. B. terrestris was detected outside the greenhouses for the first time. At 23 locations 217 specimens were collected. B. pratorum was only seen. The known strong expansion of B. lucorum (Kratochwil 2016) could be confirmed. The relation between B. jonellus and B. lucorum has constantly changed at the expense of of B. jonellus since B. lucorum occurred in Iceland. It is obvious that B. lucorum has already replaced the original species B. jonellus in some places. As a reason a strong competition of both species is given primarily (Kratochwil & Schwabe 2016). Factors effecting this competition are: the distribution of the neophyte Lupinus nootkatensis, the change in management of land as well as ethological but also morphological differences (Prys-Jones et al. 2016). A too low genetic diversity and a resulting suffering from diseases carried by other introduced bumblebee species (Prys-Jones et al. 2016) only can be supposed. Probably the influence of climatic change effects on B. jonellus in a negative way too (Kratochwil 2016, Kratochwil & Schwabe 2016). B. lucorum is just going to take the north top of Iceland. Only two locations could be found there without any bumblebees. In the future an ongoing expansion of B. lucorum is expected. B. jonellus will further be repressed and may become extinct in some places. A continuing expansion of B. terrestris can be expected.
The "quiet life hypothesis (QLH)" posits that banks enjoy the advantages of market power in terms of foregone revenues or cost savings. We suggest a unified approach to measure competition and efficiency simultaneously to test this hypothesis. We estimate bank-specific Lerner indices as measures of competition and test if cost and profit efficiency are negatively related to market power in the case of German savings banks.We find that both market power and average revenues declined among these banks between 1996 and 2006. While we find clear evidence supporting the QLH, estimated effects of the QLH are small from an economical perspective.
This paper explores consequences of consumer education on prices and welfare in retail financial markets when some consumers are naive about shrouded add-on prices and firms try to exploit it. Allowing for different information and pricing strategies we show that education is unlikely to push firms to disclose prices towards all consumers, which would be socially efficient. Instead, price discrimination emerges as a new equilibrium. Further, due to a feedback on prices, education that is good for consumers who become sophisticated may be bad for consumers who stay naive and even for the group of all consumers as a whole