Contributions published at Entrepreneurship (Ulrich Kaiser)

This paper uses data on German consumer magazines observed between 1992 and 2004 to analyze the extent to which consumers (dis-)like advertising. We estimate logit demand models separately for the six most important magazine segments in terms of circulation. We find little evidence for readers disliking advertising. On the contrary, we show that readers in many magazine segments appreciate advertising. Readers of Women's magazines, Business and politics magazines as well as Car magazines — market segments where advertisements are relatively more informative — appreciate advertising while advertising is nuisance to readers of Adult magazines, a segment where advertisements are particularly uninformative. Demand for interior design magazines is not well identified. Our logit demand estimates are confirmed by logit demand models with random coefficients and by magazine-specific monopoly demand models.

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We use comparable micro level panel data for 14 countries and a set of identically specified empirical models to investigate the relationship between exports and productivity. Our overall results are in line with the big picture that is by now familiar from the literature: exporters are more productive than non-exporters when observed and unobserved heterogeneity is controlled for, and these exporter productivity premia tend to increase with the share of exports in total sales; there is evidence in favour of self-selection of more productive firms into export markets, but nearly no evidence in favour of the learning-by-exporting hypothesis. We document that the exporter premia differ considerably across countries in identically specified empirical models. In a meta-analysis of our results we find, consistently with theoretical predictions, that productivity premia are larger in countries with lower export participation rates, with more restrictive trade policies, lower per capita GDP, less effective government and worse regulatory quality, and in countries exporting to relatively more distant markets.

Researchers in Germany have nowadays access to confidential micro data compiled from official statistics in a way that could not have been dreamt of just a few years ago. This paper describes the new institutions that grant data access – most importantly the research data centers located inside the data producing agencies – and how to access the micro data, and presents information about selected recently released data sets with a high potential for scientific research and policy evaluation. Furthermore, we contrast the German situation with the Danish way of handling research access to confidential micro data. Finally, we take a look at ongoing projects that will further improve data access in Germany.

Are initial competitive advantages self-reinforcing, so that markets exhibit an endogenous tendency to be dominated by only a few firms? Although this question is of great economic importance, no systematic empirical study has yet addressed it. Therefore, we examine experimentally whether firms with an initial cost advantage are more likely to invest in cost reductions than firms with higher initial costs. Wefind that the initial competitive advantages are indeed self-reinforcing, but subjects in the role of firms overinvest relative to the Nash equilibrium. However, the pattern of overinvestment even srengthens the tendency towards self-reinforcing cost advantages relative to the theoretical prediction. Further, as predicted by the Nash equilibrium, aggregate investment is not affected by the initial efficiency distribution. Finally, investment spillovers reduce investment, and investment is higher than the joint-profit maximizing benchmark for the case without spillovers and lower for the case with spillovers.

The paper analyzes the effects of more intense competition on firms'incentives to invest in process innovations. We carry out experiments for two-stage games, where R&D investment choices are followed by product market competition. As predicted by theory, an increase in the number of firms from two to four reduces investments. However, a positive effect is observed for a switch from Cournot to Bertrand, even though theory predicts a negative effect in the four-player case. This result reflects overinvestment in the Bertrand case. The results arise both in treatments in which both stages are implemented and in treatments in which only one stage is implemented.

This paper examines the effects of introducing competition into monopolized network industries on prices and infrastructure quality. Analyzing a model with reduced-form demand, we first show that deregulating an integrated monopoly cannot simultaneously decrease the retail price and increase infrastructure quality. Second, we derive conditions under which reducing both retail price and infrastructure quality relative to the integrated monopoly outcome increases welfare. Third, we argue that restructuring and setting very low access charges may yield welfare losses, as infrastructure investment is undermined. We provide an extensive analysis of the linear demand model and discuss policy implications.

This paper investigates the merger wave hypothesis for the US and the UK employing a Markov regime switching model. Using quarterly data covering the last thirty years, for the US, we identify the beginning of a merger wave in the mid 1990s but not the much-discussed 1980s merger wave. We argue that the latter finding can be ascribed to the refined methods of inference offered by the Gibbs sampling approach. As opposed to the US, mergers in the UK exhibit multiple waves, with activity surging in the early 1970s and the late 1980s.

We present and estimate a model of competition in a two-sided market: the market for magazine readership and advertising. Using data on magazines in Germany, we find evidence that magazines have properties of two-sided markets. The results are consistent with the perception that prices for readers are ‘subsidized’ and that magazines make all their money from advertisers. Consistent with advertisers valuing readers more than readers value advertisements, our results imply that higher demand on the reader side increases ad rates, but that higher demand on the advertising side decreases cover prices.

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This paper examines the effects of introducing competition into monopolized network industries on prices and infrastructure quality. Analyzing a model with reduced-form demand, we first show that deregulating an integrated monopoly cannot simultaneously decrease the retail price and increase infrastructure quality. Second, we derive conditions under which reducing both retail price and infrastructure quality relative to the integrated monopoly outcome increases welfare. Third, we argue that restructuring and setting very low access charges may yield welfare losses, as infrastructure investment is undermined. We provide an extensive analysis of the linear demand model and discuss policy implications.

We analyze the factors that influence the support for environmental policy proposals. Swiss referendum data show that proposals obtain more yes-votes if they do not restrict consumption possibilities directly, if they are endorsed by business associations, if environmental preferences are strong and economic conditions are favorable at the time of the referendum. Also, there are more pro-environmental votes in cantons with higher population density. On the other hand, yes-votes do not seem to depend on whether a proposal involves a tax or not.

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Printmedienmärkte weisen eine Reihe besonderer Eigenschaften auf, die sie von gewöhnlichen Produktmärkten unterscheiden. Die beiden wichtigsten dieser abgrenzenden Charakteristika sind (i) die direkte Abhängigkeit von Printmedienreichweite und Nachfrage nach Anzeigenseiten und (ii) die starke Fixkostendegression. Diese Arbeit zeigt aus wirtschaftstheoretischer Sicht, dass die Verbundenheit von Anzeigen- und Lesermarkt zu einer Reduktion der Anreize von Printmedienpreiserhöhungen im Fusionsfalle führt. Sie macht ebenso deutlich, dass die Fixkostendegression zu Effizienzgewinnen im Fusionsfall führen kann.

This paper analyzes the relationship between investment in information and communication technologies (ICT), non-ICT investment, labor productivity, and workplace reorganization. Firms are assumed to reorganize workplaces if the productivity gains arising from workplace reorganization exceed the associated reorganization costs. Two different types of organizational change are considered: enhancement group work and flattening of hierarchies. Empirical evidence is provided for a sample of 411 firms from the German business-related services sector. We develop and estimate a model for labor productivity and firms' decision to reorganize workplaces that allows workplace reorganization to affect any parameter of the labor productivity equation. Our general and flexible methodology allows us to properly take account of strategic complementarities between the input factors and workplace reorganization. The estimation results show that changes in human resources practices do not significantly affect firms' output elasticities with respect to ICT, non-ICT capital, and labor, although most of the point estimates of the individual output elasticities and of the control variables for observable firm heterogeneity are larger if workplace reorganization is realized. We therefore apply the Kernel density-estimation technique and demonstrate that for firms with organizational change, the entire labor productivity distribution shifts significantly out to the right if workplace reorganization takes place, indicating that workplace reorganization induces an increase in labor productivity that is attributable to complementarities between the various input factors and workplace reorganization. By contrast, firms without organizational change would not have realized significant productivity gains if they had reorganized workplaces.