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Competition Intensity, Potential Competition and Transaction Cost Economics

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Author Info
Busse, Matthias

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Abstract

As the process of globalisation of the world economy progresses, the degree of international competition among enterprises increases as well. Yet not all industries or branches are affected to the same extent by this development. One of the most important factors which determine the degree of globalisation of an industry is the level of transaction costs. Whereas low transaction costs tend to result in globalised markets, high transaction costs induce segmented markets. Because they may also indicate the degree of potential competition, transaction costs can be of great importance for competition authorities in the case of corporate mergers and acquisitions. Heterogeneous consumer preferences and product differentiation, as two additional determinants of the degree of globalisation, however, limit the meaningfulness of this approach. In some cases, the precision of the measurement of transaction is also inaccurate. This methodology hence cannot be generalised, but does make more sense in particular cases. Mit der fortschreitenden Globalisierung der Weltwirtschaft nimmt auch der Grad des internationalen Wettbewerbs zwischen den Unternehmen zu. Von dieser Entwicklung sind aber nicht alle Firmen im gleichen Ausmaß betroffen. Einer der wichtigsten Determinanten des Globalisierungsgrades einer Branche ist die Höhe der Transaktionskosten. Niedrige Transaktionskosten führen tendenziell zu globalisierten Märkten, hohe Transaktionskosten entsprechend zu segmentierten Märkten. Hinzu kommt, dass Transaktionskosten auch Auskunft über den Grad des potentiellen Wettbewerbs geben können. Damit erhalten Wettbewerbsbehörden einen wichtigen Indikator für die Beurteilung der räumlichen Marktabgrenzung, das heißt ob Unternehmen aus verschiedenen Ländern miteinander im Wettbewerb stehen. Hierbei sind jedoch mit heterogenen Präferenzen und Produktdifferenzierungen zwei weitere potentielle Einflussfaktoren auf den Grad der Globalisierung zu berücksichtigen. Zudem können Transaktionskosten nicht immer genau gemessen werden. Deshalb ist dieser Ansatz vielmehr in Einzelfällen sinnvoll anzuwenden und kann nicht verallgemeinert werden.

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Paper provided by Hamburg Institute of International Economics in its series Discussion Paper Series with number 26168.

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Date of creation: 2002
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Handle: RePEc:ags:hiiedp:26168

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Related research
Keywords: Transaction costs; potential competition; competition policy; International Relations/Trade; F00; F13; D23;

References listed on IDEAS
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  1. Maurice Obstfeld & Kenneth Rogoff, 2000. "The Six Major Puzzles in International Macroeconomics: Is There a Common Cause?," NBER Working Papers 7777, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  2. Krugman, Paul, 1995. "Increasing returns, imperfect competition and the positive theory of international trade," Handbook of International Economics, in: G. M. Grossman & K. Rogoff (ed.), Handbook of International Economics, edition 1, volume 3, chapter 24, pages 1243-1277 Elsevier. [Downloadable!] (restricted)
  3. Roy, Santanu & Viaene, Jean-Marie, 1998. "Preferences, Country Bias, and International Trade," Review of International Economics, Blackwell Publishing, vol. 6(2), pages 204-19, May.
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  4. Elhanan Helpman, 1999. "The Structure of Foreign Trade," Journal of Economic Perspectives, American Economic Association, vol. 13(2), pages 121-144, Spring. [Downloadable!] (restricted)
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  5. Victor V Cordell, 1992. "Effects of Consumer Preferences for Foreign Sourced Products," Journal of International Business Studies, Palgrave Macmillan Journals, vol. 23(2), pages 251-269, June. [Downloadable!] (restricted)
  6. Trefler, Daniel, 1995. "The Case of the Missing Trade and Other Mysteries," American Economic Review, American Economic Association, vol. 85(5), pages 1029-46, December. [Downloadable!] (restricted)
  7. James E. Anderson & Douglas Marcouiller, 1999. "Trade, Insecurity, and Home Bias: An Empirical Investigation," NBER Working Papers 7000, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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