IDEAS home Printed from https://ideas.repec.org/a/eee/irlaec/v29y2009i2p143-152.html
   My bibliography  Save this article

An empirical testing of leverage effects via the common distribution network

Author

Listed:
  • Park, Sangin

Abstract

The paper aims to empirically test the significance of leverage effects via the common distribution network in the conglomerate mergers between beer and soju manufacturers of Korea in the time period of 1994-2003. In this paper, a beer (or soju) manufacturer's ability to push the sales of soju (or beer) products via the common regional liquor distribution network is measured by the beer (or soju) firm's market share in the region. If the leverage effect is significant, we expect consumer choices to be significantly affected by the merged firm's ability to push. For a consistent estimation of the leverage effect on consumer demands, this paper adapts a logistic demand function for Yellow Pages in Rysman [Rysman, M. (2004). Competition between networks: A study of the market for yellow pages. Review of Economic Studies, 71, 483-512], controlling other demand-side variables such as prices, consumer loyalty, quality and the introduction of new products. The hypothesis test results indicate that the leverage effects via the common distribution network were not significant at the significance level of 0.1. This conclusion is robust to different specifications of leverage effects and the number of potential drinking.

Suggested Citation

  • Park, Sangin, 2009. "An empirical testing of leverage effects via the common distribution network," International Review of Law and Economics, Elsevier, vol. 29(2), pages 143-152, June.
  • Handle: RePEc:eee:irlaec:v:29:y:2009:i:2:p:143-152
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0144-8188(08)00059-8
    Download Restriction: Full text for ScienceDirect subscribers only

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. James H. Stock & Motohiro Yogo, 2002. "Testing for Weak Instruments in Linear IV Regression," NBER Technical Working Papers 0284, National Bureau of Economic Research, Inc.
    2. Marc Rysman, 2004. "Competition Between Networks: A Study of the Market for Yellow Pages," Review of Economic Studies, Oxford University Press, vol. 71(2), pages 483-512.
    3. Nevo, Aviv, 2001. "Measuring Market Power in the Ready-to-Eat Cereal Industry," Econometrica, Econometric Society, vol. 69(2), pages 307-342, March.
    4. William James Adams & Janet L. Yellen, 1976. "Commodity Bundling and the Burden of Monopoly," The Quarterly Journal of Economics, Oxford University Press, vol. 90(3), pages 475-498.
    5. Steven T. Berry, 1994. "Estimating Discrete-Choice Models of Product Differentiation," RAND Journal of Economics, The RAND Corporation, vol. 25(2), pages 242-262, Summer.
    6. Schmalensee, Richard, 1982. "Commodity Bundling by Single-Product Monopolies," Journal of Law and Economics, University of Chicago Press, vol. 25(1), pages 67-71, April.
    7. Deaton, Angus S & Muellbauer, John, 1980. "An Almost Ideal Demand System," American Economic Review, American Economic Association, vol. 70(3), pages 312-326, June.
    8. R. Preston McAfee & John McMillan & Michael D. Whinston, 1989. "Multiproduct Monopoly, Commodity Bundling, and Correlation of Values," The Quarterly Journal of Economics, Oxford University Press, vol. 104(2), pages 371-383.
    9. Berry, Steven & Levinsohn, James & Pakes, Ariel, 1995. "Automobile Prices in Market Equilibrium," Econometrica, Econometric Society, vol. 63(4), pages 841-890, July.
    Full references (including those not matched with items on IDEAS)

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:irlaec:v:29:y:2009:i:2:p:143-152. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Dana Niculescu). General contact details of provider: http://www.elsevier.com/locate/irle .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.