Essays in Industrial Organization
01 September 2011
31 January 2013
This dissertation consists of four chapters. Using data on firms in Switzerland, the first chapter shows that a reduction in trade barriers between Switzerland and the European Union results in firms which are on average less vertically integrated. This finding confirms recent work in international trade theory, predicting that a reduction in trade barriers makes vertical integration less attractive by thickening the market for intermediate input goods. The second chapter shows that a reduction in trade barriers increases concentration in certain industries. This finding supports the notion that fewer firms are able to survive as the toughness of price competition increases. The third chapter takes a closer look at mergers and acquisitions, which are an important vehicle for such changes in vertical or horizontal market structure. In the fourth chapter, recent developments in the market for Internet connectivity are analyzed.
New York University
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PublicationThe Impact of Trade Policy on Industry Concentration in Switzerland(University of St. Gallen, 2013)This paper studies the impact of trade policy on industry concentration. Based on the Swiss Business Census, concentration levels for all four-digit manufacturing industries in Switzerland are calculated. Then the effect of a bilateral reduction in technical barriers to trade with the European Union is estimated. Adopting a difference-in-differences approach, it turns out that concentration in affected industries with low R&D intensity increased significantly following the policy change. This supports the notion that fewer firms are able to survive as the toughness of price competition increases. The effect on industries with high R&D intensity is found to be insignificant.Type: working paperIssue: 1317
PublicationGlobalization and Vertical Structure: An Empirical InvestigationThis paper studies the effect of trade facilitation on vertical firm structure using plant-level data from Switzerland. Based on the Business Census and the Input-Output table, we first calculate a binary measure of vertical integration for all plants registered in Switzerland. We then estimate the effect of a Mutual Recognition Agreement with the European Union on the plants' probability of being vertically integrated. Adopting a difference-in-differences approach, we find that this policy change reduced the treated plants' probability of being vertically integrated by about 10 percent. Our results are consistent with recent work in international trade theory.Type: working paperIssue: 1310