A Refutation of "common Ownership Does Not Have Anti-competitive Effects in the Airline Industry" PDF Download
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Author: José Azar
Publisher:
ISBN:
Category :
Languages : en
Pages : 0
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Book Description
We show that the main claim in Dennis, Gerardi, and Schenone (JF forthcoming) (DGS), namely "that the documented positive correlation between common ownership and ticket prices stems from the market share component of the common ownership measure, and not the ownership and control components," is factually incorrect. In particular, we show empirically that the placebo that according to DGS "keeps market shares fixed" is in fact highly negatively correlated with market shares. This correlation is mechanical and arises because the data set is an unbalanced panel, as we show analytically. We make a methodological contribution to the literature by showing how one can actually separate variation from market shares from variation in ownership. Contrary to DGS' claims, ownership changes do predict price changes once one constructs a valid placebo that actually separates the variation from market shares from the variation in ownership. AST's panel regressions in fact underestimated the price effect of common ownership, due to the endogeneity of market shares.
Author: José Azar
Publisher:
ISBN:
Category :
Languages : en
Pages : 0
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Book Description
We show that the main claim in Dennis, Gerardi, and Schenone (JF forthcoming) (DGS), namely "that the documented positive correlation between common ownership and ticket prices stems from the market share component of the common ownership measure, and not the ownership and control components," is factually incorrect. In particular, we show empirically that the placebo that according to DGS "keeps market shares fixed" is in fact highly negatively correlated with market shares. This correlation is mechanical and arises because the data set is an unbalanced panel, as we show analytically. We make a methodological contribution to the literature by showing how one can actually separate variation from market shares from variation in ownership. Contrary to DGS' claims, ownership changes do predict price changes once one constructs a valid placebo that actually separates the variation from market shares from the variation in ownership. AST's panel regressions in fact underestimated the price effect of common ownership, due to the endogeneity of market shares.
Author: José Azar
Publisher:
ISBN:
Category :
Languages : en
Pages : 12
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Book Description
Dennis, Gerardi, and Schenone (2017) (DGS) claim to replicate the data construction and results of Azar, Schmalz, and Tecu (forthcoming) (AST). While their implementation of the main specifications in AST generates qualitatively similar results, they claim that AST's baseline results are driven 1) by the use of passenger volume as regression weights and 2) largely by the top fifth percentile of markets in the passenger count distribution.In this note, we show that these claims are factually incorrect. First, because DGS do not in fact replicate the data construction described in AST, their paper is of limited usefulness in showing the effect of deviations from AST's empirical specifications. Second, we show that AST's results are qualitatively robust to not weighting regressions. Third, AST's results also hold on subsamples excluding the top fifth percentile of markets by passenger count. Additional evidence we present in this note suggests that DGS's erroneous conclusions are driven by an incorrect treatment of ownership data as well as other differences in their sample's characteristics compared to AST's.
Author: Patrick Dennis
Publisher:
ISBN:
Category :
Languages : en
Pages :
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Institutional investors often own significant equity in firms that compete in the same product market. These "common owners" may have an incentive to coordinate the actions of firms that would otherwise be competing rivals, leading to anti-competitive pricing. This paper uses data on airline ticket prices to test whether common owners induce anti-competitive pricing behavior. We find little evidence to support such a hypothesis, and show that the positive relationship between average ticket prices and a commonly used measure of common ownership previously documented in the literature is generated by the endogenous market share component, rather than the ownership component, of the measure.
Author: José Azar
Publisher:
ISBN:
Category :
Languages : en
Pages : 79
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Book Description
Many natural competitors are jointly held by a small set of large institutional investors. In the US airline industry, taking common ownership into account implies increases in market concentration that are 10 times larger than what is “presumed likely to enhance market power” by antitrust authorities. Within-route changes in common ownership robustly correlate with route-level changes in ticket prices, even when we only use variation in ownership due to the combination of two large asset managers. We conclude that a hidden social cost - reduced product market competition - accompanies the private benefits of diversification and good governance.
Author: Andrew Leigh
Publisher:
ISBN: 9781921262999
Category : Educational productivity
Languages : en
Pages :
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Book Description
"Outside the United States (U.S.), very little is known about long-run trends in school productivity. We present new evidence using two data series from Australia, where comparable tests are available back to the 1960s. For young teenagers (aged 13-14), we find a small but statistically significant fall in numeracy over the period 1964-2003, and in both literacy and numeracy over the period 1975-1998. The decline is in the order of one-tenth to one-fifth of a standard deviation. Adjusting this decline for changes in student demographics does not affect this conclusion; if anything, the decline appears to be more acute. The available evidence also suggests that any changes in student attitudes, school violence, and television viewing are unlikely to have had a major impact on test scores. Real per-child school expenditure increased substantially over this period, implying a fall in school productivity. Although we cannot account for all the phenomena that might have affected school productivity, we cannot account for all the phenomena that might have affected school productivity, we identify a number of plausible explanations"--Abstract.
Author: Marco Corradi
Publisher: Cambridge University Press
ISBN: 1108841872
Category : Business & Economics
Languages : en
Pages : 353
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Book Description
Examines the intersections between corporate and antitrust law, focusing on corporate interest, governance, and the financial links among companies.
Author: Itumeleng Mogashoa
Publisher:
ISBN:
Category :
Languages : en
Pages : 0
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Since the late 1990s, global network airlines have enrolled in one of the three existing global alliances (GAL) namely the Sky-Team, Star Alliance and Oneworld. By 2011, the airlines in the alliance dominated over two-thirds of all international traffic. This research seeks to examine the legal and economic analysis, and consequent interpretation of airline alliances within civil aviation and how this affects fair competition. The evolution of global airline alliances is characterised by the analysis of their size, as well as the volume of the partnership and code-share agreement between the alliances. The findings of this study indicate that the aviation international regulatory framework recognises that these principles have thus far been enacted and applied throughout the legal and/or regulatory instruments. However, with the ever-expanding commercial aviation industry, the desire for business growth and regulatory framework are not always aligned. Airline alliances have proved to be cost-effective and efficient and enabled passengers to reach their designation on schedule. Furthermore, they have also enhanced fair competition in the airline industry with the result that the market now operates more effectively. This research recommends that airline alliances should be allowed, but that competition regulatory authorities must be empowered to scrutinise them and closely monitor the conditions imposed on the alliance to ensure the protection of the smaller players in the industry and any anti-competitive effects mitigated adequately. The regulatory competition bodies should lay out policies and procedures encouraging fair competition in the industry by seeking to eliminate unfair and procedurally flawed barriers and consideration given to the fundamental benefits to be enjoyed by the businesses and stakeholders alike in the formation and existence of these alliances.
Author: Pedro Matos
Publisher: CFA Institute Research Foundation
ISBN: 1944960988
Category : Business & Economics
Languages : en
Pages : 80
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Book Description
This survey examines the vibrant academic literature on environmental, social, and governance (ESG) investing. While there is no consensus on the exact list of ESG issues, responsible investors increasingly assess stocks in their portfolios based on nonfinancial data on environmental impact (e.g., carbon emissions), social impact (e.g., employee satisfaction), and governance attributes (e.g., board structure). The objective is to reduce exposure to investments that pose greater ESG risks or to influence companies to become more sustainable. One active area of research at present involves assessing portfolio risk exposure to climate change. This literature review focuses on institutional investors, which have grown in importance such that they have now become the largest holders of shares in public companies globally. Historically, institutional investors tended to concentrate their ESG efforts mostly on corporate governance (the “G” in ESG). These efforts included seeking to eliminate provisions that restrict shareholder rights and enhance managerial power, such as staggered boards, supermajority rules, golden parachutes, and poison pills. Highlights from this section: · There is no consensus on the exact list of ESG issues and their materiality. · The ESG issue that gets the most attention from institutional investors is climate change, in particular their portfolio companies’ exposure to carbon risk and “stranded assets.” · Investors should be positioning themselves for increased regulation, with the regulatory agenda being more ambitious in the European Union than in the United States. Readers might come away from this survey skeptical about the potential for ESG investing to affect positive change. I prefer to characterize the current state of the literature as having a “healthy dose of skepticism,” with much more remaining to be explored. Here, I hope the reader comes away with a call to action. For the industry practitioner, I believe that the investment industry should strive to achieve positive societal goals. CFA Institute provides an exemplary case in its Future of Finance series (www.cfainstitute.org/research/future-finance). For the academic community, I suggest we ramp up research aimed at tackling some of the open questions around the pressing societal goals of ESG investing. I am optimistic that practitioners and academics will identify meaningful ways to better harness the power of global financial markets for addressing the pressing ESG issues facing our society.
Author: John C. Bogle
Publisher: John Wiley & Sons
ISBN: 1119404312
Category : Business & Economics
Languages : en
Pages : 320
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Book Description
A journey through the Index Revolution from the man who started it all Stay the Course is the story the Vanguard Group as told by its founder, legendary investor John C. Bogle. This engrossing book traces the history of Vanguard—the largest mutual fund organization on earth. Offering the world’s first index mutual fund in 1976, John Bogle led Vanguard from a $1.4 billion firm with a staff of 28 to a global company of 16,000 employees and with more than $5 trillion in assets under management. An engaging blend of company history, investment perspective, and personal memoir, this book provides a fascinating look into the mind of an extraordinary man and the company he created. John Bogle continues to be an inspiring and trusted figure to millions of individual investors the world over. His creative innovation, personal integrity, and stubborn determination infuse every aspect of the company he founded. This accessible and engaging book will help you: Explore the history of some of Vanguard’s most important mutual funds, including First Index Investment Trust, Wellington Fund, and Windsor Fund Understand how the Vanguard Group gave rise to the Index Revolution and transformed the lives of millions of individual investors Gain insight on John Bogle’s views on values such as perseverance, caring, commitment, integrity, and fairness Investigate a wide range of investing topics through the lens of one of the most prominent figures in the history of modern finance The Vanguard Group and John Bogle are inextricably linked—it would be impossible to tell one story without the other. Stay the Course: The Story of Vanguard and the Index Revolution weaves these stories together taking you on a journey through the history of one revolutionary company and one remarkable man. Investors, wealth managers, financial advisors, business leaders, and those who enjoy a good story, will find this book as informative and unique as its author.
Author: Yannis Kerkemezos
Publisher:
ISBN: 9789036105958
Category :
Languages : en
Pages : 158
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