Volume 30, Issue 2, 2000
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- The Role of Market Share and Concentration in Firm Profitability: Implications for Competition Policy (Simon Feeny, Mark Rogers)
- Economic Impact of Haze-Related Air Pollution on the Tourism Industry in Brunei Darussalam (Kwabena A. Anaman, Chee N. Looi)
- Conditional Volatility Measures of Inflation Uncertainty: Evidence from the Greek Experience (Dionysios Chionis)
- Explaining the Real Size of Government in Australia: An Application of the Ferris and West Model (Brian Dollery, Sukvinder Singh)
- Revenue Implications of Export Tax Denomination in Developing Countries: The Case of Forestry in Papua New Guinea (Colin Hunt)
- Impact if Liberalisation on Industrial Structure: The Nepalese Experience (Kishor Sharma)
- The Internalisation of Environmental Capital Stocks into an Aggregate Cobb-Douglas Function (Dodo Thampapillai, Claus-H. Hanf)
The Role of Market Share and Concentration in Firm Profitability: Implications for Competition Policy
Simon Feeny, Mark Rogers
This paper analyses empirically the relationship between market share and profitability in a sample of 722 large Australian firms. This issue is linked to merger policy in Australia since the Australian Competition and Consumer Commission (ACCC) guidelines state that, in many cases, creating a market share in excess of 40 per cent is a reason for an investigation. Using the most up-to-date Australian firm-level data, it is shown that profitability tends to rise the market share exceeds 30%. This result suggests that the merger policy guidelines are broadly in agreement with empirical evidence. However, the empirical results suggest a U-shaped relationship between market share and profitability, with profitability first declining and the rising. This result challenges traditional theory and suggests that the market share to profitability relationship is complex.
Economic Impact of Haze-Related Air Pollution on the Tourism Industry in Brunei Darussalam
Kwabena A. Anaman, Chee N. Looi
The impact of the 1997 and 1998 haze-related air pollution episodes on the tourism industry in Brunei Darussalam has been analysed using multiple regression analysis and monthly arrival data of tourists from January 1995 to September 1999, a sample of 57 monthly observations. The analysis is first undertaken using ordinary least squares (OLS) regression. Count data models based on Poisson regression are then used to estimate the impact of the haze-related air pollution. Conservative estimates of impact of the haze-related air pollution using OLS regression are a reduction of 3.75 per cent in the number if tourists and direct economic loss to the tourism industry of about one million Brunei dollars (B$). Using the Poisson regression analysis, monthly arrivals are estimated to be reduced by about 28.7 per cent resulting in total direct loss of about B$8 million.
Conditional Volatility Measures of Inflation Uncertainty: Evidence from the Greek Experience
Dionysios Chionis and Panagiotis Liargovas
This paper investigates the dynamics developed in the relationship between output and prices. It examines the case of Greece which is of particular interest since the Greek economy is currently characterized by surrounding inelasicities and rigidities in labour and goods markets. By using a model of conditional volatility the CPI-inflation is decomposed in two components, one expected and one unexpected. It is argued that there is a strong long-run relationship between the unpredicted inflation and total output for the period examined.
Explaining the Real Size of Government in Australia: An Application of the Ferris and West Model
Brian Dollery, Sukvinder Singh
Empirical evidence on theories purporting to explain the size and growth of government is inconclusive. However, a new empirical approach developed by Ferris and West (1996) using real rather than nominal data seems to be promising in the light of their U.S. results. In order to determine the generality of their model, it is applied to Australian data for the period 1960 to 1995. The results provide insights into the factors affecting government size in Australia. The Ferris and West approach does not provide an adequate explanation of the real growth of government in Australia.
Revenue Implications of Export Tax Denomination in Developing Countries: The Case of Forestry in Papua New Guinea
The denomination of the resource export tax – in US dollars or local currency – has implications for the efficiency of a tax system (in terms of achieving a social equilibrium), the distribution of resource rents between government and private harvesters, and the government’s revenue base. These issues are important where industrial logging is undertaken and where substantial tax revenues are generated from the export of logs. The currency denomination of the export tax system determines the effect on revenue of a change in the US dollar price for timber. Moreover, the denomination – a policy choice – either exacerbates or ameliorates the combined revenue effects of market price change and currency movement. A Papua New Guinea case study illustrates how the denomination if log export tax in local currency ameliorated the effects of the Asian financial crisis on government revenues.
Impact of Liberalisation on Industrial Structure: The Nepalese Experience
The consequences of liberalisation on structural change are examined using data from Nepalese manufacturing. This is important because doubts that liberalisation may not solve the problems of low income developing countries remain strong die mainly to low supply elasticities and the early stage of industrialisation. Results suggest some structural change in manufacturing output and trade orientation. However, no significant improvements were recorded in productivity growth and spatial distribution, which appears to be due to the lack of basic infrastructure and the shortage if skilled manpower. Thus, appropriate investment policies – which channel resources to improve human capital and infrastructure – appear to be a crucial of the potential benefits of liberalisation are the be fully achieved.