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The prevalence of digital ecosystems and platforms underscores the need for a deeper understanding of the factors that influence performance variations within these platforms. This study introduced a multidimensional model to examine the platform ecosystem characteristics that affect performance outcomes. To this end, it adopted the Lotka-Volterra complex system theory. The model was simplified into a one-dimensional framework, enabling the examination and prediction of the relationship between performance bifurcation and configurations of platform characteristics. This study provides practical insights and implications that extend beyond academia. The results reveal that high network threshold values indicate robust platform performance, suggesting resilience against collapse. Additionally, increasing the network effect influences platform performance by shifting competition strength toward prominent tipping-point locations, which is considered a desirable regime. The results further confirm that competition dampens a platform's exponential growth; however, cross-network effects enhance it. These insights have significant implications for investors, offering a practical vision that can inform managers' strategic decision-making. These findings provide a solid foundation for developing informed strategies to enhance platform performance. In a world in which digital ecosystems play a pivotal role, the implications of this study empower stakeholders to make data-driven decisions, fostering success in a dynamic and competitive digital business environment.

While business users face difficulties accessing and porting data on platforms, the Digital Markets Act has been hailed as the legislative tool enabling business users access and transfer the data they have generated on platforms controlled by gatekeepers. The tool provided by the Digital Markets Act is discussed in this article and the author argue that business users should have a more elaborated right to first access the data they produce on platforms and in ecosystems, and secondly transfer such data from platform to platform, cloud to cloud, thing to thing or in-house. A right to access and transfer data could have several benefits; it benefits dissemination of data, creativity and innovation in connected markets and it promotes competition between platforms, clouds and ecosystem providers. Creativity will be enhanced because necessary data—being the raw material for new innovations—will be more broadly disbursed. It will also benefit consumers having a disbursed and disseminated data commons for the development of ideas, innovations, and the exchange of knowledge. [ABSTRACT FROM AUTHOR]

Previous research has emphasized the importance of matching innovations with a suitable business model. The design of business models for digital innovations such as telemedicine is a major challenge in health care systems. In this regulated context, the institutional environment plays a critical role for the sustainability of business models. In this paper, I propose an extended business model framework for network-based digital innovations. My study examines how the institutional environment and network-based organizational benefits affect the total value creation of telemedicine networks. I show how both perspectives acting in concert are able to account for the total value created in network-based business models in health care and contribute to the diffusion of digital innovations. My findings suggest that institutional bodies present important key partners in business models in regulated contexts, especially during the early stages of development and diffusion. Second, preexisting network structures, upon which network-based digital innovations can build, may accelerate the diffusion. Third, my study demonstrates the importance of value co-creation and appropriation that encompass all stakeholders in a network. Finally, I describe four key drivers for total value: (1) improvements in quality of and access to care, (2) reimbursement regulation, (3) network-based organizational benefits such as efficiency gains, learning, or knowledge transfer, and (4) legitimacy gains resulting from institutional isomorphism. [ABSTRACT FROM AUTHOR]

The article examines how a simple general equilibrium model establishes a link between the patience of economic agents and the well-being of nations. It notes that forward-looking entrepreneurs enter the market as long as their expected profits are larger than the fixed entry cost. It adds that low rates of time preference are a fundamental driver for the maintenance of relational contracts between firms and suppliers.

Franchisors capitalize on franchisee entrepreneurial capacity to grow. However, enabling franchisees to develop their ventures may damage system consistency. This dilemma makes conflict particularly prevalent in the field of franchising. Nevertheless, prior research has reported an incomplete picture of factors leading to serious disagreement and premature termination in franchise partnerships. We address this gap, first, by adding the entrepreneurial autonomy of franchisees as a relevant but underexplored source of conflict and, second, by providing a more fine-grained analysis of franchisors’ versus franchisees’ drivers of termination. Specifically, we focus on the controversial issues of pricing and local advertising policies and analyze how expanding franchisees’ entrepreneurial autonomy in these decision areas is related to contract terminations depending on who ended the relationship (the franchisor or a franchisee). The study also highlights less controversial requirements and conditions (e.g., upfront investments, franchisor experience …) that may reduce early terminations. Our empirical objectives are met by using survey data from a sample of franchisor companies. The results show how the performance outcomes of entrepreneurial autonomy differ depending on the decision area in which it is exercised. Results also throw light on the consequences of various critical franchise policies that may be masked if both types of termination (franchisors vs. franchisees) are considered together. [ABSTRACT FROM AUTHOR]

Although cluster research has been an enormously vivid field in the past years, the idea that firms’ individual competences influence the knowledge gain from collocation is still under-researched. In this paper, we aim to fill this gap in two steps. First, we derive four firm-specific cluster competences from existing literature as key components of a T-shaped model which is based on the resource and the relational view on knowledge spillovers. Second, we evaluate the explanatory power of our model in terms of firm success by conducting empirical testing on the basis of several logistic regressions in the form of proportional odds models. For this purpose, we use a hitherto unexploited firm-level data set, gained from a survey conducted among small and medium-sized craft businesses in Germany. The results provide evidence that idiosyncratic cluster competences on the firm level are supportive of firm success in business clusters. [ABSTRACT FROM PUBLISHER]

This article addresses transaction costs of different governance forms in regional public rail transport by comparing Germany's competitive contract awarding model with Switzerland's direct contract awarding model. We propose a concept of transaction costs with four dimensions, namely the awarding procedure, the institutional framework, provision of system services, and the impact of learning and innovation. We then identify drivers and amounts of transaction costs in both governance forms. In Germany's competitive model, public transport authorities (PTAs) must guarantee effective competition using different instruments, whereas transaction costs are lowered by clear definition and allocation of responsibilities. In Switzerland's cooperative model, costly competition surrogates serve to overcome information asymmetries. An informal and trusting culture of cooperation prevents high transaction costs. Factors such as complexity of different kinds or unforeseen behaviour of PTAs increase transaction costs in any model. Summing up, our results illustrate that transaction costs are no legitimate argument against competition if the high amounts of subsidies are taken into account. Introducing competition for the market in Switzerland's regional public rail transport, however, would be challenging and trigger high one-time reform costs since it would relate to a radical ‘cultural change’. [ABSTRACT FROM AUTHOR]

Trust is an important driver of superior alliance performance. Alliance managers are influential in this regard because trust requires active involvement, commitment and the dedicated support of the key actors involved in the strategic alliance. Despite the importance of trust for explaining alliance performance, little effort has been made to systematically investigate the mechanisms that managers can use to purposefully create trust in strategic alliances. We use Parkhe's (J World Bus 33:417-437, ) theoretical framework to derive nine hypotheses that distinguish between process-based, characteristic-based and institutional-based trust-building mechanisms. Our meta-analysis of 64 empirical studies shows that trust is strongly related to alliance performance. Process-based mechanisms are more important for building trust than characteristic- and institutional-based mechanisms. The effects of prior ties and asset specificity are not as strong as expected and the impact of safeguards on trust is not well understood. Overall, theoretical trust research has outpaced empirical research by far and promising opportunities for future empirical research exist. [ABSTRACT FROM AUTHOR]

Coordination costs in a wholesale electricity market are a relevant public policy consideration. The mitigation of coordination costs, all else equal, should increase participation in the marketplace. Since Federal Energy Regulatory Commission (FERC) Order 888 was issued in 1996, the level of trading activity in bulk electricity markets has increased significantly. In 1999, FERC issued Order 2000 to advance the role of regional transmission organizations (RTOs) in the restructured marketplace for wholesale electricity. RTOs have the potential to reduce the coordination costs, while also having the countervailing effect of causing market participants to incur compliance costs. This paper utilizes the diversity of the United States electricity market and a panel data set representing electric utilities for the period 1990–2009 to study the effects that RTOs have had on wholesale electricity exchange. The paper finds that the presence of a transparent wholesale marketplace for electricity has the effect of increasing participation, but this participation is uneven across types of electric utilities. Greater participation is seen for investor-owned and larger utilities. The results have important implications for policy aimed at wholesale markets and the transmission organizations, as the opportunities afforded by transparency may not be uniformly distributed across all market participants. [ABSTRACT FROM AUTHOR]

The global Information and Communications Technologies industry has experienced a rapid, radical reorganization of industry leaders and business models-most recently in mobile. New players Apple and Google abruptly redefined the industry, bringing a wave of commoditization to carriers and equipment manufacturers. Technologies, corporate strategies, and industry structures are usually the first places to look when explaining these industry disruptions, but this paper argues that it was actually a set of political bargains during initial phases of telecommunications liberalization, which differed across countries, that set the trajectories of development in motion. This paper shows how different sets of winners and losers of domestic and regional commoditization battles emerged in various ICT industries around the world. Carriers won in Japan, equipment manufacturers in Europe, and eventually, computer services industry actors rather than communications firms emerged as winners in the US. These differences in industry winner outcomes was shaped by the relative political strength of incumbent communications monopolies and their will to remain industry leaders, given the political system and political dynamics they faced during initial liberalization. The US computer services industry, which developed independently of its telecommunications sector due to antitrust and government policy, eventually commoditized all others, both domestically and abroad. This paper contends that a political economy approach, tracing how politics and regulatory processes shaped industry structures, allows for a better understanding of the underlying path dependent processes that shape rapidly changing global technological and industry outcomes, with implications beyond ICT. [ABSTRACT FROM AUTHOR]

An extensive literature shows that agency issues and transaction costs impact vertical integration decisions. Another mature literature indicates that market structure influences competitive behavior. Less consideration has been given to how vertical integration and market structure may interact. I address this gap by focusing on the potential for moral hazard arising from intra-firm competition. Focusing on retail gasoline sales, I argue that when multiple stations share a common brand in a market, a vertically separated station has an incentive to deviate from the cooperative strategy that the brand-owning refiner would prefer. I empirically test this prediction using rich data, and find evidence of both such moral hazard and the desire to avoid it. [ABSTRACT FROM AUTHOR]

This paper examines the effects of OPEC membership on economic development. Using the theory of transaction cost economics (TCE), we show that OPEC satisfies the characteristics of a hybrid organisation under TCE. Thus, membership in OPEC should improve economic development by reducing transaction costs. We suggest that this effect is stronger in less developed countries because of information asymmetries among regulatory authorities and firms. We also posit that membership in OPEC can alleviate the resource curse of its members by reducing the price volatility of oil and increasing bargaining power. We use a historical dataset of oil reserves that allows us to consider the period before the creation of OPEC in the analysis and find that the benefits of oil reserve endowment are higher for OPEC countries. However, these benefits decrease at higher levels of economic development. [ABSTRACT FROM AUTHOR]

A new definition of regional milieu is emerging from the recent innovation policy framework inspired by the notion of a ‘knowledge economy’. It is grounded in a theoretical context where the emphasis is on the interactive character of innovation, involving the sharing and exchange of different forms of knowledge among the actors. Identifying regional positioning within the global knowledge value chain is a current preoccupation of both policy and empirical research. This study tries to measure the degree of involvement of a (follower) regional community of biotechnology actors in the global knowledge value chain. It applies inductive research and exploratory case studies to analyse local relational behaviour within the knowledge network (KN) structure. Our description of a regional bio-community highlights the distinctiveness of regional knowledge in relation to the distribution of KN capabilities. The critical nodes in the KN structure are the intra-regional actors, represented by public basic research organizations. These actors bridge between local basic research groups and the international scientific community, although the ability of local actors to collaborate can affect the strength of the links among them. This aspect, which is not addressed by regional strategies, should be the focus of new regional policies. [ABSTRACT FROM AUTHOR]

We empirically examine the impact of bank consolidation on bank acquisition of soft information about borrowers. Using a dataset of small business financing, we find that mergers of small banks have a negative impact on soft information acquisition, whereas mergers of large banks have no impact. We also find some evidence that an increase in organizational complexity upon a merger, rather than a post-merger cost-cut, is likely to cause a negative and significant impact on soft information acquisition by small banks. These findings are consistent with the organizational theory that predicts a comparative advantage of simple and flat organizations in acquiring and processing soft information. [ABSTRACT FROM AUTHOR]

This paper studies an incomplete contract framework in which specific investments affect parties' outside options. We show that the 'direction' of standard hold-up in this new framework strictly depends on the impact generated by investments on ex-post parties' outside options. This conclusion reverses some of the main results raised by the standard literature on incomplete contracts. Under given conditions, parties may even over-invest in assets specificity, as the changes induced in outside options improve their ex-post bargaining power. We discuss the implications for competition policy and for the management of incomplete contracts. [ABSTRACT FROM AUTHOR]

In this paper we analyze the problem of the enforcement of incomplete contracts with endogenous outside options. Some of the equilibria we outline may reverse one of the main results presented in the standard literature. We then revisit the literature on the highly debated Fisher Body/General Motors merger and suggest an explanation based on GM's need to control the Fisher brothers' outside options. [ABSTRACT FROM AUTHOR]

This article gives a new explanation for the phenomenon of subcontracting. A model in which a principal contracts two agents who work in a sequence on a project, have soft information and can collude is considered. Side-contracts between agents can be signed at any stage of the game. It is shown that in this setting both a decentralized contracting structure, in which contracting of the agents at the initial production stage is delegated to the agent at the final production stage, and a centralized structure, in which the principal directly contracts both agents, can be superior for the principal. The article derives the conditions under which this holds. The results give an explanation for recently observed tendencies in public procurement of design and construction activities. [ABSTRACT FROM AUTHOR]

The Coasean theory of the firm (Coase in Economica 4:386-405, ) has flourished with the theory of incomplete contracts. Transaction costs in the form of enforcement costs have been deemed to be the main determinants of the decision to 'make' versus 'buy'. Surprisingly, this stream of literature has almost neglected that transaction costs may also generate incomplete property rights (Coase in J Law Econ 3:1-44, ). As firm's activities entail both contractual and property rights, these two domains interfere each other on the decision to carry out a transaction within the firm. When property rights are incomplete, potential externalities may increase the cost of using the price mechanism to procure the assets needed in a given transaction. The resulting 'Coasean firm' would not only centralize incomplete contracts under a unified governance system, but it will also aggregate incomplete property rights under a unified ownership structure. [ABSTRACT FROM AUTHOR]

Coase (Economica 4:386-405, ) observed that, within firms, employees are directed by fiat. Ever since it has been argued that hierarchical control and fiat are institutional attributes of firms. In contrast with this view, there is evidence that the organizational structure of many interfirm relations, from supply networks to franchising, is also hierarchical. To reconcile Coase's insight with the evidence, I develop a model where the obligations of both a firm's contractors and its employees cannot be enforced by courts, so they must be self-enforcing. I show that fiat, in the form of relational contracts where the agent obeys the principal in equilibrium, occurs both when the agent is an employee-so the principal owns all the assets-and when she is a contractor-so the agent owns some assets. However, the principal can give more orders to an employee (contractor) when decisions sufficiently above (close to) those that maximize the value of the contractor's assets are optimal-for instance, because there are strong positive externalities between the assets. The model has several implications for the theory of the firm, the distinction between markets, hybrids and hierarchies, and the choice between in-house provision and outsourcing of public services. [ABSTRACT FROM AUTHOR]

This is the first econometric study that explores which franchisors in Japan require royalties, what determines the royalty rates of those that require sales-based royalties, and what determines their franchise-fee amounts. Our findings are broadly consistent with the standard principal-agent view of franchise contracts, in which royalties heighten franchisor performance incentives. From an analysis of a broad sample of 278 franchisors in Japan, in 2001, we find that franchise contracts are more likely to include royalties if franchisor performance incentives are more valuable. The same conditions are associated with higher sales-based royalty rates and higher franchise-fee amounts. [ABSTRACT FROM AUTHOR]

By applying factor analysis to unique data on loan screening for small and medium-sized enterprises (SMEs) in Japan, we investigate the factors that banks actually evaluate when underwriting commercial loans. We find that banks emphasize three factors when they decide whether to grant loans: the relationship factor, the financial statement factor, and the collateral/guarantee factor. We also find that smaller banks place greater emphasis on the relationship and the collateral/guarantee factors, and that banks under competitive pressure emphasize the relationship factor to a greater extent. We interpret these findings based on the theory of relationship lending and lending technologies. [ABSTRACT FROM AUTHOR]

Whether the firms that supply Internet hardware and software should face restrictions on the use of their property is an important and controversial policy issue. Advocates of 'net neutrality'-including President Obama and the current FCC majority-believe that owners of broadband distribution systems (hardware used to distribute Internet and video services) and producers of certain 'must-have' video content should be subject to prophylactic regulation that transcends present-day antitrust law enforcement. In the economic terms that are used in debates on competition policy, the concern is with vertical integration that may give firms both the opportunity (through denial of access or price discrimination) and incentive (increased profit) to restrict competition. This paper's central point is that virtually every production process in the economy is vertically integrated, and economics predicts changes in the extent of vertical integration-that is, changes in the boundaries of the firm-in response to changes in relative prices, technology, or institutions. Both vertical integration and changes in the extent of vertical integration are benign characteristics of efficient, dynamic, competitive markets. While there is no shortage of theoretical models in which vertical integration may be harmful, most such models have restrictive assumptions and ambiguous welfare predictions-even when market power is assumed to be present. Empirical evidence that vertical integration or vertical restraints are harmful is weak, compared to evidence that vertical integration is beneficial-again, even in cases where market power appears to be present. Thus, it is reasonable to conclude that prophylactic regulation is not necessary, and may well reduce welfare. Sound policy is to wait for ex post evidence of harm to justify interventions in specific cases. Net neutrality, recently enacted by the FCC but subject to judicial review, is an unfortunate idea. [ABSTRACT FROM AUTHOR]

In this paper, we employ a new dataset based on a sample of 123 franchise systems originating from Germany to empirically test hypotheses stemming from agency theory and capital scarcity considerations on the contractual relations and the organizational structure in franchising. We include proxies for the franchisor's capital scarcity as well as for moral hazard on the franchisee's and the franchisor's side. Furthermore, we distinguish between initial and ongoing franchisor support. Our results indicate that agency models based on double moral hazard do explain the design of franchise contracts and the organizational structure in terms of the proportion of franchised outlets. We find that the incentive component of the franchise contract (the royalty rate) is not influenced by moral hazard on the franchisee's side, but rather by moral hazard on the franchisor's side. Furthermore, the proportion franchised is strongly influenced by moral hazard on the franchisee's side. Hence, after providing incentives to outlet managers by turning them into franchisees, thereby granting them residual claimancy, the royalty rate mainly serves to ensure ongoing franchisor input. The franchisor's capital scarcity influences the fixed fee in franchise contracts and the proportion of franchised outlets, thus supporting standard capital scarcity arguments. [ABSTRACT FROM AUTHOR]

Copyright of Jahrbuch fur Regionalwissenschaft is the property of Springer Nature and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

Copyright of Zeitschrift Für Management is the property of Springer Nature and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

The paper examines the effects of subcontracting on vertical product differentiation in a spatial competition model. It is shown that the level of differentiation is determined by the consignor's bargaining power and the ratio of the transport rates between the final product and the subcontracted input. Furthermore, the paper finds that part of the results obtained under horizontal product differentiation are not reproduced in a vertical product context. [ABSTRACT FROM AUTHOR]

This paper addresses two questions concerning Joint Venture (JV) agreements. We first study the formation and the performance of a JV when the partners’ contribution has a different impact on the JV profits. Then, we check whether the JV is more likely as well as the welfare level improves when the decision on JV profit sharing among partners is delegated to an independent JV management (Management sharing) rather than jointly taken by partners (Coordinated sharing). We find that the firm whose effort has a higher impact on the JV’s profits should have a larger profit share. Moreover, at least in some cases, Management sharing increases both welfare and the probability that the JV is formed. [ABSTRACT FROM AUTHOR]

The paper empirically analyses the effects of legal provisions (setting penalties and incentives, and regulating the parties' obligations and risks) on electricity contracts price formation. Using 27California long-term electricity contracts for the trade of electricity between generators, we perform an econometric exercise and target the main determinants that affect electricity price. The general result is that provisions increasing (decreasing the trading risk for the seller, increase (decrease) the price. Those provisions setting penalties (incentives) for the seller decrease the price. These effects are stronger for the contract maximum price. Our 2SLS results can be interpreted in the theoretical framework of transaction cost economics, where provisions regulating risks are set in order to allow for ex post adaptation to uncertainty and complexity of transactions and institutional settings. The paper is, therefore, an attempt to endogenize uncertainty and complexity. [ABSTRACT FROM AUTHOR]

In several food-producing sectors, we observe vertical integration between the farming and processing stages. The salmon industry, which has motivated this paper, has seen a rise in large vertically integrated companies over the last decade, with direct ownership of production activities including hatcheries, fish processing and exporting. Both the farming and processing stages have become more capital intensive, which has led to a steeper U-shaped average cost (AC) curve. In this paper we present a theoretical link between this technological shift and vertical integration: in a repeated game model of relational contracting, we show that when the AC curve is sufficiently steep, then processors and farmers are more likely to vertically integrate. The reason is that steep AC curves make it costly to deviate from the optimal production scale, which in turn makes processors more vulnerable to hold-up and opportunistic behaviours from its suppliers. [ABSTRACT FROM AUTHOR]

Many recent economic studies have shown that traditional economic theory applies to nontraditional settings such as religious organizations. This paper contrasts two labor markets for clergy that result from different denominational polities to examine the impact of labor market structure on clergy compensation in Protestant denominations. Many Protestant churches operate autonomously and clergy and congregations negotiate contracts in a free market. However, in a distinct sub-group of Protestant denominations there is involvement by denominational hierarchy in order to raise the level of clergy compensation and benefits. Regression analysis using a unique, random sample of US clergy suggests that different labor market structures result in economically important and statistically significant differences in the distributions of clergy salaries and benefits. [ABSTRACT FROM AUTHOR]