Resumen de Essays in empirical industrial organization
Luis Aguiar Wicht
My PhD thesis consists of three chapters in Empirical Industrial Organization. The first two chapters focus on the relationship between firrm performance and specific public policies. In particular, we analyze the cases of cooperative research and development (R&D) in the European Union and the regulation of public transports in France. The third chapter focuses on copyright protection in the digital era and analyzes the relationship between legal and illegal consumption of digital music. The first chapter, entitled European Cooperative R&D and Firm Performance, focuses on the impact of participation in research joint ventures as part of the European Union Framework Programmes on firms' economic performance. These programmes are the main financial tools used by the European Union to support cooperative R&D activities in the EU. Unlike previous empirical studies, this chapter suggests that their impact on firms' competitiveness is significant. We analyze industry-oriented research joint ventures supported by the Fifth European Framework Programme between 1998 and 2002. A key feature of this Programme is that funding is available to the firms based on social and economic concerns instead of pure performance criteria, which guarantees that financial support is not granted conditional on technological opportunities. This allows us to identify the causal effect of the programme on firms' performance using the funding available to the firms in their respective industries as a source of exogenous variation in the decision to participate in the programme. Our results suggest that participation in large research projects raises labor productivity by at least 35 percent and profit margin by up to 8 percentage points. The objective of the second chapter, entitled Knowledge Spillovers in Cost-Reduction Incentives, is to identify and measure the relevance of knowledge spillovers in the French urban transportation industry, where most regulated transportation networks are operated by firms that belong to the same company. We build and estimate a structural cost regulation model under incomplete information where the service is regulated by an authority and is provided by a single operator that may be owned by a larger company. We identify the knowledge spillovers which arise for some operators being linked to a same group, and see how they influence the firms' decisions of exerting effort in order to reduce their operating costs. Our model provides us with estimates of the operators' inefficiencies, the effort of the managers and the knowledge spillovers. Our results show that knowledge spillovers are indeed relevant for the existing industrial groups present in the French urban transport industry. Simulation exercises provide evidence of signifficant reductions in total operating cost following the enlargement of industrial groups and mergers between existing groups. In the third chapter, entitled Digital Music Consumption on the Internet: Evidence from Clickstream Data, we analyze the behavior of digital music consumers on the Internet. Using clickstream data on a panel of more than 16,000 European consumers, we estimate the effects of illegal downloading and legal streaming on the legal purchases of digital music. Our results suggest that Internet users do not view illegal downloading as a substitute to legal digital music. Although positive and signifficant, our estimated elasticities are essentially zero: a 10% increase in clicks on illegal downloading websites leads to a 0.2% increase in clicks on legal purchases websites. Online music streaming services are found to have a somewhat larger (but still small) effect on the purchases of digital sound recordings, suggesting complementarities between these two modes of music consumption. According to our results, a 10% increase in clicks on legal streaming websites lead to up to a 0.7% increase in clicks on legal digital purchases websites. We also find important cross country difference in these effects.
