L11 - Production, Pricing, and Market Structure; Size Distribution of FirmsReturn

Currently a considerable attention to the subject of network industries is being paid in discussions on various levels. It is understandable as network industries in fact ensure the production and distribution of energy sources which play a key role in developed economies. The discussions are usually focused on the question of reasonable profit of network industries subjects and on the other hand the question of generally acceptable costs. Equilibrium on the network industries market, as well as on any market, is being created based on the level of demand and supply on relevant market. In this article we will discuss the analysis of optimization models of consumers and producers behavior on the network industries market as well as the question of effectiveness of this specific market. We will point out certain features of network industries market where the consumer usually is not able to substitute a product of network industry with other product of appropriate characteristics in a short time period, thus considering the product being exclusive. This exclusivity can be formally represented in the utility function and other related analytical tasks. In paper we study the properties of a network industry optimization problem and economically interpretable implications of Kuhn-Tucker optimality conditions of this model.

The aim of the article is to investigate if there exists a systematic link between size of the firm, market concentration and R&D activity of firms. Three tentative results emerged from the regression analysis based on the firm balanced panel data 1998-2006. First it follows from a regression analysis that a positive relationship between size and R&D activity of the firm exists, which is non-linear however. Second the results indicate that a negative relationship between firm R&D personnel and industry concentration exists. If market concentration is a measure of competition than we can conclude that innovation is related to the competitive market structure. We arrived at the same conclusion when innovation was measured by intangible assets and competition was measured by Lerner index. Finally, our analysis concluded that although foreign firms are on average larger than domestic, a negative relationship between the foreign ownership of the firm and the number of R&D employees exists. In comparison to domestic firms, foreign firms have less R&D personnel.

If taxes are the same across countries and no tariffs are imposed on international trade, the optimal strategy of a multinational firm is to set transfer prices at marginal costs of its affiliated firms. But in reality we observe trade tariffs and tax differences among countries which lead multinational firms to deviate transfer prices from marginal costs. Multinationals use transfer prices in order to increase profits in affiliates which are located in low tax countries at the expense of affiliates which are located in high tax countries. I demonstrate on a sample of EU countries that the lower the tax rate in a country the higher the profitability of foreign direct investment in that country. As some studies suggest the gross value added and export prices are artificially overvalued in low tax countries and artificially undervalued in high tax countries.

This study is devoted to analysis of different aspects of world oil market development and its role in further growth of individual national economies, especially in connection with the ever intensifying globalization process. The study shows individual aspects and parts of the oil market, be it production and consumption of crude oil, its territorial dislocation, including EU, and also an analysis of the impact that has the development of oil consumption on economical results of individual national economies. In the first place it analyses the connections with the growth of competition ability of companies. Further research is devoted to the establishment of crude oil price and to the most important aspects on which depends the price creation process. Supply and demand factors are also analyzed. The study comes to a conclusion that the biggest obstacle in using the crude oil will not be its availability, at least in the short run, but the ever fast increasing price. This high price will enable the use of oil only to such companies and countries that will be able to implement the oil in the production process with very high efficiency. Such conditions satisfy only products and services that are based on unique technical and scientific know-how, with high added value, or in such areas of national economies where the use of oil is unenviable.

The paper presents in contribution the development of theories and opinions about competition, competitiveness and antimonopoly policy. These topics are treated starting from the oldest time, e.g. from Aristotle, through antique world, early capitalism, A. Smith and the classical Ricardian tradition. She further discusses the ruinous competition and the origin of the first framework of anti-trust legislation at the break of 19th and 20th centuries, Marx's interpretation of concentration tendencies of capitalist development and his followers, the origin of imperfect competition, ordoliberalism and the system of neoliberal politics and at last the dynamic theory of competition - concept of workable competition as well as theory of "balancing force" and the concept of so-called mature corporations.