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We analyze the effect of initial public offerings (IPOs) on industry competitors and provide evidence that companies experience negative stock price reactions to completed IPOs in their industry and positive stock price reactions to their withdrawal. Following a successful IPO in their industry, they show significant deterioration in their operating performance. These results are consistent with the existence of IPOrelated competitive advantages through the loosening of financial constraints, financial intermediary certification, and the presence of knowledge capital. These aspects of competitiveness are significant in explaining the cross-section of underperformance as well as survival probabilities for competing firms.

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This paper argues that empirical economic analysis in court proceedings is subject to important economic and legal restrictions, cumulating in a fundamental trade-off between accuracy and practicality. We draw lessons from two influential German court cases - the paper wholesaler cartel decision of 2007 and the cement cartel decision of 2009. We characterise the trade-offs arguing that they need to be well understood, made transparent, and that decisions on how to proceed in light of these trade-offs have to be taken upfront by the court. In this respect, we believe that the three-step procedure (design, application, and robustness checks) followed by the German court in the cement case is well suited to meet the appropriate legal standard and requirements, both with respect to accuracy and practicality.

 

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The telecommunication industry is currently in the midst of a disruptive technological development. Next generation (fibre) networks (NGN) increase transmission data speeds from the current 16Mbit/s to more than 100Mbit/s. This enables new services such as HDTV, interactive gaming or video on demand. While the technology exists today, the timing and extent of actual investments depend on the access regulation for non-investors. This paper explores how different regulatory access regimes affect investments and social welfare. We find that the existing access regulation, where the investor bears the investment risk alone, induces too little investments to the detriment of consumers. In contrast, access regimes that distribute the investment risk among more or all telecoms firms stimulate investments and increase consumer surplus. The paper also explores how different forms of risk-sharing, in terms of participating firms and cost allocations, affect social welfare. The (simulation) results presented in this paper build on a game theoretical model.