Policy implications of the effects of concentration and multimarket contact in China's airline market

Review of Industrial Organization

Volumn 34, Issue 4, 2009, Pages 307-326

  Zhang, Yahua ^a   Round, David K ^b  

^a UNIVERSITY OF SOUTHERN QUEENSLAND   (Australia)

^b UNIVERSITY OF SOUTH AUSTRALIA   (Australia)

Author keywords

Airline mergers; China; Concentration; Market power; Multimarket contact

Indexed keywords

AIRLINE INDUSTRY; INDUSTRIAL PERFORMANCE; MARKET SYSTEM; MERGER;

ASIA; CHINA; EURASIA; FAR EAST;

EID: 70349171129     PISSN: 0889938X     EISSN: 15737160     Source Type: Journal    
DOI: 10.1007/s11151-009-9215-2     Document Type: Article

References (62)

1. Bailey E. E., Graham D. R., Kaplan D. P. (1985) Deregulating the airlines. MIT Press, Cambridge
2. Bailey E. E., Panzar J. C. (1981) The contestability for airline markets during transition to deregulation. Journal of Law and Economics 44: 125-145
3. Baker J. B., Rubinfeld D. L. (1999) Empirical methods in antitrust litigation: Review and critique. Boalt working papers in public law. University of California, Berkeley
4. Baum J. A. C., Korn H. J. (1996) Competitive dynamics of interfirm rivalry. Academy of Management Journal 39: 255-291
5. Baum C. F., Schaffer M. E., Stillman S. (2003) Instrumental variables and GMM: Estimation and testing. Stata Journal 3: 1-31
6. Bennett R. D., Craun J. M. (1993) The airline deregulation evolution continues: The Southwest effect. US Department of Transportation, Office of Aviation Analysis, Washington, DC
7. Bernheim B. D., Whinston M. D. (1990) Multimarket contact and collusive behaviour. RAND Journal of Economics 21: 1-26
8. Berry S. T (1990) Airport presence as product differentiation. American Economic Review 80: 394-399
9. Borenstein S. (1989) Hubs and high fares: Dominance and market power in the US airline industry. RAND Journal of Economics 20: 344-365
10. Borenstein S. (1990) Airline mergers, airport Dominance, and market power. American Economic Review 80: 400-404
11. Borenstein S. (1991) The dominant-firm advantage in multiproduct industries: Evidence from the US airlines. Quarterly Journal of Economics 106: 1237-1266
12. Borenstein S. (1992) The evolution of US airline competition. Journal of Economic Perspective 6: 45-73
13. Borenstein S., Rose N. (1994) Competition and price dispersion in the US airline industry. Journal of Political Economy 102: 653-683
14. Bresnahan T.F. (1989) Empirical studies of industries with market power. In: Schmalensee R., Willig R.D. (eds) Handbook of industrial organization Volume II. Elsevier Science Publisher, Amsterdam
15. Brueckner J. K. (2003) International airfares in the age of alliances: The effects of codesharing and antitrust immunity. Review of Economics and Statistics 85: 105-118
16. Brueckner J. K., Dyer N. J., Spiller P. T. (1992) Fare determination in airline hub and spoke networks. RAND Journal of Economics 23: 309-333
17. Brueckner J. K., Spiller P. T. (1994) Economies of traffic density in the deregulated airline industry. Journal of Law and Economics 37: 379-415
18. Brueckner J. K., Whalen T. (2000) The price effects of international airline alliances. Journal of Law and Economics 43: 503-545
19. Busse M. (2002) Firm financial condition and airline price wars. RAND Journal of Economics 33: 298-318
20. China Civil Aviation Statistics. (2004). Beijing: China Civil Aviation Press.
21. China Civil Aviation Statistics. (2005). Beijing: China Civil Aviation Press.
22. China City Statistics Yearbook. (2004). Statistics bureau. Beijng: China Statistics Press.
23. De Bonis R., Ferrando A. (2000) The Italian banking structure in the 1990s: Testing the multimarket contact hypothesis. Economic Notes 29: 215-241
24. Dresner M., Lin J., Windle R. (1996) The impact of low-cost carriers on airport and route competition. Journal of Transport Economics and Policy 30: 309-328
25. Dresner M., Tretheway M.W (1992) Modelling and testing the effect of market structure on price: The case of international air transport. Journal of Transport Economics and Policy 26: 171-184
26. Edwards, C. D. (1955). Conglomerate bigness as a source of power. In G. J. Stigler (Ed.), Business concentration and price policy (pp. 331-353). Princeton: National Bureau of Economic Research, Princeton University Press.
27. Evans W. N., Kessides I. N. (1993) Localized market power in the US airline industry. Review of Economics and Statistics 75: 66-75
28. Evans W. N., Kessides I. N. (1994) Living by the golden rule: Multimarket contact in the US airline industry. Quarterly Journal of Economics 109: 341-366
29. Fischer T., Kamerschen D. R. (2003) Measuring competition in the US airline industry using the Rosse-Panzar test and cross-sectional regression analyses. Journal of Applied Economics 6: 73-93
30. GAO. (1988). Airline competition: Fare and service changes at St. Louis since the TWA-Ozark merger. US General Accounting Office, GAO/ RCED-88-217BR, Washington, DC.
31. GAO. (1990). Airline competition: Industry operating and marketing practices limit market entry. US General Accounting Office, Report RCED 90-147. Washington, DC.
32. Gimeno J., Woo C. (1996) Hypercompetition in a multimarket environment: The role of strategic similarity and multimarket contact in competitive de-escalation. Organisation Science 7: 322-341
33. Graham D. R., Kaplan D. P., Sibley D. S. (1983) Efficiency and competition in the airline industry. Bell Journal of Economics 14: 118-138
34. Greene W. H. (2003) Econometric analysis (5th ed.). Prentice Hall, Upper Saddle River, NJ
35. Hansen L. P. (1982) Large sample properties of the generalized methods of moments. Econometrica 50: 1029-1054
36. He N. (2005) Domestic carriers fight in the three gateways following deregulation in entry. Oriental Morning Post, 20 April 2005. Wenhui Press, Shanghai
37. Heggestad A. A., Rhoades S. A. (1978) Multi-market interdependence and local market competition in banking. Review of Economics and Statistics 60: 523-532
38. International Finance News. (2003). Evolution of airfare regulation. 17 April 2003. Beijing: People's Daily Press.
39. Jans I., Rosenbaum D. (1997) Multimarket contact and pricing: Evidence from the US cement industry. International Journal of Industrial Organisation 15: 391-412
40. Kim E. H., Singal V. (1993) Mergers and market power: Evidence from the airline industry. American Economic Review 83: 549-569
41. Leahy A. S. (1994) Concentration in the US airline industry. International Journal of Transport Economics 21: 209-215
42. Lee D., Luengo-Prado M. J. (2005) The impact of passenger mix on reported "hub premiums" in the US airline industry. Southern Economic Journal 72: 372-394
43. Levine M. E. (1987) Airline competition in deregulated markets: Theory, firm strategy, and public policy. Yale Journal on Regulation 4: 393-495
44. Lijesen M. G., Nijkamp P., Rietveld P. (2004) Do European carriers charge hub premiums?. Networks and Spatial Economics 4: 347-360
45. Morrison S. A. (1996) Airline mergers: A longer view. Journal of Transport Economics and Policy 30: 237-250
46. Morrison S. A. (2001) Actual, adjacent and potential competition: Estimating the full impact of Southwest Airlines. Journal of Transport Economics and Policy 35: 239-256
47. Morrison, S. A., & Winston, C. (1989). Enhancing the performance of the deregulated air transportation system. Brooking Papers on Economic Activity: Microeconomics, 61-123.
48. Morrison S. A., Winston C. (1995) The evolution of the airline industry. The Brookings Institution, Washington, DC
49. Morrison, S. A., & Winston, C. (1996). Causes and consequences of airline fare wars. Brookings Papers on Economic Activity: Microeconomics, 85-131.
50. Park J., Zhang A. (2000) An empirical analysis of global airline alliances: Cases in north Atlantic markets. Review of Industrial Organisation 16: 367-384
51. Sandler R. D. (1988) Market share instability in commercial airline markets and the impact of deregulation. Journal of Industrial Economics 36: 327-335
52. Scott J. T. (1993) Purposive diversification and economic performance. Cambridge University Press, Cambridge
53. Scott J. T. (2001) Designing multimarket-contact hypothesis tests: Patent citations and multimarket contact in the product and innovation markets of the chemicals industry. In: Baum J. A. C., Greve H. R. (eds) Multiunit organisation and multimarket strategy advances in strategic management. JAI/Elsevier Science, Oxford, pp 175-202
54. Singal V. (1996) Airline mergers and multimarket contact. Managerial and Decision Economics 17: 559-574
55. Strassmann D. L. (1990) Potential competition in the deregulated airlines. Review of Economics and Statistics 72: 696-702
56. Tretheway M. W., Kincaid I. S. (2005) The effect of market structure on airline prices: A review of empirical results. Journal of Air Law and Commerce 70: 467-498
57. Vowles T. M. (2000) The effect of low fare air carriers on airfares in the US. Journal of Transport Geography 8: 121-128
58. Vowles T. M. (2006) Airfare pricing determinants in hub-to-hub markets. Journal of Transport Geography 14: 15-22
59. Werden G. J., Joskow A. S., Johnson R. L. (1991) The effects of mergers on price and output: Two case studies from the airline industry. Managerial and Decision Economics 12: 341-352
60. Windle R. J., Dresner M. E. (1995) The short and long run effects of entry on US domestic air routes. Transportation Journal 35: 14-25
61. Wooldridge J. M. (2002) Econometric analysis of cross section and panel data. MIT Press, Cambridge and London
62. Zhang Y., Round D. K. (2008) China's airline deregulation since 1997 and the driving forces behind the 2002 airline consolidations. Journal of Air Transport Management 14: 130-142