Today, in the Russian scientific literature, the peculiarities of the development of industry firm dynamics remain understudied, especially from the standpoint of their potential effects on the firms effectiveness. This article evaluates the impact of the entry and exit of firms on financial results and performance indicators of dairy companies. It is proved that the entry and exit parameters of firms, along with the level of industrial concentration, are significant factors determining both the dynamics of gross profit of companies and the industry average rate of gross profit margin. Against the background of declining industry dynamics in 2017—2020, a slowdown of a number of indicators of innovative activity of dairy industry companies and an increase of their profitability indicators have been revealed. At the same time, the impact of industry dynamics on efficiency indicators is ambiguous: it is noticeable on labor productivity values, but no such impact is observed on the efficiency indicators of the use of fixed capital. The influence of the age of industrial companies on labor productivity and capital return has also been established, and the hypothesis of higher production efficiency of younger companies has been confirmed. It is necessary to stimulate the influx of young and innovative companies into the industrial sector, increase the number of new firms, reduce the impact of structural and strategic barriers to entry, and improve the conditions of entrepreneurship in the manufacturing sector of the Russian economy.
The article analyzes the practical aspects of the functioning of some barriers to entry in the era of digital transformation of industry markets. It is noted that under the influence of digitalization processes, both positive changes in the mechanism of market operation are recorded, as well as a number of negative circumstances that have become a serious challenge for antitrust agencies. Control of big data, initial investment in digital infrastructure, and broad technological capabilities of digital blocking of users, against the background of powerful network effects and pronounced economies of scale, carry the potential for significant growth in the market power of individual firms. The article substantiates that such trends theoretically pose a significant threat to competition, and can form new types of entry barriers. At the same time, practical arguments are presented that indicate the ambiguity of this position.
Vertical restraints applied by major operators of digital markets have become a serious challenge for international regulators and governments of leading world powers in recent years. Having new specific features in comparison with the restraints in force in traditional sales channels, they can lead to a rapid strengthening of the market power of dominant online platforms and to the subsequent monopolization of markets. The article is devoted to the study of business practices of applying various types of vertical restraints in global digital markets. Using the example of global leading companies (Apple Inc., Amazon, Booking.com., Microsoft, etc.), the market consequences of the introduction of exclusive and related contracts, cross-platform parity agreements, as well as a wide range of transaction bans are demonstrated. In particular, suppliers and dealers are significantly limited in their ability to sell competing products and brands and list them on major online marketplaces. Bans are introduced on the use of Internet sites for price aggregation and comparison, as well as certain e-commerce platforms and certain types of payment means. At the same time, there are significant penalties for non-compliance with the terms of vertical contracts. Buyers and users are limited by the possibilities of using software products of independent developers, connecting to competing online services. Technological solutions are being introduced that increase the costs of sharing hardware and software of competing operators. And such solutions are greatly simplified in the conditions of existing “closed” global digital ecosystems. It is shown that the norms of vertical contracts of major market players are able to effectively eliminate the cost advantages of both existing operators and new firms, significantly increasing the entry costs and reducing potential of entering firms to attract the target audience at the start of activity. The most vulnerable here are, first of all, small highly specialized companies using low-budget business models. The author proposes a theoretical model that reveals the mechanism that prevents new firms from achieving the minimum effective sales volume. Using the example of the distributor’s retail price control strategy, it is proved that the use of vertical contracts allows both increasing the profits of existing operators and successfully preventing potential competitors from entering the market. At the same time, it is noted that the use of vertical restraints contributes to solving a number of current business problems of large digital companies: effective protection of investments in the development of e-commerce channels, limiting the turnover of counterfeit products, deepening the differentiation of market supply, reducing the risks of price wars and leveling the actual “stowaway problem”. Therefore, the qualification of vertical restraints as good practices, or as abuses of market power, should be based on an analysis of the objectives of such restraints and a comprehensive assessment of their potential consequences. An important step towards solving this complex and very sensitive problem may be the adoption of the Digital Markets Act by the European Parliament in 2023.
scite is a Brooklyn-based organization that helps researchers better discover and understand research articles through Smart Citations–citations that display the context of the citation and describe whether the article provides supporting or contrasting evidence. scite is used by students and researchers from around the world and is funded in part by the National Science Foundation and the National Institute on Drug Abuse of the National Institutes of Health.
hi@scite.ai
10624 S. Eastern Ave., Ste. A-614
Henderson, NV 89052, USA
Copyright © 2024 scite LLC. All rights reserved.
Made with 💙 for researchers
Part of the Research Solutions Family.