ISBN 978-80-7343-403-8 (Univerzita Karlova, Centrum pro ekonomický výzkum a doktorské studium) ISBN 978-80-7344-432-7 (Národohospodářský ústav AV ČR, v. v. i.) AbstractThis paper studies the incentives for a monopolistic …rm producing a good with network externalities to advertise when consumers face imperfect information and therefore must search to realize their actual willingness to pay for the good. A …rm may disclose market information through advertising if it …nds it bene…cial. The results suggest that advertising is more likely in the case of a negative network e¤ect and less likely with a positive network e¤ect. When a monopolist faces a strong network externality, it chooses to support the maximum possible network and charge a price equal to the value of the externality. Finally, depending on the value of the search cost and type of network externality, a monopolist may use di¤erent advertising content: no information, price information only, product characteristics, or both price and product characteristics. Speci…cally, if all consumers have the same search cost, as the search cost grows the …rm must include more information in the advertising content, while as the network externality changes from negative to positive, the …rm reduces the content. In contrast, if consumers di¤er in their search costs, the …rm tends to provide more information as the externality changes from negative to positive.JEL codes: D42, D83, D85, L12
Relevance. Foreign investment is likely to be attracted to resource-rich countries because of their wealth of natural resources. However, the fact that foreign direct investment (FDI) contributes less than 10% of these countries’ GDP indicates that FDI has a non-proportional impact when compared to the size of the natural resources. Hence, it is critical to identify the missing link impeding resource optimization through FDI. Research objective. Given the significance of FDI, the study seeks to ascertain whether the quality of institutions in resource-rich countries influences FDI inflows. This is significant because resource-rich countries may have other factors that encourage FDI but do not result in resource optimization. Data and methods. The study employed panel data analysis to analyze the impact of FDI on economic growth in resource-rich countries and the role of institutions in attracting FDI. The study relies on the Augmented Mean Group Estimator and on the annual data from the World Bank's World Development Indicator and the World Bank's World Governance Indicator for the top ten resource-rich countries. Results. Our preliminary evidence indicated that FDI had a positive and significant effect on economic growth in resource-rich countries. The extent of the influence, on the other hand, is minimal for all categories of countries. Our main results revealed that institutional quality has a significant pull effect on FDI, with trade openness playing a key role, particularly in resource-rich nations with well-developed institutions. Conclusions. We found that institutional quality plays a critical role in attracting FDI, which could have hampered natural resource optimization. Furthermore, countries with high institutional quality and less restrictive investment policies attract more foreign direct investment (FDI) than countries with low institutional quality and with investment policies ranging from moderate to restrictive. In general, resource-rich countries, particularly those with weak institutional qualities, should address the gap in institutional quality to attract more inward investment.
Poor institutions have been identified to hinder economic growth and development, with negative social and economic effects such as skilled human resource emigration. In a resource-rich economy, a poor institutional framework has been stated to be a key cause of resource curse. The current study used the CIS and other bordering countries to investigate the impact of both home and destination country institutional quality on migration flows to the Russian Federation. Is the Quality of Institutions (Origin and Host Countries) Important in Migration? The study demonstrated that institutional quality matters for migration from surrounding countries using a gravity-based model estimated using the Poisson Pseudo Maximum Likelihood (PPML). Population, unemployment, and GDP per capita were identified as push factors. In addition, the study discovered a correlation between the institutional quality of the host country and the inward migration flow. Therefore, the study recommends enhancing the institutional quality of the host country to increase the positive effects of inward migration flow
Empirical studies on advertising outlays report that incumbent …rms change their advertising strategies in response to a new entry. While some incumbents reduce their advertising expenditures, others increase them in comparison to the preentry period. Existing literature on strategic advertising in entry games is mostly focused on entry deterrence, meanwhile no theoretical foundation is found in this literature to explain what determines a change in the advertising strategies in the case of entry accommodation. The present work considers four types of advertising and builds a model that examines how accommodating incumbents decide on advertising. The paper also provides results on how advertising is related to the size of the entry. Particularly, informative advertising and advertising enhancing product di¤erentiation allow greater entry, while complementary and business-stealing advertising result in fewer entries since they reduce residual demand for potential entrants. Depending on whether post-entry competition variables are strategic substitutes or strategic complements, incumbent …rms may increase or reduce their advertising outlays in response to new entries.
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.