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We analyse the impact of FDI on market concentration for the Portuguese manufacturing industries in the 2006–2009 period. Using panel data estimation, and after controlling for other determinants of industry concentration (entry barriers, market size, and growth), we found a significant negative impact of FDI on industry concentration. This finding is in line with the results of the empirical literature on other developed countries. Moreover, it supports the argument that FDI has positive effects on domestic firms, eventually through positive externalities, and contradicts the widespread view that in small economies FDI increases concentration. Overall, this study adds to the controversial literature on FDI and concentration, and it is the first study on this topic applied to Portugal.

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In this paper we study the way a multiproduct firm, regulated through a dynamic price cap, can develop a price strategy that uses the regulatory policy to deter entry. We consider a firm that initially operates as a monopolist in two markets but faces potential entry in one of the markets. We conclude that the regulated firm can have the incentive to block the entry. This strategy leads to the reduction of the price in both markets. However, the final effect of the entry deterrence strategy on total consumer surplus is not always positive. Copyright International Atlantic Economic Society 2007price cap regulation, entry, L11, L51,

We investigate how an incumbent firm can use the regulatory policy about entry and the informational advantage to protect his market position. This question is studied through the construction of a signalling game where we assume that the regulator has less information about demand than the firms. We conclude that there is a pooling equilibrium and partially separating equilibria in which entry is deterred and, if demand is high, there will be insufficient entry. The final effect on welfare depends on the tradeoff between short-run benefits (lower price) and long-run losses (weaker competition).

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In this paper we discuss the European regulation policy regarding vertical separation in communications and electricity industries. In the electricity sector the discussion concerns ownership unbundling while in communications the recent regulatory debate is about functional separation. We conclude that for electricity, ownership unbundling seems to be the best option to achieve competition in wholesale markets although there is still some risks concerning investment. Instead, for the communication sector the regulatory options are deeply dependent on the intensity of network competition between operators that combine different technological platforms. Technology also seems to be a key driver for diverse regulatory approaches concerning the unbundling requirement.

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