Ela Glowicka - Academia.edu (original) (raw)

Papers by Ela Glowicka

This report provides input for the evaluation of the State aid rules related to environmental pro... more This report provides input for the evaluation of the State aid rules related to environmental protection and energy, with a particular focus on the EU Guidelines on State aid for environmental protection and energy (EEAG) applicable in 2014-2020 and on the provisions applicable to aid for environmental protection and energy (Section 7) of Commission Regulation (EU) 651/2014 (GBER). The overall objective of the report is to provide background information for the review of these provisions. The topics covered in the report are related to the effectiveness, efficiency and relevance of the State aid rules.

"Swedish Interconnector case /Improving electricity cross-border trade"* I. Introductio... more "Swedish Interconnector case /Improving electricity cross-border trade"* I. Introduction The size of the transmission network is a key determinant of competition in wholesale electricity…

Introduction The classification of resale price maintenance (RPM) within a competition law contex... more Introduction The classification of resale price maintenance (RPM) within a competition law context has been the subject of controversy for decades. Until recently in the US, RPM - in its form of…

When faced with a proposed merger, antitrust authorities have to assess the likelihood and the ma... more When faced with a proposed merger, antitrust authorities have to assess the likelihood and the magnitude of anticompetitive effects that may occur following the removal of one of the merging parties as an independent force in the various markets affected by the transaction. These possible anticompetitive effects must then be weighed against potential efficiency gains. To enable it to complete this task in the limited amount of time provided by the legislators, the Commission collects and contrasts information from different sources. The notifying party’s compulsory notification (Form CO) is the initial source of such information and contains a description of the industry along with more specific details regarding the affected markets. In addition, to ensure that it has a complete understanding of the competitive landscape in each of the affected markets, the Commission supplements this information with the views of other market participants such as the merging parties’ suppliers, co...

"Fuel for thought - StatoilHydro/ConocoPhillips (Jet)"* I. Introduction When faced with... more "Fuel for thought - StatoilHydro/ConocoPhillips (Jet)"* I. Introduction When faced with a proposed merger, antitrust authorities have to assess the likelihood and the magnitude of…

Competition Policy Newsletter, 2010

The paper provides an empirical analysis of the extent of generic entry in prescription medicines... more The paper provides an empirical analysis of the extent of generic entry in prescription medicines in the EU, the timing of such entry, the level of generic market penetration and the effect of such penetration on the average price of medicines. The analysis is based on a comprehensive sample of prescription medicines facing loss of exclusivity (linked to patent expiry) in the period between 2000 and 2007. Sections 2 and 3 of this paper draw upon the European Commission's Staff Working Document "Final Report on the pharmaceutical sector inquiry" published on 8 July 2009 (available at http://ec.europa.eu/competition/sectors/pharmaceuticals/inquiry/index.html).

Governments in the European Union frequently bail out firms in distress by granting state aid cal... more Governments in the European Union frequently bail out firms in distress by granting state aid called Rescue and Restructuring Subsidies. This thesis consists of three chapters analyzing three different aspects of European bailouts. In the first chapter, I use data from 86 cases during the years 1995-2003 to examine the effectiveness of bailouts in preventing bankruptcy and the determinants of bailout policy. The results are threefold. First, the estimated discrete-time hazard rate increases during the first four years after the subsidy and drops after that, suggesting that some bailouts only delayed exit instead of preventing it. Second, governments' bailout decisions favored state-owned firms, even though state-owned firms did not outperform private ones in the survival chances. Third, subsidy choice is an endogenous variable in the analysis of the hazard rate. Treating it as exogenous underestimates its impact on the bankruptcy probability. Several policy implications of the results are discussed in the chapter. The second chapter is a theoretical study of the effects of bailouts on market structure and welfare in an international asymmetric Cournot duopoly. I adopt a common market setting, where consumers from the two countries form one market. I show that the subsidy is positive also when it fails to prevent the exit. The reason is a strategic effect, which forces the more efficient firm to make additional cost-reducing effort. When the exit is prevented, allocative and productive efficiencies are lower than in case of exit and the only gaining player is the rescued firm. The third chapter provides evidence of political, institutional and economic determinants of bailout policies in the countries of the European Union. I use a new data set based on European Commission's rescue and restructuring aid decisions during the years 1995-2003 merged with information about electoral outcomes in European countries. The main finding is that in countries with majoritarian democratic institutions bailouts are more likely, in particular during years preceding elections. Since bailouts are a targeted fiscal policy, the evidence supports the theory of Persson and Tabellini (2000) predicting that electoral systems shape incentives for fiscal policy choices.

Governments in the EU grant Rescue and Restructure Subsidies to bail out ailing firms. In an inte... more Governments in the EU grant Rescue and Restructure Subsidies to bail out ailing firms. In an international asymmetric Cournot duopoly we study effects of such subsidies on market structure and welfare. We adopt a common market setting, where consumers from the two countries form one market. We show that the subsidy is positive also when it fails to prevent the exit. The reason is a strategic effect, which forces the more efficient firm to make additional costreducing effort. When the exit is prevented, allocative and productive efficiencies are lower and the only gaining player is the rescued firm.

Effectiveness of Bailouts in the EU * by Ela Glowicka Governments in the EU frequently bail out f... more Effectiveness of Bailouts in the EU * by Ela Glowicka Governments in the EU frequently bail out firms in distress by granting state aid. I use data from 86 cases during the years 1995-2003 to examine two issues: the impact of bailouts on bankruptcy probability and the determinants of bailout policy. I have three main results. First, the estimated discrete-time hazard rate increases during the first four years after the subsidy and drops after that, suggesting that some bailouts only delayed exit instead of preventing it. The number of failing bailouts could be reduced if European control was tougher. Second, governments ’ bailout decisions favored public firms, even though public firms did not outperform private ones in the survival chances. Third, subsidy choice is an endogenous variable in the analysis of the hazard rate. Treating it as exogenous underestimates its impact on the bankruptcy probability.

European State Aid Law Quarterly, 2018

Journal of Antitrust Enforcement, 2015

With e-commerce having accelerated over recent years, retailing has changed significantly. Manufa... more With e-commerce having accelerated over recent years, retailing has changed significantly. Manufacturers and retailers have established multichannel (offline/online) strategies within which pricing restraints often constitute a central element. Behind these strategies sits the firms' ambition to find a solution to free-riding. Free-riding results in non-optimal service levels and price setting and thus offers a business justification for pricing restrains which, in many instances, are viewed as infringements under Article 101 or 102 Treaty on the Functioning of the European Union (TFEU). In this article we map out the alignment of characteristics of products targeted by recent antitrust enforcement in Europe with the likelihood of free-rider effects taking place. Specifically in the case of products with search and experience characteristics, we find intensive enforcement activity despite prevalent free-rider effects.

SSRN Electronic Journal, 2006

Governments in the EU frequently bail out firms in distress by granting state aid. I use data fro... more Governments in the EU frequently bail out firms in distress by granting state aid. I use data from 86 cases during the years 1995-2003 to examine two issues: the effectiveness of bailouts in preventing bankruptcy and the determinants of bailout policy. The results are threefold. First, the estimated discrete-time hazard rate increases during the first four years after the subsidy and drops after that, suggesting that some bailouts only delayed exit instead of preventing it. The number of failing bailouts could be reduced if European control was tougher. Second, governments' bailout decisions favored state-owned firms, even though state-owned firms did not outperform private ones in the survival chances. Third, subsidy choice is an endogenous variable in the analysis of the hazard rate. Treating it as exogenous underestimates its impact on the bankruptcy probability. Several policy implications of the results are discussed in the paper.

This note provides a simple explanation why sellers rarely set optimal reserve prices in one-shot... more This note provides a simple explanation why sellers rarely set optimal reserve prices in one-shot auctions. In a standard sealed-bid second-price auction, bidders with private values do not bid truthfully if the seller cannot commit to her announced reserve price. Consequently, expected revenue may be lower than without the announcement of a reserve price.

SSRN Electronic Journal, 2005

Governments in the EU grant Rescue and Restructure Subsidies to bail out ailing firms. In an inte... more Governments in the EU grant Rescue and Restructure Subsidies to bail out ailing firms. In an international asymmetric Cournot duopoly we study effects of such subsidies on market structure and welfare. We adopt a common market setting, where consumers from the two countries form one market. We show that the subsidy is positive also when it fails to prevent the exit. The reason is a strategic effect, which forces the more efficient firm to make additional cost-reducing effort. When the exit is prevented, allocative and productive efficiencies are lower and the only gaining player is the rescued firm.

This report provides input for the evaluation of the State aid rules related to environmental pro... more This report provides input for the evaluation of the State aid rules related to environmental protection and energy, with a particular focus on the EU Guidelines on State aid for environmental protection and energy (EEAG) applicable in 2014-2020 and on the provisions applicable to aid for environmental protection and energy (Section 7) of Commission Regulation (EU) 651/2014 (GBER). The overall objective of the report is to provide background information for the review of these provisions. The topics covered in the report are related to the effectiveness, efficiency and relevance of the State aid rules.

"Swedish Interconnector case /Improving electricity cross-border trade"* I. Introductio... more "Swedish Interconnector case /Improving electricity cross-border trade"* I. Introduction The size of the transmission network is a key determinant of competition in wholesale electricity…

Introduction The classification of resale price maintenance (RPM) within a competition law contex... more Introduction The classification of resale price maintenance (RPM) within a competition law context has been the subject of controversy for decades. Until recently in the US, RPM - in its form of…

When faced with a proposed merger, antitrust authorities have to assess the likelihood and the ma... more When faced with a proposed merger, antitrust authorities have to assess the likelihood and the magnitude of anticompetitive effects that may occur following the removal of one of the merging parties as an independent force in the various markets affected by the transaction. These possible anticompetitive effects must then be weighed against potential efficiency gains. To enable it to complete this task in the limited amount of time provided by the legislators, the Commission collects and contrasts information from different sources. The notifying party’s compulsory notification (Form CO) is the initial source of such information and contains a description of the industry along with more specific details regarding the affected markets. In addition, to ensure that it has a complete understanding of the competitive landscape in each of the affected markets, the Commission supplements this information with the views of other market participants such as the merging parties’ suppliers, co...

"Fuel for thought - StatoilHydro/ConocoPhillips (Jet)"* I. Introduction When faced with... more "Fuel for thought - StatoilHydro/ConocoPhillips (Jet)"* I. Introduction When faced with a proposed merger, antitrust authorities have to assess the likelihood and the magnitude of…

Competition Policy Newsletter, 2010

The paper provides an empirical analysis of the extent of generic entry in prescription medicines... more The paper provides an empirical analysis of the extent of generic entry in prescription medicines in the EU, the timing of such entry, the level of generic market penetration and the effect of such penetration on the average price of medicines. The analysis is based on a comprehensive sample of prescription medicines facing loss of exclusivity (linked to patent expiry) in the period between 2000 and 2007. Sections 2 and 3 of this paper draw upon the European Commission's Staff Working Document "Final Report on the pharmaceutical sector inquiry" published on 8 July 2009 (available at http://ec.europa.eu/competition/sectors/pharmaceuticals/inquiry/index.html).

Governments in the European Union frequently bail out firms in distress by granting state aid cal... more Governments in the European Union frequently bail out firms in distress by granting state aid called Rescue and Restructuring Subsidies. This thesis consists of three chapters analyzing three different aspects of European bailouts. In the first chapter, I use data from 86 cases during the years 1995-2003 to examine the effectiveness of bailouts in preventing bankruptcy and the determinants of bailout policy. The results are threefold. First, the estimated discrete-time hazard rate increases during the first four years after the subsidy and drops after that, suggesting that some bailouts only delayed exit instead of preventing it. Second, governments' bailout decisions favored state-owned firms, even though state-owned firms did not outperform private ones in the survival chances. Third, subsidy choice is an endogenous variable in the analysis of the hazard rate. Treating it as exogenous underestimates its impact on the bankruptcy probability. Several policy implications of the results are discussed in the chapter. The second chapter is a theoretical study of the effects of bailouts on market structure and welfare in an international asymmetric Cournot duopoly. I adopt a common market setting, where consumers from the two countries form one market. I show that the subsidy is positive also when it fails to prevent the exit. The reason is a strategic effect, which forces the more efficient firm to make additional cost-reducing effort. When the exit is prevented, allocative and productive efficiencies are lower than in case of exit and the only gaining player is the rescued firm. The third chapter provides evidence of political, institutional and economic determinants of bailout policies in the countries of the European Union. I use a new data set based on European Commission's rescue and restructuring aid decisions during the years 1995-2003 merged with information about electoral outcomes in European countries. The main finding is that in countries with majoritarian democratic institutions bailouts are more likely, in particular during years preceding elections. Since bailouts are a targeted fiscal policy, the evidence supports the theory of Persson and Tabellini (2000) predicting that electoral systems shape incentives for fiscal policy choices.

Governments in the EU grant Rescue and Restructure Subsidies to bail out ailing firms. In an inte... more Governments in the EU grant Rescue and Restructure Subsidies to bail out ailing firms. In an international asymmetric Cournot duopoly we study effects of such subsidies on market structure and welfare. We adopt a common market setting, where consumers from the two countries form one market. We show that the subsidy is positive also when it fails to prevent the exit. The reason is a strategic effect, which forces the more efficient firm to make additional costreducing effort. When the exit is prevented, allocative and productive efficiencies are lower and the only gaining player is the rescued firm.

Effectiveness of Bailouts in the EU * by Ela Glowicka Governments in the EU frequently bail out f... more Effectiveness of Bailouts in the EU * by Ela Glowicka Governments in the EU frequently bail out firms in distress by granting state aid. I use data from 86 cases during the years 1995-2003 to examine two issues: the impact of bailouts on bankruptcy probability and the determinants of bailout policy. I have three main results. First, the estimated discrete-time hazard rate increases during the first four years after the subsidy and drops after that, suggesting that some bailouts only delayed exit instead of preventing it. The number of failing bailouts could be reduced if European control was tougher. Second, governments ’ bailout decisions favored public firms, even though public firms did not outperform private ones in the survival chances. Third, subsidy choice is an endogenous variable in the analysis of the hazard rate. Treating it as exogenous underestimates its impact on the bankruptcy probability.

European State Aid Law Quarterly, 2018

Journal of Antitrust Enforcement, 2015

With e-commerce having accelerated over recent years, retailing has changed significantly. Manufa... more With e-commerce having accelerated over recent years, retailing has changed significantly. Manufacturers and retailers have established multichannel (offline/online) strategies within which pricing restraints often constitute a central element. Behind these strategies sits the firms' ambition to find a solution to free-riding. Free-riding results in non-optimal service levels and price setting and thus offers a business justification for pricing restrains which, in many instances, are viewed as infringements under Article 101 or 102 Treaty on the Functioning of the European Union (TFEU). In this article we map out the alignment of characteristics of products targeted by recent antitrust enforcement in Europe with the likelihood of free-rider effects taking place. Specifically in the case of products with search and experience characteristics, we find intensive enforcement activity despite prevalent free-rider effects.

SSRN Electronic Journal, 2006

Governments in the EU frequently bail out firms in distress by granting state aid. I use data fro... more Governments in the EU frequently bail out firms in distress by granting state aid. I use data from 86 cases during the years 1995-2003 to examine two issues: the effectiveness of bailouts in preventing bankruptcy and the determinants of bailout policy. The results are threefold. First, the estimated discrete-time hazard rate increases during the first four years after the subsidy and drops after that, suggesting that some bailouts only delayed exit instead of preventing it. The number of failing bailouts could be reduced if European control was tougher. Second, governments' bailout decisions favored state-owned firms, even though state-owned firms did not outperform private ones in the survival chances. Third, subsidy choice is an endogenous variable in the analysis of the hazard rate. Treating it as exogenous underestimates its impact on the bankruptcy probability. Several policy implications of the results are discussed in the paper.

This note provides a simple explanation why sellers rarely set optimal reserve prices in one-shot... more This note provides a simple explanation why sellers rarely set optimal reserve prices in one-shot auctions. In a standard sealed-bid second-price auction, bidders with private values do not bid truthfully if the seller cannot commit to her announced reserve price. Consequently, expected revenue may be lower than without the announcement of a reserve price.

SSRN Electronic Journal, 2005

Governments in the EU grant Rescue and Restructure Subsidies to bail out ailing firms. In an inte... more Governments in the EU grant Rescue and Restructure Subsidies to bail out ailing firms. In an international asymmetric Cournot duopoly we study effects of such subsidies on market structure and welfare. We adopt a common market setting, where consumers from the two countries form one market. We show that the subsidy is positive also when it fails to prevent the exit. The reason is a strategic effect, which forces the more efficient firm to make additional cost-reducing effort. When the exit is prevented, allocative and productive efficiencies are lower and the only gaining player is the rescued firm.