Abstract: Liberalization of the European automobile
distribution system in 2002 limits the ability of manufacturers to impose
vertical restraints, leading to a substantial restructuring of the industry
and increasing the competitive pressure among dealers. We estimate an
equilibrium model of profit maximization to evaluate how dealers change
their innovation strategies with this regime change. Using French data we
evaluate the existence of complementarities among adoptions of innovations
and the scale of production. We conclude that as firms expand their scale of
production they concentrate their effort in one type of innovation only.
Results are robust to the existence of unobserved heterogeneity.
Co-authors: Tobias Kretschmer (Institute for Communications Economics, Ludwig-Maximilians-Universität-München) and José C. Pernías (Universidad Jaume I de Castellón).
Funding: NET Institute; Anglo-German Foundation; and the Research
Council of Norway.
Seminars: Freie
Universität Berlin, U.S. Federal Communications Commission, Kyoto University, Universidade
Técnica de Lisboa, Ludwig-Maximilians-Universität-München,
University of Southern Denmark at Odense, University of Texas at Austin, Universiteit Utretch, Wissenschaftszentrum
Berlin für Sozialforschung (WZB).
Conferences: 2008 LACEA/LAMES meeting
in Rio de Janeiro; V Jornadas sobre Integración Económica, Castellón; 2009 Winter Workshop at the Centre for Competition
and Regulatory Policy at City University London; the 10th CEPR Conference on Applied Industrial Organization, Mannheim, May 2009; and the 2010 NET Institute Conference on Network Economics.
