Markets, Innovation and Competition

In many ways, market economies are more dominant than ever before where competition intensifies, calling for innovation. On the one hand markets have facilitated wealth creation and spurred innovation; on the other, they are often held responsible for causing financial instability and widening inequality and are vulnerable to asset tunnelling, to name but a few criticisms. This gives rise to a range of connected issues to be analysed by MIC – the Markets, Innovation and Competition Themed Research Group.

Please contact MIC Research Group Dr Steven Brand if you are interested in working with MIC. 

MIC Seminars – Autumn 2018

The full autumn programme is currently in development but we will be posting further details shortly. For further details on the programme please contact Dr Fangya Xu.

Wednesday 17 October 2018 -  Dr Panagiotis Tziogkidis (Plymouth Business School) - Evaluating countries’ innovation potential: an international perspective - 16:00-17:30, Cookworthy Building 404.

The paper proposes a novel two-step approach that evaluates countries’ innovation efficiency and their responsiveness to expansions in their innovation inputs, while addressing shortcomings associated with composite indicators. Based on our evaluations, we propose innovation policies tailored to take into account the diverse economic environments of the many countries in our study. Applying multidirectional efficiency analysis (MEA) on data from the Global Innovation Index, we obtain separate efficiency scores for each innovation input and output. We then estimate different sensitivities for each country, by applying partial least squares on explanatory and response matrices which are determined by the nearest neighbours of the country under consideration. The findings reveal substantial asymmetries with respect to innovation efficiencies and sensitivities, which is indicative of the diversity of national innovation systems. Considering these two dimensions in combination, we outline three policy directions that can be followed, offering a platform for better-informed decision-making.

MIC Seminars – Spring 2018

Details of the first MIC seminar in spring 2018 are below. The full Spring programme is currently in development but we will be posting further details shortly. For further details on the programme please contact Dr Fangya Xu.

Wednesday 23 May 2018 -  Gianluca Marcato (Full Professor in Finance and Real Estate, Henley Business School, University of Reading) -  Time to Homeownership and Mortgage Design (with Rafal Wojakowski) -  16:00-18:00, 505 Cookworthy Building

Accessibility to homeownership in western countries, especially for middle to low income earners has decreased over time due to several factors such as stringent covenants, pressure of rental growth on household income expenditure and a negative gap between wage and house price growth. Moreover, young households face higher accumulated student loans and, in a steadily rising and strong rental market, they are not able to generate enough savings to cover the initial deposit necessary to become homeowners. We design an income sharing mortgage product where borrowers accept to pledge a portion of their future income to anticipate the time necessary to become homeowners by obtaining a higher LTV (up to 100 per cent). Our analysis finds that this mortgage may be useful for lower income households in periods of higher uncertainty and that it may become less expensive in a high interest rate environment. Finally, this product also embeds an incentive to save, with potential benefits for the overall systemic risk of the banking sector. As a consequence we find that the default risk is not higher than a plain vanilla mortgage with lower LTV.

Wednesday 2 May 2018 – Dr Chunping Liu (Senior Lecturer, Nottingham Trent University) – What determines China’s housing price dynamics? New evidence from a DSGE-VAR  16:00–17:30, Cookworthy Building 401 

We investigate what determines China’s housing price dynamics using a DSGE-VAR estimated with priors allowing for the featured operating of normal and shadow banks in China, with data observed between 2001 and 2014. We find that the housing demand shock, which is the essential factor for housing price bubbles to happen, accounts for over 80 per cent of the housing price fluctuation. We also find that a prosperous housing market could have led to future economic growth, though quantitatively its marginal impact is small. But this also means that, for policy-makers who wish to stabilise the housing market, the cost on output reduction would be rather limited.

Wednesday 14 March – Professor Max Munday (Cardiff Business School) – How serious is a devolved data deficit? – 16:00 –17:30 

Professor Max Munday discusses whether there is appropriate economic intelligence available at the sub-national level to inform decisions on economic policy making.  More information can be found on our spring programme page

MIC Seminars – Autumn 2017

Details of the first MIC seminar in autumn 2017 are below. The full autumn programme is currently in development but we will be posting further details shortly. For further details on the programme please contact Dr Fangya Xu.

Wednesday 4 October – Neil Smith (University of Plymouth) Mr Godley, Mr Forrester and Stock-Flow Consistent modelling through the lens of System Dynamics - 16:00–17:30, Room 404, Cookworthy Building, University of Plymouth.

Neil Smith presents his paper on Stock-Flow Consistent Modelling and Systems Dynamics. More information can be found on our autumn programme page.

Wednesday 18 October – Dr Mike Felgenhauer – The (face) value of (non-) manipulable arguments 16:00–17:30, Room 401 Cookworthy Building

This paper studies quality requirements for different types of arguments. More information can be found on our autumn programme page.

Wednesday 1 November – Dr Simon Ashby – Operational Risk and Reputation in Financial Institutions: Does Media Tone Make a Difference? – 16:00–17:30, Cookworthy Building 401.

This paper examines the equity-based and debt-based reputational effects of financial sentiment tones in operational risk announcements. More information can be found on our autumn programme page.

MIC Seminars – Spring 2017

Below is a list of the seminars that were organised by MIC in spring 2017. Further details, including full abstracts and, where available relevant papers, can be found on our Spring 2017 seminar programme page.

Wednesday 8 March 2017 – Dr Panagiotis Tziogkidis (University of Plymouth) – The Global Innovation Index – Measurement and Implications – 16:00–17:30, Cookworthy Building 404.

This paper investigates the plausibility of the practice of equal weighting in the Global Innovation Index. More information can be found on our spring programme page.

Wednesday 29 March 2017 – Professor Kent Matthews (University of Cardiff) – ‘Run for home’ – SME Lending and the Head Quarters –16:00–17:30, Cookworthy Building 401.

This paper is aimed at two strands of the empirical literature in banking. More information can be found on our spring programme page.

Wednesday 3 May 2017 – Professor Marian Rizov (University of Lincoln) – Internet, Productivity, and Market Structure  14:00–15:30, Cookworthy Building 404.

This paper investigates the role of the internet on firms' productivity and market structure. More information can be found on our spring programme page.

Friday 19 May 2017 – Dr Peng Wang (University of Southampton) – Do Qualified Foreign Institutional Investors Improve the Informational Efficiency of Stock Prices in China? – 11:15–12:45, Cookworthy Building 401.

This study investigates the impact of investments by qualified foreign institutional investors (QFIIs) on the informational efficiency. More information can be found on our spring programme page.

Wednesday 24 May 2017 – Professor Rebecca Boden (University of Tampere, Finland) – Universities Challenged: the Entry of Private Providers into UK Higher Education – 15:30–17:00, Cookworthy Building 502. Please note: the time and venue has been amended from that which was originally advertised.

There is a significant degree of policy and organisational isomorphism in the global higher education reform landscape. More information can be found on our spring programme page.

Wednesday 31 May 2017 – Professor Robert McMaster (University of Glasgow) – Reconfiguring Economic Democracy  14:00–15:30, Cookworthy Building 505.

This paper argues that economic democracy has to be rethought as a concept. More information can be found on our spring programme page.

MIC research strands

The different strands of MIC connect more fundamental issues, such as the question of how to organise interaction between individuals in the presence of private information, with more specific ones, such as how regulators can step in to foster and keep up a financial and economic environment that is functioning, fair, competitive and sustainable. The group analyses financial market interdependence and integration, investigate innovation strategies, and relate competition in markets to competition between regions and countries. The different strands of MIC integrate research on economic behaviour, financial markets, and government policy and regulation. The global dimension of MIC focuses on how firms and governments manoeuvre in an internationally competitive environment.

MIC consists of three key research strands:

Finance and Economic Behaviour (including: Dr Mike Felgenhauer, Professor Peijie Wang):

  • market interaction in the presence of private information and the value of arguments
  • corporate information disclosure rules and the behaviour of investors and firms
  • corporate innovation strategies, information disclosure, and financial markets.

Manoeuvring in an Internationally Competitive Environment (including: Dr Basel Awartani, Dr Ahmed El-Masry, Professor Salima Paul, Professor Peijie Wang):
  • international competitiveness, international finance, and FDI
  • national innovation policies and international competitive advantage
  • financial market interdependence, international transmission mechanisms, and linkages between equity and commodity markets
  • risk management.

Regional Development, Environmental Protection, and International Cooperation (including: Dr James Benhin, Professor Paul Bishop, Dr Steven Brand and Dr Alexander Haupt):
  • regional growth, industrial diversity, and regional entrepreneurship
  • international and interregional competition for firms, capital and skilled workers
  • international cooperation, environmental policy, and innovation.

Selected publications 

View a more complete list of MIC publications

Felgenhauer, M. and Loerke, P. (in Press) "Bayesian Persuasion with Private Experimentation", International Economic Review.

Tziogkidis P., Matthews K., Philippas D., (2016) “The Effects of Sector Reforms on Bank Productivity: The Greek Banking Case”, Annals of Operations Research, published online before print  

El-Masry, A.A., de Mingo-López, D. V., Tortosa-Ausina, E., and Matallín-Sáez, J.C. (2016) "Environmental Conditions and Fund Characteristics of Mutual Fund Performance in MENA region", Journal of Economic Behavior & Organization, Vol. 132, Supplement, pp. 174-197  

Maghyereh, A. I., Awartani, B., & Bouri, E. (2016). "The Directional Volatility Connectedness between Crude Oil and Equity Markets: New Evidence from Implied Volatility Indexes". Energy Economics, Vol. 57, pp. 78-93

Basso, A. (2015) "Does Democracy Foster the Fertility Transition?" Kyklos. Vol. 68, No. 4, pp.459-474

Butt, H. A. and Virk, N. S. (2015) "Liquidity and Asset prices: An Empirical Investigation of the Nordic Stock Markets", European Financial Management, Vol. 21, pp.672–705

Wang, P.J. and Brand, S. (2015) "A New Approach to Estimating Value-Income Ratios with Income Growth and Time-Varying Yields", European Journal of Operational Research, Vol. 242, No. 1, pp.182-187

Kling, G., Paul, S.P. and Gonis, E. (2014) "Cash Holding, Trade Credit and Access to Short-term Bank Finance", International Review of Financial Analysis, Vol. 32 (March), pp.123-131

Bishop, P. (2013) "The Spatial Distribution of Personal Insolvencies in England and Wales, 2000–2007" Regional Studies, No. 47, Vol. 3, pp.419-432

Wang, P.J. (2013) "A Driver Currency Hypothesis", Economics Letters, Vol.118, No.1, pp.60-62

Dang, T.V. and Felgenhauer, M. (2012) "Information Provision in Over-the-counter Markets", Journal of Financial Intermediation, Vol. 21, No.1, pp.79-96

Dascher, K. and Haupt, A. (2011) "The Political Economy of Regional Integration Projects at Borders where Poor and Rich Meet: The Role of Cross-Border Shopping and Community Sorting" Journal of Urban Economics, Vol. 69, No.1, pp.148-164