This article investigates the influence of competition on price and product quality among Austrian camping sites, a market
characterised by both horizontal (spatial) and vertical product differentiation. Theoretically, the effect of competition
on quality is ambiguous and depends on the degree of cost substitutability between output and quality. Estimating a system
of equations shows that intense competition has a positive impact on product quality and a negative effect on prices (conditional
on quality). As high quality is associated with high prices, the total effect of competition on prices is rather small.
We empirically investigate the importance of centrality (holding a central position in a spatial network) for strategic interaction
in pricing for the Austrian retail gasoline market. Results from spatial autoregressive models suggest that the gasoline station
located most closely to the market center – defined as the 1-median location – exerts the strongest effect on pricing decisions
of other stations. We conclude that centrality influences firms' pricing behaviour and further find that the importance of
centrality increases with market size.
This article analyses the link between immigration and trade at the firm level, utilising information on the export activities
of 8,300 firms located in different Central European countries (Austria, Czech Republic, Slovakia and Hungary) for various
export markets as well as regional data on immigration. The empirical analysis suggests a strong, economically meaningful
and statistically significant impact of immigration on the export propensity (extensive margin), whereas the influence on
firms' export volumes (intensive margin) is much smaller. This leads to the conclusion that immigrants promote export activities
to their home countries mainly by reducing fixed costs of trade.
Matthias Firgo, Dieter Pennerstorfer, Christoph R. Weiss
