Policy implications of the effects of concentration and multimarket contact in China's airline market
Article
Article Title | Policy implications of the effects of concentration and multimarket contact in China's airline market |
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ERA Journal ID | 18472 |
Article Category | Article |
Authors | Zhang, Yahua (Author) and Round, David K. (Author) |
Journal Title | Review of Industrial Organization |
Journal Citation | 34 (4), pp. 307-326 |
Number of Pages | 20 |
Year | 2009 |
Place of Publication | Secaucus, NJ. United States |
ISSN | 0889-938X |
1573-7160 | |
Digital Object Identifier (DOI) | https://doi.org/10.1007/s11151-009-9215-2 |
Web Address (URL) | http://www.springerlink.com/content/54203683575t56p1/fulltext.pdf |
Abstract | Unlike many other mergers in developed countries, which might have been assessed and their effects estimated by antitrust authorities before being granted antitrust immunity, the airline mergers that swept China's airline industry in 2002 occurred with no antitrust challenge. These mergers provide the opportunity to study important market power issues in China's airline markets. Given that increased concentration and multimarket contact are the main legacies of an airline merger, the effects of mergers on these variables can raise the potential for the exercise of market power. However, an examination of the period 2002–2004 during which the Chinese airline mergers occurred shows that the resulting increased concentration and enhanced multimarket contact did not have important consequences for airfares in Chinese city-pair markets. The presence of Hainan Airlines appears to have played an important role in suppressing the airfares charged by China Eastern and China Southern. |
Keywords | airline mergers; China; concentration; market power; multimarket contact |
ANZSRC Field of Research 2020 | 350901. Air transportation and freight services |
380109. Industry economics and industrial organisation | |
380117. Transport economics | |
Public Notes | File reproduced in accordance with the copyright policy of the publisher/author. |
Byline Affiliations | School of Accounting, Economics and Finance |
University of South Australia |
https://research.usq.edu.au/item/9z2x8/policy-implications-of-the-effects-of-concentration-and-multimarket-contact-in-china-s-airline-market
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