Monsieur Jonas TEUSCH soutiendra publiquement sa dissertation pour l'obtention du titre de Docteur en sciences économiques et de gestion avec sa thèse intitulée" Horizontal integration under yardstick competition", le 21 novembre 2017 à 10h00, Bâtiment CORE B-135, 34 voie du roman pays, 1348 Louvain-La-Neuve.
Summary:
Horizontal integration through mergers and cross-ownership is common in industries regulated by yardstick competition. However, even though yardstick competition is applied to sectors of vital economic importance, such as energy and water networks, the welfare effects of horizontal integration in these settings have largely escaped scientific scrutiny. The dissertation therefore studies the welfare implications of horizontal integration under yardstick competition and identifies potential trade-offs. Specifically, whereas mergers and cross-ownership may bring about efficiency gains, there is a possibility that horizontal integration simultaneously decreases the effectiveness of regulation, benefitting certain firms at the expense of consumers and competitors. Key conditions for such strategic effects to occur and to dominate efficiency effects are derived in a principal-agent model. The thesis also demonstrates that the issue is not merely of academic interest, but has affected the practical application of yardstick competition in the electricity distribution industries of both Belgium and Norway.
Chapter 1 analyses how horizontal mergers, joint ventures and regulatory decentralisation complicate the application of yardstick competition in Belgian electricity distribution. Chapter 2 develops a theoretical model of mergers under yardstick competition - formalising the welfare trade-offs at the heart of this dissertation. Chapter 3 leverages Data Envelopment Analysis to quantify both efficiency and strategic effects of horizontal restructuring in Norwegian electricity distribution and points to a recent merger that appears to have been driven by strategic motivations. Chapter 4 uses several econometric identification strategies to establish that between 2007 and 2015, cross-ownership increased firm performance in Norwegian electricity distribution - which suggests that the net welfare effects were positive in this application.
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