Prague Economic Papers 2003, 12(4):317-329 | DOI: 10.18267/j.pep.224

Strategic market research and industry structure in integrated economy

Jacek Cukrowski¹, Manfred M. Fischer²

¹ University of Finance and Management (WSFiZ), Ciepla 40, 15-472 Bialystok and Center for Social and Economic Research (CASE), Sienkiewicza 12, 00944 Warsaw, Poland (e-mail: Jacek.Cukrowski@case.com.pl).

² Department of Economic Geography and Geoinformatics, Vienna University of Economic and Business Administration, Rossauer Lände 23/1, A-1090 Vienna, Austria.

The paper is concerned with the impact of market research prior to integration with European Union (EU) on the structures of noncompetitive industries in integrated economy. The analysis focuses on monopolistic markets with stochastic demand. Firms are considered in dynamic multiperiod model, where intertemporal links are determined by expenditures on market research in a present period and benefits from this activity (i.e., smaller variance of the prediction error) in the future. We show that the optimal market research strategy is stationary and depends on market size. Consequently, after accession firms operating prior to integration in small markets are expected to have much less information about the total market than their competitors from the EU. This informational asymmetry may affect the structure of the industry in integrated economy. In the extreme case, the firm operating before integration in the small market can be ruled out from the integrated market.

Klíčová slova: demand uncertainty, European integration, industry structures, asymmetric information, demand forecasting, barriers for entry

JEL classification: D80, F15, L10

Zveřejněno: 1. leden 2003  Zobrazit citaci