arXiv subjects

Suguru Otani

Publications and source records attributed to Suguru Otani.

26 records · Page 2Linked to original sources

arXiv2024

Unified Merger List in the Container Shipping Industry from 1966 to 2022: A Structural Estimation of M&A Matching

We construct a novel unified merger list in the global container shipping industry between 1966 (the beginning of the industry) and 2022. Combining the list with proprietary data, we construct a structural matching model to describe the historical transition of the importance of a firm's age, size, and geographical proximity on merger decisions. We find that, as a positive factor, a firm's size is more important than a firm's age by 9.858 times as a merger incentive between 1991 and 2005. However, between 2006 and 2022, as a negative factor, a firm's size is more important than a firm's age by 2.013 times, that is, a firm's size works as a disincentive. We also find that the distance between buyer and seller firms works as a disincentive for the whole period, but the importance has dwindled to economic insignificance in recent years. In counterfactual simulations, we observe that the prohibition of mergers between firms in the same country would affect the merger configuration of not only the firms involved in prohibited mergers but also those involved in permitted mergers. Finally, we present interview-based evidence of the consistency between our merger lists, estimations, and counterfactual simulations with the industry experts' historical experiences.

econ.GN↗

arXiv2024

An MPEC Estimator for the Sequential Search Model

This paper proposes a constrained maximum likelihood estimator for sequential search models, using the MPEC (Mathematical Programming with Equilibrium Constraints) approach. This method enhances numerical accuracy while avoiding ad hoc components and errors related to equilibrium conditions. Monte Carlo simulations show that the estimator performs better in small samples, with lower bias and root-mean-squared error, though less effectively in large samples. Despite these mixed results, the MPEC approach remains valuable for identifying candidate parameters comparable to the benchmark, without relying on ad hoc look-up tables, as it generates the table through solved equilibrium constraints.

econ.EM↗

arXiv2024

Challenges in Statistically Rejecting the Perfect Competition Hypothesis Using Imperfect Competition Data

We theoretically prove why statistically rejecting the null hypothesis of perfect competition is challenging, known as a common problem in the literature. We also assess the finite sample performance of the conduct parameter test in homogeneous goods markets, showing that statistical power increases with the number of markets, a larger conduct parameter, and a stronger demand rotation instrument. However, even with a moderate number of markets and five firms, rejecting the null hypothesis of perfect competition remains difficult, irrespective of instrument strength or the use of optimal instruments. Our findings suggest that empirical results failing to reject perfect competition are due to the limited number of markets rather than methodological shortcomings.

econ.EM↗

arXiv2024

A Note on Identification of Match Fixed Effects as Interpretable Unobserved Match Affinity

We highlight that match fixed effects, represented by the coefficients of interaction terms involving dummy variables for two elements, lack identification without specific restrictions on parameters. Consequently, the coefficients typically reported as relative match fixed effects by statistical software are not interpretable. To address this, we establish normalization conditions that enable identification of match fixed effect parameters as interpretable indicators of unobserved match affinity, facilitating comparisons among observed matches. Using data from middle school students in the 2007 Trends in International Mathematics and Science Study (TIMSS), we highlight the distribution of comparable match fixed effects within a specific school.

econ.EM↗

arXiv2024

Individual Rationality Conditions of Identifying Matching Costs in Transferable Utility Matching Games

As the widely applied method for measuring matching assortativeness in a transferable utility matching game, a matching maximum score estimation is proposed by \cite{fox2010qe}. This article reveals that combining unmatched agents, transfers, and individual rationality conditions with sufficiently large penalty terms makes it possible to identify the coefficient parameter of a single common constant, i.e., matching costs in the market.

econ.GN↗

arXiv2023

Resolving the Conflict on Conduct Parameter Estimation in Homogeneous Goods Markets between Bresnahan (1982) and Perloff and Shen (2012)

We revisit conduct parameter estimation in homogeneous goods markets to resolve the conflict between Bresnahan (1982) and Perloff and Shen (2012) regarding the identification and the estimation of conduct parameters. We point out that Perloff and Shen's (2012) proof is incorrect and its simulation setting is invalid. Our simulation shows that estimation becomes accurate when demand shifters are properly added in supply estimation and sample sizes are increased, supporting Bresnahan (1982).

econ.EM↗

arXiv2023

Unified Container Shipping Industry Data From 1966: Freight Rate, Shipping Quantity, Newbuilding, Secondhand, and Scrap Price

We construct a new unified panel dataset that combines route-year-level freight rates with shipping quantities for the six major routes and industry-year-level newbuilding, secondhand, and scrap prices from 1966 (the beginning of the industry) to 2009. We offer detailed instructions on how to merge various datasets and validate the data's consistency by industry experts and former executives who have historical knowledge and experience. Using this dataset, we provide a quantitative and descriptive analysis of the industry dynamics known as the container crisis. Finally, we identify structural breaks for each variable to demonstrate the impact of the shipping cartels' collapse.

econ.GN↗

arXiv2023

Estimating Endogenous Coalitional Mergers: Merger Costs and Assortativeness of Size and Specialization

I present a structural empirical model of a one-sided one-to-many matching with complementarities to quantify the effect of subsidy design on endogenous merger matching. I investigate shipping mergers and consolidations in Japan in 1964. At the time, 95 firms formed six large groups. I find that the existence of unmatched firms enables us to recover merger costs, and the importance of technological diversification varies across carrier and firm types. The counterfactual simulations show that 20 \% of government subsidy expenditures could have been cut. The government could have possibly changed the equilibrium number of groups to between one and six.

econ.GN↗