Author, as appears in the article.: Fageda, Xavier; Flores-Fillol, Ricardo; Theilen, Bernd
Department: Economia
URV's Author/s: Flores Fillol, Ricardo / Theilen, Bernd Georg
Keywords: Strategic alliances Mergers Markets Joint ventures International airfares Impact Hybrid cooperation agreements Economics Competition Antitrust immunity Alliances Airlines Airline industry
Abstract: This paper develops a unified framework to analyze a continuum of hybrid cooperation agreements along two dimensions: their degree of revenue sharing (scope of alliances) and their degree of cost sharing (scope of joint ventures). The analysis focuses on the air transportation industry, distinguishing between interline and interhub markets. As economies of traffic density become stronger, we find that the socially optimal cooperation agreement moves from full alliance to joint venture in interline markets, whereas it moves from joint ventureto merger in interhub markets. These results are driven by the tradeoff between a procompetitive effect of alliances in interline markets and an anticompetitive effect in interhub markets, along with the efficiency gains associated with joint ventures in interhub markets. We also develop an empirical application for intercontinental routes for the period 2010-2016 that identifies a positive impact of deeper degrees of airline cooperation (revenue and cost sharing) on traffic, both in interline and interhub markets. Therefore, the potential anticompetitive effect of deeper alliances in interhub markets is not observed in our sample.
Thematic Areas: Strategy and management Science and technology studies Industrial relations Industrial and manufacturing engineering Engineering (miscellaneous) Economics, econometrics and finance (miscellaneous) Economics and econometrics Economics Economia Ciencias sociales Business and management Aerospace engineering
licence for use: https://creativecommons.org/licenses/by/3.0/es/
ISSN: 01677187
Author's mail: ricardo.flores@urv.cat bernd.theilen@urv.cat
Author identifier: 0000-0002-3506-1634 0000-0001-7141-2780
Record's date: 2023-02-22
Papper version: info:eu-repo/semantics/acceptedVersion
Link to the original source: https://www.sciencedirect.com/science/article/abs/pii/S0167718717303855
Papper original source: International Journal Of Industrial Organization. 62 194-227
APA: Fageda, Xavier; Flores-Fillol, Ricardo; Theilen, Bernd (2019). Hybrid cooperation agreements in networks: The case of the airline industry. International Journal Of Industrial Organization, 62(), 194-227. DOI: 10.1016/j.ijindorg.2017.10.008
Licence document URL: https://repositori.urv.cat/ca/proteccio-de-dades/
Article's DOI: 10.1016/j.ijindorg.2017.10.008
Entity: Universitat Rovira i Virgili
Journal publication year: 2019
Publication Type: Journal Publications
Repositori URV