RESEARCH

Publications

Working papers

          [Abstract] This study utilizes the homogeneous oligopoly model to investigate the optimal technology licensing strategy of the licensee in the industry. We assume that the technology licensing strategies that the licensee can choose are fixed-fee, royalty, or equity, and at the same time the licensor compete with licensee.  Our main findings are as follows: First, if the technological innovation is non-drastic and the degree of innovation is small (middle, large), then when the licensor licenses to all firms in the industry, the optimal technology licensing strategy for the licensee is equity (equity, royalty). Second, an increase in optimal equity share will increase with not only increase technological innovation but also raise the marginal production cost of the licensee. Finally, when the technological innovation is nod-drastic, and the degree of innovation is small and middle, the social welfare under one firm licensed will be greater than that under all firms licensed in the industry.

          [Abstract] Firms collocating with competitors not only take advantage of agglomeration economies but also face greater competition. We investigate the geographic location decisions of Airbnb listings to infer their tradeoff between locating close to favorable demand conditions and differentiating themselves geographically from competitors. Whereas listings providing more service amenities tend to locate away from competitors, listings with few service amenities tend to locate close to others. Our theoretical model explains the main features of the observed spatial patterns of the Airbnb accommodation industry in London. Consistent with the predicitions of our model, our empiircal findings show the Airbnb listings would like to locate far from (close to) their competitors as an increase (a decrease) in the magnitude of service amenities. Our study contributes an importance on the peer-to-peer accommodation literature. Managerial implications on leveraging agglomeration for service amenities are provided to Airbnb and its hosts, implies that price competition may be more severe in the Airbnb industry. 

          [Abstract] This study investigates how hotels choose their strategic positioning from neighbouring hotels, and how their strategic positioning influences productivity. Moreover, this research also analyses the direct and indirect spatial spillover effects of strategic positioning on productivity. Using the monthly data from the Bureau of Tourism in Taiwan from January 2012 to December 2020, first, using the data envelopment analysis, each hotel's productivity score is estimated, and then strategic positionings based on location, size, and price differences are spatially regressed using the spatial autoregressive panel model. Findings infer heterogeneous impacts of the different strategic positions on hotel producticity. Significant spatial spillovers of hotel productivity across neighbouring hotels were evident, highlighting the importance of place-based strategic postioning. This study therefore suggests the coexistence of both positive and negative externalities in the hotel market.

          [Abstract] This paper studies automakers’ competitive behavior in the Taiwanese automotive market. A large management and economics research suggest that competition between firms may be softened due to a context of multimarket contact, that is, firms compete with one another in multiple markets simultaneously. The mutual recognition of their interdependencies will reduce the intensity of competition, leading to mutual forbearance. Using the annual date from the Taiwanese automotive market from 2017 to 2022, the reduced-form evidence shows that an increase in multimarket contact leads to higher auto prices. The result shows that there is a significant and positive relationship between multimarket and price, suggesting that the greater the level of multimarket contact, the higher the auto price. This paper contributes to the empirical literature on multimarket contact by analyzing a different industry context and using longitudinal data.

          [Abstract] Two-dimensional Hotelling models predict that firms choose to maximally differentiate on one dominant characteristic and minimally differentiate on the other dominated characteristic. This study uses lodging tax data from the Texas Comptroller of Public Accounts to examine the joint choices of geographic location and product positioning (or brand) by multi-unit hotel operators at different market boundary levels. First, our findings suggest that greater distance between own hotels is associated with less product differentiation, which implies a max-min equilibrium. Second, considering the coexistence of horizontal and vertical differentiation, we obtain a higher likelihood at hotel will be of the same quality tier as its nearest neighbor the nearer the neighbor; while a farther distance to nearest neighbor increases the degree of quality differentiation in the scenario of vertical differentiation. This implies both max-min and max-max equilibria are obtained, respectively. Third, owners with properties at different level of quality are more likely to add new properties that are higher quality, while more geographically differentiated portfolios add lower quality properties at the margin. This implies a max-min equilibrium obtained. Therefore, our findings provide insights into the strategic motivations of multi-unit owners and, within their decisions, the relevant dominance of place versus market position.

          [Abstract] COVID-19 had devastated the global hospitality industry and productivity levels due to national lockdowns, border closures, and halt in economic activities. In response to COVID-19, hotels have taken different strategic operational action, such as cutting expenditures, terminating employee contacts, and changing operational patterns, to survive from this sheer devastation. This study investigates how different operational responses to COVID-19 impact hotel productivity change, specifically investigating the importance of F&B operations in comparison to the rooms operations and applying the case of the Taiwanese hotel industry. Using regression discontinuity design analysis, first, the study finds a significant causal impact of COVID-19 travel restrictions on hotel revenue. Second, using the control function methods, findings show that F&B operation is a more efficient strategy compared to rooms to recover hotel productivity and revenue from the pandemic. This research provides insights on how hotels can reallocate their operational resources in response to crises.

          [Abstract] We examine the joint effects of product differentiation and ownership structure on the evolution of the cluster in the Texas lodging industry. We focus on how the joint effects of product market strategies and ownership structures shape industry dynamics and ultimately the spatial distribution of hotels. We propose that multi-unit owners who operate a bundle of product portfolio can extract more benefits but neutralize more threats from agglomeration. First, our results show that the multi-unit owner is more likely to establish a new high-end hotel in a market even if the cluster is characterized by high counts of low-end hotels if one of the incumbents belongs to the multi-unit owner. Second, our findings indicate that the multi-unit owner who operates multiple cross-tier/same-chain hotels is more willing to establish a new high-end hotel in a market characterized by a high count of low-end hotels if one of his hotels exists in this market. Our results imply that the control on nearby incumbents avoids activities that diminish the value of the entrant of the high-end hotel in the vicinity.

          [Abstract] This study accesses the establishment data from the Census of Retail Trade (CRT) to examine how the effect of franchising influences the performance of hotel segments across all identifiable hotels in the United States in aggregate, as well as each individual quality segment. First, the findings indicate that franchising is associated with higher performance both with and without controlling the franchise status. Second, the results imply that the effects of franchising and multi-unit franchising have differential benefits based on the product quality attributes. Our results further suggest that previous studies examining franchising way have overlooked these differences.

Work in process