A83220 Doing Business Around the World

At the end of the course the student will be able to:

• Identify and analyze firm-specific objectives and organizational, pricing and marketing strategies tailored to business success or other firm objectives under specific market structures and conditions.
• Address the extent to which different forms of government intervention may affect the specific structure of the market and firm strategy including: regulation, subsidies, tariffs, quotas, antitrust laws, patents and copyrights

Course Prerequisite (no exceptions): The course is meant for graduate students in economics who have a solid foundation in microeconomic theory and industrial organization.  Undergraduate students are generally not admitted in this course.  However, undergaduates who are in their final year of coursework can occasionally be admitted to the course but only upon permission of the instructor. 

This course requires students to apply and analyze what they learn in the course though in-class discussions, a written paper and group presentations.   As such, it gives students immediate feed back and practical tools that require them to put into practice what they are learning.  This includes: developing anlaytical and creative thinking as well as research, writing and presentation skills -- all of which will prove useful for future academic courses and practical work experiences.        

This course reviews the main models of market structure as a basis for analyzing and discussing real world decision-making by market participants, including firms, consumers and government regulators.  The aim of the course is to give students a strategic understanding of the behavior of firms and other market participants in economies across the world.  It does so by focusing on ways in which firm-specific strategies influence market structure, as well as ways in which firms choose strategies in response to the structure of the markets in which they operate.  Within this context, the government can play an important role in influencing firm behavior, market structure and market outcome.    

The lectures will make extensive use of real-world examples, case studies and in-class experiments to illustrate and analyze these relationships and interactions, including:

• Hollywood strategy: what movies to release and when
• Zegna, Ferrero, Armani, Illy: privately held and proud of it
• Bayer, Coca-Cola, Gucci: the power of brand name
• Tech sector: waiting longer before going public
• The Italian highway system: a public/private partnership
• Collusion pays off (even if you’re caught): vitamins, flat screens, beer, banking
• Cooperative in-class experiment: why cartel members cheat
• Monopolization antitrust suits: Microsoft and Intel
• Do Facebook and Google have too much market power?
• Government regulation in the market for cigarettes
• Cheap Chinese imports: rationales for and against trade restrictions

The course may feature guest speakers who are experts in their respective fields.  Past guest speakers included:

1. Luxury goods: Anna Zegna, Image Director Zegna Group, President Zegna Foundation
2. Banking: Dr. Eugenio Namor, Professor LIUC, President Anthilia Capital Partners
3. Equity Research: Fabrizio Malavolti, Hammer Partners
4. Lobbying in ETFs and taxation: Dr. Federico Sidoti, consultant Ecomunicare

Workshop in Firm Organizational Features: The course includes a separate mandatory workshop of 20 hours taught by Prof. Filippo Pavesi.  The workshop offers students an in–depth analysis of the determinants of firm size, corporate hierachies and organizational incentives making use of case studies and in-class simulations. Specific topics that will be analyzed are:

• Vertical boundaries of the firm (make or buy decisions)
• Integration and its alternatives
• Understanding organizational incentives: the principal agent framework
• Corporate Hierarchies: do they still matter? 

Workshop Text Book: Dranove, Besanko, Shanley, Schaefer, “Economics of Strategy”, Wiley, 7^th Edition (Chapters 3 and 4); Ricketts M., “The Economics of Business Enterprise. An Introduction to Economic Organization and the Theory of the Firm”, Edward Elgar, 3^rd Edition (Chapters 5 and 6).  Additional references and readings will be provided during the course.

The course will run under a lecture format requiring active students’ involvement. Students are responsible for LEARNING the assigned lecture material and for PROVIDING a meaningful contribution to the discussion led by the instructor. Enrollment in this class involves a commitment from students to dedicate the time and energy required to be prepared and active class participants.  

Lecture materials (slides, notes, articles and video links) as well as course informational updates are posted on the E-Course Moodle platform.

Textbook (optional): Martin Ricketts,The Economics of Business Enterprise - An Introduction to Economic Organization and the Theory of the Firm, Edward Elgar Publcihsing, 2019.    

The total course grade is out of 30 points of which 70% (21/30 points) from Prof. Della Valle's portion of the course and 30% (9 points) from the Workshop in Firm Organizational Features taught by Prof. Pavesi. 

The grade for Prof. Della Valle's portion of the course will be as follows:  class attendance and participation 25% (5 pts.), group project 50% (10 pts.), topic-specific paper: 25% (6 pts.).

The grade for Prof. Pavesi's portion of the course will be as follows: class attendance and participation 35% (3 pts), in-class group presentation 65% (6 pts). 

Focusing students' grades on analytical, research and writing skills (rather than strictly answering exam questions) shifts the focus of learning from didactic feedback to more active creative thinking and analysis.   The intention is to give the students skills that will prove helpful in better assimilating the material learned in the course as well as applying it in real-world contexts.  

Attending students: Attending students are required to complete all of the course requirements by the end of the course date.  No late submissions of group presentations or topic specific papers are permitted.  Students who have not completed the course requirements by the end of the course date will be considered to be non-attending and required to abide by the corresponding grading guidelines for non-attending students (see below).    

Non attending students (please read these instructions carefully): Due to the nature and structure of this course, students are strongly discouraged from following this course if they cannot attend classes.  However, those students for whom this class is a degree requirement and who cannot attend class for acceptable reasons, can fulfill the course requirements by completing the following:

1. A three-hour written non-attending student exam based on comprehensive knowledge of all of the material (lecture slides, notes and readings) posted on the E- course Moodle platform as well as the contents of chapters 2-4, 8, 13-15 from the textbook Martin Ricketts, The Economics of Business Enterprise – An Introduction to Economic Organisation and the Theory of the Firm, Edward Elgar Publishing, 2019. The exam for non-attending students will also include questions aimed at assessing the student’s knowledge of applied microeconomics and industrial organization.

For materials relating to the Workshop in Firm Organizational Features non-attending student should contact Prof. Pavesi directly.

2. Two individual research papers: the first on a topic relating to Prof. Della Valle’s portion of the course and the second relating to Prof. Pavesi’s workshop. Non-attending students should contact Profs. Della Valle (a.dellavalle@liuc.it) and Pavesi (fpavesi@liuc.it) regarding the nature, scope and choice of the paper topics. 

Grading for non-attending students will be determined as follows: 50% final exam (15 points) and 50% papers (15 points of which 9 for Prof. Della Valle’s paper and 6 for Prof. Pavesi’s paper).

Note: Students for whom the course is not a degree requirement will be permitted to take the course on a non-attending basis only upon permission of Prof. Della Valle who must be contacted before the course is accepted in their study plan.