We analyse the impact of FDI on market concentration for the Portuguese manufacturing industries in the 2006–2009 period. Using panel data estimation, and after controlling for other determinants of industry concentration (entry barriers, market size, and growth), we found a significant negative impact of FDI on industry concentration. This finding is in line with the results of the empirical literature on other developed countries. Moreover, it supports the argument that FDI has positive effects on domestic firms, eventually through positive externalities, and contradicts the widespread view that in small economies FDI increases concentration. Overall, this study adds to the controversial literature on FDI and concentration, and it is the first study on this topic applied to Portugal.

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In this paper, we develop a theoretical model that enriches the literature on the pros and cons of ownership unbundling vis-à-vis lighter unbundling frameworks in the natural gas markets. For each regulatory framework, we compute equilibrium outcomes when an incumbent firm and a new entrant compete à la Cournot in the final gas market. We find that the entrant's contracting conditions in the upstream market and the transmission tariff are key determinants of the market structure in the downstream gas market (both with ownership and with legal unbundling). We also study how the regulator must optimally set transmission tariffs in each of the two unbundling regimes. We conclude that welfare maximizing tariffs often require free access to the transmission network (in both regulatoy regimes). However, when the regulator aims at promoting the break-even of the regulated transmission system operator, the first-best tariff is unfeasible in both regimes. Hence, we study a more realistic setup , in which the regulator's action is constrained by the break-even of the regulated firm (the transmission system operator). In this setup , we find that, for

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We investigate how an incumbent firm can use the regulatory policy about entry and the informational advantage to protect his market position. This question is studied through the construction of a signalling game where we assume that the regulator has less information about demand than the firms. We conclude that there is a pooling equilibrium and partially separating equilibria in which entry is deterred and, if demand is high, there will be insufficient entry. The final effect on welfare depends on the tradeoff between short-run benefits (lower price) and long-run losses (weaker competition).