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Price Competition and Market Structure: The Impact of Cartel Policy on Concentration in the UK

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Symeonidis, George

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Abstract

This paper examines the impact of firms' conduct on market structure. It studies the evolution of concentration in UK manufacturing following the abolition of cartels using a theoretical framework based on Sutton's theory of market structure and a panel data set of four-digit industries over 1958-77. The econometric results suggest that the intensity of price competition has a positive effect on concentration in exogenous sunk cost industries as well as in advertising-intensive and R&D-intensive industries. The concentration-market size relationship, while negative in exogenous sunk cost industries, breaks down in industries with high advertising or R&D intensity. Copyright 2000 by Blackwell Publishing Ltd

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Article provided by Blackwell Publishing in its journal Journal of Industrial Economics.

Volume (Year): 48 (2000)
Issue (Month): 1 (March)
Pages: 1-26
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Handle: RePEc:bla:jindec:v:48:y:2000:i:1:p:1-26

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Curry, B & George, K D, 1983. "Industrial Concentration: A Survey," Journal of Industrial Economics, Blackwell Publishing, vol. 31(3), pages 203-55, March. [Downloadable!] (restricted)
  2. Wright, Neil R, 1978. "Product Differentiation, Concentration, and Changes in Concentration," The Review of Economics and Statistics, MIT Press, vol. 60(4), pages 628-31, November. [Downloadable!] (restricted)
  3. George Symeonidis, 1999. "Price and non-price competition with endogenous market structure," Economics Discussion Papers 501, University of Essex, Department of Economics.
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  4. Waldman, Donald M., 1982. "A stationary point for the stochastic frontier likelihood," Journal of Econometrics, Elsevier, vol. 18(2), pages 275-279, February. [Downloadable!] (restricted)
  5. Davies, Stephen, 1980. "Minimum Efficient Size and Seller Concentration: An Empirical Problem," Journal of Industrial Economics, Blackwell Publishing, vol. 28(3), pages 287-301, March. [Downloadable!] (restricted)
  6. James G. MacKinnon & Halbert White, 1983. "Some Heteroskedasticity Consistent Covariance Matrix Estimators with Improved Finite Sample Properties," Working Papers 537, Queen's University, Department of Economics. [Downloadable!]
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  7. Vickers, John, 1989. "The nature of costs and the number of firms at cournot equilibrium," International Journal of Industrial Organization, Elsevier, vol. 7(4), pages 503-509, December. [Downloadable!] (restricted)
  8. Symeonidis, George, 2000. "Price Competition, Non-price Competition and the Market Structure: Theory and Evidence from the UK," Economica, London School of Economics and Political Science, vol. 67(267), pages 437-56, August. [Downloadable!] (restricted)
  9. Sleuwaegen, Leo & Yamawaki, Hideki, 1988. "The formation of the European Common Market and changes in market structure and performance," European Economic Review, Elsevier, vol. 32(7), pages 1451-1475, September. [Downloadable!] (restricted)
  10. Bittlingmayer, George, 1985. "Did Antitrust Policy Cause the Great Merger Wave?," Journal of Law & Economics, University of Chicago Press, vol. 28(1), pages 77-118, April.
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Pekka Ilmakunnas, 2008. "Lower Bounds of Concentration in a Small Open Economy," Review of Industrial Organization, Springer, vol. 32(1), pages 19-33, February. [Downloadable!] (restricted)
    Other versions:
  2. Michael Raith, 2003. "Competition, Risk, and Managerial Incentives," American Economic Review, American Economic Association, vol. 93(4), pages 1425-1436, September. [Downloadable!]
  3. Stephen Martin & Paola Valbonesi, 2006. "The State Aid Game," "Marco Fanno" Working Papers 0024, Dipartimento di Scienze Economiche "Marco Fanno". [Downloadable!]
  4. Stefan Buehler & Christian Kaiser & Franz Jaeger, 2004. "Competition Policy and Exit Rates: Evidence from Switzerland," Working Papers 0405, University of Zurich, Socioeconomic Institute, revised Apr 2005. [Downloadable!]
    Other versions:
  5. George Symeonidis, 2001. "Price Competition, Innovation and Profitability: Theory and UK Evidence," Economics Discussion Papers 530, University of Essex, Department of Economics. [Downloadable!]
    Other versions:
  6. Giannetti, C., 2008. "Intensity of Competition and Market Structure in the Italian Banking Industry," Discussion Paper 2008-43, Tilburg University, Center for Economic Research. [Downloadable!]
    Other versions:
  7. George Symeonidis, 2007. "The Effect of Competition on Wages and Productivity: Evidence from the UK," Economics Discussion Papers 626, University of Essex, Department of Economics. [Downloadable!]
  8. Symeonidis, George, 1999. "In Which Industries Is Collusion More Likely?," CEPR Discussion Papers 2301, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
  9. Catherine Matraves, 2002. "European Integration and Market Structure in the Soft Drinks Industry," International Journal of the Economics of Business, Taylor and Francis Journals, vol. 9(3), pages 295-310, November. [Downloadable!] (restricted)
  10. Rey, Patrick, 2002. "Towards a Theory of Competition Policy," IDEI Working Papers 121, Institut d'Économie Industrielle (IDEI), Toulouse. [Downloadable!]
  11. Harvie, Charles & Lee, Boon-Chye, 2003. "Public Policy and Small and Medium Enterprise Development," Economics Working Papers wp03-18, School of Economics, University of Wollongong, NSW, Australia. [Downloadable!]
  12. Nigel Driffield, 2001. "Inward investment, industry concentration and the speed of adjustment," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 137(2), pages 193-214, June. [Downloadable!] (restricted)
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This page was last updated on 2009-11-22.


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