The relationship between technical efficiency and industrial concentration: Evidence from the Indonesian food and beverages industry
AbstractThis paper investigates the relationship between technical efficiency and industrial concentration in the Indonesian food and beverages sector. Firm-level data obtained from the Indonesian Bureau of Central Statistics (BPS) are used to estimate technical efficiency scores and calculate measures of industrial concentration. The results show that the food and beverages industry is characterized by high industrial concentration and firms in the industry are inefficient. The Granger-causality test suggests a one-way direction of causality, with industrial concentration having a negative impact on technical efficiency, at the sector level. This suggests that the quiet-life hypothesis, rather than the efficient-structure hypothesis, applies to the Indonesian food and beverages industry.
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Bibliographic InfoArticle provided by Elsevier in its journal Journal of Asian Economics.
Volume (Year): 23 (2012)
Issue (Month): 4 ()
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Web page: http://www.elsevier.com/locate/asieco
Technical efficiency; Industrial concentration; Quiet-life hypothesis; Efficient-structure hypothesis; Data envelopment analysis (DEA);
Find related papers by JEL classification:
- L10 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - General
- L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
- L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
- L66 - Industrial Organization - - Industry Studies: Manufacturing - - - Food; Beverages; Cosmetics; Tobacco
- C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
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