Price margins and capital adjustment : Canadian mill products and pulp and paper industries
AbstractThe purpose of this paper is to estimate a model incorporating noncompetitive behaviour in product and factor markets, In addition, capital accumulation is subject to adjustment costs so that firms are not constrained to be in long-run equilibrium. The model is applied to two major Canadian manufacturing industries: pulp and paper and mill products. The results show for both industries in each of the three product markets and the wood input market that there is competitive behaviour. In addition, the industries are not in long-run equilibrium as marginal adjustment costs cause marginal profit to exceed the rental rate on capital. With the industries exhibiting short-run competitive behaviour in product and factor markets, new estimates are derived for scale economies and rates of technological change. Unlike the results from other studies, both industries exhibit small scale economies and positive rates of technological change.
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Bibliographic InfoArticle provided by Elsevier in its journal International Journal of Industrial Organization.
Volume (Year): 10 (1992)
Issue (Month): 3 (September)
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Web page: http://www.elsevier.com/locate/inca/505551
Other versions of this item:
- Bernstein, Jeffrey I., 1991. "Price Margins and Capital Adjustment: Canadian Mill Products and Pulp and Paper Industries," Working Papers 91-42, C.V. Starr Center for Applied Economics, New York University.
- Jeffrey I. Bernstein, 1992. "Price Margins and Capital Adjustment: Canadian Mill Products and Pulp and Paper Industries," NBER Working Papers 3982, National Bureau of Economic Research, Inc.
- Jeffery Bernstein, 1991. "Price Margins and Capital Adjustment: Canadian Mill Products and Pulp and Paper Industries," Carleton Economic Papers 91-07, Carleton University, Department of Economics, revised Sep 1992.
- L6 - Industrial Organization - - Industry Studies: Manufacturing
- D2 - Microeconomics - - Production and Organizations
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