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Do Investigations of Competition Authorities Really Increase the Degree of Competition? An Answer From Turkish Cement Market

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  • Aydin Çelen
  • Burak Gunalp
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    Abstract

    In this paper, we assess the effects of the investigations carried by the Turkish Competition Board in 1997, 2002 and 2003 on the degree competition in the Turkish cement market. For this aim, we used proverbial Bresnahan-Lau framework with alternative definitions for the supply relation. Our first finding is that cement producers had a considerable amount of market power at the period prior to the first investigation in 1997. In addition, this study shows that, parallel to our initial expectation, competition in the cement market increased thanks to the investigations. The positive effect of the first investigation is found to be especially significant. Hence, this study witnesses that the enforcement of the competition law by the Turkish Competition Board has produced the desired effects in the most problematic sector with respect to competition law.

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    Bibliographic Info

    Article provided by University of Economics, Prague in its journal Prague Economic Papers.

    Volume (Year): 2010 (2010)
    Issue (Month): 2 ()
    Pages: 150-168

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    Handle: RePEc:prg:jnlpep:v:2010:y:2010:i:2:id:369:p:150-168

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    Related research

    Keywords: market power; market performance; degree of competition; competition policy; cement market; Bresnahan-Lau methodology;

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    References

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    1. Jozef Konings & Patrick Van Cayseele & Frederic Warzynski, 1999. "The Dynamics of Industrial Markups in Two Small Open Economies: Does National Competition Policy Matter ?," Center for Economic Studies - Discussion papers ces9914, Katholieke Universiteit Leuven, Centrum voor Economische Studiën.
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    9. Choi, Dosoung & Philippatos, George C, 1983. "Financial Consequences of Antitrust Enforcement," The Review of Economics and Statistics, MIT Press, vol. 65(3), pages 501-06, August.
    10. Deodhar, Satish Y. & Sheldon, Ian M., 1997. "Market Power In The World Market For Soymeal Exports," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 22(01), July.
    11. Kulaksizoglu, Tamer, 2004. "Measuring the Effectiveness of Competition Policy: Evidence from the Turkish Cement Industry," MPRA Paper 357, University Library of Munich, Germany.
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