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Industrial concentration and price-cost margin of the Indonesian food and beverages sector

Author

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  • Maman Setiawan
  • Grigorios Emvalomatis
  • Alfons Oude Lansink

Abstract

This article investigates trends in industrial concentration and its relationship with the price-cost margin in 54 subsectors of the Indonesian food and beverages sector in the period 1995 to 2006. This study uses firm-level survey data provided by the Indonesian Bureau of Central Statistics (BPS), classified at the five-digit International Standard Industrial Classification (ISIC) Level. The results show a significant increase in industrial concentration in 1995 to 1999, which coincided with the period of the economic crisis in Indonesia. After 1999, the industrial concentration exhibits a slightly decreasing long-term trend. Furthermore, the industrial concentration for all subsectors tends to converge to the same value in the long run. Additionally, results show that higher industrial concentration yields a higher price-cost margin. Finally, the introduction of the competition law in 1999 has slightly lowered industrial concentration and the price-cost margin.

Suggested Citation

  • Maman Setiawan & Grigorios Emvalomatis & Alfons Oude Lansink, 2012. "Industrial concentration and price-cost margin of the Indonesian food and beverages sector," Applied Economics, Taylor & Francis Journals, vol. 44(29), pages 3805-3814, October.
    • Handle: RePEc:taf:applec:44:y:2012:i:29:p:3805-3814
    DOI: 10.1080/00036846.2011.581220
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    Cited by:

    1. Maman Setiawan & Nury Effendi & Rina Indiastuti & Mohamad Fahmi & Budiono, 2022. "Innovation and Dynamic Productivity Growth in the Indonesian Food and Beverage Industry," Resources, MDPI, vol. 11(11), pages 1-13, October.
    2. Briones, Roehlano M., 2013. "The Structure of Agricultural Trade Industry in Developing Countries," Discussion Papers DP 2013-15, Philippine Institute for Development Studies.
    3. Maman Setiawan & Grigorios Emvalomatis & Alfons Oude Lansink, 2013. "Structure, conduct, and performance: evidence from the Indonesian food and beverages industry," Empirical Economics, Springer, vol. 45(3), pages 1149-1165, December.
    4. Dahlia Nauly & Harianto Harianto & Sri Hartoyo & Tanti Novianti, 2020. "Foreign Presence and Indonesian Food Industry Performance," International Journal of Economics and Financial Issues, Econjournals, vol. 10(2), pages 48-52.
    5. Dimitrios Giokas & Nicolaos Eriotis & Ioannis Dokas, 2015. "Efficiency and productivity of the food and beverage listed firms in the pre-recession and recessionary periods in Greece," Applied Economics, Taylor & Francis Journals, vol. 47(19), pages 1927-1941, April.
    6. Setiawan, Maman & Emvalomatis, Grigorios & Oude Lansink, Alfons, 2012. "The relationship between technical efficiency and industrial concentration: Evidence from the Indonesian food and beverages industry," Journal of Asian Economics, Elsevier, vol. 23(4), pages 466-475.
    7. Ivana Blazkova, & Ondrej Dvoulety, 2017. "Is the price-cost margin affected by the market concentration? Evidence from the Czech food and beverages industry," Business and Economic Horizons (BEH), Prague Development Center, vol. 13(2), pages 256-269, May.
    8. Ivana Blazkova & Ondrej Dvoulety, 2018. "Sectoral And Firm-Level Determinants Of Profitability: A Multilevel Approach," International Journal of Entrepreneurial Knowledge, Center for International Scientific Research of VSO and VSPP, vol. 6(2), pages 32-44, December.

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