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Quality and Competition: An Empirical Analysis across Industries

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  • John M. Crespi
  • Stéphan Marette

Abstract

This paper empirically explores the link between quality and concentration in a cross-section of manufactured goods. Using concentration data and product quality indicators, an ordered probit estimation explores the impact of concentration on quality that is defined as an index of quality characteristics. The results demonstrate that market concentration and quality are positively correlated across different industries. When industry concentration increases, the likelihood of the product being higher quality increases and the likelihood of observing a lower quality decreases.

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File URL: http://www.card.iastate.edu/publications/DBS/PDFFiles/06wp420.pdf
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File URL: http://www.card.iastate.edu/publications/synopsis.aspx?id=998
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Bibliographic Info

Paper provided by Food and Agricultural Policy Research Institute (FAPRI) at Iowa State University in its series Food and Agricultural Policy Research Institute (FAPRI) Publications with number 06-wp420.

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Date of creation: Mar 2006
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Handle: RePEc:ias:fpaper:06-wp420

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Related research

Keywords: concentration; market structure; ordered probit; product differentiation; product quality.;

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