Market Power, Competition and Ownership in Emerging Economies
AbstractIn this paper, we analyze the effects of trade, concentration and ownership on the pricing behavior of firms in two transition countries, Bulgaria and Romania. We use an extensive dataset of more than 3000 firms and sector level information to estimate the effects of these three factors on the price cost margin (PCM) for the period 1994-1998. We find: 1) that trade disciplines the industry in concentrated industries; 2) that high concentration is associated with more market power; 3) that private and foreign owned firms heve higher PCMs. This indicates that the pricing strategy of private firms is inherently differentthan the one of State firms, either as the results of different objectives or induced by the abuse of market power.
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Bibliographic InfoPaper provided by LICOS - Centre for Institutions and Economic Performance, KU Leuven in its series LICOS Discussion Papers with number 11001.
Length: 23 pages
Date of creation: 2001
Date of revision:
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market power; price cost margin; trade; competition; ownership; transition;
Find related papers by JEL classification:
- L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
- L33 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Comparison of Public and Private Enterprise and Nonprofit Institutions; Privatization; Contracting Out
- P3 - Economic Systems - - Socialist Institutions and Their Transitions
This paper has been announced in the following NEP Reports:
- NEP-ALL-2003-11-03 (All new papers)
- NEP-COM-2003-11-03 (Industrial Competition)
- NEP-MFD-2003-11-03 (Microfinance)
- NEP-TRA-2003-11-03 (Transition Economics)
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