Testing for Market Power in the Norwegian Primary Aluminium Industry
AbstractThe hypothesis of market power in the Norwegian primary aluminium industry is tested using plant-level panel data. Economies of scale are found to be present, and Norwegian aluminium plants charge a procyclical price-cost margin that significantly exceeds zero. Consequently, the simple competitive hypothesis is rejected. The hypothesis that products are differentiated is not rejected, since several plants are found to charge a price permanently over the world market price. A decline in industry concentration internationally, which is assumed to increase the degree of competition, has no significant effect on the price-cost margins of Norwegian plants.
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Bibliographic InfoPaper provided by Research Department of Statistics Norway in its series Discussion Papers with number 132.
Date of creation: Nov 1994
Date of revision:
Market power; Differentiated products; Aluminium industry;
Find related papers by JEL classification:
- C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
- D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
- D43 - Microeconomics - - Market Structure and Pricing - - - Oligopoly and Other Forms of Market Imperfection
- L61 - Industrial Organization - - Industry Studies: Manufacturing - - - Metals and Metal Products; Cement; Glass; Ceramics
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