The Determinants of the Price-Cost Margins of the Manufacturing Firms in Turkey
AbstractThis study examines the determinants of the price-cost margins in the Turkish manufacturing industry spanning from 1995 to 2003. The literature on this subject points to the importance of market structure, business cycles and input costs. Utilizing panel data econometric techniques on a large number of manufacturing firms by conditioning on their firm size, age, ownership and export orientation, the study finds that there exists a marked difference among the firms’ pricing behaviors according to their market share. Import penetration seems to be ineffective to reduce the price-cost margins of large, high market share and foreign partner firms, while exporting activity was observed to act as a factor to enhance competition. The analysis also suggests that price-cost margins behave pro-cyclically in general and an appreciation of the domestic currency reduces price-cost margins by way of lowering input costs.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Research and Monetary Policy Department, Central Bank of the Republic of Turkey in its series Working Papers with number 0515.
Date of creation: 2005
Date of revision:
Contact details of provider:
Postal: Head Office, Istiklal Cad. 10 Ulus, 06100 Ankara
Phone: (90 312) 507 5000
Fax: (90 312) 507 5640
Web page: http://www.tcmb.gov.tr
More information through EDIRC
Price-cost margins; Market Structure; Import Penetration;
Find related papers by JEL classification:
- D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
- L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
This paper has been announced in the following NEP Reports:
- NEP-ALL-2006-01-01 (All new papers)
- NEP-COM-2006-01-01 (Industrial Competition)
- NEP-CWA-2006-01-01 (Central & Western Asia)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Sharpe, Steven A, 1994.
"Financial Market Imperfections, Firm Leverage, and the Cyclicality of Employment,"
American Economic Review,
American Economic Association, vol. 84(4), pages 1060-74, September.
- Steven A. Sharpe, 1993. "Financial market imperfections, firm leverage and the cyclicality of employment," Finance and Economics Discussion Series 93-10, Board of Governors of the Federal Reserve System (U.S.).
- Evren Ceritoglu, 2002. "The Cyclicality Of Mark-Up Ratios : The Case Of Turkish Industry," Working Papers 0204, Research and Monetary Policy Department, Central Bank of the Republic of Turkey.
- Richard Cantor, 1990. "Effects of leverage on corporate investment and hiring decisions," Quarterly Review, Federal Reserve Bank of New York, issue Sum, pages 31-41.
- Jacquemin, Alexis, 1982. "Imperfect Market Structure and International Trade-Some Recent Research," Kyklos, Wiley Blackwell, vol. 35(1), pages 75-93.
- Hausman, Jerry A & Taylor, William E, 1981.
"Panel Data and Unobservable Individual Effects,"
Econometric Society, vol. 49(6), pages 1377-98, November.
- Mary Hallward-Driemeier & Giuseppe Iarossi & Kenneth L. Sokoloff, 2002. "Exports and Manufacturing Productivity in East Asia: A Comparative Analysis with Firm-Level Data," NBER Working Papers 8894, National Bureau of Economic Research, Inc.
- Cihan Yalcin, 2000. "Price-Cost Margins and Trade Liberalization in Turkish Manufacturing Industry : A Panel Data Analysis," Discussion Papers 0001, Research and Monetary Policy Department, Central Bank of the Republic of Turkey.
- Foroutan, Faezeh, 1991. "Foreign trade and its relation to competition and productivity in Turkish industry," Policy Research Working Paper Series 604, The World Bank.
- Ebru Voyvoda & A. Erinc Yeldan, 2001.
"Patterns of Productivity Growth and the Wage Cycle in Turkish Manufacturing,"
International Review of Applied Economics,
Taylor & Francis Journals, vol. 15(4), pages 375-396.
- Erinç Yeldan & Ebru Voyvoda, 1999. "Patterns of Productivity Growth and the Wage Cycle in Turkish Manufacturing," Departmental Working Papers 9911, Bilkent University, Department of Economics.
- Akbar Ullah & Ejaz Ghani & Attiya Y. Javed, 2013. "Market Power and Industrial Performance in Pakistan," PIDE-Working Papers 2013:88, Pakistan Institute of Development Economics.
- Saatci, Mustafa & Aslan, Alper, 2007. "TÜRKİYE İMALAT SANAYİNDE İTHALATIN PİYASAYI DİSİPLİNE ETME HİPOTEZİNİN TESTİ: PANEL VERi YAKLASIMI," MPRA Paper 10604, University Library of Munich, Germany.
- Aslan, Alper & Kula, Ferit, 2008. "Türkiye İmalat Sanayinde Fiyat-Maliyet Marjları: Dönemler ve Sektörler İtibariyle Karsılastırmalı Bir Analiz," MPRA Paper 10606, University Library of Munich, Germany.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Gulhanim Kayatas).
If references are entirely missing, you can add them using this form.