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The Falling Price of Cement in Africa

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  • Leone, Fabrizio
  • Macchiavello,Rocco
  • Reed,Tristan

Abstract

Prices for several intermediate inputs, including cement, are higher in developingeconomies—particularly in Africa. Combining data from the International Comparison Program with a global directory ofcement plants we estimate an industry equilibrium model to distinguish between drivers of international pricedispersion: demand, costs, conduct, and entry. Developing economies feature both higher marginal costs and highermarkups. African markets are not characterized by higher barriers to entry and, if anything, feature relatively morecompetitive conduct. The small size of many national markets, however, limits entry and competition and explainsmost of the higher markups. Policy implications are discussed.

Suggested Citation

  • Leone, Fabrizio & Macchiavello,Rocco & Reed,Tristan, 2021. "The Falling Price of Cement in Africa," Policy Research Working Paper Series 9706, The World Bank.
  • Handle: RePEc:wbk:wbrwps:9706
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    More about this item

    Keywords

    Transport Services; Competitiveness and Competition Policy; Energy Policies & Economics; Green Issues; Hydrology;
    All these keywords.

    JEL classification:

    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L41 - Industrial Organization - - Antitrust Issues and Policies - - - Monopolization; Horizontal Anticompetitive Practices
    • L61 - Industrial Organization - - Industry Studies: Manufacturing - - - Metals and Metal Products; Cement; Glass; Ceramics
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development

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