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Coping With Data Limitations When Measuring Oligopoly Power In A Developing Country

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Listed:
  • Lahcen ACHY
  • Azzeddine AZZAM
  • Khalid SEKKAT

Abstract

Researchers’ enthusiasm for estimating industry oligopoly power in developing countries is often not matched with availability of data. Even when available, data are often incomplete, inconsistent, too aggregated, and almost always collected by government agencies for purposes different from those of the researcher. This paper demonstrates how some of the theoretical restrictions implied by firm optimizing behavior can be used to specify and make inference about market power in a conjectural elasticity model when data availability is a problem. For illustration, we specify and make inference of market power in an empirical model of 7 manufacturing industries in Morocco. The model requires observations on only two variables likely to be found in most industry statistics collected for tax purposes by governments in developing countries: Sales revenue and payroll.

Suggested Citation

  • Lahcen ACHY & Azzeddine AZZAM & Khalid SEKKAT, 2009. "Coping With Data Limitations When Measuring Oligopoly Power In A Developing Country," Regional and Sectoral Economic Studies, Euro-American Association of Economic Development, vol. 9(2).
  • Handle: RePEc:eaa:eerese:v:9:y2009:i:9_12
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    References listed on IDEAS

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    1. Appelbaum, Elie, 1982. "The estimation of the degree of oligopoly power," Journal of Econometrics, Elsevier, vol. 19(2-3), pages 287-299, August.
    2. Lahcen Achy & Khalid Sekkat, 2003. "The European Single Currency and MENA's Exports to Europe," Review of Development Economics, Wiley Blackwell, vol. 7(4), pages 563-582, November.
    3. Khalid Sekkat & Lahcen Achy, 2007. "Competition, efficiency and competition policy in Morocco," ULB Institutional Repository 2013/7404, ULB -- Universite Libre de Bruxelles.
    4. Bresnahan, Timothy F., 1989. "Empirical studies of industries with market power," Handbook of Industrial Organization, in: R. Schmalensee & R. Willig (ed.), Handbook of Industrial Organization, edition 1, volume 2, chapter 17, pages 1011-1057, Elsevier.
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