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Panel Data Estimation Techniques and Mark Up Ratios

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  • Michael L. Polemis

Abstract

The purpose of this paper is to evaluate the market power of the Greek manufacturing and services industry over the period 1970-2007. In particular, the empirical model, estimates the mark-up ratio following the Roeger (1995) methodology, separately for the two industries by using Ordinary Least Squares (OLS) and Two Stage Ordinary Least Squares (TSLS) in two unbalanced panel data sets. The sample comprises a total of 23 and 26 two-digit NACE codes. The empirical results indicate the existence of significant market power in the Greek manufacturing and services industry. Moreover, mark-up ratios vary significantly between the two industries, with services having higher mark ups than manufacturing.

Suggested Citation

  • Michael L. Polemis, 2014. "Panel Data Estimation Techniques and Mark Up Ratios," European Research Studies Journal, European Research Studies Journal, vol. 0(1), pages 69-84.
    • Handle: RePEc:ers:journl:v:xvii:y:2014:i:1:p:69-84
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    References listed on IDEAS

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    1. Nishimura, Kiyohiko G. & Ohkusa, Yasushi & Ariga, Kenn, 1999. "Estimating the mark-up over marginal cost: a panel analysis of Japanese firms 1971-1994," International Journal of Industrial Organization, Elsevier, vol. 17(8), pages 1077-1111, November.
    2. Joaquim Oliveira Martins & Stefano Scarpetta & Dirk Pilat, 1996. "Mark-Up Ratios in Manufacturing Industries: Estimates for 14 OECD Countries," OECD Economics Department Working Papers 162, OECD Publishing.
    3. Anthony N Rezitis & Maria A. Kalantzi, 2012. "Assessing competitive conditions and welfare losses in the Greek food and beverages manufacturing industry: An extended Hall-Roeger approach," Economics Bulletin, AccessEcon, vol. 32(2), pages 1413-1427.
    4. Rebekka Christopoulou & Philip Vermeulen, 2012. "Markups in the Euro area and the US over the period 1981–2004: a comparison of 50 sectors," Empirical Economics, Springer, vol. 42(1), pages 53-77, February.
    5. Anthony Rezitis & Maria Kalantzi, 2011. "Investigating Market Structure of the Greek Manufacturing Industry: A Hall-Roeger Approach," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 39(4), pages 383-400, December.
    6. Hall, Robert E, 1988. "The Relation between Price and Marginal Cost in U.S. Industry," Journal of Political Economy, University of Chicago Press, vol. 96(5), pages 921-947, October.
    7. Anthony N. Rezitis & Maria A. Kalantzi, 2013. "Measuring the degree of market power in the Greek manufacturing industry," International Review of Applied Economics, Taylor & Francis Journals, vol. 27(3), pages 339-359, May.
    8. Novella Bottini & Margit Molnár, 2010. "How large are competitive pressures in services markets?: Estimation of mark-ups for selected OECD countries," OECD Journal: Economic Studies, OECD Publishing, vol. 2010(1), pages 1-51.
    9. Rezitis, Anthony N. & Kalantizi, Maria A., 2012. "Investigating market structure of the Greek food and beverages manufacturing industry: A Hall-Roeger approach," Agricultural Economics Review, Greek Association of Agricultural Economists, vol. 13(1), pages 1-17.
    10. Roeger, Werner, 1995. "Can Imperfect Competition Explain the Difference between Primal and Dual Productivity Measures? Estimates for U.S. Manufacturing," Journal of Political Economy, University of Chicago Press, vol. 103(2), pages 316-330, April.
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    Cited by:

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    4. Chrysovalantis Amountzias, 2019. "Pricing Decisions and Competitive Conduct Across Manufacturing Sectors: Evidence from 19 European Union Manufacturing Industries," Journal of Industry, Competition and Trade, Springer, vol. 19(3), pages 413-440, September.
    5. E.V. Balatsky & N.A. Ekimova, 2021. "Fiscal and Social Effectiveness Assessment of the Personal Income Tax Reform in Russia," Journal of Applied Economic Research, Graduate School of Economics and Management, Ural Federal University, vol. 20(2), pages 175-193.

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    More about this item

    Keywords

    Mark up Ratio; Greece; Competition; Significant Market Power.;
    All these keywords.

    JEL classification:

    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L16 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Industrial Organization and Macroeconomics; Macroeconomic Industrial Structure
    • L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General
    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection

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