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Is the price-cost margin affected by the market concentration? Evidence from the Czech food and beverages industry

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  • Ivana Blazkova,
  • Ondrej Dvoulety

Abstract

The paper investigates the relationship between the market concentration and the price-cost margin in the Czech food processing industry during 2003-2014. Estimated econometric models with Fixed Effects supported hypothesis assuming the positive impact of the market concentration on the price-cost margin controlling for productivity. The increase in the productivity was associated with the increase of the price-cost margins. Based on the results, policy makers should promote market competition in the food processing industry, for example through the reduction of entry barriers. Another option worth consideration is to support R&D activities potentially leading to market transformation and increase in efficiency.

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  • Ivana Blazkova, & Ondrej Dvoulety, 2017. "Is the price-cost margin affected by the market concentration? Evidence from the Czech food and beverages industry," Business and Economic Horizons (BEH), Prague Development Center, vol. 13(2), pages 256-269, May.
    • Handle: RePEc:pdc:jrnbeh:v:13:y:2017:i:2:p:256-269
    DOI: 10.15208/beh.2017.19
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    1. Lozano Navarro, Francisco-Javier, 2021. "Análisis de la concentración de mercado en la actividad inmobiliaria de Santiago [Market concentration of real estate in Santiago]," MPRA Paper 118262, University Library of Munich, Germany.

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    More about this item

    Keywords

    Price-cost margin; market concentration; food and beverages industry; Czech Republic; regression analysis;
    All these keywords.

    JEL classification:

    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • L66 - Industrial Organization - - Industry Studies: Manufacturing - - - Food; Beverages; Cosmetics; Tobacco

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