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Do Investigations of Competition Authorities Really Increase the Degree of Competition? An Answer From Turkish Cement Market

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  • Aydin Çelen
  • Burak Gunalp

Abstract

In this paper, we assess the effects of the investigations carried by the Turkish Competition Board in 1997, 2002 and 2003 on the degree competition in the Turkish cement market. For this aim, we used proverbial Bresnahan-Lau framework with alternative definitions for the supply relation. Our first finding is that cement producers had a considerable amount of market power at the period prior to the first investigation in 1997. In addition, this study shows that, parallel to our initial expectation, competition in the cement market increased thanks to the investigations. The positive effect of the first investigation is found to be especially significant. Hence, this study witnesses that the enforcement of the competition law by the Turkish Competition Board has produced the desired effects in the most problematic sector with respect to competition law.

Suggested Citation

  • Aydin Çelen & Burak Gunalp, 2010. "Do Investigations of Competition Authorities Really Increase the Degree of Competition? An Answer From Turkish Cement Market," Prague Economic Papers, University of Economics, Prague, vol. 2010(2), pages 150-168.
  • Handle: RePEc:prg:jnlpep:v:2010:y:2010:i:2:id:369:p:150-168
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    References listed on IDEAS

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    1. repec:eee:riibaf:v:42:y:2017:i:c:p:745-768 is not listed on IDEAS

    More about this item

    Keywords

    market power; market performance; cement market; Bresnahan-Lau methodology; degree of competition; competition policy;

    JEL classification:

    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L40 - Industrial Organization - - Antitrust Issues and Policies - - - General
    • L61 - Industrial Organization - - Industry Studies: Manufacturing - - - Metals and Metal Products; Cement; Glass; Ceramics

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