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Structure, conduct, and performance: evidence from the Indonesian food and beverages industry

Listed author(s):
  • Maman Setiawan

    ()

  • Grigorios Emvalomatis

    ()

  • Alfons Oude Lansink

    ()

This article employs the Structure–Conduct–Performance (SCP) paradigm to investigate the simultaneous relationship between industrial concentration, price rigidity, technical efficiency, and price-cost margin in the Indonesian food and beverages industry. This research extends the SCP framework by including price rigidity and technical efficiency as additional key variables. The results suggest that there is a simultaneous relationship between industrial concentration, price rigidity, technical efficiency, and price-cost margin with a positive bi-directional relationship between industrial concentration and price-cost margin. These findings imply that an appropriate course of action for the regulator in this highly concentrated industry is to reduce industrial concentration in order to increase competition, reduce upward price flexibility, and increase technical efficiency in the long run. Copyright Springer-Verlag Berlin Heidelberg 2013

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File URL: http://hdl.handle.net/10.1007/s00181-012-0648-3
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Article provided by Springer in its journal Empirical Economics.

Volume (Year): 45 (2013)
Issue (Month): 3 (December)
Pages: 1149-1165

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Handle: RePEc:spr:empeco:v:45:y:2013:i:3:p:1149-1165
DOI: 10.1007/s00181-012-0648-3
Contact details of provider: Web page: http://www.springer.com

Order Information: Web: http://www.springer.com/economics/econometrics/journal/181/PS2

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