Mark-ups, industry structure and the business cycle
Information on the primal and dual productivity measure is used to estimate industry mark-ups for 4-digit US manufacturing industries. Investigating the relationship between these estimates and various industry characteristics as well as their cyclical movements, it is found that mark-ups are significantly higher in concentrated and capital-intensive industries with high growth rates and advertising-to-sales ratios. In contrast to previous research, significant differences inmark-ups over the business cycle are not found. It is argued that the procyclicality of margins reported in earlier studies might be caused by the (false) assumption of identical average and marginal costs.
Volume (Year): 7 (2000)
Issue (Month): 3 ()
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- Ian Domowitz & R. Glenn Hubbard & Bruce C. Petersen, 1986. "Business Cycles and the Relationship Between Concentration and Price-Cost Margins," RAND Journal of Economics, The RAND Corporation, vol. 17(1), pages 1-17, Spring.
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NBER Working Papers
1785, National Bureau of Economic Research, Inc.
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- Schmalensee, Richard, 1989.
"Inter-industry studies of structure and performance,"
Handbook of Industrial Organization,
in: R. Schmalensee & R. Willig (ed.), Handbook of Industrial Organization, edition 1, volume 2, chapter 16, pages 951-1009
- Schmalensee, Richard., 1987. "Inter-industry studies of structure and performance," Working papers 1874-87., Massachusetts Institute of Technology (MIT), Sloan School of Management.
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