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Buyer Structure and Seller Performance in U.S. Manufacturing Industries

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  • Schumacher, Ute
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    Abstract

    The relationship between performance and market structure is investigated, with particular emphasis on the organization of the market on the buyers' side and its effect on seller profit margins. Based on a sample of U.S. manufacturing industries that is stratified according to product group categories as well as degree of seller concentration, it is established that highly concentrated buyers exhibit significant power to impair profitability especially in oligopolistic consumer goods industries. The impact of countervailing power appears to be strong regardless of demand conditions. Copyright 1991 by MIT Press.

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    Article provided by MIT Press in its journal Review of Economics & Statistics.

    Volume (Year): 73 (1991)
    Issue (Month): 2 (May)
    Pages: 277-284

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    Handle: RePEc:tpr:restat:v:73:y:1991:i:2:p:277-84
    Contact details of provider: Web page: http://mitpress.mit.edu/journals/

    Order Information: Web: http://mitpress.mit.edu/journal-home.tcl?issn=00346535

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    Cited by:

    1. Bhattacharyya, Sugato & Nain, Amrita, 2011. "Horizontal acquisitions and buying power: A product market analysis," Journal of Financial Economics, Elsevier, vol. 99(1), pages 97-115, January.
    2. Funaki, Y. & Houba, H.E.D. & Motchenkova, E., 2012. "Market Power in Bilateral Oligopoly Markets with Nonexpendable Infrastructure," Discussion Paper 2012-041, Tilburg University, Tilburg Law and Economic Center.
    3. Rungporn Roengpitya, 2008. "The Effects of Financial Deregulation on Bank Governance: The Panel Data Evidence of the 1990s," Working Papers 2008-08, Monetary Policy Group, Bank of Thailand.
    4. Bradley J. Ruffle, 2005. "Buyer Countervailing Power: A Survey of Experimental Evidence," Working Papers 0512, Ben-Gurion University of the Negev, Department of Economics.
    5. Shahrur, Husayn, 2005. "Industry structure and horizontal takeovers: Analysis of wealth effects on rivals, suppliers, and corporate customers," Journal of Financial Economics, Elsevier, vol. 76(1), pages 61-98, April.
    6. Kale, Jayant R. & Shahrur, Husayn, 2007. "Corporate capital structure and the characteristics of suppliers and customers," Journal of Financial Economics, Elsevier, vol. 83(2), pages 321-365, February.
    7. Hüschelrath, Kai, 2008. "Detection of Anticompetitive Horizontal Mergers," ZEW Discussion Papers 08-106, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
    8. Hui, Kai Wai & Klasa, Sandy & Yeung, P. Eric, 2012. "Corporate suppliers and customers and accounting conservatism," Journal of Accounting and Economics, Elsevier, vol. 53(1), pages 115-135.
    9. Dhaliwal, Dan & Judd, J. Scott & Serfling, Matthew & Shaikh, Sarah, 2016. "Customer concentration risk and the cost of equity capital," Journal of Accounting and Economics, Elsevier, vol. 61(1), pages 23-48.
    10. Fotopoulos, Georgios & Spence, Nigel, 1999. "Net entry behaviour in Greek manufacturing: consumer, intermediate and capital goods industries," International Journal of Industrial Organization, Elsevier, vol. 17(8), pages 1219-1230, November.

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