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Quality and Competition: An Empirical Analysis across Industries

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  • Crespi, John M.
  • Marette, Stephan

Abstract

This paper empirically explores the link between quality and concentration in a cross-section of manufactured goods. Using concentration data and product quality indicators, an ordered probit estimation explores the impact of concentration on quality that is defined as an index of quality characteristics. The results demonstrate that market concentration and quality are positively correlated across different industries. When industry concentration increases, the likelihood of the product being higher quality increases and the likelihood of observing a lower quality decreases.

Suggested Citation

  • Crespi, John M. & Marette, Stephan, 2006. "Quality and Competition: An Empirical Analysis across Industries," Papers 18426, Hebrew University of Jerusalem Archive.
    • Handle: RePEc:ags:hebarc:18426
    DOI: 10.22004/ag.econ.18426
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    1. Asher Wolinsky, 1993. "Competition in a Market for Informed Experts' Services," RAND Journal of Economics, The RAND Corporation, vol. 24(3), pages 380-398, Autumn.
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