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Concentration and Market Size: Lower Bound Estimates for the Brazilian Industry

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  • Marcelo Resende

Abstract

The paper estimates the lower bound for market concentration taking as reference the framework advanced by Sutton (1991). Quantile regression methods were considered in the context of the Brazilian manufacturing industry in 2005 and separate estimates were obtained for exogenous and endogenous sunk cost industries. The evidence favoured a convergence of the concentration lower bound towards zero in exogenous sunk costs industries in line with previous empirical evidence for developed countries. In ontrast, the magnitude was similar in the case of endogenous sunk cost industries what might reflect the low technological effort in that emerging economy.

Suggested Citation

  • Marcelo Resende, 2008. "Concentration and Market Size: Lower Bound Estimates for the Brazilian Industry," CESifo Working Paper Series 2441, CESifo.
    • Handle: RePEc:ces:ceswps:_2441
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    References listed on IDEAS

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    1. 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, Elsevier.
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    3. Moshe Buchinsky, 1998. "Recent Advances in Quantile Regression Models: A Practical Guideline for Empirical Research," Journal of Human Resources, University of Wisconsin Press, vol. 33(1), pages 88-126.
    4. Maria Letizia Giorgetti, 2003. "Lower Bound Estimation – Quantile Regression and Simplex Method: An Application to Italian Manufacturing Sectors," Journal of Industrial Economics, Wiley Blackwell, vol. 51(1), pages 113-120, March.
    5. Lyons, Bruce R, 1980. "A New Measure of Minimum Efficient Plant Size in UK Manufacturing Industry," Economica, London School of Economics and Political Science, vol. 47(185), pages 19-34, February.
    6. Kannebley, Sergio Jr. & Porto, Geciane S. & Pazello, Elaine Toldo, 2005. "Characteristics of Brazilian innovative firms: An empirical analysis based on PINTEC--industrial research on technological innovation," Research Policy, Elsevier, vol. 34(6), pages 872-893, August.
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    8. Robinson, William T & Chiang, Jeongwen, 1996. "Are Sutton's Predictions Robust?: Empirical Insights into Advertising, R&D, and Concentration," Journal of Industrial Economics, Wiley Blackwell, vol. 44(4), pages 389-408, December.
    9. R. Schmalensee & R. Willig (ed.), 1989. "Handbook of Industrial Organization," Handbook of Industrial Organization, Elsevier, edition 1, volume 1, number 1.
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    More about this item

    Keywords

    concentration; market size;

    JEL classification:

    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms

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