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The Price Effects of an Emerging Retail Market


  • Jiri Podpiera
  • Marie Rakova


In this paper we analyze the effects of changing market structure on price dynamics of final goods in the emerging Czech retail market. We estimate the extent of upstream and downstream market power and find that changing market structure was responsible for an average yearly decrease in the prices of retailed products of 0.8 p.p. during 2000–2005. At the same time, however, we anticipate that the already started period of mergers and acquisitions could cause yearly increases in the prices of retailed products of 1.2 p.p. (approximately 0.5 p.p. in the CPI) over the next ten years.

Suggested Citation

  • Jiri Podpiera & Marie Rakova, 2008. "The Price Effects of an Emerging Retail Market," Working Papers 2008/6, Czech National Bank, Research Department.
  • Handle: RePEc:cnb:wpaper:2008/6

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    References listed on IDEAS

    1. Karel Janda & Jill J. McCluskey & Gordon C. Rausser, 2000. "Food Import Demand in the Czech Republic," Journal of Agricultural Economics, Wiley Blackwell, vol. 51(1), pages 22-44.
    2. Lamm, R McFall, 1981. "Prices and Concentration in the Food Retailing Industry," Journal of Industrial Economics, Wiley Blackwell, vol. 30(1), pages 67-78, September.
    3. Asplund, Marcus & Friberg, Richard, 2002. " Food Prices and Market Structure in Sweden," Scandinavian Journal of Economics, Wiley Blackwell, vol. 104(4), pages 547-566, December.
    4. Newmark, Craig M., 1990. "A new test of the price-concentration relationship in grocery retailing," Economics Letters, Elsevier, vol. 33(4), pages 369-373, August.
    5. Peter Thompson & Mihaela Pintea, 2008. "Sorting, Selection, and Industry Shakeouts," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 33(1), pages 23-40, August.
    6. Horvath, Michael & Schivardi, Fabiano & Woywode, Michael, 2001. "On industry life-cycles: delay, entry, and shakeout in beer brewing," International Journal of Industrial Organization, Elsevier, vol. 19(7), pages 1023-1052, July.
    7. Howard Smith, 2004. "Supermarket Choice and Supermarket Competition in Market Equilibrium," Review of Economic Studies, Oxford University Press, vol. 71(1), pages 235-263.
    8. Barros, Pedro Pita & Brito, Duarte & de Lucena, Diogo, 2006. "Mergers in the food retailing sector: An empirical investigation," European Economic Review, Elsevier, vol. 50(2), pages 447-468, February.
    9. Hopenhayn, Hugo A, 1992. "Entry, Exit, and Firm Dynamics in Long Run Equilibrium," Econometrica, Econometric Society, vol. 60(5), pages 1127-1150, September.
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    Cited by:

    1. Jan Babecky & Alena Bicakova & Alexis Derviz & Tomas Havranek & Roman Horvath & Lubos Komarek & Zlatuse Komarkova & Jakub Mateju & Ke Pang & Renata Pasalicova & Zuzana Prelcova & Marie Rakova & Pierre, 2011. "Macro-Financial Linkages: Theory and Applications," Occasional Publications - Edited Volumes, Czech National Bank, Research Department, edition 2, volume 9, number rb09/2 edited by Jan Babecky.
    2. Katerina Arnostova & Jozef Barunik & Jan Filacek & Michal Franta & David Havrlant & Roman Horvath & Filip Novotny & Marie Rakova & Lubos Ruzicka & Branislav Saxa & Katerina Smidkova & Peter Toth, 2012. "Macroeconomic Forecasting: Methods, Accuracy and Coordination," Occasional Publications - Edited Volumes, Czech National Bank, Research Department, edition 1, volume 10, number rb10/1 edited by Jan Babecky.

    More about this item


    Market structure; retail market; transition economy.;

    JEL classification:

    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
    • L81 - Industrial Organization - - Industry Studies: Services - - - Retail and Wholesale Trade; e-Commerce

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