Do Small Firms Price-Cost Margins Follow Those of Large Firms
The paper investigates the extent to which small firms' price-cost margins follow those of large firms. A two-equation model is used with data for 36 Dutch three-digit manufacturing industries over the period 1975-86. The effects of market structure characteristics are also examined. The main result is that small firms (10-50 employees) appear to have the freedom to set prices above cost independently of larger firms in the same industry. Copyright 1995 by Blackwell Publishing Ltd and the Board of Trustees of the Bulletin of Economic Research
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|Date of creation:||1993|
|Contact details of provider:|| Postal: RESEARCH INSTITUTE FOR SMALL AND MEDIUM-SIZED BUSINESS IN THE NETHERLANDS, NEUHUYS.|
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