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The Effects of Concentration on Competition and Efficiency : Some Evidence from the French Audit Market

Author

Listed:
  • Géraldine Broye
  • Laurent Weill

    (Laboratoire de Recherche en Gestion et Economie, Institut d'Etudes Politiques, Strasbourg)

Abstract

This paper aims at investigating the effects of concentration on competition and cost efficiency of the French audit market. Competition is measured with the Rosse-Panzar model, while cost efficiency is estimated with stochastic frontier approach. Cost efficiency levels are estimated at around 75% with greater efficiency for Big-Four firms, while the nature of competition appears to be monopolistic competition. Dynamic analysis shows a reduction in competition, and a decrease in cost efficiency for Big-Four and non-Big-Four firms between 1999 and 2003. We therefore provide support to a negative impact of concentration on competition and cost efficiency.

Suggested Citation

  • Géraldine Broye & Laurent Weill, 2008. "The Effects of Concentration on Competition and Efficiency : Some Evidence from the French Audit Market," Working Papers of LaRGE Research Center 2008-04, Laboratoire de Recherche en Gestion et Economie (LaRGE), Université de Strasbourg.
    • Handle: RePEc:lar:wpaper:2008-04
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Auditing; audit market; competition; efficiency.;
    All these keywords.

    JEL classification:

    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
    • M4 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting

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