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Classical Competition and Regulating Capital: Theory and Empirical Evidence

In this article we discuss the salient features of the classical and neoclassical theories of competition and we test their fundamental propositions using data from Greek manufacturing industries. The cross section data of 3-digit (total 91) industries of the three (pooled together) census years show no evidence of a direct statistical relationship between the degree of concentration and profitability. The econometric analysis of time series data for 2-digit industries lends support to the hypothesis for the long-run tendential equalization of incremental rates of return to the economy’s average incremental rate of return.

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Paper provided by Department of Economics, University of Macedonia in its series Discussion Paper Series with number 2011_02.

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Date of creation: Feb 2011
Date of revision: Feb 2011
Handle: RePEc:mcd:mcddps:2011_02
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  3. Kapetanios, George & Shin, Yongcheol & Snell, Andy, 2003. "Testing for a unit root in the nonlinear STAR framework," Journal of Econometrics, Elsevier, vol. 112(2), pages 359-379, February.
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  11. Persefoni Tsaliki & Lefteris Tsoulfidis, 1998. "Alternative Theories of Competition: evidence from Greek manufacturing," International Review of Applied Economics, Taylor & Francis Journals, vol. 12(2), pages 187-204.
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  15. Mueller,Dennis C., 2009. "Profits in the Long Run," Cambridge Books, Cambridge University Press, number 9780521101592, October.
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  17. Anwar M. Shaikh, 1995. "The Stock Market and the Corporate Sector: Profit-Based Approach," Economics Working Paper Archive wp_146, Levy Economics Institute.
  18. Flaschel, Peter & Semmler, Willi, 1987. "Classical and Neoclassical Competitive Adjustment Processes," The Manchester School of Economic & Social Studies, University of Manchester, vol. 55(1), pages 13-37, March.
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  22. Andrea Vaona, 2011. "An empirical investigation into the gravitation and convergence of industry return rates in OECD countries," International Review of Applied Economics, Taylor & Francis Journals, vol. 25(4), pages 465-502.
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