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Antitrust Issues in International Comparisons of Market Structure

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  • Joseph G. Hirschberg
  • Esfandiar Maasoumi
  • Daniel Slottje
  • Augustine C. Arize

Abstract

The analysis and definition of markets, their structure, and concentration, especially for international comparisons, are complicated by a lack of adequate and comparable data. This is particularly so for multi-product and multinational firms. For instance, the U.S. Department of Commerce reports measures of industry concentration which do not embody either the control of subsidiary firms or the possible multinational nature of their ownership. Nor are these reported measures consistently based on sales data. Other countries produce similar reports, but these studies are generally not comparable to U.S. due, in part, to incompatible sector definitions. Few government- sponsored studies provide firm-level detail or timely information. Also, given the widespread multinational nature of many larger firms, an international analysis of ownership and operations is necessary. This paper addresses the issues encountered in the construction of international market data from the existing financial reports, and provides methods for the comparison of measures of market concentration and industry diversity across countries. Using 1991 financial data, a firm level data set is constructed and used to compute comparable measures of market concentration and industry diversity in the food industries for the U.S. and European Community (EC). One innovation is to impute the distribution of sales of sub-code products by a firm based on simulations as well as nonparametric estimates of an existing data set. 1 We wish to acknowledge the help of Peter Voros for his efforts in collecting the data on which much of this analysis is based. We also wish to thank Dennis Henderson, Ian Sheldon and Michael Ferrantino for their comments on an earlier version of this paper. Support for Hirschberg?s research came from the USDA NC-194 Project.

Suggested Citation

  • Joseph G. Hirschberg & Esfandiar Maasoumi & Daniel Slottje & Augustine C. Arize, 2002. "Antitrust Issues in International Comparisons of Market Structure," Department of Economics - Working Papers Series 836, The University of Melbourne.
  • Handle: RePEc:mlb:wpaper:836
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    References listed on IDEAS

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    1. Gasmi, F & Laffont, J J & Vuong, Q, 1992. "Econometric Analysis of Collusive Behavior in a Soft-Drink Market," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 1(2), pages 277-311, Summer.
    2. Hyde, Charles & Perloff, Jeffrey M, 1993. "Can market power be estimated?," Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series qt6d7127mr, Department of Agricultural & Resource Economics, UC Berkeley.
    3. David E. Buschena & Jeffrey M. Perloff, 1991. "The Creation of Dominant Firm Market Power in the Coconut Oil Export Market," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 73(4), pages 1000-1008.
    4. Hirschberg, J. & Dayton, J. & Voros, P., 1992. "Firm Level Data: A Compendium of International Data Sources for the Food Processing Industries," Occasional Papers 233080, Regional Research Project NC-194: Organization and Performance of World Food Systems.
    5. 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.
    6. Clarke, R & Davies, S W, 1983. "Aggregate Concentration, Market Concentration and Diversification," Economic Journal, Royal Economic Society, vol. 93(369), pages 182-192, March.
    7. Utton, M A, 1977. "Large Firm Diversification in British Manufacturing Industry," Economic Journal, Royal Economic Society, vol. 87(345), pages 96-113, March.
    8. repec:cdl:agrebk:677104 is not listed on IDEAS
    9. Berry, Charles H, 1971. "Corporate Growth and Diversification," Journal of Law and Economics, University of Chicago Press, vol. 14(2), pages 371-384, October.
    10. Handy, Charles R. & Henderson, Dennis R., 1992. "Foreign Investment in Food Manufacturing," Occasional Papers 233088, Regional Research Project NC-194: Organization and Performance of World Food Systems.
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    12. Geroski, Paul A, 1988. "In Pursuit of Monopoly Power: Recent Quantitative Work in Industrial Economics," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 3(2), pages 107-123, April.
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    Cited by:

    1. David P.Byrne & Roger Ware, 2011. "Price Cycles and Price Leadership in Gasoline Markets: New Evidence from Canada," Department of Economics - Working Papers Series 1124, The University of Melbourne.
    2. Arize, A. C. & Malindretos, John & Grivoyannis, Elias C., 2005. "Inflation-rate volatility and money demand: Evidence from less developed countries," International Review of Economics & Finance, Elsevier, vol. 14(1), pages 57-80.

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