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Sustainability of Collusion: Evidence from the Late 19th Century Basque Iron and Steel Industry

Author

Listed:
  • Pedro Mendi

    () (Universidad de Navarra)

  • Róbert F. Veszteg

    () (Universidad de Navarra)

Abstract

This paper presents evidence on actual collusive agreements from the late 19th Century iron and steel industry in Spain. We examine the minutes of the executive boards of two Basque firms, Altos Hornos de Bilbao and Vizcaya, to discuss the relevance of different factors on survival and failure of a number of explicit collusive agreements reached in the industry from 1886 to 1901. We find that collusion was more likely to break down in periods of falling demand, and that strong demand provides these agreements with stability. Additionally, we argue that the presence of centralized sales agencies, similar degrees of vertical integration among colluding firms, and tariff protection are factors that facilitate collusion.

Suggested Citation

  • Pedro Mendi & Róbert F. Veszteg, 2007. "Sustainability of Collusion: Evidence from the Late 19th Century Basque Iron and Steel Industry," Faculty Working Papers 04/07, School of Economics and Business Administration, University of Navarra.
  • Handle: RePEc:una:unccee:wp0407
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    File URL: http://www.unav.edu/documents/10174/6546776/1181550507_wp0407.pdf
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    Cited by:

    1. Pedro Mendi & Róbert Veszteg, 2007. "Profitable mergers with endogenous tariffs," Economics Bulletin, AccessEcon, vol. 12(23), pages 1-8.
    2. Pedro Mendi & Rafael Moner-Colonques & José Sempere-Monerris, 2011. "Vertical integration, collusion, and tariffs," SERIEs: Journal of the Spanish Economic Association, Springer;Spanish Economic Association, vol. 2(3), pages 359-378, September.

    More about this item

    Keywords

    market power; collusion; iron and steel industry;

    JEL classification:

    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L41 - Industrial Organization - - Antitrust Issues and Policies - - - Monopolization; Horizontal Anticompetitive Practices
    • N84 - Economic History - - Micro-Business History - - - Europe: 1913-

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