scholarly journals Markups and Concentration in the Context of Digitization: Evidence from German Manufacturing Industries

2021 ◽  
Vol 0 (0) ◽  
Author(s):  
John P. Weche ◽  
Joachim Wagner
Keyword(s):  
Market Power ◽  
Organization Theory ◽  
Empirical Studies ◽  
Digital Transformation ◽  
Manufacturing Industries ◽  
Average Increase ◽  
Firm Level ◽  
Level Data ◽  
Advanced Economies ◽  
Industrial Organization Theory

Abstract Recent empirical studies suggest that there is a rising trend of market power across sectors in advanced economies. We contribute to this line of research by providing industry-specific evidence for German manufacturing industries, based on representative high-quality firm-level data from official statistics that cover firms from all size classes with more than 20 employees (2005–2013). We compare firm-specific markups and industry concentration as market power indicators that reflect a market structure and a performance perspective, respectively. Our results do not suggest an overall average increase in market power in German manufacturing, but increasing markups and an increasing concentration in many industries. We demonstrate the complementarity of the indicators, as predicted by industrial organization theory. We also evaluate the competitive impact of digitization and find no clear evidence that digital transformation and market power go hand in hand.

scholarly journals Antitrust Policies and Profitability in Nontradable Sectors

2021 ◽  
Vol 3 (2) ◽  
pp. 251-265
Author(s):  
Timothy Besley ◽  
Nicola Fontana ◽  
Nicola Limodio
Keyword(s):  
Market Power ◽  
Firm Level ◽  
Profit Margins ◽  
Level Data ◽  
Firm Level Data ◽  
Domestic Policies

Firms in tradable sectors are more likely to be subject to external competition to limit market power, while nontradable firms are more dependent on domestic policies and institutions. This paper combines an antitrust index available for multiple countries with firm-level data from Orbis covering more than 12 million firms from 94 countries, including 20 sectors over 10 years and finds that profit margins of firms operating in nontradable sectors are significantly lower in countries with stronger antitrust policies compared to firms operating in tradable sectors. The results are robust to a wide variety of empirical specifications. (JEL D22, E02, L44)

scholarly journals Creative Destruction of Industries: Yokohama City in the Great Kanto Earthquake, 1923

2019 ◽  
Vol 79 (1) ◽  
pp. 1-31 ◽  
Author(s):  
Tetsuji Okazaki ◽  
Toshihiro Okubo ◽  
Eric Strobl
Keyword(s):  
Creative Destruction ◽  
Manufacturing Industries ◽  
Firm Level ◽  
Machine Technology ◽  
Kanto Earthquake ◽  
Level Data ◽  
Firm Level Data ◽  
Before And After

The Great Kanto Earthquake occurred on 1 September 1923 and inflicted serious damage on Yokohama City. About 90 percent of the factories in Yokohama City were burnt down or completely destroyed. However, these manufacturing industries appear to have swiftly recovered in the aftermath of the damage. This article investigates the role of creative destruction due to the Great Kanto Earthquake. Using firm-level data on capital (horsepower of motors) before and after the earthquake, we find substantial creative destruction, that is, upgrade of machine technology and/or survival of efficient firms. We find further collaborating evidence of this at the prefecture level.

scholarly journals EXPORT BEHAVIOUR OF MANUFACTURING FIRMS IN INDONESIA, 1990-2000

2010 ◽  
Vol 12 (2) ◽  
pp. 227-242
Author(s):  
Sahminan Sahminan ◽  
Yati Kurniati
Keyword(s):  
Foreign Ownership ◽  
Manufacturing Firms ◽  
Lower Proportion ◽  
Manufacturing Industries ◽  
Firm Level ◽  
Panel Data Regression ◽  
Level Data ◽  
Data Regression ◽  
Export Behaviour ◽  
Firm Level Data

This paper examines export behaviour of manufacturing firms in Indonesia. We use firm-level data from survey of medium and large Indonesian manufacturing industries over the period 1990-2000. Using panel data regression technique, we find the following regularities. First, there is a persistency in the firm’s decision to export as well as proportion of exported output. Second, higher wage, larger number of production employment, higher productivity and higher share of foreign ownership lead to higher probability of a firm to export. Third, higher wage leads to higher proportion of exported output. However, higher productivity or higher share of foreign ownership leads to lower proportion of exported output. Fourth, while real exchange rate does not significantly affect the probability of firms to export, it significantly affects the proportion of exported output. Fifth, both probability to export and proportion of exported output was significantly much lower during the 1997/1998’s Asian crisis. Finally, looking at the export behaviour across industries, the estimation results show that there is a variation of export behavior across industries.Keywords: Export, manufacture, Indonesia.JEL Classification: F14, F13, D21

scholarly journals Heterogeneous Markups, Growth, and Endogenous Misallocation

Econometrica ◽  
2020 ◽  
Vol 88 (5) ◽  
pp. 2037-2073 ◽  
Author(s):  
Michael Peters
Keyword(s):  
United States ◽  
Market Power ◽  
Productivity Growth ◽  
Firm Dynamics ◽  
The United States ◽  
Equilibrium Outcome ◽  
Firm Level ◽  
Competitive Effects ◽  
Level Data ◽  
Firm Level Data

Markups vary systematically across firms and are a source of misallocation. This paper develops a tractable model of firm dynamics where firms' market power is endogenous and the distribution of markups emerges as an equilibrium outcome. Monopoly power is the result of a process of forward‐looking, risky accumulation: firms invest in productivity growth to increase markups in their existing products but are stochastically replaced by more efficient competitors. Creative destruction therefore has pro‐competitive effects because faster churn gives firms less time to accumulate market power. In an application to firm‐level data from Indonesia, the model predicts that, relative to the United States, misallocation is more severe and firms are substantially smaller. To explain these patterns, the model suggests an important role for frictions that prevent existing firms from entering new markets. Differences in entry costs for new firms are less important.

scholarly journals How Much Cash Is At Risk In U.S. Non-Financial Firms? A VaR-Type Measurement

2015 ◽  
Vol 31 (4) ◽  
pp. 1579
Author(s):  
Frantz Maurer
Keyword(s):  
At Risk ◽  
Risk Management ◽  
Cash Flow ◽  
Management Practices ◽  
Risk Measures ◽  
Risk Measure ◽  
Empirical Studies ◽  
Firm Level ◽  
Level Data ◽  
Corporate Risk

<p>Risk management techniques first developed by, and for, banks are now being adopted by non-financial corporations. However, while firms are already engaged in activities intended to develop their risk management practices, they often do not possess risk measures focused on key corporate financial results such as earnings or cash flow. The main contribution of this paper is to develop a cash flow-based risk measure conditional on specific company-level factors. With U.S. firm-level data, we present evidence that Cash Flow-at-Risk and Expected shortfall differ across main non-financial industries. Our results call for renewed attention to the role that VaR-type measures for cash flow can play in empirical studies dedicated to corporate risk analysis, and with respect to corporate-level risk management purposes.</p>

scholarly journals PERILAKU EKSPOR PERUSAHAAN MANUFAKTUR DI INDONESIA, 1990-2000

2010 ◽  
Vol 12 (2) ◽  
pp. 243-259
Author(s):  
Sahminan Sahminan ◽  
Yati Kurniati
Keyword(s):  
Foreign Ownership ◽  
Manufacturing Firms ◽  
Lower Proportion ◽  
Manufacturing Industries ◽  
Firm Level ◽  
Panel Data Regression ◽  
Level Data ◽  
Data Regression ◽  
Export Behaviour ◽  
Firm Level Data

This paper examines export behaviour of manufacturing firms in Indonesia. We use firm-level data from survey of medium and large Indonesian manufacturing industries over the period 1990-2000. Using panel data regression technique, we find the following regularities. First, there is a persistency in the firm’s decision to export as well as proportion of exported output. Second, higher wage, larger number of production employment, higher productivity and higher share of foreign ownership lead to higher probability of a firm to export. Third, higher wage leads to higher proportion of exported output. However, higher productivity or higher share of foreign ownership leads to lower proportion of exported output. Fourth, while real exchange rate does not significantly affect the probability of firms to export, it significantly affects the proportion of exported output. Fifth, both probability to export and proportion of exported output was significantly much lower during the 1997/1998’s Asian crisis. Finally, looking at the export behaviour across industries, the estimation results show that there is a variation of export behavior across industries.Keywords: Export, manufacture, Indonesia.JEL Classification: F14, F13, D21

Does Institutional Diversity Affect Firms' Innovative Activities in Asian Economies?

2017 ◽  
pp. 1662-1689
Author(s):  
Hironori Tohyama ◽  
Yuji Harada
Keyword(s):  
Supply Chain ◽  
Global Supply Chain ◽  
Favorable Effect ◽  
Institutional Diversity ◽  
Firm Level ◽  
Innovation Activities ◽  
Level Data ◽  
Advanced Economies ◽  
Asian Economies ◽  
East Asian Economies

This chapter looks to contribute to the recent literature on institutional comparative analyses of Asian economies; it makes three distinct contributions. First, we investigate the institutional diversity of Asian economies by using multivariate methods, and show five different groups within Asian economies that can be distinguished from advanced economies. Second, based on firm-level data, we determine whether institutional environments have a favorable effect on the innovation activities of firms; concurrently, we discuss whether or not joining a global supply chain induces firms to engage in innovation activities. Our analytical results show that institutional characteristics have a positive effect on firms' decisions to engage in those activities, and that institutional configurations provide the foundation for a global supply chain built in East Asian economies. Third, we emphasize that the current institutional diversity can persist, given the positive interaction between the institutional diversity of Asian economies and the innovation activities of Asian firms.

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