Market Power, Productivity and Wage Determination: Ukrainian Firm Level Evidence

2017 ◽  
Author(s):  
Oleksandr Shepotylo ◽  
Volodymyr Vakhitov
Keyword(s):  
Market Power ◽  
Wage Determination ◽  
Firm Level

Bribes, market power and access to credit: evidence from cross-country firm-level data

2021 ◽  
Author(s):  
Le Thanh Ha ◽  
Dao Hanh Le ◽  
Nguyen Ngoc Mai
Keyword(s):  
Market Power ◽  
Firm Level ◽  
Access To Credit ◽  
Level Data ◽  
Firm Level Data ◽  
Cross Country

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)

What Determines Profitability in the Indian Automobile Industry?

2021 ◽  
pp. 001946622110635
Author(s):  
Shilpi Tyagi ◽  
Varun Mahajan
Keyword(s):  
Market Power ◽  
Automobile Industry ◽  
Positive Impact ◽  
Growth Strategy ◽  
Raw Material ◽  
Investment Strategies ◽  
Firm Level ◽  
Global Competitiveness ◽  
Advertising Intensity ◽  
Jel Code

This study tends to examine the firm-level profitability determinants of Indian automobile and ancillary industry which is recognised for its global competitiveness. The study uses recent dataset to investigate the firm-level profitability determinants in the Indian automobile and ancillary industry and records the effect of shifts in profitability due to change in economic environment. This study intends at using real financial balanced panel data for a period 1999–2019 and applies the two-step system generalised method of moments regression model with robust standard errors. The study has found that lagged profitability, marketing and advertising intensity, firm’s market power and operational efficiency have exercised positive impact on firm-level profitability. Negative and statistically significant impact of raw material import intensity and export intensity highlights the need of planning and implementation of appropriate investment strategies. The findings of this study suggest that firms should pay more attention to optimise their operating expenditures, marketing and advertisement expenditures and expand their market power as a part of their survival and growth strategy. JEL Code: L25

Technological Innovations and Market Power: A Study of Indian Pharmaceutical Industry

2020 ◽  
pp. 097639962094427
Author(s):  
Madan Dhanora ◽  
Ruchi Sharma ◽  
Walter G. Park
Keyword(s):  
Pharmaceutical Industry ◽  
Market Power ◽  
Process Innovation ◽  
Technological Innovations ◽  
Firm Level ◽  
Innovation Activities ◽  
Product And Process Innovation ◽  
Product And Process ◽  
The Impact ◽  
Indian Pharmaceutical Industry

Technological innovations are positively associated with firms’ market performance. This study aims to examine the impact of product and process innovation on the market power of 168 Indian pharmaceutical firms during 2000–2013. We generate product and process patent stock to capture firm-level innovation activities. Findings of this study suggest that both product and process innovation positively influence firms’ market power. Results also reveal that MNEs enjoy more market power in the Indian pharmaceutical industry. Further, this study also highlights that there is a differential impact of firms’ product group on market power. This study concludes that patenting is a positive source of firm performance in the Indian pharmaceutical industry.

Market power and allocative efficiency loss: a comparative analysis on China's tobacco and food industries

2020 ◽  
Vol 10 (3) ◽  
pp. 327-339
Author(s):  
Jiawu Dai ◽  
Xiuqing Wang ◽  
Guang Yuan
Keyword(s):  
Industrial Organization ◽  
Comparative Analysis ◽  
Market Power ◽  
Tobacco Industry ◽  
Allocative Efficiency ◽  
Micro Data ◽  
Firm Level ◽  
Efficiency Loss ◽  
Content Type ◽  
Food Industries

PurposeThe effect of market power on allocative efficiency is one of the most important topics in industrial organization and has undergone rigorous investigation since the 1970s. However, empirical studies based on firm-level data are relatively rare, especially with regard to China's tobacco and food industries. Accordingly, this research measures market power and allocative efficiency loss (AEL) of the main tobacco and food industries in China with micro data at firm level. Subsequently, it conducts a comparative analysis on them.Design/methodology/approachThis research applies the New Empirical Industrial Organization (NEIO) model, consisting of five pricing and demand simultaneous equations to measure market power, and the AEL model to measure AEL induced by market power. To match with the micro data at firm level, the study implements a change in the traditional NEIO model by abandoning the aggregating process.FindingsEmpirical results show that China's tobacco industry, among five sectors selected, has the largest market power and thus the highest degree of AEL, whereas other sectors have apparently smaller market power and lower levels of AEL. Comparative analysis demonstrates a coarse positive correlation between market power and AEL in the selected industries. In general, the results accord well with the existing empirical findings and the reality.Research limitations/implicationsThis study has some deficiencies. First, owing to the limitation of high-quality data, the sectors analyzed in this research are insufficient to sum up all the characteristics and rules of China's whole food industry. Second, this research only analyzes seller market power and leaves out buyer market power, which could be a direction for future research.Practical implicationsThe relevant administrations should strictly limit the monopoly behaviors of enterprises and establish a favorable and competitive market environment, especially for the tobacco industry. This suggestion is precisely an important content of China's Supply-side Reform.Originality/valueThe research improves the NEIO model in that it can be estimated with micro data at firm level. To the best knowledge of the authors, very few empirical and comparative analyses exist on market power and AEL for China's tobacco and food manufacturers using micro data.

Market power behaviour in the Danish food marketing chain

2009 ◽  
Vol 9 (1) ◽  
pp. 43-58 ◽  
Author(s):  
Jørgen Dejgaard Jensen
Keyword(s):  
Market Power ◽  
Food Industry ◽  
The Other ◽  
Food Marketing ◽  
Firm Level ◽  
Market Pricing ◽  
Poultry Processing ◽  
Econometric Approach ◽  
Input Markets ◽  
Marketing Chain

The paper presents and demonstrates an econometric approach to analysing food industry firms' market pricing behaviour within the framework of translog cost functions and based on firm-level accounts panel data. The study identifies effects that can be interpreted as firms' market power behaviour in output or input markets. The most robust indications of market power behaviour in output markets are found in the pork and poultry processing sectors, as well as for firms in the bakeries sector. On the other hand, the most robust market power behaviour indications regarding input markets are found for poultry processing. In general, the patterns with regard to market power behaviour seem to be more clearly identified in the processing sectors than in the distribution sectors.

Estimation of market power in the presence of firm level inefficiencies

2012 ◽  
Vol 168 (1) ◽  
pp. 141-155 ◽  
Author(s):  
Levent Kutlu ◽  
Robin C. Sickles
Keyword(s):  
Market Power ◽  
Firm Level

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.

The impact of industry concentration on the market’s ability to anticipate future earnings

2016 ◽  
Vol 24 (4) ◽  
pp. 443-475 ◽  
Author(s):  
In-Mu Haw ◽  
Bingbing Hu ◽  
Jay Junghun Lee ◽  
Woody Wu
Keyword(s):  
Stock Returns ◽  
Market Power ◽  
Information Transfer ◽  
Positive Impact ◽  
Product Market ◽  
Industry Concentration ◽  
Firm Level ◽  
Content Type ◽  
Future Earnings ◽  
The Impact

Purpose The existing literature has established the importance of industry concentration in explaining firm performance and information environments. However, little is known about whether and how industry concentration affects investors’ ability to anticipate future earnings. This paper aims to investigate this query by identifying and testing two channels, product market power and intra-industry information transfer, through which industry concentration affects the informativeness of stock returns about future earnings. Design/methodology/approach The paper measures the informativeness of stock returns about future earnings by the future earnings response coefficient (FERC)). This study estimates the FERC using a firm-level sample from 38 economies. Findings The authors find that industry concentration significantly enhances investors’ ability to predict future earnings. Further tests show that both product market power and intra-industry information transfer contribute to explaining the positive association between industry concentration and the FERC, with the former playing a more salient role. Finally, the authors show that a country’s effective competition law attenuates the positive impact of industry concentration on the FERC by weakening the economic impact of the two underlying channels. Originality/value This study contributes to the growing literature on the price-leading-earnings relation, industry concentration and international corporate governance.

scholarly journals Trade Policy and Market Power: Firm-Level Evidence

2019 ◽  
Author(s):  
Alan Asprilla ◽  
Nicolas Berman ◽  
Olivier Cadot ◽  
Melise Jaud
Keyword(s):  
Trade Policy ◽  
Market Power ◽  
Firm Level
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