Hagemejer, Jan and Gradzewicz, Michal (2007): Impact of competition and business cycles on the behaviour of monopolistic markups in the Polish economy. Published in: Bank i Kredyt , Vol. 4, No. 3 (March 2007)
Download (201kB) | Preview
The aim of this study is to analyse the impact of competition, both internal and external, and of the business cycle on monopolistic markups in the Polish economy. The results show that there are significant markups in several sectors of the economy which complies with earlier estimations by the authors. According to the estimations carried out, competition has a significant impact on the level of markups. This result applies both to internal competition, measured by market concentration, and foreign competition, measured by import penetration ratios. In addition, there was a significant negative correlation between markups and the macroeconomic cycle which seems to confirm the conclusions from numerous theoretical macro and microeconomic models. The results also point to a positive but less clear correlation between the sectoral cycle and the level of markups. A different reaction of markups to the sectoral and macroeconomic cycles may result from a different nature of adjustments of businesses in reaction to exogenous shocks affecting either the sectoral or the macroeconomic environment of the enterprises.
|Item Type:||MPRA Paper|
|Original Title:||Impact of competition and business cycles on the behaviour of monopolistic markups in the Polish economy|
|Keywords:||markups, microeconometrics, microeconomics, monopoly power|
|Subjects:||D - Microeconomics > D2 - Production and Organizations > D21 - Firm Behavior: Theory
B - History of Economic Thought, Methodology, and Heterodox Approaches > B2 - History of Economic Thought since 1925 > B21 - Microeconomics
C - Mathematical and Quantitative Methods > C2 - Single Equation Models ; Single Variables > C23 - Panel Data Models ; Spatio-temporal Models
|Depositing User:||Jan Hagemejer|
|Date Deposited:||17. Jun 2009 00:44|
|Last Modified:||14. Feb 2013 10:43|
Abraham, F., Konings, J., Vanormelingen, S., 2006, Price and wage setting in an integrating Europe: firm level evidence, National Bank of Belgium working paper no. 93.
Athey, S., Bagwell, K., Sanchirico, C., 2004, Collusion and Price Rigidity, Review of Economic Studies, Vol. 71 s.317, Blackwell Synergy Volume 71 Page 317 - April 2004
Atkinson F., Ehrman, M., Smets, F., 2006, Inflation persistence and price setting behaviour in the Euro area. A summary of the IPN evidence, ECB Occasional Papers, no. 46
Bils, M, 1989, Pricing in a Customer Market, Quarterly Journal of Economics, vol. 104, s. 699-718.
Bils, M., 1987, The Cyclical Behaviour of Price and Marginal Cost, American Economic Review, vol. 77, pages 838-55.
Boulhol H. (2004), Has increased competition really pushed down manufacturing markups?, CDC IXIS i TEAM (University Paris I Panthéon-Sorbonne and CNRS), Working Paper
Christiano, L. J., Eichenbaum, M., Evans, Ch. L., 2005, Nominal Rigidities and the Dynamic Effects of a Shock to Monetary Policy, Journal of Political Economy, vol. 113, no. 1
Comin, D., Gertler, M., 2006, Medium Term Business Cycles, American Economic Review, June 2006
Dobrinsky, R., Körosi, G., Markov, N., Halpern, L., 2004, Firms’ Price Markups and Returns to Scale in Imperfect Markets: Bulgaria and Hungary, William Davidson Institute Working Paper Number 710
Gali, J, Zilibotti, F., 1995, Endogenous Growth and Poverty Traps in a Cournotian Model, Annales d’economie et de statistique, vol. 37-38
Görg, H., Warzynski, F., 2003. Price Cost Margins and Exporting Behaviour : Evidence from Firm Level Data, Discussion Papers of DIW Berlin 365, DIW Berlin, German Institute for Economic Research
Gradzewicz, M., Hagemejer, J., 2006, Marże monopolistyczne i przychody skali w gospodarce polskiej – Analiza mikroekometryczna, in print “Ekonomista”
Green, EJ., Porter, RH., 1984, Noncooperative Collusion under Imperfect Price Information, Econometrica, Vol. 52, No. 1.
Hall R.E., 1988, The relation between price and marginal cost in U.S. industry, Journal of Political Economy, vol. 96, no. 5
Hall R. L., Hitch C. J. (1939), Price Theory and Business Behaviour, Oxford Economic Papers, No. 2., p. 12-45
Hyde, C. E., Perloff, J. M., 1995, Can market power be estimated?, Review of Industrial Organization, No. 10
Jorgenson, D. W., Griliches, Z. 1967, The explanation of productivity change, Review of Economic Studies, Vol. 34, pages 249-83; reprint in D W Jorgenson, Productivity: volume 1: postwar U.S. economic growth, Cambridge, MA: The MIT Press
Klette, T . J., 1999, Market power, scale economics and productivity: estimates from a panel of establishments data, Journal of Industrial Economics, Vol. 47, No. 4
Konigns, J., Van Cayselle, P., Warzynski, F., 2003, The effects of privatization and international competitive pressure on Firms’ Price-Cost Margins: Micro Evidence from Emerging Economies, William Davidson Institute Working Paper Number 603
Konings, J., Vandenbussche, H., 2005, Antidumping protection and markups of domestic firms, Journal of International Economic, vol 65, 151-165
Kreps, DM., Scheinkman, JA., 1983, Quantity Precommitment and Bertrand Competition Yield Cournot Outcomes, The Bell Journal of Economics, Vol. 14, No. 2. pp. 326-337.
Lundin, NN., 2004, Has Import Disciplined Swedish Manufacturing Firms in the 1990s?, Journal of Industry, Competition and Trade, Volume 4, Number 2
Marchetti, D.J., 2002, Markups and the Business Cycle: Evidence from Italian Manufacturing Branches, Open Economies Review, 13, pp. 87-103.
Martins J. O., Scarpetta, S., 1999, The Levels and Cyclical Behaviour of Mark-ups Across Countries and Market Structures, OECD Economic Department Working Papers, No. 213.
Melitz, M. J., 2003, The Impact of Trade on Intra-Industry Reallocations and Aggregate Industry Productivity, Econometrica, vol. 71, no. 6
Oulton, N., Srinivasan, S., 2003, Capital stocks, capital services and depreciation: an integrated framework, Bank of England Working Paper, No. 192
Roeger, W., 1995, Can Imperfect Competition Explain the Difference between Primal and Dual Productivity Measures? Estimates for U.S. Manufacturing, Journal of Political Economy, Vol. 103, No. 2., pp. 316-330
Rotemberg, J. J, Woodford, M., 1999. The Cyclical Behavior of Prices and Costs. in: Handbook of Macroeconomics, vol. 1B, John B. Taylor and Michael Woodford (editors). Amsterdam, Elsevier Science
Rotemberg, J. J., Saloner, G., 1984, A Supergame-Theoretic Model of Business Cycles and Price Wars During Booms, NBER Working Paper, no. 1412
Small, I., 1997, The Cyclicality of Mark-Ups and Profit Margins: Some Evidence for Manufacturing and Services”. Bank of England Working Paper No. 72.
Sweezy P. M. (1939), Demand Under Conditions of Oligopoly, The Journal of Political Economy, Vol. 47, No. 4, p. 568-573 Weitzman, V., 1982, Increasing Returns and the Foundations of Unemployment Theory, Economic Journal, vol. 92, pp. 787-804.