Lerner Index. Estimation and the Impact of its Market Structure Determinants

Alejandro Castañeda

Economía Mexicana NUEVA ÉPOCA, 2006, vol. XV, issue 2, 165-197

Abstract: Using the reasoning that assumes that a pro-cyclical Solow residual is an indication of the presence of market power, the paper estimates the Lerner index. At the same time in which we estimate the Lerner index, we measure the impact of industry structure variables (concentration and imports) on this index. Because we have panel data, we also allow for a change in the impact of these variables across time. For the whole manufacturing sector, we find that concentration and imports have a differing impact on the Lerner index across the business cycle. We find evidence that shows that the Lerner index behaves anticyclically. And we also make the analysis by type of good (durables and non-durables) and find differing impacts of concentration and imports by type of good.

Keywords: Lerner index estimation; concentration; import-penetration; pro-cyclical Solow residual (search for similar items in EconPapers)
JEL-codes: L00 L11 L60 (search for similar items in EconPapers)
Date: 2006
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Persistent link: https://EconPapers.repec.org/RePEc:emc:ecomex:v:15:y:2006:i:2:p:165-197

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