Firm-Size Distribution and Price-Cost Margins in Dutch Manufacturing

Yvonne Prince and Roy Thurik

Small Business Economics, 1993, vol. 5, issue 3, 173-86

Abstract: Industrial economists surmise a relation between the size distribution of firms and performance. Usually, attention is focused on the high end of the size distribution. The widely used four-firm seller concentration ratio, C4, ignores what happens at the low end of the size distribution. We investigate to what extent the level and the growth of small business presence influence price-cost margins in Dutch manufacturing. We use a large data set of 66 industries for a thirteen year period. This allows the investigation of both small business influences within a framework in which that of many other market structure variables is also studied. Evidence is shown that price-cost margins are influenced by large firm dominance, growth in small business presence, capital intensity, business cycle, international trade and buyer concentration. Copyright 1993 by Kluwer Academic Publishers

Date: 1993
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Working Paper: Firm-Size Distribution and Price-Cost Margins in Dutch Manufacturing (1991)
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