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Is the price-cost margin affected by the market concentration? Evidence from the Czech food and beverages industry

Ivana Blazkova, and Ondrej Dvoulety

Business and Economic Horizons (BEH), 2017, vol. 13, issue 2, 256-269

Abstract: The paper investigates the relationship between the market concentration and the price-cost margin in the Czech food processing industry during 2003-2014. Estimated econometric models with Fixed Effects supported hypothesis assuming the positive impact of the market concentration on the price-cost margin controlling for productivity. The increase in the productivity was associated with the increase of the price-cost margins. Based on the results, policy makers should promote market competition in the food processing industry, for example through the reduction of entry barriers. Another option worth consideration is to support R&D activities potentially leading to market transformation and increase in efficiency.

Keywords: Price-cost margin; market concentration; food and beverages industry; Czech Republic; regression analysis (search for similar items in EconPapers)
JEL-codes: L11 L66 (search for similar items in EconPapers)
Date: 2017
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Handle: RePEc:pdc:jrnbeh:v:13:y:2017:i:2:p:256-269