Structure, conduct, and performance: evidence from the Indonesian food and beverages industry

Maman Setiawan (), Grigorios Emvalomatis and Alfons Oude Lansink ()

Empirical Economics, 2013, vol. 45, issue 3, 1149-1165

Abstract: This article employs the Structure–Conduct–Performance (SCP) paradigm to investigate the simultaneous relationship between industrial concentration, price rigidity, technical efficiency, and price-cost margin in the Indonesian food and beverages industry. This research extends the SCP framework by including price rigidity and technical efficiency as additional key variables. The results suggest that there is a simultaneous relationship between industrial concentration, price rigidity, technical efficiency, and price-cost margin with a positive bi-directional relationship between industrial concentration and price-cost margin. These findings imply that an appropriate course of action for the regulator in this highly concentrated industry is to reduce industrial concentration in order to increase competition, reduce upward price flexibility, and increase technical efficiency in the long run. Copyright Springer-Verlag Berlin Heidelberg 2013

Keywords: Structure–Conduct–Performance; Food and beverages industry; Panel data and simultaneous equations model; Technical efficiency; L10; L11; L13; C33; C36 (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (3)

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DOI: 10.1007/s00181-012-0648-3

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