Competition and the relative productivity of large and small firms

George Symeonidis ()

Applied Economics, 2011, vol. 43, issue 24, 3253-3264

Abstract: Using a comprehensive dataset on the incidence of price-fixing across British manufacturing industries in the 1950s, I compare collusive and competitive industries and find evidence of a negative relationship between collusion and the labour productivity of larger firms relative to smaller firms. In particular, collusion is associated with a reduction or even a reversal of the productivity gap between larger and smaller firms. This result is robust to controlling for the potential endogeneity of collusion.

Date: 2011
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DOI: 10.1080/00036840903508379

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