Market Power, Competition and Ownership in Emerging Economies

Jozef Konings, Patrick Van Cayseele and Frederic Warzynsi

LICOS Discussion Papers from LICOS - Centre for Institutions and Economic Performance, KU Leuven

Abstract: In this paper, we analyze the effects of trade, concentration and ownership on the pricing behavior of firms in two transition countries, Bulgaria and Romania. We use an extensive dataset of more than 3000 firms and sector level information to estimate the effects of these three factors on the price cost margin (PCM) for the period 1994-1998. We find: 1) that trade disciplines the industry in concentrated industries; 2) that high concentration is associated with more market power; 3) that private and foreign owned firms heve higher PCMs. This indicates that the pricing strategy of private firms is inherently differentthan the one of State firms, either as the results of different objectives or induced by the abuse of market power.

Keywords: market power; price cost margin; trade; competition; ownership; transition (search for similar items in EconPapers)
JEL-codes: L1 L33 P3 (search for similar items in EconPapers)
Pages: 23 pages
Date: 2001
New Economics Papers: this item is included in nep-com, nep-mfd and nep-tra
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:lic:licosd:11001

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