Lower bounds of concentration in a small open economy
Pekka Ilmakunnas ()
MPRA Paper from University Library of Munich, Germany
We examine how Sutton’s “bounds” approach works in a small country where industries have relatively high export and import intensities. Import competition is used as an indicator for the degree of competition in the low sunk cost industries. The bounds are estimated as stochastic frontiers, where observable industry characteristics, export intensity and entry barriers, are allowed to affect the mean and variance of the deviations from the frontier. In accordance with the theory, high R&D intensity industries have a lower bound for concentration, which is higher than that for low sunk cost intensity industries. For high advertising industries the theory does not hold as well. High import competition leads to a higher bound in the low sunk cost industries.
Keywords: concentration; sunk costs; R&D; stochastic frontiers (search for similar items in EconPapers)
JEL-codes: L13 L60 L11 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-com
References: Add references at CitEc
Citations: Track citations by RSS feed
Downloads: (external link)
https://mpra.ub.uni-muenchen.de/1859/1/MPRA_paper_1859.pdf original version (application/pdf)
Journal Article: Lower Bounds of Concentration in a Small Open Economy (2008)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:1859
Access Statistics for this paper
More papers in MPRA Paper from University Library of Munich, Germany Ludwigstraße 33, D-80539 Munich, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Joachim Winter ().